A presentation made on the analysis of a Havard Business School briefcase on- Crescent Pure, during a Marketing Management internship by Professor Sameer Mathur.
2. What is Crescent Pure?
• A non-alcoholic functional beverage.
• Combination of energy-enhancing, hydrating, and
all-organic ingredients.
• Refreshed, energized, and enhanced mental focus.
3. What is Portland Drake Beverages?
A MANUFACTURER OF ORGANIC JUICES
AND SPARKLING WATERS
4. Who are the Players?
• Sarah Ryan- vice president of marketing for Portland
Drake Beverages (PDB).
• Michael Booth- PDB’s CEO
• Peter Hooper- Founder of Crescent.
• Matt Levor- PDB’s director of market research.
6. Situation Analysis-1/3
1. Sarah Ryan, vice president of marketing for PDB had just a few weeks
to finalize a product-positioning strategy for Crescent Pure.
2. They have to decide weather Crescent Pure should be positioned as
an energy drink or a sports drink.
3. She is also wondered if Crescent positioned itself as organic
refreshment .
4. PDB was under pressure to define the product by October 1 in order
to negotiate with beverage distributors and retailers, and to hire
advertisers to develop ad campaigns in time for the January 2014
launch.
7. Situation Analysis-2/3
Ryan knew that booth wanted to hear-
1. Industry specifics related to each of the two
positioning options.
2. The potential benefits and drawbacks of each
option
3. Her final recommendation
8. Situation Analysis-3/3
U.S. beverage industry: Non-alcoholic :
1. Included water, dairy, juice, soda, and functional
beverages & was estimated to be $131 billion and was
projected to grow to $164 billion by 2018.
2. Market had suffered due to restrained consumer spending
during the economic recession, but the trend was slowly
reversing as the economy recovered.
10. PROBELMS
1. Production capacity constraints prevented PDB from
launching the drink nationally until early 2015.
2. PDB was under pressure to define the product
(Crescent Pure) by October 1 in order to negotiate
with beverage distributors and retailers, and to hire
advertisers to develop ad campaigns in time for the
January 2014 launch.
3. To find the required sales for PDB to breakeven on
2014 advertising expenditures of $750,000.
12. DECISIONS
Sarah Ryan,
• Had to decide a positioning strategy for Crescent Pure within the
time period of 6 weeks.
• Had to decide if PDB could exploit Crescent’s broad appeal with
positioning that focused on health, wellness, and natural
ingredients?
• Had to recommend an approach to identify possible distributors
and retail outlets and hire advertising firms.
• The drink’s positioning would influence where the product was
sold and, therefore, which distributors PDB would select.
13. EVALUATIION-1/2
Ryan agreed that Crescent’s product attributes could
support positioning in one of two functional beverage
categories:
Energy drinks or Sports drinks
14. EVALUATIION-2/2
• Thirty-four percent of the population said they
consumed an energy beverage in the last six
months; the projected market for energy drinks in
2013 is $8.5 billion
• In 2012, the market for sports drinks was $6.3
billion; 42% of sports beverage drinkers considered
sports drinks “anytime beverages”8 and did not
associate them only with exercise.
17. Market
size
Consumer
data
Competition Opportunit
y
Threats
1. The market
for energy
drinks was
growing
every year.
2. It was
estimated to
be $8.5
billion in
the United
States in
2013 .
3. It was
expected to
reach $13.5
billion by
1. The largest
group of energy-
drink consumers
were males
between ages 18
and 34,
including
parents of
children.
2. Highest volume
of energy drinks
was consumed
by respondents
with a
household
income below
$25,000 per
1. Together,
Fright, Razor,
Torque, and
Stellar
accounted for
85% of
category
revenue.
2. The
remaining
15% was split
between
roughly thirty
independent
regional and
national
producers.
1. Sales of
energy
drinks with
lower levels
of caffeine,
purer
ingredients
were rising
due to
consumer
demand for
healthier
food and
beverage
choices.
1. Consumers
were
becoming
more and
more about
the health
risks of
Energy
drinks.
Hence,
buying such
drinks less
frequently.
19. Market
size
Competition Threats Opportunity
1. Roughly
half of men
drank
sports
drinks,
while only a
third of
women did.
2. Sports
drinks
appealed to
younger
consumers
—62% of
those
between
ages 18 and
24, and
1. Gleam and Drip
had 73% and
21% market
share,
respectively.
The remaining
6% of market
share was split
fairly evenly
among roughly
20 producers.
1. Concern
regarding
rising
childhood
obesity rates
resulted in
government-
mandated
guidelines to
remove high-
calorie
sugary drinks
and snacks,
including
sports
drinks, from
school
vending
machines
1. New diet and low-sugar sports
drinks were growth areas for the
industry. Diet and low-sugar
sports beverages, which did not
exist before 2009, had grown by
33% between 2010 and 2012,
taking market share from
traditional sports drinks.17 The
market size for diet and low-
sugar sports drinks was expected
to increase from $1.4 billion in
2012 to $2.97 billion in 2017.
25. HYPOTHESIS-1/4
• From the consumer studies table we study that the
word of mouth is more in case of sports drinks.
• Health risks associated with sports drinks are less in
compared to energy drinks, which people lately have
started avoiding.
•Also, people find sports drinks more hydrating and
refreshing comparison to energy drinks.
26. HYPOTHESIS-2/4
• The more number of competitors in energy drinks
market will be a tough challenge for PDB to out-edge
them, knowing that they all are pre-established.
• While number of such competitors is less in the sports
drinks market.
• The opportunities in sports drinks market are great
while it is declining for the energy drinks due to health
risks associated.
28. • Crescent’s hydrating elements, paired with the mental
focus and energy boost, can enhance athletic performance.
• It can also stave off post-workout fatigue if consumed
after exercise.
• Perhaps Crescent’s low sugar content and all-natural
ingredients can appeal to health-conscious consumers
seeking healthier “anytime” beverages that are free from
artificial ingredients and sweeteners.
32. HYPOTHESIS-4/4
• We did notice the positive values of Crescent as an
energy drink and as a sports drink. But, there’s a lot
that comes with it.
• One thing that is common in both; serving Crescent
as an energy drink or as a sports drink is, the
natural ingredients it is comprised of.
• By limiting its positioning to just one or two of
these attributes, PDB might risk excluding
additional, lucrative customer segments.
37. • Being a all new beverage and coming out in market as an organic
beverage, it will attain great consumer attention because of its
supernova qualities and being something new.
• A great shift towards it will be seen because of it’s natural ingredients
and values.
• Hence, the product can be marketed in a ad budget of $750,000.
• Because of a great history of Crescent so far, retailers and distributors
will also show interest towards the product as they’ll be getting good
margin and safety from the declining markets of energy drinks/sports
drinks because of people getting concerned about their health.
Why the product will
succeed?
40. Analysis-1
• Crescent’s retail price = $2.75
• Variable costs for Crescent were $1.02 per
can; PDB’s wholesale price to distributors was
$29.76 per case (or $1.24 per can).
• PDB’s production of Crescent to 12,000 cases
per month in 2014.
41. Analysis-2
• .26*12000*24= total earnings of PDB
=$63,630 if they manage to sell all 12000 cases they produce
• For 12 months, the earning would be
63,630*12=760,320 if they sell all that they produce.
• Money spent on ad=750,000
• Net income=$9,680 only.
Total cases= 12000*12=144,000 and income $9680
for breakeven we need to reduce 9680/6.24=1551 cases.
Hence, for breakeven, PDB needs to manufacture only
142,449 cases
43. As mentioned and analyzed earlier, if
this hypothesis turns to be wrong then,
then the better alternative to position
Crescent Pure is to position it as a
Sports Drink.
44.
45. Created by Manik Kapoor, NSIT Delhi, during a
Marketing Internship by Prof. Sameer Mathur
