Overview: Time: 2001 - 2003 Trend: fast, exciting, action, new, Majority target market: young Hispanics (LA,

TX, -- NYC) majority male. Promotion focus and strategies: Retailers*, Small taco shops, mom & pop shops, hole in the wall restaurants, special events, street team: modified 2000 - 2003 Honda Civic SI (female promoters) - cars are colored to all the flavors of the lines - including all the aftermarket products / brands, street team apparel, website, myspace, sponsor celeb, Pull to retailers, Push to consumers ----------------------------------------------------Target Market stays the same Competitive Analysis The soft drink industry is extremely competitive. Three companies (Coca-Cola, Pepsi, Dr. Pepper/7Up) control over 90% of the market share. Coca-Cola owns five of the top ten soft drink brands, Pepsi owns three, and Dr. Pepper/7Up owns the other two. Rivalry Among Firms o The level of rivalry among firms in the soft drink industry is extremely high. o Three firms control over 90% of market share and are always in an intense battle to wrestle market share from the other two firms. Threat of New Entrants o The threat of new entrants in the soft drink industry is low. o The current oligopoly in the soft drink industry provides a very significant entry barrier. Threat of Substitutes o The threat of substitute products is high. o Water, juice, tea, coffee, milk, sports drinks, and an array of other non soft drinks are available as a beverage substitute for soft drinks. o New beverages, both soft drinks and non soft drinks, are constantly being developed, meaning that new substitutes are constantly becoming available. Bargaining Power of Buyers o The bargaining power of buyers in the soft drink industry is high. o Retail outlets are responsible for most soft drink sales, and this can allow stores to have bidding wars for shelf and display space and fast food outlets can negotiate to drive down the price of syrups. Bargaining Power of Suppliers o The bargaining power of suppliers is low. o The resources used are not scarce, substitutes are available, and switching costs are not high, resulting in low supplier bargaining power. Market Definition Soft Drink Industry Demographics/Behavior

Average American consumes over 18 ounces of soft drinks per day. Most soft drinks are consumed by those aged 20-49. Diet drinks are mostly consumed by those over 25. Brand and taste preferences are formed between the ages of 12 and 24. Teens and young adults (12-24) are also more frequent consumers of soft drinks. Hispanics and African Americans consume the most soft drinks per capita. 25% of the US population is under 18 and 25% of the US population is either Hispanic or African American, and both of these groups prefer flavored soft drinks. Hispanic under 18 population will rise 22% by 2010 while the white under 18 population will decrease 5% in the same period. Squirt Demographics/Behavior Squirt originally targeted those aged 18-44, then narrowed to 18-34. Ruby Red Squirt was targeted at the 12-24 age group. 73% of Squirt is consumed by Caucasians, 15% by African Americans, and 12% by Hispanics. Targets those looking primarily for a thirst quencher. Ruby Red targeting those looking for an exciting and bold beverage. Newer target is the 18-24 year old Hispanic market. Also markets to the general soft drink market. Segmentation Criteria Demographics Age Squirts current targeted age group is 18-24. Ruby Red Squirt is targeted at those 12-24. Diet Squirt is targeted at those 25 and older. Ethnic/Racial Group Hispanics African-Americans Caucasians Others Generation Squirt is marketing towards Generation Y.

Income Level There is no segmentation based on income level. Behavior Those who work hard and play harder are targeted. Those who look to maximize life experiences and are spontaneous are targeted. Those who are looking for a thirst quencher are targeted. Product Feature/Brand Perception Squirt is targeting those who look for thirst quenching as the most important product feature. Squirt is targeting those who find the following perceptions of the brand important: Young Hip Outgoing Exciting Edgy Geographically This is used in combination with demographics, especially within the Hispanic Market. will be More than 50% of Hispanics in the US live in California and Texas and specifically targeted.

Los Angeles and New York City are the largest concentrated Hispanic markets and will be targeted. New York City, Chicago, Houston, and Los Angeles all rank within the top 10 largest populations of both Hispanics and African Americans and will be specifically targeted. Frequency African Americans and Hispanics consume the most soft drinks per capita. 12-24 year olds are the heaviest soft drink consumers and receive extra attention.

Strategy

Single-Segment Concentration Ruby Red Squirt is using a single-segment concentration strategy by targeting those 12-24 who are looking for a bold and exciting thirst quencher. Selective Specialization The overall Squirt brand uses this strategy by positioning Squirt, Ruby Red Squirt, and the diet versions in different ways and marketing them to different segments. Product Specialization The Squirt brand uses product specialization to a degree. The brand attempts to market itself across several segments, even though it focuses strongly one only one or a few. Market Specialization Neither the Squirt brand nor the Dr. Pepper/7Up company utilize the market specialization strategy, which involves meeting the many needs of a selected segment. Full Market Coverage This is the strategy that Dr. Pepper/7Up Inc. are using, with the Squirt brand being one product line marketed to cover some segments, such as the Hispanic, African-American, and young adult markets. VALS Experiencers Experiencers are the number one VALS type that Squirt targets. They are youthful, enthusiastic, and impulsive which are all attributes that fit perfectly into Squirts positioning statement which is discussed below. Experiencers are also heavy consumers, increasing the likelihood that they will be more frequent users than other VALS types. Makers Makers are the next targeted VALS type, and they are similar to Experiencers. They are focused on experiences as well, although more through working. They are very practical and simple people, and this fits perfectly into Squirts thirst quenching emphasis. Strivers

Strivers are another VALS type targeted by Squirt. Opinions of others, status, and stylish products are what are important to the Striver. This fits in well with the Squirt positioning strategy of being a drink for young, cool, and hip individuals. Strivers are also heavy consumers due to the fact that status is important to them and shopping is a way to exemplify it. Market Potential Hispanic Market The US Hispanic population grew 57.9% from 1990 to 2000 and is still growing minority group in the country. Hispanics are 12.5% of US population. Lots of potential in California and Texas as over 50% of the US Hispanic lives in those two states. New York Citys population is 27% Hispanic, which is a major city with a potential.

the fasting

population

lot of

35% of US Hispanics are under 18, and the median age of US Hispanics is 25, which indicates a great opportunity as this market fits Squirts positioning statement perfectly. By 2005, the Hispanic youth market will be the largest minority youth market in the US, and 17% of youth market overall. Mexico is the #2 carbonated soft drink market in the world, and Squirt is the #8 overall soft drink brand in Mexico. Grapefruit is the second largest soft drink category in Mexico and Squirt is the #2 grapefruit brand. This indicates that Squirt might be able to capitalize on its Mexican popularity in the US, based on the growing Hispanic population. Hispanics tend to be more brand loyal, so if they can be reached, they customers. Hispanics, along with African-Americans, consume the most soft drinks capita.

could be life

in the US per

Young Adult Market 25.7% of US population is under 18, and additional 9.6% of the population falls between the ages of 18-24. Young adult market tends to prefer flavored drinks. Young adults tend to be higher frequency consumers of soft drinks. Market Share

Soft Drink Industry Coca Cola has 44.1% of the market share, Pepsi has 31.4%, and Dr. owns 14.7% of the market. Other fringe competitors combine to own the other 9.8% of the market. Coca Cola owns 5 of the top ten individual brands, Pepsi owns 3, and Dr. Pepper/7UP owns 2 and these 10 brands make up 72.9% of the soft drink market.

Pepper/7Up

Grapefruit and Citrus Soft Drink Industry Squirt is #3 citrus brand behind both regular and diet Mountain Dew. Mountain Dew owns 72.9% of the market share and Diet Mountain Dew owns 9.6%, collectively giving Mountain Dew 82.5% of the citrus soft drink market. Squirt owns only 5.6% of the citrus soft drink market, but still outperforms every Coca-Cola citrus soft drink. Fresca is the CocaCola product with the largest citrus soft drink market share at 4.6%.

Product Classification Durable Product o It is measurable because it is consumed in one or fewer uses. o It is purchased frequently o The typical marketing strategy is to make the product available in many locations and charge a small mark-up, advertise heavily to induce trial and build preference. Consumer Goods Squirt is classified as a convenience good because it is purchased frequently and it takes minimum effort to make the decision to purchase. Marketers should distribute in many locations to increase visibility. Differentiation Differentiation Strategy: A product can be differentiated in many ways including form, features, and performance: o Squirt will differentiate itself on its thirst quenching capabilities. o Squirt will also use its new image of being hip and young to differentiate itself from its competitors. Its Points of difference include: fun young, exciting, enthusiastic, impulsive, cool, and risk takers. The brand should be associated with the new cool. The new cool is trendy and its a new form of being cool. It is a characteristic that trendsetters will follow. Points of parity: Squirt is similar in its thirst quenching capabilities to other soft drinks; however, no other products provide the gratifying taste that Squirt does. Because of this difference consumers will purchase the product because they perceive a difference.

Squirts new style will incorporate being cool, exciting, and risk taking.

Product Line Squirt will modernize its product line to encourage customer migration to higher-valued, and a slightly higher-priced premium item. Squirt will introduce four new flavors: Pineapple, Tamarind, Mandarin, Lime, and Mango. o Based on observations of the Jarritos brand (a soda marketed at Hispanics) we have concluded that the above flavors would be ideal to introduce to the Squirt line to attract new customers. Packaging Packaging as a marketing tool: Self-service: this type of packaging attracts attention, describes the product features, creates consumer confidence, and makes a favorable impression of the product. The packaging should be appealing to the consumer as well as be informative and to the point. Packaging objectives The packaging should immediately identify the product as Squirt. If a consumer saw the package he or she should be able to identify the product without confusion. The packaging should also ease in the transportation. Descriptive information such as Caffeine free or Diet should easily be identified so that the consumer knows the product characteristics. Since Squirt is an already established brand it is important that Squirt stay with its current packaging colors and logo. We will introduce a glass bottle line with 12 and 24 packs. The Hispanic community likes glass bottles rather than aluminum. Labeling o Squirts label should reflect its new characteristics of new and exciting. o The labels on the can and glass bottle should be designed accordingly. o Functions of the label: o It will identify the product as Squirt o It will identify the flavor: mandarin, pineapple, mandarin, grapefruit, mango etc. o It will depict if its caffeinated, caffeine free, diet or non-diet, or made with sugar cane. o The graphics should be eye-catching and entertaining to the consumer. o The label should incorporate the Points of Difference such as: thirst-quenching, exciting, risk taking, cool, and hip. Positioning Designing the companys offering and image to occupy a distinctive place in the minds of the target market. o Defining a competitive frame -Determine category membership: close competitors and substitutes -Points-of-Differences (PODs): Squirts thirst quenching capability. Its new image which depicts it as new and cool. -Points-of-parity (POPs): Squirt is similar in its thirst quenching capabilities to other soft drinks; however, no other products provide the gratifying taste that Squirt does. Because of this difference consumers will purchase the product because they perceive a difference. o Product Life-Cycle (PLC)

 Currently in the maturity stage: at this stage the company can modify its product (quality, feature, or style) or marketing program modification (prices, distribution, advertising, sales promotion, personal selling, services) o Squirt will introduce new flavors which are mango, pineapple, mandarin, lime, and tamarind. o Product Strategy o Squirts product strategy will be based on product differentiation. Squirt cannot use a pricebased strategy since the products pricing must remain competitive. Squirt will strive to answer the following questions: o Who the product is aimed at? The product is aimed at the multicultural population between the ages of 18-24 o What benefit the product brings? o Some of the benefits of consuming the product are its thirst-quenching capabilities o Other benefits revolve around the individual and how the product makes the consumer feel. The product can make them feel young and exciting. Other benefits will include how others perceive the individual. For example, if the consumer is seen consuming the beverage others will perceive the consumer as being cool. o What your position is in the marketplace? Squirts position is fun and exciting. By positioning itself as fun and exciting, Squirt is able to differentiate itself from competitors. o Other benefits will include modernization of the Squirt brand through its new associations of being cool and fun. o What advantage the strategy will have over those of your competitors? Squirt will be perceived as cool and new. Other beverages have not been revamped to relate to a younger and more risk taking consumer. Squirt new image will appeal to the younger consumer because they will be able to identify with the new qualities of the product. Product Differentiation Squirt will aim at differentiating its product from its competitor by presenting itself as o Fun o Hip o Exciting o Adventurous All the above differentiation points are qualities that the consumer can identify with. By differentiating itself, the Squirt customer will perceive a difference between the competitors product and its own product. The goal in the differentiation strategy should be to distance Squirt from its competitors by appealing to its potential customers through its associations of being fun, hip, and exciting. There are two forms of product differentiation vertical differentiation and horizontal differentiation. o Squirt will use horizontal differentiation, which focuses on the customers preferences. This method should be used since beverages do not have many points of differentiation. If we focus on what the customer likes and prefers, we will be able to adjust the product accordingly to create a pulling effect in distribution. Squirt will also use a line strategy to differentiate its product. o The original Squirt flavor can extend to caffeinated soft-drinks as well as the new flavors that will be introduced. o We will create new flavors such as, mango, pineapple, lime, and mandarin.

Brand Strategies The brand is a young, 18-24 year old who likes to have fun, explore and take risks. o The brand represents a new generation that gets bored easily and likes to experience things spontaneously. o The goal should be to have consumers re-purchase the brand every time they have the need to quench their thirst. What are the brands objectives? o To become the number one citrus soft drink among Hispanic consumers between the ages of 18-24 through advertising and promotions. What are you brand barriers? o Unforeseen environmental changes such as, the economy, raw material shortages. o Competitors in the soft-drink product category, specifically those who already cater to the Hispanic market such as the Jarriots brand. Brand packaging and identity o The brand packaging will reflect our target market. It will be fun and modern. o Can we extend the Squirt brand to other products? We can extend to other products such as pop-sickles, lip smackers, yogurt and juice. What is our vision, mission? Vision: o To become the number soft drink through ethical means and practices. Mission: o To provide a thirst-quenching beverage to consumers between the ages of 18-24. o How will we accomplish this? We will accomplish our vision and mission by becoming part of the community through event sponsorships and cause marketing. Through cause marketing we will support causes that are important to our target consumers to gain exposure and further reinforce our new image. To cater to the Hispanic market Squirt will come out with new flavors that include pineapple, mandarin, grapefruit, and mango. By studying competitors we have uncovered that the Hispanic market likes to consume beverages in glass bottles. Squirt will offer glass bottles to fulfill the need of authenticity. Glass bottles in the Hispanic community represents authenticity and if Squirt can associate itself with it then we can capture a large share of the Hispanic market. Squirt will transition from being a retro brand to being a newer and cooler brand to be able to reach out to a younger demographic. Other non-tangible benefits will include over the phone customer care. The customer can call the customer hotline to give feedback about the product that they consumed. o The customer hotline must be bilingual to ensure that the Hispanic consumers can give feedback. Logo, Trademarks and Slogans The current Squirt colors will remain the same. The only thing that will change is Squirts design. It will be modernized to attract younger consumers. o Younger consumers are attracted to art that is modern rather than retro. o Our tagline will remain the same because Squirt has already built their brand image reputation. By changing the tagline we would risk losing the retro consumers who have been loyal to the product.

 Slogan: o General Market: A burst of flavor o Hispanic Market: A squirt of style. Tagline: Squirt it.

It is humorous and catchy.

Price Strategy Price Objectives Profit, sales, status quo Range: high (

Distribution Definition of Channel The key task of the channels chosen is to distribute Squirt products to retailers, where they are able to reach the customer and other potential consumers. This will entail two types of indirect marketing channel levels: 1. One-level channel involves the retailer as the sole intermediary between the manufacturer or concentrate producer and the consumers. This occurs as a result of orders made from fountain service retailers such as momand-pop restaurants and other fast-casual restaurants. 2. Three-level channel involves the bottler, distributor, and retailer as intermediaries between the manufacturer or concentrate producer to the final consumers. This occurs as a result of orders made from various retailers such as supermarkets/grocery stores, combination stores, general merchandise, and convenience stores.

Criteria for Channel Choice The Indirect marketing channels utilized for distribution are influenced by these four factors 1. Manufacturer Reliable and efficient, cost effective Perishable ingredients Location, distance to distributors and retailers

2. Product Product quality consistency Packaging issues concerning glass bottles, plastic bottles, and overall package displays Intermediary packaging issues between manufacturer, bottler, and distributors 3. Market Low market share compared to Coca Cola and Pepsi Co; Growing Hispanic market; Hispanic and African Americans consume the most soft drink per capita 4. Competitive The bargaining power of buyers in the soft drink industry is high. Retail outlets are responsible for most soft drink sales, and this can allow stores to have bidding wars for shelf and display space and fast food outlets can negotiate to drive down the price of syrups. The bargaining power of suppliers is low. The resources used are not scarce, substitutes are available, and switching costs are not high, resulting in low supplier bargaining power. Channel Members The bottling network consists of four major participants: I. Manufacturer/ Concentrate producers Concentrate producers manufacture the flavors: Original Squirt, Pineapple, Tamarind (non-citrus), Mandarin, Lime, Mango (non-citrus). Manufacturer will be able to sell and ship to distributors for retailers who will provide Squirt through fountain services. II. Bottler Bottlers add sweetener, carbonated water, and other additional ingredients to syrup made by the concentrate producers. After mixing the ingredients together, it is then packaged in bottles and cans, as well as the packaging aspects of the product. The beverages are then shipped to vendor distributors. III. Distributor The distributor will sell the packaged product to various retailers. In addition, they may also provide additional value to the product and distribution process: -provide contacts to prospective customers -help with promotion and sales strategies

-prompt delivery of products to retailers by company vendors or other methods IV. Retailers Retailers meet the needs of the target consumer by selling the product (bottled, canned, and/or fountain service drinks) to consumer and potential customers. Other key retailer aspects include: -convenience through store location and store hours -merchandise return policies -information of products - promotion of products Degree of Distribution Squirt will employ an Intensive distribution system in which Squirt products will be placed in as many outlets as possible in its target segments. Locations can include supermarkets/grocery stores, general merchandise stores, convenience stores (provide convenience by location and time), gas stations, restaurants (mom-and-pop, fountain service retailers), and limited line merchants. An intensive distribution strategy will increase coverage, sales, & product and service availability to customers and potential customers. With the right direction, it is possible to convert these potential customers to profitable customers. Supply Chain Management 1. Customer Relationship Management Provide and retain enough customer touch points and accessibility of Squirt products to the customer. Touch points will allow individual customers to encounter the brand or product to help facilitate brand awareness, induce trial, and maximize loyalty. Allow customer feedback of products to better understand and address customer needs and preferences. Keep current customers providing by maintaining consistent product quality for all Squirt products. Concentrating on quality and consistency of the product will help contribute to positive brand equity. 2. Ordering System The ordering system will employ a set of information systems to help facilitate orders and reduce the time between an orders receipt and delivery. Establish contracts with large-scale retailers such as supermarkets, general merchandise, and combination stores. Company vendors that visit the stores, if necessary, can directly place an order on the spot.

Smaller retailers can contact distributors once a reorder point is reached. Fountain-service retailers will be able to order directly from the manufacturer. 3. Inventory Control Inventory control of products will focus on maintaining direct accountability and consistency of product flow to retailers. For large scale retailers that demand higher inventory levels , vendors will have a great amount of control by visiting retailers to check, update, and maintain inventory everyday of the week. Vendors will keep track of inventory levels on a week-by-week basis for smaller retailers. 4. Logistics Sales forecasting to reflect demand of Squirt products in target markets will help determine production quantities. A strong focus on time-delivery, meeting emergency needs, careful handling of merchandise, and a willingness to take back defective goods and resupply quickly. Establish agreement among channel members regarding price policies, territorial rights, and special services to be performed by each. On-time delivery standards are set on a weekly basis for all retailers. Implementation of Radio Frequency Identification (RFID) technology to keep track of inventory from production of goods to the transportation of goods. 5. Transportation Methods a. Large trucks utilized for safe and efficient physical movement of products between intermediaries b. Distributor placed in Los Angeles, California; San Antonio, Houston, and Irving, Texas; and Carlstadt, New Jersey to reach appropriate target markets. c. Direct store delivery by company vendors i. Smaller vehicles such as company vans used for everyday shipment of products at low volumes of product. These deliveries are evident in general merchandise stores such as Target. These types of delivery can also be made to smaller retailers such as independent convenience stores and gas stations.

ii. Larger trucks used for shipments with higher volumes of product by large scale retailers such as supermarkets. The products are packed into palettes for safe organized delivery of the products. iii. Delivery made to retailers warehouse, where the retailer then sends the product to its stores Channel Integration In the U.S., Dr. Pepper Snapple Group (DPS) markets, bottles and distributes a broad range of soft drinks, non-carbonated beverages and mixers, from national to regional brands. Approximately half of DPS annual volume is distributed through companyowned bottling and distribution network. The remainder is driven through thirdparty/licensed bottlers and distributors, including those in both the Coca-Cola and Pepsi bottling systems, as well as independent bottlers, brokers and distributors. These activities create more value for all members involved, resulting in a greater value for the consumer. Therefore, DPS employs both a corporate and contractual vertical integration system. Moreover, in managing its intermediaries, DPS will employ both push and pull strategies through its channels.Push strategies will be supported by the execution of pull strategies to facilitate consumer demand of Squirt. 1. Push: keep relationship intact with intermediaries (retailersrestaurants, convenience stores, gas stations, grocery stores) to carry, promote, and sell the products to target market/consumers. As a result, the push strategy will attract consumers with low brand loyalty, who make choices in the store, and are impulse buyers 2. Pull: will draw people to consume Squirt as a result of promotions (i.e. advertising, etc); will attract high involvement consumers whom are brand loyal, consumers who can perceive differences between soda brands, and have already made the decision to purchase Squirt before going to the store.

Promotion Strategies Promotional Mix (percent layout, Pie Chart) Advertising : is paid form of a nonpersonal communication about and organization, product, service, or idea by an identified sponsor. Personal Selling: Sale Promotion: Public Relation: Support Promotion: Direct Marketing: Checking with Distribution (Push - Personal Selling lead, supporting by sale promotions)

(Pull - Advertising lead, supported by sale promotions) Promotional objectives (two objectives for each. What we want to do) Advertising Personal Selling Sale Promotion Public Relation Support Promotion Direct Marketing Channel Promotion Bottlers Distributor Retailers* Creative Appeal rational emotion fear sex humor Media Schedule Schedule Strategies (Timeline (months)- rectangle chart, left side with promotions) Pulsing, Continuous, Flighting (Advertising and Promotions Page 315 - 317) Advertising Media Sales Promotions Methods Personal Selling Types Public Relations Types Public Relations Types Direct Marketing Methods Support Promotions Methods Budget

Overview: Time: 2001 - 2003 Trend: fast, exciting, action, new, Majority target market: young Hispanics (LA, TX, -- NYC) majority male. Promotion focus and strategies: Retailers*, Small taco shops, mom & pop shops, hole in the wall restaurants, special events, street team: modified 2000 - 2003 Honda Civic SI (female promoters) - cars are colored to all the flavors of the lines - including all the aftermarket products / brands, street team apparel, website, myspace, sponsor celeb, Pull to retailers, Push to consumers

Target Market Competitive Analysis The soft drink industry is extremely competitive. Three companies (Coca-Cola, Pepsi, Dr. Pepper/7Up) control over 90% of the market share. Coca-Cola owns five of the top ten soft drink brands, Pepsi owns three, and Dr. Pepper/7Up owns the other two. Rivalry Among Firms o The level of rivalry among firms in the soft drink industry is extremely high. o Three firms control over 90% of market share and are always in an intense battle to wrestle market share from the other two firms. Threat of New Entrants

o The threat of new entrants in the soft drink industry is low. o The current oligopoly in the soft drink industry provides a very significant entry barrier. Threat of Substitutes o The threat of substitute products is high. o Water, juice, tea, coffee, milk, sports drinks, and an array of other non soft drinks are available as a beverage substitute for soft drinks. o New beverages, both soft drinks and non soft drinks, are constantly being developed, meaning that new substitutes are constantly becoming available. Bargaining Power of Buyers o The bargaining power of buyers in the soft drink industry is high. o Retail outlets are responsible for most soft drink sales, and this can allow stores to have bidding wars for shelf and display space and fast food outlets can negotiate to drive down the price of syrups. Bargaining Power of Suppliers o The bargaining power of suppliers is low. o The resources used are not scarce, substitutes are available, and switching costs are not high, resulting in low supplier bargaining power. Market Definition Soft Drink Industry Demographics/Behavior Average American consumes over 18 ounces of soft drinks per day. Most soft drinks are consumed by those aged 20-49. Diet drinks are mostly consumed by those over 25. Brand and taste preferences are formed between the ages of 12 and 24. Teens and young adults (12-24) are also more frequent consumers of soft drinks. Hispanics and African Americans consume the most soft drinks per capita.

25% of the US population is under 18 and 25% of the US population is either Hispanic or African American, and both of these groups prefer flavored soft drinks. Hispanic under 18 population will rise 22% by 2010 while the white under 18 population will decrease 5% in the same period. Squirt Demographics/Behavior Squirt originally targeted those aged 18-44, then narrowed to 18-34. Ruby Red Squirt was targeted at the 12-24 age group. 73% of Squirt is consumed by Caucasians, 15% by African Americans, and 12% by Hispanics. Targets those looking primarily for a thirst quencher. Ruby Red targeting those looking for an exciting and bold beverage. Newer target is the 18-24 year old Hispanic market. Also markets to the general soft drink market. Segmentation Criteria Demographics Age Squirts current targeted age group is 1824. Ruby Red Squirt is targeted at those 1224. Diet Squirt is targeted at those 25 and older. Ethnic/Racial Group Hispanics African-Americans Caucasians Others Generation

Squirt is marketing towards Generation Y. Income Level There is no segmentation based on income level. Behavior Those who work hard and play harder are targeted. Those who look to maximize life experiences and are spontaneous are targeted. Those who are looking for a thirst quencher are targeted. Product Feature/Brand Perception Squirt is targeting those who look for thirst quenching as the most important product feature. Squirt is targeting those who find the following perceptions of the brand important: Young Hip Outgoing Exciting Edgy Geographically This is used in combination with demographics, especially within the Hispanic Market. More than 50% of Hispanics in the US live in California and Texas and will be specifically targeted. Los Angeles and New York City are the largest concentrated Hispanic markets and will be targeted. New York City, Chicago, Houston, and Los Angeles all rank within the top 10 largest populations of both Hispanics and African Americans and will be specifically targeted. Frequency African Americans and Hispanics consume the most soft drinks per capita. 12-24 year olds are the heaviest soft drink consumers and receive extra attention.

Strategy Single-Segment Concentration Ruby Red Squirt is using a single-segment concentration strategy by targeting those 12-24 who are looking for a bold and exciting thirst quencher. Selective Specialization The overall Squirt brand uses this strategy by positioning Squirt, Ruby Red Squirt, and the diet versions in different ways and marketing them to different segments. Product Specialization The Squirt brand uses product specialization to a degree. The brand attempts to market itself across several segments, even though it focuses strongly one only one or a few. Market Specialization Neither the Squirt brand nor the Dr. Pepper/7Up company utilize the market specialization strategy, which involves meeting the many needs of a selected segment. Full Market Coverage This is the strategy that Dr. Pepper/7Up Inc. are using, with the Squirt brand being one product line marketed to cover some segments, such as the Hispanic, African-American, and young adult markets. VALS Experiencers Experiencers are the number one VALS type that Squirt targets. They are youthful, enthusiastic, and impulsive which are all attributes that fit perfectly into Squirts positioning statement which is discussed below. Experiencers are also heavy consumers, increasing the likelihood that they will be more frequent users than other VALS types. Makers Makers are the next targeted VALS type, and they are similar to Experiencers. They are focused on experiences as well, although more through working. They are very

practical and simple people, and this fits perfectly into Squirts thirst quenching emphasis. Strivers Strivers are another VALS type targeted by Squirt. Opinions of others, status, and stylish products are what are important to the Striver. This fits in well with the Squirt positioning strategy of being a drink for young, cool, and hip individuals. Strivers are also heavy consumers due to the fact that status is important to them and shopping is a way to exemplify it. Market Potential Hispanic Market The US Hispanic population grew 57.9% from 1990 to 2000 and is still the fasting growing minority group in the country. Hispanics are 12.5% of US population. Lots of potential in California and Texas as over 50% of the US Hispanic population lives in those two states. New York Citys population is 27% Hispanic, which is a major city with a lot of potential. 35% of US Hispanics are under 18, and the median age of US Hispanics is 25, which indicates a great opportunity as this market fits Squirts positioning statement perfectly. By 2005, the Hispanic youth market will be the largest minority youth market in the US, and 17% of youth market overall. Mexico is the #2 carbonated soft drink market in the world, and Squirt is the #8 overall soft drink brand in Mexico. Grapefruit is the second largest soft drink category in Mexico and Squirt is the #2 grapefruit brand. This indicates that Squirt might be able to capitalize on its Mexican popularity in the US, based on the growing Hispanic population. Hispanics tend to be more brand loyal, so if

they can be reached, they could be life customers. Hispanics, along with African-Americans, consume the most soft drinks in the US per capita. Young Adult Market 25.7% of US population is under 18, and additional 9.6% of the population falls between the ages of 18-24. Young adult market tends to prefer flavored drinks. Young adults tend to be higher frequency consumers of soft drinks. Market Share Soft Drink Industry Coca Cola has 44.1% of the market share, Pepsi has 31.4%, and Dr. Pepper/7Up owns 14.7% of the market. Other fringe competitors combine to own the other 9.8% of the market. Coca Cola owns 5 of the top ten individual brands, Pepsi owns 3, and Dr. Pepper/7UP owns 2 and these 10 brands make up 72.9% of the soft drink market. Grapefruit and Citrus Soft Drink Industry Squirt is #3 citrus brand behind both regular and diet Mountain Dew. Mountain Dew owns 72.9% of the market share and Diet Mountain Dew owns 9.6%, collectively giving Mountain Dew 82.5% of the citrus soft drink market. Squirt owns only 5.6% of the citrus soft drink market, but still outperforms every Coca-Cola citrus soft drink. Fresca is the Coca-Cola product with the largest citrus soft drink market share at 4.6%. Product Strategies

Product Classification Durable Product o It is measurable because it is consumed in one or fewer uses. o It is purchased frequently o The typical marketing strategy is to make the product available in many locations and charge a small mark-up, advertise heavily to induce trial and build preference. Consumer Goods Squirt is classified as a convenience good because it is purchased frequently and it takes minimum effort to make the decision to purchase. Marketers should distribute in many locations to increase visibility. Differentiation Differentiation Strategy: A product can be differentiated in many ways including form, features, and performance: o Squirt will differentiate itself on its thirst quenching capabilities. o Squirt will also use its new image of being hip and young to differentiate itself from its competitors. Its Points of difference include: fun young, exciting, enthusiastic, impulsive, cool, and risk takers. The brand should be associated with the new cool. The new cool is trendy and its a new form of being cool. It is a characteristic that trendsetters will follow. Points of parity: Squirt is similar in its thirst quenching capabilities to other soft drinks; however, no other products provide the gratifying taste that Squirt does. Because of this difference consumers will purchase the product because they perceive a difference. Squirts new style will incorporate being cool, exciting, and risk taking. Product Line Squirt will modernize its product line to encourage customer migration to higher-valued, and a slightly higher-priced

premium item. Squirt will introduce four new flavors: Pineapple, Tamarind, Mandarin, Lime, and Mango. o Based on observations of the Jarritos brand (a soda marketed at Hispanics) we have concluded that the above flavors would be ideal to introduce to the Squirt line to attract new customers. Packaging Packaging as a marketing tool: Self-service: this type of packaging attracts attention, describes the product features, creates consumer confidence, and makes a favorable impression of the product. The packaging should be appealing to the consumer as well as be informative and to the point. Packaging objectives The packaging should immediately identify the product as Squirt. If a consumer saw the package he or she should be able to identify the product without confusion. The packaging should also ease in the transportation. Descriptive information such as Caffeine free or Diet should easily be identified so that the consumer knows the product characteristics. Since Squirt is an already established brand it is important that Squirt stay with its current packaging colors and logo. We will introduce a glass bottle line with 12 and 24 packs. The Hispanic community likes glass bottles rather than aluminum. Labeling o Squirts label should reflect its new characteristics of new and exciting. o The labels on the can and glass bottle should be designed accordingly. o Functions of the label: o It will identify the product as Squirt o It will identify the flavor: mandarin, pineapple, mandarin,

grapefruit, mango etc. o It will depict if its caffeinated, caffeine free, diet or non-diet, or made with sugar cane. o The graphics should be eye-catching and entertaining to the consumer. o The label should incorporate the Points of Difference such as: thirst-quenching, exciting, risk taking, cool, and hip. Positioning Designing the companys offering and image to occupy a distinctive place in the minds of the target market. o Defining a competitive frame -Determine category membership: close competitors and substitutes -Points-of-Differences (PODs): Squirts thirst quenching capability. Its new image which depicts it as new and cool. -Points-of-parity (POPs): Squirt is similar in its thirst quenching capabilities to other soft drinks; however, no other products provide the gratifying taste that Squirt does. Because of this difference consumers will purchase the product because they perceive a difference. o Product Life-Cycle (PLC) Currently in the maturity stage: at this stage the company can modify its product (quality, feature, or style) or marketing program modification (prices, distribution, advertising, sales promotion, personal selling, services) o Squirt will introduce new flavors which are mango, pineapple, mandarin, lime, and tamarind. o Product Strategy o Squirts product strategy will be based on product differentiation. Squirt cannot use a price-based strategy since the products pricing must remain competitive. Squirt will strive to answer the following questions: o Who the product is aimed at? The product is aimed at the multicultural population between

the ages of 18-24 o What benefit the product brings? o Some of the benefits of consuming the product are its thirstquenching capabilities o Other benefits revolve around the individual and how the product makes the consumer feel. The product can make them feel young and exciting. Other benefits will include how others perceive the individual. For example, if the consumer is seen consuming the beverage others will perceive the consumer as being cool. o What your position is in the marketplace? Squirts position is fun and exciting. By positioning itself as fun and exciting, Squirt is able to differentiate itself from competitors. o Other benefits will include modernization of the Squirt brand through its new associations of being cool and fun. o What advantage the strategy will have over those of your competitors? Squirt will be perceived as cool and new. Other beverages have not been revamped to relate to a younger and more risk taking consumer. Squirt new image will appeal to the younger consumer because they will be able to identify with the new qualities of the product. Product Differentiation Squirt will aim at differentiating its product from its competitor by presenting itself as o Fun o Hip o Exciting o Adventurous All the above differentiation points are qualities that the consumer can identify with. By differentiating itself, the Squirt customer will perceive a difference between the competitors product and its own product.

 The goal in the differentiation strategy should be to distance Squirt from its competitors by appealing to its potential customers through its associations of being fun, hip, and exciting. There are two forms of product differentiation vertical differentiation and horizontal differentiation. o Squirt will use horizontal differentiation, which focuses on the customers preferences. This method should be used since beverages do not have many points of differentiation. If we focus on what the customer likes and prefers, we will be able to adjust the product accordingly to create a pulling effect in distribution. Squirt will also use a line strategy to differentiate its product. o The original Squirt flavor can extend to caffeinated softdrinks as well as the new flavors that will be introduced. o We will create new flavors such as, mango, pineapple, lime, and mandarin. Brand Strategies The brand is a young, 18-24 year old who likes to have fun, explore and take risks. o The brand represents a new generation that gets bored easily and likes to experience things spontaneously. o The goal should be to have consumers re-purchase the brand every time they have the need to quench their thirst. What are the brands objectives? o To become the number one citrus soft drink among Hispanic consumers between the ages of 18-24 through advertising and promotions. What are you brand barriers? o Unforeseen environmental changes such as, the economy, raw material shortages. o Competitors in the soft-drink product category, specifically those who already cater to the Hispanic market such as the Jarriots brand.

 Brand packaging and identity o The brand packaging will reflect our target market. It will be fun and modern. o Can we extend the Squirt brand to other products? We can extend to other products such as pop-sickles, lip smackers, yogurt and juice. What is our vision, mission? Vision: o To become the number soft drink through ethical means and practices. Mission: o To provide a thirst-quenching beverage to consumers between the ages of 18-24. o How will we accomplish this? We will accomplish our vision and mission by becoming part of the community through event sponsorships and cause marketing. Through cause marketing we will support causes that are important to our target consumers to gain exposure and further reinforce our new image. To cater to the Hispanic market Squirt will come out with new flavors that include pineapple, mandarin, grapefruit, and mango. By studying competitors we have uncovered that the Hispanic market likes to consume beverages in glass bottles. Squirt will offer glass bottles to fulfill the need of authenticity. Glass bottles in the Hispanic community represents authenticity and if Squirt can associate itself with it then we can capture a large share of the Hispanic market. Squirt will transition from being a retro brand to being a newer and cooler brand to be able to reach out to a younger demographic. Other non-tangible benefits will include over the phone customer care. The customer can call the customer hotline to give feedback about the product that they consumed. o The customer hotline must be bilingual to ensure that the Hispanic consumers can give feedback.

Logo, Trademarks and Slogans The current Squirt colors will remain the same. The only thing that will change is Squirts design. It will be modernized to attract younger consumers. o Younger consumers are attracted to art that is modern rather than retro. o Our tagline will remain the same because Squirt has already built their brand image reputation. By changing the tagline we would risk losing the retro consumers who have been loyal to the product. Slogan: o General Market: A burst of flavor o Hispanic Market: A squirt of style. Tagline: Squirt it. o It is humorous and catchy. Pricing Price Objective - Squirts price objective is to maximize market share, without lowering customers perceptions of its value. - Squirt will remain priced just below the status quo to induce sales. Price Range/Price Point Price Range -Squirt will be sold in the lower middle range of soft drinks. Price Points Suggested Retail Value Can - $0.79 Plastic Bottle - $0.99 Glass Bottle - $1.59 12 pack - $7.99 24 pack - $12.99 Factors Affecting price Materials The addition of glass bottles will add to our costs, and thus affect our costs. Our increased market share will help to cover these increased costs.

Competition The competitive nature of the soft drink industry is very influential on our pricing strategy. The status quo sets somewhat of a price ceiling for us, if we want to be successful in terms of increased market share. Elasticity of demand/breakdown Consumers in the soft drink industry tend to be price sensitive, given the sheer amount of competition, and the countless substitutes. Price Strategy -The pricing strategy that will be pursued by Squirt will be a slightly discounted version of going rate pricing. Due to the competitive nature of the soft-drink industry and the price sensitivity of our target market, any vast difference in pricing from the industry norm will have profound effects on demand for our products. Channel Discounts Cash Discount -In order to maintain healthy accounts receivable, Dr Pepper/Seven-Up will offer terms of 2/10 net 30 to its bottlers and suppliers. Quantity Discount - Dr Pepper/Seven-Up will offer quantity discounts on Squirt to its major retailers. Functional Discount - In return for performing certain functions such selling, storing, and record keeping, Dr. Pepper/Seven-Up will offer discounts to its bottlers, Seasonal Discount - Dr. Pepper/Seven-Up will offer discounts during our lower seasons, including Winter and the colder months of the year. Allowance - Bottlers will receive up to 20 cents per case in order to reward them for participation in our merchandising promotions, and our cooperative advertising efforts.
Distribution Definition of Channel The key task of the channels chosen is to distribute Squirt products to retailers, where they are able to reach the customer and other potential consumers.

This will entail two types of indirect marketing channel levels: 1. One-level channel involves the retailer as the sole intermediary between the manufacturer or concentrate producer and the consumers. This occurs as a result of orders made from fountain service retailers such as mom-and-pop restaurants and other fast-casual restaurants. 2. Three-level channel involves the bottler, distributor, and retailer as intermediaries between the manufacturer or concentrate producer to the final consumers. This occurs as a result of orders made from various retailers such as supermarkets/grocery stores, combination stores, general merchandise, and convenience stores. Criteria for Channel Choice The Indirect marketing channels utilized for distribution are influenced by these four factors 1. Manufacturer Reliable and efficient, cost effective Perishable ingredients Location, distance to distributors and retailers 2. Product Product quality consistency Packaging issues concerning glass bottles, plastic bottles, and overall package displays Intermediary packaging issues between manufacturer, bottler, and distributors 3. Market Low market share compared to Coca Cola and Pepsi Co; Growing Hispanic market; Hispanic and African Americans consume the most soft drink per capita 4. Competitive The bargaining power of buyers in the soft drink industry is high. Retail outlets are responsible for most soft drink sales, and this can allow stores to have bidding wars for shelf and display space and fast food outlets can

negotiate to drive down the price of syrups. The bargaining power of suppliers is low. The resources used are not scarce, substitutes are available, and switching costs are not high, resulting in low supplier bargaining power.

Channel Members The bottling network consists of four major participants: I. Manufacturer/ Concentrate producers Concentrate producers manufacture the flavors: Original Squirt, Pineapple, Tamarind (non-citrus), Mandarin, Lime, Mango (non-citrus). Manufacturer will be able to sell and ship to distributors for retailers who will provide Squirt through fountain services. II. Bottler Bottlers add sweetener, carbonated water, and other additional ingredients to syrup made by the concentrate producers. After mixing the ingredients together, it is then packaged in bottles and cans, as well as the packaging aspects of the product. The beverages are then shipped to vendor distributors. III. Distributor The distributor will sell the packaged product to various retailers. In addition, they may also provide additional value to the product and distribution process: -provide contacts to prospective customers -help with promotion and sales strategies -prompt delivery of products to retailers by company vendors or other methods IV. Retailers Retailers meet the needs of the target consumer by selling the product (bottled, canned, and/or fountain service drinks) to consumer and potential customers. Other key retailer aspects include: -convenience through store location and store hours

-merchandise return policies -information of products - promotion of products Degree of Distribution Squirt will employ an Intensive distribution system in which Squirt products will be placed in as many outlets as possible in its target segments. Locations can include supermarkets/grocery stores, general merchandise stores, convenience stores (provide convenience by location and time), gas stations, restaurants (mom-and-pop, fountain service retailers), and limited line merchants. An intensive distribution strategy will increase coverage, sales, & product and service availability to customers and potential customers. With the right direction, it is possible to convert these potential customers to profitable customers. Supply Chain Management 1. Customer Relationship Management Provide and retain enough customer touch points and accessibility of Squirt products to the customer. Touch points will allow individual customers to encounter the brand or product to help facilitate brand awareness, induce trial, and maximize loyalty. Allow customer feedback of products to better understand and address customer needs and preferences. Keep current customers providing by maintaining consistent product quality for all Squirt products. Concentrating on quality and consistency of the product will help contribute to positive brand equity. 2. Ordering System The ordering system will employ a set of information systems to help facilitate orders and reduce the time between an orders receipt and delivery. Establish contracts with large-scale retailers such as supermarkets, general merchandise, and combination stores. Company vendors

that visit

the stores, if necessary, can directly place an order on the spot. Smaller retailers can contact distributors once a reorder point is reached.

Fountain-service retailers will be able to order directly from the manufacturer. 3. Inventory Control Inventory control of products will focus on maintaining direct accountability and consistency of product flow to retailers. For large scale retailers that demand higher inventory levels, vendors will have a great amount of control by visiting retailers to check, update, and maintain inventory everyday of the week. Vendors will keep track of inventory levels on a week-by-week basis for smaller retailers. 4. Logistics Sales forecasting to reflect demand of Squirt products in target markets will help determine production quantities. A strong focus on time-delivery, meeting emergency needs, careful handling of merchandise, and a willingness to take back defective goods and resupply quickly. Establish agreement among channel members regarding price policies, territorial rights, and special services to be performed by each. On-time delivery standards are set on a weekly basis for all retailers. Implementation of Radio Frequency Identification (RFID) technology to keep track of inventory from production of goods to the transportation of goods. 5. Transportation Methods a. Large trucks utilized for safe and efficient physical movement of products between intermediaries

b. Distributor placed in Los Angeles, California; San Antonio, Houston, and Irving, Texas; and Carlstadt, New Jersey to reach appropriate target markets. c. Direct store delivery by company vendors i. Smaller vehicles such as company vans used for everyday shipment of products at low volumes of product. These deliveries are evident in general merchandise stores such as Target. These types of delivery can also be made to smaller retailers such as independent convenience stores and gas stations. ii. Larger trucks used for shipments with higher volumes of product by large scale retailers such as supermarkets. The products are packed palettes for safe organized delivery of the products. iii. Delivery made to retailers warehouse, where the retailer then sends the product to its stores Channel Integration In the U.S., Dr. Pepper Snapple Group (DPS) markets, bottles and distributes a broad range of soft drinks, non-carbonated beverages and mixers, from national to regional brands. Approximately half of DPS annual volume is distributed through company-owned bottling and distribution network. The remainder is driven through third-party/licensed bottlers and distributors, including those in both the Coca-Cola and Pepsi bottling systems, as well as independent bottlers, brokers and distributors. These activities create more value for all members involved, resulting in a greater value for the consumer. Therefore, DPS employs both a corporate and contractual vertical integration system. Moreover, in managing its intermediaries, DPS will employ both push and pull strategies through its channels.Push strategies will be supported by the execution of pull strategies to facilitate consumer demand of Squirt. 1. Push: keep relationship intact with intermediaries (retailersrestaurants, convenience stores, gas stations, grocery stores) to carry, promote, and sell the products to target market/consumers. As a result, the push strategy will attract consumers with low brand loyalty, who make choices in the store, and are impulse buyers 2. Pull: will draw people to consume Squirt as a result of promotions (i.e. advertising, etc); will attract high involvement consumers whom are brand

into

loyal, consumers who can perceive differences between soda brands, and have already made the decision to purchase Squirt before going to the store.

Promotion Strategies Promotional Mix To increase interest and awareness if the Squirt Soda brand well be focusing on the promotional strategies. To deliver our message and objectives across the market, we propose the use of the promotional mix. The six concepts well be using from the promotional mix will be advertising, personal selling, sale promotion, public relations, support promotion, and direct marketing. To divide our focus, well be spending 20% in Advertising, 15% in Direct Marketing, 30% in Sale Promotion, 20% in Support Promotion, 10% in Personal Selling, and 5% Public Relations. Since advertising is the best-known form of promotion and is able to deliver our message in to a larger market we decided to use 20% our efforts into advertisements. Using advertisement to push out the new lines of squirt and brand image is very important to the company. 15% of direct marketing will keep people inform and updated on the brand. 30% of sale promotion will gives incentives for consumers to purchase the lines. 20% of support promotion will help maintain our campaign. 10% of personal selling will help keep our relationships with our distribution chain. 5% of the public relations will help with the good image rating for the company. With our distribution line well be using a pull affect. With personal selling leading our distribution chain accounts well be keeping a strong relationship with our distributers. The distribution chain will be supported by sales promotions to give incentives. For our consumers, well be using a pull affect. (Push - Personal Selling lead, supporting by sale promotions) 30% (Pull - Advertising lead, supported by sale promotions) 70% Promotional objectives Our objectives for advertising are to diversify our market and establish a lifestyle. Our objectives for personal selling are to establish an excellent relationship with our distribution/supply chain and put buyers in our prospective of our brand. Our objectives for sale promotion are to stimulate immediate sales toward consumers and drive relationship and trade deals with wholesalers, distribution, and retailers.

 Our objectives for public relation are to create a good standing image with the community and charity. Our objectives for support promotion are to establish a brand image within the market and incentivize trails. Our objectives for direct marketing are to increase an interactive media base and receive a larger feedback response. Channel Promotion Bottlers Giving bottlers merchandising allowances, price deals, and participation in partnership / co-sponsor tradeshows. Distributor - Giving distribution merchandising allowances, price deals, and participation in partnership / co-sponsor tradeshows. Retailers* - Giving retailers merchandising allowances, price deals, and participation in partnership / co-sponsor tradeshows. Creative Appeal Emotion when creating a lifestyle, consumers will slowly build an emotional attachment to the brand. Sex By using female street team promoters and using sex appeal it will attract our target market. Humor Squirt It grabbing the young teen eye and males leading off to A Squirt Of Style Squirt Thats What She Said. Never Too Late For A Squirt. Media Schedule 2001 - 2003 J an
Stree t Team and Hondas

F eb ar

M pr

A ay

M un

J ul

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TV Ads

Print

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Fiest a Broadway

Out of Advertising

Radi o

Exclu sive Trade Show

The Children Hospital LA Colle ge Tour

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Advertising Out of the home advertising: Billboards, Bus Wraps, Bus Shelters, Posters, Promotional Street Team Cars (Modified Honda Civic Si), Street Team Girls. Outdoor will be ran throughout the year. TV Ads: Ran from March April, Summertime: June July, September November. Sales Promotions Giving out coupons / bonus packages at street team tours and college campus tours. Promoting us trade shows and co-promoting with distribution chain. Personal Selling Visiting our buyers and giving the custom fridges and full lines of our products. And putting them in a drawing to win custom Honda Civic. Visiting our distributers and suppliers to and promote them at trade shows Public Relations Children Hospital LA and Fiesta Broadway Direct Marketing Interactive media and website Support Promotions Promotion focus and strategies: Retailers*, Small taco shops, mom & pop shops, hole in the wall restaurants, special events, street team: modified 2000 - 2003 Honda Civic SI (female promoters) - cars are colored to all the flavors of the lines - including all the aftermarket products / brands, street team apparel, website, myspace, sponsor celeb, Budget