Magazine article Marketing

Mark Ritson on Branding: Snapple Is an Object Lesson in Equity

Magazine article Marketing

Mark Ritson on Branding: Snapple Is an Object Lesson in Equity

Article excerpt

Almost 40 years after Cadbury and Schweppes joined forces, the two are once again going their separate ways. Cadbury plc made its modest debut as a pure confectionery manufacturer on the FTSE last week. This week sees its former beverage business listed in New York as DPSG - Dr Pepper Snapple Group.

Students of brand management will no doubt be familiar with one of the key brands in the DPSG portfolio - Snapple. To study Snapple is to study the very history of modern consumer branding.

It begins with founders, in this case, three entrepreneurs working in a natural food store in the East Village of New York City in 1972. They spotted that shoppers were looking for more natural products and set up a business selling natural juices and iced teas.

As with most founders, there was a distinct absence of market research, positioning or any long-term marketing strategy. Snapple grew organically via a network of corner stores. The key lesson Snapple teaches us is to let founders be founders and not be too quick to apply the artificial laws of marketing to a brand that is still led by them.

The next era for Snapple began in 1987 with the arrival of a professional marketer in Carl Gilman. He avoided making any gut decisions, instead conducting research. He then grew the brand slowly, but deliberately. Thanks to the business-school case studies written about Gilman and his decisions, he has now taught a generation of MBAs how to manage a brand: start with research, define a clear positioning, and break the rules by being true to your brand.

In 1994 the brand was acquired by the Quaker Oats company for dollars 1.7bn. It was a huge price tag, but Quaker had already had amazing success with Gatorade and was keen to apply its proven approach to another beverage brand. However, Snapple sales tanked, and it sold the apparently ruined brand three years later for dollars 300m less than its purchase price. The key lesson for marketers: a strategy that works for one brand will never work for another.

In 1997 a small beverage group called Triarc began to rebuild Snapple's brand equity, and eventually its sales, by going back to its heritage By 2000, sales were back to pre-Quaker levels and the brand was bought by Cadbury Schweppes for dollars 1. …

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