Strategic marketing

Question 1

The challenge that is associated with Dr. Pepper Snapple Group extending its product offering to include the energy beverage does relate to the growth problems. Based on the analysis, the industry tends to be affected by an increase in prices and all other packaging competition activities can affect the organization’s entry to the energy beverage market. As a result, it is probable that the company will experience challenges that involve the financial commitment to investment.

 Because the market is also in the maturity stage, there tends to be a limitation regarding the growth. There is also the challenge of weak advertising. Because of the modest funds, the company does not have a lot of choices, but they should use their cash funds in advertising and also creating awareness among the customers. There is also the challenge of strong and competitive rivals. There tend to be five major competitors account for 94% of the dollar sales and the unit volume. The top beverage competitors include the Red Bull that dominates the market; hence, it is difficult to acquire market share.

Question 2

The market for the energy beverage has seen substantial growth since 2001. As the market continues to mature and the competition in the industry becomes great, it leads to a high struggle for maintaining consistency in the growth. In the recent years, the growth in the energy beverage market has decreased because of maturing of the market and also as a result of new entrants to the market of hybrid energy beverage. Most of the players in this market include Pepsi-Co, Red Bull, Coca-Cola, and Rockstar (Kerin & Peterson 2013). While each of these players does have their weaknesses and strength, one thing is sure regarding the market is brand loyalty. That is what a huge obstacle in this market is for Dr. Pepper Snapple.  In this market, the current target markets for most of the competitors in the industry are a male between 12 and 34 years. However, there tend to be other market segments that have high consumption rate as well, which means that there tend to be a market available that is not currently being marketed. 

Question 3

The determined pricing strategy is going to have a significant impact on the profitability because providing the energy drink at a competitive price is going to be critical to its success. The demographics are essential as the firm is going to effectively target its customers and mostly the adults aged between 35-54 years. It is also vital that the company should first examine whether it is going to be profitable if it operates through convenience stores as against the supermarkets. Dr. Pepper needs to differentiate its products through increasing vitamins B, herbs, and caffeine so that to stimulate mental alertness and also offer additional energy boosts to clients.

Question 4

As the marketing manager, several alternatives are available to overcome the challenges. Some of the strategies that may be applicable in overcoming the challenges include advertising and promotion, brand awareness, and pricing. The best decision is setting up a price around the industry average per the single-serve package. With regards to advertising, it is necessary to have a goal that will involve creating awareness and also stimulate the brand trial (Kerin & Peterson 2013). The marketing channels selected must be able to offer the highest returns.

Reference

Kerin, R., & Peterson, R. (2013). Strategic marketing problems: Cases and comments. Upper Saddle River, Prentice Hall.

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