harvard case study Crescent Pure

1. A Harvard Business School Case Study

2.  Crescent Pure
 PDB(Portland Drake Beverages)

3. Sarah Ryan
Michael Booth
Matt Levor
Vice-President ( Marketing) , PDB
CEO, PDB
Director of Market Research,
PDB

4.  Michael Booth, PDB’s CEO has tasked Sarah Ryan with
evaluating possible positioning strategies for the launch
Crescent Pure (newly purchased by PDB) .
 Sarah has to evaluate 3 possible positioning of Crescent -
Sports drink, Energy drink or Organic drink and give her
recommendation.

5. The BIG Picture
 PDB core values : Quality, Affordable organic
beverages.
 In order to beat its competitors , PDB is planning a
‘soft’ launch of Crescent Pure in 3 states , to prepare
for the major launch next year.
 It has set a target of $750,000 in revenues to
consider Crescent Pure a success.

6. Possible Positioning Options
Energy Drink Sports Drink
Organic
Drink

7. Market Analysis – Energy Drinks
THREATS
Alleged health risks,
reduced consumption
OPPORTUNITIES
Consumers want low
caffeine and more
natural ingredients
COMPETITION
Razor, Fright,
Torque and Stellar
hold 85% share
MARKET SIZE
Estimated worth $13.5 billion by 2018.
Majority consumers in ages 18-34

8. Market Analysis – Sports Drinks
THREATS
High sugar content,
concerns regarding
obesity
OPPORTUNITIES
Newly launched low-
sugar and diet drinks
have gained customers
COMPETITION
Gleam and Drip hold
about 90%of market
share
MARKET SIZE
Expected to reach
$9.58 billion by 2017

9. Market Analysis – Organic Drinks
THREATS
Low advertising spend will
cause lack of brand
recognition
OPPORTUNITIES
Consumers have become
health-conscious, embrace
organic drinks
COMPETITION
No major brands in
competition currently,
nascent segment.

10. Crescent Pure vs. Energy Drinks
Points of Parity
• Refreshing
• Energizing
• Caffeine content
• Kills fatigue
Points of
Difference
• Organic
• Low Sugar
• $2.75 vs $2.99

11. Crescent Pure vs. Sports Drinks
Points of Parity
• High Nutritional value
• Keep Hydrated
• Enhance Performance
Points of Difference
• Low Sugar
• Healthy alternative

12. Consumer Analysis

16. Recommendation
 Crescent Pure should be positioned as an Organic,
healthy sport drink to capture a much wider
market ( ages 18-60) .
 This will help the company avoid competition in
Energy and Sports drinks segments and capitalise on
its reputation of being organic and healthy.

17. Break-even Analysis

18.  Variable cost of 1 can is $1.02 . After applying a margin profit of 18%,
prize per can to the distributor will be $1.24
 This implies a net margin of (1.24 – 1.02) = $0.22 profit per can .
 Company’s production = 12,000 cases per month.
 Net Revenue : 0.22*24*12*1200 = $760320 , in one year .
 Net Profit = Net revenue- Advertising budget = 760320- 75000
=$10,320
The analysis shows that PDB will be able to break even in
the given time and turn a profit of $10,320

19. Summary
 Companies Involved
 Characters Involved
 Situational Analysis
 Possible product positioning options – Energy
drinks, Sports drinks, Organic drinks
 Consumer Analysis
 Recommendation
 Break-even Analysis

20. Disclaimer
Created by Abhishek Parashar
(HBTI K )
During a marketing
management internship under
Prof. Sameer Mathur
IIM Lucknow