Case Study - MBA

UNIVERSAL COLLEGES OF PARAÑAQUE INC.
8273 Dr. A Santos Avenue, Sucat Road, Parañaque City
A Case Study on
SCHWEPPES RASPBERRY GINGER ALE
Prepared and Submitted by:
Francisca L. Patagnan and
Ma. Samanta Nicole Q. Angeles
4th Year Students
Bachelor of Science in Business Administration
Major in Financial Management
In partial fulfillment of the
Credit and Collection Subject
Prof. Sonny A. Palacio
Adviser
COMPANY PROFILE
In the late 18th century, Johann Jacob Schweppes (1740–1821),
a German-born naturalize Swiss watchmaker amateur scientist developed a
process to manufacture carbonated mineral water, based on a process
discovered by Joseph Priestley in 1770, founding the Schweppes Company in
Geneva in 1783. In 1792, he moved to London to develop the business
there. In 1843 Schweppes commercialized Malvern Water at the Holy well
spring in the Malvern Hills, which was to become a favorite of the British
Royal Family through to the present day. Mainstay products include Ginger
Ale (1870), bitter lemon (1957), and tonic water (the oldest soft drink in the
world (1771).
In 1969 Cadbury merged with Schweppes to form Cadbury
Schweppes. Schweppes was a well-known British brand that
manufactured carbonated mineral water and soft drinks. The merged

companies would go on to acquire Sunkist, Canada Dry, Typhoo Tea and
more. Schweppes Beverages was created, and the manufacture of Cadbury
confectionery brands was licensed to Hershey. Cadbury Schweppes Public
Limited Company was one of the largest British owned confectionery and
soft drink companies with marketing operations in more than 100 countries
around the world. In 1989, the company recorded total sales of 2,843.2
million pounds and a before-tax profit of 251 million pounds. The company
managed its beverages operation in North America through Cadbury
Beverages North America. Cadbury Beverages North America was organized
into several subdivisions, each handling projects under specific brand,
namely, SCHWEPPES, CANADA DRY, SUNKIST, CRUSH, HIRES, and MOTT’S.
Although divisions of one company, they operated independently and
competed freely in the market. A product director and an associate product
manager, Sam Johnson, manage the Schweppes subdivision for the whole
of North America.
After acquiring many other brands in the ensuing years, the company
was split in 2008, with its US beverage unit becoming the "Dr. Pepper
Snapple Group" and separated from its global confectionery business.

Today Cadbury Schweppes is the largest confectionery company in
the world, employing more than 70,000 employees. In 2006 the company
had over $15 billion in overall sales. In March of 2007, Cadbury Schweppes
announced that it intends to separate its confectionery and beverage
businesses. With almost 200 years in the business, Cadbury Schweppes will
continue to prosper in the coming decades.
Schweppes Raspberry Ginger Ale was introduced in January 1991
in the US. The forecasts regarding the sales for the first year was 2 million
cases and real sales for the first half - year (January-June) are 2 million
cases twice more than projected. That means that the Schweppes Raspberry
Ginger Ale has took its place in the consumer’s minds and the distribution
performance through both bottlers and retailers is successful. But the data
comparison of performance (first 6 months of 1991 and 1990) of Schweppes
Ginger Ale sales stayed on the same level while other Schweppes products
had recorded an increase of 4 % the average growth rate of the industry.
Also the consumer study results have shown that Schweppes Raspberry
Ginger Ale sales are mostly (70%) generated at the cost of competitors and
only some portion (30%) at the cost of other Cadbury Beverages North
America products. That once again shows that the marketing performance of
Schweppes Raspberry Ginger Ale is successful and in the right direction. As
to the issue of cannibalization, this was predictable and represents the
standard way of development - 26% of Schweppes Raspberry Ginger Ale
sales came at the cost of Cadbury Beverages North America other Ginger
Ales, though initially estimated only 20%. This data means that even
compared to other Cadbury Beverages North America Schweppes Raspberry
Ginger Ale marketing, distribution as well as composition and taste is better.
The other Cadbury Beverages North America products sales are almost
unaffected by introduction of Schweppes Raspberry Ginger Ale as predicted.
For the current point Net Income from Schweppes Ginger Ales is increased
by USD 440 000 (if we calculate the approximate income with Schweppes
Raspberry Ginger Ale and without it), if we take into the consideration that
SRGA took only 3 % of other Schweppes Ginger Ales. But taking into
account the forecast of increasing sales of SGRA the total net income for
Ginger Ales will increase ceteris paribus.

I. TIME CONTEXT
1991
II. VIEW POINT
A product director and an associate product manager
(Sam Johnson) manage the Schweppes subdivision for the whole
of North America.
III. DEFINITION OF THE PROBLEM
Main Problem: How does Cadbury Schweppes Public Limited
Company increase their sales by 20% in the
Schweppes Raspberry Ginger Ale?
IV. OBJECTIVE
 Must Objective
o To increase sales of Cadbury Schweppes Public Limited
Company in Schweppes Raspberry Ginger Ale by 20%.

 Want Objective
o To make as many sales as possible to increase sales
growth.
o To established strong relationship with suppliers for
possible opportunity in additional credit terms.
o To achieve 25% margin increase in sales from retailers
V. AREAS OF CONSIDERATION
 Strengths
o Strong Brand Name
o Operation Less Competition
o Unique Selling Proposition.
 Weaknesses
o Brand Awareness Selective Consumer & Product.
o Current Position
o Product Display Brand Image
o Consumer less enthusiastic about trying such new
product version.
 Opportunities
o 95% of consumer consume as soft drink & 5% as
alcohol mixture
o Products in regular and Diet varieties
o Introduced Nationally in the US
o one of the largest British owned confectionary & soft
drink
o Schweppes Raspberry Ginger Ale had position itself in
the consumer mind either as a mixer or as a soft drink
for special occasions
 Threats
o Competitors like Hot & Cold
Beverages
o Major bottling agreement with
leading companies
o Common Distribution
VI. ALTERNATIVE COURSES OF ACTION (ACA)
1. To regularly follow up customers inventory in order
to monitor customers purchasing orders
2. To create an agreement to suppliers for reasonable
payment terms and for loyalty purposes.
3. To provide reasonable discount and promotions that
would benefit for the retailers.

VII. DECISION MATRIX
DECISION CRITERIA
ACA #1 ACA#2 ACA#3
COSTUMER 9 9 8
COMMITMENT
SUPPLIER 8 9 9
COMMITMENT
RETAILERS 8 9 9
COMMITMENT
25 27 26
TOTAL
Lowest: 1
Highest: 10
Vlll. RECOMMENDATION
 I would Suggest ACA 2, To be able to achieve 20% increase in sales
in Schweppes Raspberry Ginger Ale product because if there’s a
well-defined agreement with suppliers the transaction will be
smooth and applicably comply. The terms in payments are
significantly important because of terms you will be receiving your
merchandise for a future payment. You are selling and yet
achieving income even it not been due on payments.
IX. CONCLUSION
I therefore conclude that having a good and established
relationship with suppliers will make transactions and earnings
more profitable because suppliers are very significant to
company’s production and having reasonable terms and

condition with regards to payment the working capital will use
efficiently.
PRODUCTS

COMPETITORS


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UNIVERSAL COLLEGES OF PARAÑAQUE INC.

8273 Dr. A Santos Avenue, Sucat Road, Parañaque City

SCHWEPPES RASPBERRY GINGER ALE

Prepared and Submitted by:

Francisca L. Patagnan and

Ma. Samanta Nicole Q. Angeles

4th Year Students

Bachelor of Science in Business Administration

Major in Financial Management

In partial fulfillment of the

Credit and Collection Subject

Prof. Sonny A. Palacio

8273 Dr. A Santos Avenue, Sucat Road, Parañaque City

In the late 18th century, Johann Jacob Schweppes (1740–1821),

a German-born naturalize Swiss watchmaker amateur scientist developed a

process to manufacture carbonated mineral water, based on a process

discovered by Joseph Priestley in 1770, founding the Schweppes Company in

Geneva in 1783. In 1792, he moved to London to develop the business

there. In 1843 Schweppes commercialized Malvern Water at the Holy well

Royal Family through to the present day. Mainstay products include Ginger

Ale (1870), bitter lemon (1957), and tonic water (the oldest soft drink in the

In 1969 Cadbury merged with Schweppes to form Cadbury

Schweppes. Schweppes was a well-known British brand that

manufactured carbonated mineral water and soft drinks. The merged

8273 Dr. A Santos Avenue, Sucat Road, Parañaque City

companies would go on to acquire Sunkist, Canada Dry, Typhoo Tea and

more. Schweppes Beverages was created, and the manufacture of Cadbury

confectionery brands was licensed to Hershey. Cadbury Schweppes Public

managed its beverages operation in North America through Cadbury

Beverages North America. Cadbury Beverages North America was organized

into several subdivisions, each handling projects under specific brand,

namely, SCHWEPPES, CANADA DRY, SUNKIST, CRUSH, HIRES, and MOTT’S.

Although divisions of one company, they operated independently and

competed freely in the market. A product director and an associate product

Snapple Group" and separated from its global confectionery business.

8273 Dr. A Santos Avenue, Sucat Road, Parañaque City

Today Cadbury Schweppes is the largest confectionery company in

announced that it intends to separate its confectionery and beverage

continue to prosper in the coming decades.

Schweppes Raspberry Ginger Ale was introduced in January 1991

performance through both bottlers and retailers is successful. But the data

comparison of performance (first 6 months of 1991 and 1990) of Schweppes

had recorded an increase of 4 % the average growth rate of the industry.

8273 Dr. A Santos Avenue, Sucat Road, Parañaque City

Schweppes Raspberry Ginger Ale is successful and in the right direction. As

to the issue of cannibalization, this was predictable and represents the

standard way of development - 26% of Schweppes Raspberry Ginger Ale

compared to other Cadbury Beverages North America Schweppes Raspberry

Ginger Ale marketing, distribution as well as composition and taste is better.

unaffected by introduction of Schweppes Raspberry Ginger Ale as predicted.

Ginger Ales will increase ceteris paribus.

8273 Dr. A Santos Avenue, Sucat Road, Parañaque City

II. VIEW POINT

A product director and an associate product manager

(Sam Johnson) manage the Schweppes subdivision for the whole

III. DEFINITION OF THE PROBLEM

Main Problem: How does Cadbury Schweppes Public Limited

Company increase their sales by 20% in the

Schweppes Raspberry Ginger Ale?

o To increase sales of Cadbury Schweppes Public Limited

Company in Schweppes Raspberry Ginger Ale by 20%.

8273 Dr. A Santos Avenue, Sucat Road, Parañaque City

o To make as many sales as possible to increase sales