The Snapple case is a known example how brands can dramatically lose brand equity if they are sold. In 1993 Quaker Oats Company (now part of Pepsico) bought Snapple for 1,7 billion USD and sold it in 1997 to Triarc (now The Wendy’s Company) for 300 million. In 2000 Snapple was again sold by Triarc to Cadbury Schweppes (now Dr Pepper Snapple Group) for 1 billion USD. Snapple worth dropped 1,4 billion USD in 4 years, and gained 700 million in 3 years. The difference in worth reflected brand equity and revenue changes. John Deighton analyzes the Snapple case in an article for Harvard Business Review.
The decisions which led to a loss of 1,4 billion USD in Snapple worth are well described in Deighton’s article. What is missing is the synthesis or a rule which can be used in any business today, almost 30 years later, to prevent such error. We suggest the following synthesis:
Content design processes must be transferred together with the brand to preserve the brand equity.
While the product is transferred, content is underestimated and neglected. New managers of brands often assume that if they have the product, all will be well. And this is not true. Other processes such as sales and marketing play an important role, but content processes are hardest to replicate and maintain, because they build the brand’s soft values. If Prada or Ferrari are sold, it is not sufficient to only transfer their product design and production, but also content design and production processes, because content builds their brand together with the product.
PS Regarding above Snapple facts image, Quaker Oats Company was spending approx. 1,5 million USD per day due to bad brand equity management.
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