Quaker Oats: Branding Challenges: Quaker Oats

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Register to read the introduction… Unfortunately, some companies have mismanaged their greatest asset—their brands. This is what befell the popular Snapple brand almost as soon as Quaker Oats bought the beverage marketer for $1.7 billion in 1994. Snapple had become a hit through powerful grassroots marketing and distribution through small outlets and convenience stores. Analysts said that because Quaker did not understand the brand’s appeal, it made the mistake of changing the ads and the distribution. Snapple lost so much money and market share that in 1997, Quaker finally sold the company for $300 million to Triarc, which has since revived the floundering brand.8

Branding Challenges
Branding poses several challenges to the marketer (see Figure 4-3). The first is whether or not to brand, the second is how to handle brand sponsorship, the third is choosing a brand name, the fourth is deciding on brand strategy, and the fifth is whether to reposition a brand later on.

To Brand or Not to Brand?
The first decision is whether the company should develop a brand name for its product. Branding is such a strong force today that hardly anything goes unbranded,

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7. Maintain price and reduce perceived quality. Cut marketing expense to combat rising.

Smaller market share.
Maintained margin. Reduced long-term profitability.

8. Introduce an economy model. Give the market what it wants. Some cannibalization but higher total volume.

Another factor leading to price increases is overdemand. When a company cannot supply all of its customers, it can use one of the following pricing techniques:


With delayed quotation pricing, the company does not set a final price until the product is finished or delivered. This is prevalent in industries with long production lead times.



With escalator clauses, the company requires the customer to pay today’s price and all or part of any inflation increase that occurs before delivery, based on some specified price index. Such clauses are found in many contracts involving industrial projects of long duration.



With unbundling, the company maintains its price but removes or prices separately one or more elements that were part of the former offer, such as free delivery or installation. ➤

With reduction of discounts, the company no longer offers its normal cash and
quantity

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