A Harvard Business School case study on product positioning

1. DFSDFSDFASD
Crescent Pure
Harvard Business School Case Study Analysis

2. Which
Companies
Are
Involved?

3. Portland Drake Beverages
 Manufacturer of Organic Juices &
Sparkling water.
 Revenue as of 2012 – $120.5 million
 Key People
 Micheal Booth - CEO
 Sarah Ryan - VP, Marketing
 Matt Levor - Director, Market Research

4. Crescent Pure
 Founded by Peter Hooper in Oregon,2008
 Manufactures Non Alcoholic,
Organic,Performance Enhancing
beverages.
 Acquired by PDP in 2014

6.  PDP has to decide a positioning strategy
for Crescent Pure.
 It has to analyse –
 Industry Specifics
 Pros & Cons of each option
 Final Recommendation

7. Product Positioning Options
1.Energy
Drink
3.Organic
Drink
2.Sports
Drink

8. Target Age
Group
-18 -24 Years
Typical cost of a
can
~ $2 to $5
Market Share
– 85% is
captured by top
4 competitors
Total Market
Value
- $8.5 Billion in
2013
Energy
Drink

9. Target Age
Group
-12 -24 Years
Typical cost of a
can
~ $1 to $2
Market Share
– 94% is
captured by top
2 competitors
Total Market
Value
- $6.3 Billion in
2012
Sports
Drink

10. Target Age Group
-Preferred by all
Ages
Includes Soft
drinks,tea,milk &
Soy beverages
Customers are
health conscious
Typical cost of a
can
~ $6.25
(Premium Pricing)
Organic
Drink

11. Positioning as Sports Drink
 Considered as “anytime
beverage ” by sports beverage
drinkers.
 Wider consumer base as
compared to energy drinks.
 Total Market Value by 2017 –
$9.58 Billion.
 USP - Low sugar content & all
natural ingredients will
appeal to health conscious
customers.
 Average price is ~ $1.5-
$2.With $2.75 price tag
crescent will be premium
priced.
 Concerns rising over relations
of sports drinks with child
obesity.
 Total market size is only
$9.58B as compared to energy
drinks $13.5B

12. Positioning as Energy Drink
 Positioning as an energy
enhancing drink would
reinforce perceptions from
Oregon.
 Total Market Value by 2018 –
$13.5 Billion.
 Average price for 8 oz. is
$2.99,which is higher than
Crescent Pure’s $2.75.
 USP- Organic Certification &
minimal caffeine content.
 Decline in consumption due
to negative media attention.
 Also frequency of
consumption is less.
 Market entry is difficult due
to many substitutes.

13. Positioning as Organic Drink
 Chance to dominate an
upcoming market.
 Customers are willing to pay
premium prices.
 Established brand image of
PDP.
 USP- Unique pricing of $2.75
is lower than $3 which is the
price expected by customers.
 Great taste.
 Small customer base of only
health conscious consumers.
 Risk of loosing other
lucrative segments.

14. 0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Energy Drinks
Sports Drinks
Crescent
Customer Perception

15. Customer Demographics
44%
36%
15%
3% 2%
Age Ranges
18-24
25-34
35-44
45-54
55+
59%
41%
Male
Female

16. Customer Demographics
44%
36%
15%
3% 2%
Age Ranges
18-24
25-34
35-44
45-54
55+
59%
41%
Male
Female

20. Entity Amount
Wholesale Price per Can $1.24
Variable Cost per Can (-) $1.02
Profit per can $0.22
Cans per Case 24
Profit per case 24*0.22=$5.28
Total cases produced in 1
month
12,000
Total Cases produced in 1 year 144,000
Profit per year 144,000 x 5.28
= $760320
Advertising Expense (-) $750,000
Net Profit $10,320

23. RECAP
 Introduction to PDP &
Crescent Pure
Formulating Problem
Statement-
Product Positioning
Pros & Cons
Consumer Reponse
Analysis
Final Recommendation
Organic Energy Drink
Break Even Analysis

24. DISCLAIMER
Created by Abhijeet Nasery, COEP,during Marketing Internship
by Prof Sameer Mathur, IIM Lucknow