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UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr.

A Santos Avenue, Sucat Road, Paraaque 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

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

COMPANY PROFILE

In the late 18th century, Johann Jacob Schweppes (17401821), 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

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque 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 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 MOTTS. 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.

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

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 consumers 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

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

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.

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

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%.

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

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

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

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

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

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.

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

VII. DECISION MATRIX

DECISION CRITERIA

ACA #1 COSTUMER COMMITMENT SUPPLIER COMMITMENT RETAILERS COMMITMENT TOTAL 9 8 8 25

ACA#2 9 9 9 27

ACA#3 8 9 9 26

Lowest: 1 Highest: 10

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

Vlll. RECOMMENDATION I would Suggest ACA 2, To be able to achieve 20% increase in sales in Schweppes Raspberry Ginger Ale product because if theres 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 having are very significant terms to and

companys

production

and

reasonable

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

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

PRODUCTS

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

COMPETITORS

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

UNIVERSAL COLLEGES OF PARAAQUE INC. 8273 Dr. A Santos Avenue, Sucat Road, Paraaque City

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