Squirt – Nature of industry, market, and buyer behavior
In the United States, people consume more carbonated drinks than tap water. Research has shown that the average American drinks about 53 gallons of soft drinks
per year. However, soft drink consumption has declined over the past few years (Kerin & Peterson, 2004).
The soft drink industry has three major participants in the production and distribution; concentrate producers, bottlers, and retail outlets. Concentrate producers are responsible for consumer advertising and promotion programs, product development and planning and market research. The bottler’s responsibility is to set up local and retail trade promotions. Among this is selling and servicing retail outlets, placements and maintenance of advertisements, and the restocking of retailer’s shelves and vending machines.
Competition in the soft drink industry is mostly relevant among the top three companies; Coca-cola, Pepsi-Cola, and Dr. Pepper/Seven Up. Each of these companies offers a product similar to Squirt, but each has their own variation. Coca-Cola’s Fresca is also a grapefruit flavored carbonated rink, but it has sugar and is caffeine free. Coco-cola also offers Mello Yellow and Surge. Pepsi-Cola has the largest carbonated citrus drink called Mountain Dew (Kerin & Peterson, 2004).
The Organization
Squirt Brand carbonated drink is a caffeine-free, low sodium soft drink that is a blend of grapefruit juices mixed with carbonation. It is the best selling carbonated grapefruit drink in the United States. Squirt is marketed under Dr. Pepper/Seven Up Inc, which is owned by the London based company Cadbury Schweppes, the world’s third largest soft-drink company. Dr. Pepper/Seven up Inc is the largest non-cola soft drink enterprise in North America and the third largest soft drink company in the United States. They produce such products as Hawaiian Punch, Canada Dry, A&W Root Beer, and RC Cola. Dr. Pepper and Seven Up are both ranked in the top ten soft drinks in the United States based on market share (Kerin & Peterson, 2004).
Squirt’s origins date back to the 1930’s. A man by the name of Herb Bishop came up with a carbonated drink that blends grapefruit juice and sugar. The taste was so refreshing he used the word Squirt to describe it, because it was like squirting grapefruit right into the mouth. Bishop marketed his product using the character “Little Squirt”. In 1977, Squirt was purchased by a Michigan based company Brooks products. This company reformulated the recipe and logo and marketed it in the mainstream. Diet Squirt was introduced in 1983 and was the first soft drink that was sweetened with Nutra Sweet.
Today, Squirt’s product line consists of regular, diet, Ruby Red, and Diet Ruby Red. Diet Squirt and Diet Ruby Red account for 20% of Squirt’s total sales. Previous to a positioning review in 1995 by Foote, Cone, and Belding, Squirt focused its advertising on the 18 to 34 year old target market. Squirt advertised through newspapers inserts, cable TV spots, spot radio, and consumer, retail, and trade promotions. Squirt’s promotions exceeded the advertising expenditures. Squirt has been attributed with having the highest brand loyalty amongst competitors even though Mountain Dew was the most heavily advertised. At this time, the positioning of the company was to target Squirt to adults and Ruby Red to teens and young adults. The company was shooting commercials involving Rollerblading and Mountain Biking. Advertising messages emphasized how Squirt was beyond the ordinary taste, but also that it’s incredibly exciting. Throughout the five years, Squirts creative execution and positioning were revisited three times. Each time though, no changes were made. In the meantime, Coca-Cola announced that Fresca would be available in 95% of the United States Bottler Markets (Kerin & Peterson, 2004).
Plan of Action
When Foote, Cone, and Belding (FCB) reviewed Squirt’s positioning, they analyzed the companies marketing efforts and came up with a few recommendations involving a new position. First of all, they concluded that amongst its seven biggest competitors it is the most thirst quenching, but no necessarily refreshing or hip. Secondly, Fresca was the most similar in all attributes. FCB concluded that, “a creative strategy needed to be developed to increase relevancy with a younger target market and focus on squirt’s thirst quenching property.”
FCB recommended that Squirt’s target market should be multi -cultural and geared to the 18 to 24 year old market. They suggested that Squirt take an angle toward relating it to becoming an adult with more responsibility. FCB stated the there would be many benefits to this new position including its appropriateness for the carbonated drink category, it emphasizes self gratification, the freedom this demographic strives to maintain, and the potential to break through within the clutter of soft drink advertising. Finally, they stated that with Squirt’s look and feel, the new look would be consistent (Kerin & Peterson, 2004).
Potential Outcomes
With the growing number of Hispanics in the United States, and the fact that statistics has proven Hispanics and African Americans are a huge portion of citrus flavored carbonated beverages consumers, marketing to them makes sense. Taking this into consideration, it is obvious that Squirt should start a campaign that offers advertisements, television commercials, and banners in Spanish. According to www.hispaniccallcenter.com, Hispanics have an increasing amount of disposable income, and the number one thing they spend their money on is food and beverages in the home (Hispanic Affluence, 1996). Knowing this and knowing about the increasing population, management at Squirt should devise plans to get advertisements into every Spanish speaking news publication in Texas and California. In these two states alone, more than 50% of the Hispanic population lives (Kerin & Peterson, 2004). They should also focus their television and radio advertisements on the interest of the Hispanic community.
According to the revenue seen by companies who advertise in Hispanic magazines, none of them are soft drink companies (Print Advertising, 2006). Dr. Pepper/Seven Up Inc should take this advantage to be number one in the Hispanic US market and devise advertisements that could be used in Spanish magazines.
Squirt brand soft drinks has the ability to make Dr. Pepper/Seven Up Inc a leader amongst its competition. With some broadening of the advertising scope, and reviewing of the previous ads, they can revitalize their corporate position and go where the other citrus blends have not yet gone.