Dr Pepper & MTV in Sun Drop Promo - Analyst Blog

Dr Pepper Snapple Group Inc. (DPS), in order to promote its non-cola, flavored brand Sun Drop, teamed up with MTVN Music Group, a division of Viacom Inc.'s (VIA) MTV Networks. The multi-year contract aims not only to promote and distribute the brand nationwide but offer new packaging graphics in an increasingly complex media environment.

MTV Scratch, a recently announced in-house and creative advertising team of MTV, would spearhead the campaign. The promotion of the brand involves featuring the product on air through MTV programming, including the 25^th Anniversary season of the reality show, “The Real World”, and the Woodie Awards hosted by mtvU, MTV Network's music channel targeted exclusively for college students. Campaigns through MTV channels would help popularize the Sun Drop brand among the new generation of consumers that MTV knows best. Besides such airings, Sun Drop will also be featured as part of a multi-city consumer sampling initiative at music festivals and on college campuses across the United States.

Sun Drop is a citrus soda originally introduced in 1949 holding brand equity among Dr Pepper's portfolio of brands. Dr Pepper aims to pump up the brand's fan base through the creative and original marketing of MTV.

Dr Pepper's stratagem basically entails leveraging the recent trends in favor of flavored sodas, a non-cola segment of the soft drink industry. According to the Beverage Digest report, an industry publication, cola sales have dropped to 55.4% of the U.S. soda market in 2009 from 60.5% in 1999. Following industry trends, sales of Dr Pepper, Crush, and other brands are witnessing a steady increase.

We believe the Dr Pepper— MTV alliance will go a long way to popularize Sun Drop among consumers new to this flavored citric brand and to those already initiated. It represents a novel way to attract new patrons and increase sales.

We maintain our Neutral long-term recommendation on Dr Pepper Snapple Group. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no definite directional pressure on the shares over the near term.

 
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