Cadbury Crush free essay sample

Since 1985, Crush repositioned itself to target individuals between the ages of 12-17. Appendix D shows that Pepsi Co. and Minute Maid entered the market with their own orange soda brands capturing a large portion of the orange soda market. These new juggernaut competitors reduced Crush’s market share consistently each year by positioning themselves in the 15-30 year old market. Initially, we thought it would be wise for Crush to revert back to its’ original target market, however with the emergence of Pepsi Co. s Slice and Coca Cola’s Minute Maid into the market, and the fact that both brands are targeting individuals roughly between the ages of 15-30 (Crushes’ previous target market) (Exhibit 8), we believe it would be best for Crush to make an adjustment to their current positioning strategy. Shifting from their current age range (teens 12-17)(Exhibit 13) to younger children between the ages of 6-16 would tap into a market segment not currently being pu rsued by the new dominant Orange Soda companies. This shift would differentiate Crush even further from their competition, and as a result lead to more market share capture potential and competitive advantage due to the fact that they will be the first major orange soda brand to enter into this new target market. Secondly, the alignment with a younger age bracket comes less of a say the actual consumers (young kids) have in the purchase of this product which is why Crush needs to promote the fact that their formula includes 10% real juice, making it more appealing to the actual purchasers of the households (parents). We know that Slice and Minute Maid have already positioned themselves as a healthier choice, but within their market (p. 323). The fact that Crush has natural juice will encourage parents to purchase the brand that their kids will love. Placing an emphasis on the natural flavor in print and media advertisements will reassure parents that they are making a healthy choice for their kids. 2. Based on your analysis, what objectives should be set for the Crush advertising and promotion program? What strategies should be pursued? Crush’s first objective should be to continue repairing the relationships with the bottling network and build relationships with retailers. Crush should also increase spot marketing in areas most associated with children. Also, since Orange Crush’s main issue is that they are no longer uniquely differentiated among their competitors in the orange soda market, we feel the main objective should be to reposition the brand with respect to a younger age bracket (6-16). Finally, an integrated marketing communications strategy tying into the interests of the younger age bracket will be implemented. In terms of advertising, Crush should incorporate their promotion strategies into end of aisle displays in supermarkets and television commercials. Because a brand can be locked out of about 60% of supermarket soft drink volume, it is important to involve the grocery retailers in a push marketing strategy by offering incentives to display Orange Crush in end aisle displays. Orange Slice and Minute Maid use promotional mediums such as magazines, newspapers, and billboards on the sides of roads (all places that reach THEIR target market). In order to grab the attention of the Crush brands’ new young target market, Crush should focus on advertising on key television channels (i. e. : Nickelodeon, Cartoon Network) during prime cartoon watching hours, such as Saturday morning and after-school. Eye-catching end of aisle display in grocery stores including their popular cultural icon of the time will attract the attention of younger kids to their product. To grab the attention of the household purchasers (parents), coupons should be included in grocery store flyers to further enrich consumer value when considering Orange Crush for purchase. Crush needs to change their distribution strategy. Exhibit 7 shows that Sunkist, Slice, and Minute Maid all had much broader distribution coverage than Crush (exhibit 7). As a result the 3 brands enjoyed a much higher market share capture percentage than Crush (exhibit 5). This is due to the fact that Crush switched from bottling companies to warehouses as their primary means for distributing their product. Crush is in the process of re-establishing and expanding its relationship with bottling companies and it appears that the bottling network will be repaired to the point that Crush would be represented in 75% of the total orange category in time for the re-launch of the Crush brand. They need to engage in strategic meetings with marketing and sales representatives of both Crush and the bottling companies to develop an overview of the new positioning campaign. These relationships are key to Crush’s ability to regain market share and vastly improve their marketing coverage. Bringing the bottlers in to help develop the labeling and bottling to reposition Crush toward a younger demographic will not only help bridge the relationship, but introduce valuable insight into the new marketing campaign. An additional approach may be to involve a youthful cultural personality to endorse the product, such as a cartoon character. For example, placing â€Å"The Lorax† character, for instance, on the Crush label and have â€Å"The Lorax† star in Crush commercials will align Crush with the most popular children’s cultural icon within the new target market and could be the final piece in creating a truly integrated marketing communications package. 3. How much should be spent on advertising and promotion to re-launch the Crush brand (i. . , total dollar media expenses)? Be specific and be sure to base your recommended spending on facts provided in the case Our recommendation for the advertising and promotion budget is based around two separate areas: Historical trends and advertising/promotion expenses expressed as a percent of total sales relative to what Pepsi and Coca Cola are doing. First, in regard to historical trends, in 1985, Crush captured 22% of the market sh are while spending 25. 2%, or $4,371,200. 0 on advertising expenses, earning total sales revenues of $17,345,680. 00. This occurred without the presence of Pepsi and Coca Cola competing in their target market. Due to our repositioning strategy, Crush will once again be targeting a segment where there is little competition. This will set the conditions for an environment similar to what Crush operated in during 1985. In 1989 Coca Cola’s Slice captured 21% of the market share, and Pepsi’s Minute Maid captured 14% of the market share. The average advertising expenditures expressed as a % of total sales revenue spent by Pepsi and Coca Cola was 24. 4%. What does this mean for Crush? If Crush mimicked the successful advertising expenditures of Pepsi and Coca Cola, this 24. 4% would be a 15. 3% increase from what Crush is currently spending on advertising expressed as a % of their total sales revenue. An increase of $3,101,840 on advertising expenditures to around $5,000,000 will allow us to reach our goal of an 11% market share. Based on our estimates, a conservative 3% increase in market share from 1989 will increase our net profit by $622,180 to an estimated $12,543,440. Our prediction and recommendation is that with this increased advertising budget, relative to what Coke and Pepsi spend on advertising will bring about an increase in total market share for Crush. Historically, when Crush had few competitors in their market, they spent more money on advertising (as a % of sales revenue), and experienced a higher market share captured percentage. Currently, Pepsi and Coca Cola are doing very well, in terms of market share capture with their current % of sales advertising expenditures. If Crush reflects the same relative spending on advertising in relation to their total sales revenue, Crush will experience a higher market share capture percentage. If Crush goes with our recommendation to align itself with this younger age bracket, they will again have fewer companies competing in their target market, adding to the effectiveness of the recommended advertising budget. Furthermore, in 1985 when Crush was spending roughly 25% of total sales on advertising, they experienced a relatively high market share capture percentage related to other competitors. Once again, with the new positioning strategy the conditions will be set for a competitive environment similar to the one experienced by Crush in 1985 (moving away from competing with big Pepsi and Coke, and competing in an arena in which there are fewer competitors) and with our new projected advertising budget, 24. 4% of total sales revenue which one, reflects the relative spending on advertising by Coke and Pepsi which led to their success in acquiring a majority market share, and two, is almost equal to the percentage of total revenue spent on advertising in 1985 by Crush, a year in which they were very successful in capturing 22% of the market share given their competitive environment). The correct amount of spending based on the competitive environment within the target market is what’s im portant here, not necessarily the most amount of spending on advertising/promotion.