Case Analysis #2
BUS C 515
|Weight||Rating (0-10 scale)||Total|
|Market Attractiveness Factors:|
|Customer Needs and Behavior||0.3||7||2.6|
|Segment and Growth Rate||0.5||8||3.8|
|Total: Market Attractiveness||1.0||8.4|
- The 0.3 weighting because we felt they are doing a good job of meeting customer needs – they recognized a need and provided a good solution to that need.
- We rated this a 7 because we felt that the business is doing a good job at meeting customer needs. The business realized that there was a customer need aimed at this specific product and decided to create a product that would please the customers. If RTD did not focus on the customers needs, their product would not be successful.
- As consumers became more health conscious about the beverages they drank, Snapple created a tea for those consumers, and their tea can be considered to be more popular than their original fruit drink. They have also developed many diet flavors of drinks for those who want to count calories. This is something that Snapple should continue to capitalize on as many consumers prefer healthier/diet beverages.
Segment and Growth Rate:
- The 0.5 weighting was the highest weighted factor due to the fact there are no other products other than the fruit flavored RTD drinks. When the market growth decreases, RTD drinks brand value decreases. When market growth increases, RTD brand value goes up as well.
- This was rated an 8 because the segment size is determined by whether the growth increases or decreases.
- The 0.2 rating was determined due to Dr. Pepper recent acquisition Snapple. Dr. Pepper’s product line now creates an internal growth within the company. If Snapple were to falter as a product, Dr. Pepper would likely be unaffected by the issues of Snapple.
- The macro trend was rated a 9. The organization would be able to survive a macro trend away from RTD, the Snapple brand would still be an asset to the organization.
- Demographics have skewed the RTD drink market to the younger generations and they health conscious. Women are a large factor toward this market as well. There are a lot more health food stores opening across the country: stores like Whole Foods, Trader Joes, New Season’s Markets, etc… all of which will drive the demographics of these fruit drinks.
- Sociocultural will have an impact on this as well. Healthy eating and drinking is considered to be a popular lifestyle these days. Diets such as Atkins, Paleo, vegan, vegetarian, etc… are all driven by the cultural lifestyles of consumers.
- Because of the relatively cheap costs to these drinks and peoples preference for them, the economy wouldn’t have too much of an impact from the consumer side. It could impact the manufacturing process as well as the suppliers of RTD fruit drinks however. Shifts in the economy can increase the cost for suppliers for these drinks which in turn would increase the cost slightly.
- There is a possibility that the legislation could ban non-healthy substitutes or implement “soda taxes” more regularly across the United States. This could be a benefit to the RTD fruit drinks so long as they are not included in any type of ban: other drinks will become more costly and people will see RTD fruit drinks as a cheaper alternative.
- Technological aspect isn’t as large of an impact as the others. Snapple includes a fun fact on the lid for each bottle. And they may even consider a redesign of the bottle if the look ever needs a re-design. Many drink producers are switching to a cylindrical bottle or can.
- Natural is the biggest impact for RTD fruit drinks as the fruit needs to be produced and grown. This can be at risk due to weather impacts: flooding, serious droughts, and severe weather can destroy plants and trees that produce the ingredients needed to make RTD fruit drinks.
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