Dr. Pepper Plants a Kiss

Product innovation is a key to growing or sometimes maintaining market share for consumer companies. Just as PepsiCo (PEP) is about to introduce Pepsi Natural, Pepsi Throwback and Mountain Dew Throwback, Dr. Pepper Snapple Group (DPS) announced a new flavor -- Dr. Pepper Cherry.

Billed as "It's a whole new reason to try Dr Pepper," the beverage is a new blend of Dr Pepper with cherry flavor. Supported by an aggressive marketing plan, the company will employ Gene Simmons of KISS to introduce Dr. Pepper Cherry. The commercial's theme will be that Dr Pepper Cherry has just a KISS of cherry flavor, which makes it amazingly smooth.

Also, Gene Simmons will be the third "Dr." (Dr. Love) in the "Trust Me, I'm a Dr." advertising campaign, drawing on the KISS song "Calling Dr. Love." The first 2 "Drs" were basketball Hall of Famer Dr. J (Julius Erving) and Dr. Frasier Crane (5-time Emmy Award winner Kelsey Grammer).

The TV commercial will feature Gene Simmons in full KISS "Demon" regalia and will begin to air on March 30th on both network and cable television. The marketing campaign will also include sampling with more than one million cans of Dr. Pepper Cherry to be given away on city streets this summer. Dr. Pepper Cherry (both regular and diet) is already available nationwide.

Initially, new products reduce a company's profitability. Before the product is feasible, R&D is expensed as incurred. Once the product has been developed, investments must be made in the bottling operations to produce the new soft drink. Production lines must be set up, new labels must be designed and produced, and the distribution system must be altered to accommodate the new product.

Lastly, investments must be made through a marketing campaign to launch the new brand with sufficient advertising and sampling to make it successful. Only after a period of time will the new product add to profitability, usually within 2 years.

However, new products have strategic benefits. They keep the brand fresh and in the front of the mind of consumers. New products allow the company to maintain shelf space (and hence market share) as competitors are also introducing new products.

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