Professional Documents
Culture Documents
Company Profile. Cadbury Schweppes Public Limited Company (PLC) is one of the oldest and largest
family-run businesses in the world today. Although confectioner Cadbury Limited merged with the
carbonated drinks company Schweppes Limited in 1969, Cadbury Schweppes is still run by members of
the Cadbury family, which has been represented in Cadbury’s top management for more than 170 years.
The company is currently one of the world’s leading producers of chocolate candy and soft drinks.
Cadbury Schweppes PLC managed its beverage operations in North America through Cadbury Beverages
North America (CBNA). Under CBNA are several divisions assigned to handle the operations of each brand,
namely: Crush, Sunkist, Schweppes, Canada Dry, Hires, and Mott’s. Each division has been given the free
hand to manage its own operations and compete freely in the market.
The Adult Soft Drink Business. Of the six divisions of CBNA, Schweppes and Canada Dry are classified as
adult soft drinks. Adult soft drinks are referred to as beverages that are commonly used as an alcohol
mixer or consumed as general soft drinks. Examples of adult soft drinks include: ginger ale, club soda,
tonic water, bitter lemon, and sweetened sparkling waters, among others. Although Schweppes and
Canada Dry were part of the leading brands under this category, it was noted that in 1991, the collective
From 1965 to 1990, a study on liquid market trends in the United States showed that the consumption of
soft drinks in general continued to increase, notwithstanding its competition with other hot and cold
beverages in terms of market share. However, given its image and use a mixer, adult soft drinks are
packaged in 1-liter polyethylene bottles rather than 12-ounce cans and 2-liter bottles which were popular
Manufacturing of Schweppes Adult Soft Drinks. Since colas (Coca-Cola or Pepsi Co) dominate the US
market, major bottlers had exclusive agreements with either companies, making it as their primary
product line. With this agreement, bottlers are also responsible for the marketing of other products of
which their partner company carries. Once established, bottlers look for non-competing products to
widen their product assortment, and these includes: ginger ale, tonic water, and bottled water, among
others.
Given that major players in the cola industry have no own brands of adult soft drinks, Schweppes and
Canada Dry complemented the general soft drinks of the cola and lemon-lime giants. The product line of
Distribution of Adult Soft Drinks. Given that cola giants dominate the primary display space, adult soft
drinks, most of the time had to compete to have adequate space. Display space refer to space allocated
to a certain product that also plays an important role to boost sales. Since Schweppes and Canada Dry are
non-competing in nature, the task of obtaining adequate shelf space is less difficult.
Schweppes’s Ginger Ale Product Line. Ginger ale is primarily composed of carbonated water, sugar, syrup,
and ginger flavor. Similar with Canada Dry, Ginger ale offers the market both regular and diet varieties.
Though it is generally classified as an adult soft drink, Schweppe’s ginger ale is more widely used as a
general soft drink rather than a mixer, especially in the northeast part of the United States of America. In
the West, however, ginger ale is commonly used as a mixer with alcohol. As a result, marketing of ginger
ale is heavily concentrated in the northeast, placing second to Canada Dry who controls 33.5 percent of
the U.S. ginger ale market, and ahead of Seagrams who only have 3.1 percent share of the market.
Consumer Image of Ginger Ale. Although more commonly consumed as a soft drink, ginger ale are most
of the time branded as a mixer to alcohol. Studies have shown that even those who consume it as a general
soft drink primarily associate ginger ale as a mixer rather than as a general soft drink. Perception
(promoted as mixer) and packaging (being commonly distributed in 1-liter PET bottles) are considered to
first conceptualized as a general soft drink for all occasions. Done with the product development phase,
Sam Johnson, Associate Product Manager of Schweppes under CBNA, was up to the assignment of
convincing the management to proceed with the manufacturing of the product without having a negative
impact on the performance of existing ginger ale products in the market. SRGA was launched nationally
in the US in 1991.
Viewpoint
Sam Johnson, Product Director and Associate Product Manager of Schweppes under Cadbury Beverages
North America
Time Context
Take off point of the analysis is set after the 1st half of 1991
How to balance the potential growth/success of Schweppes Raspberry Ginger Ale, as a new entrant,
1. To be able to reinforce the image of Schweppes Ginger Ale (of any variant) as a general soft drink
2. To be the preferred product of target retailers in terms of product distribution in the market
3. To be the preferred product of the consumers both as a general soft drink and as mixer in order
to maximize potential earnings that will benefit the suppliers and investors
factor/ as a pre-requisite to
business success
Areas of Consideration
- Introduced nationally in
the US
Demographic Segmentation
- Targeted to appeal all
group of people
- Diffused preference
British owned
drinks company
Positioned as either a
alcohol mixer
SRGA targeted to be
consumed as more of a
than as a mixer
United States
promotions
- Less competition
- Unique selling
proposition
Weaknesses
- Brand awareness
market
and ages
- Increasing consumption
cold beverages
mixer)
- Offered varieties
Threats
- Competition among
other types of
beverages
leading companies
- Distribution channel
the product
Strategic Alternatives
1 2 3
prospective retailers
3 Continue conduct of Bank of effective Continuously monitor
buying behavior
sales customers
Devise strategies on a more creative brand image for ginger ale (of any variant) as a
potential factors for improvement on reasonable terms and for loyalty purposes
1 4 4 4 3
2 3 4 3 4
3 4 3 4 4
4 2 3 2 4
With a score of “4” being the highest and “1” being the lowest
Analysis and Conclusion
With a score of “4” being the highest and “1” being the lowest
B. Conclusion
The table above shows that the percentage weights used measures the effectiveness of the
solutions provided. Considerable weight was given to review existing marketing mix strategies
of the company and look for potential areas for improvement in order to make the current
Recommendation to Management
Given the impact of SRGA during the first half of 1991, the Management should focus its attention
in finding effective ways to manage and improve its existing channels of distribution. To do such, existing
agreements/arrangements much be revisited and identify potential areas for improvement. Given the
current position of ginger ale, in general, as a product, it is critical for the company to further strengthen
its relationship marking in channels, i.e., develop long-term and/or trusting relationships with customers,
distributors, supplies or other parties in the marking environment. By doing such, it will enable CBNA to
have an efficient channel in place wherein the right type of products are delivered when and where it is