I. Factual Summary:
Dr. Pepper is the main contender in the non-alcoholic beverage industry. Their wide range of products is the key to their continued success; by giving consumers variety. Dr. Pepper also remains profitable by maintaining a strong brand images and relationship with its consumers. Their main customers are large retails stores like Wal-Mart and Target; as well as convenient stores.
II. Problem/ Opportunity:
Dr. Pepper has the opportunity to branch out in the sports/energy drink market. The problem is the high level of competition. Red Bull and Monster already possess a great deal of the market and are well-known through branding and advertisement.
III. Alternative Solutions:
a.) Launch an energy drink and rely on the already existing relationships with vendors and consumers to make a profit. Use creative advertisements and slogans to compete against the competition.
b.) Create an entirely new niche of product to stand out above the crowd. The product would need to be focused around the 18-25 age range; since that is where the market is seeing the most sales. Also, it will need to designed to fit into the “on-the go” lifestyle.
c.) Focus on current products; and not venture into the sports drink genre. To avoid a potential loss of profit; Dr. Pepper could forgo launching a new line in an already competitive market.
IV. Selection Solution:
Dr. Pepper can launch a new drink that is protein filled. New to the shelves this product will attract the athletic consumer as well as those on the go lifestyles that are looking for a healthier drink choice. Dr. Pepper can still charge a higher price than Gatorade, and reach the same target market; since this is an entirely new concept.
The U.S. sports drink market posted total retail sales of $7.5 billion in 2006 and a year-over-year growth rate of about 13%. Dr. Pepper definitely needs to be part of this product category. By sticking out above the crowd with the protein filled drink, Dr. Pepper will not be directly competing against Red Bull or Monster, but will still have a presence in the health conscious market. Dr. Pepper can use in place relationships and strong brand image to its advantage while launching this new drink. It is important to target the right market with this product; which would be the 18 to 25 age range.