Marketing case study

1. Crescent Pure

3. Crescent :
A non-alcoholic organic functional beverage
Sarah Ryan:
Vice president of marketing at PDB
Portland Drake Beverages(PDB):
A manufacturer of organic juices and sparkling water
Michael Booth:
CEO of PDB
Matt Levor:
Director of Market Research at PDB

5. Questions faced by Sarah
 Which brand positioning option will maximise
Crescent’s revenue?
 What are the industry specifics on these two brand
positions?
 What are the drawbacks and benefits of each
strategies?
 How to approach the market?

7. Situation Analysis
 PDB has acquired Crescent Pure in July 2013
 PDB to “soft launch” the product in three western
states in January 2014
 Management disagreed about two viable positioning
strategies-As an energy drink or as a sports drink.
 PDB set $75,000 as benchmark earning goal
 Sarah Ryan in charge of brand positioning for its new
acquisition

8. Data available on US Beverage
industry and its distribution
 In 2013,non alcoholic beverage market estimated to be
$131 billion and projected to grow 10 $164 billion by
2018.
 Manufacturers retained distributors for getting
products to retail shops.
 Distributors maintained relationships with retailers.
 Distributors added average 0f 25% margin to products.
 Retailers added 40% margin to products purchased
from distributors.

9. Crescent Pure’s History
 Founded by Peter Hooper in Crescent,Oregon in 2008.
 Beverage had half the energy and 70% less sugar than
the leading energy beverages(Fright and Razor).
 Benefitted from launching the product in Oregon
where sales of local products are supported.
 Distribution included 200 retail shops and was selling
at 100o cases per month.
 It retailed at $3.75 for an 8 ounce can.

10. Acquisition by PDB and future
 PDB CEO Booth thought that new companies steal
market share in the functional beverages market. So,
he acquired Crescent to expand its business.
 Due to short term production capacity restraints had
to limit to 12000 cases per month in 2014.
 Set price to $2.75 (27% less than original price)to
reflect on its pricing strategy of its other products.
 PDB used only three distributors for its West coast
strategy in 2014 due to limited production.

11.  Booth estimated that monthly cost of distributors
would average $34,000 in its first year.
 The drink’s positioning would influence the choice of
distributors.

13. Energy drinks
 This would reinforce existing perceptions in Oregon
 Projected price $2.75 is less than the average price
$2.99.
 Target enthusiastic consumers aged 18 to 24.
 Crescent healthier alternative to leading products.
 Negative media attention to energy drinks has reduced
consumers.

14. Sports drinks
 Market for sports drinks was $6.3 billion
 Drinkers considered them as “anytime beverages”
 They come in various sizes.
 Average $1 to $2 for 12 ounce and 24 ounce containers.
 Crescent’s price higher than other sports drinks and
should be positioned for its premium price.
 Health conscious customer will turn to Crescent due to
its organic contents

15. Comparison between Markets of
Sports drinks and Energy drinks
 Market size:
Market size has grown by a large percentage for energy
drink than sports drink in 2007 to 2012. Market size of
energy drink was also large for energy drink and it is
predicted that it will grow bigger.
 Consumer data:
Both products were favored more by men. Most of the
consumers of energy drink are men aged 18 to 34,while for
sports drinks age was from 12 to 24.Women didn’t find
sports drink as refreshing as what men found.

16.  Competition
Energy drinks faced more competition than sports
drinks
 Opportunity
Crescent’s low caffeine content will favor in energy
drinks and its low sugar will favor in sports drinks.
 Threats
Energy drinks consumers were concerned about the
health risks involved and sports drinks consumers were
concerned about obesity due to the high sugar contents.

17. Consumer study of energy drinks
and sports drinks
Percentage of respondents who indicated a word that described
energy or sports drinks
Energy Drinks Sports Drinks
 Refreshing 12% 34%
 Healthy 6% 16%
 Affordable 5% 11%
 Functional 22% 28%
 Too sweet 9% 8%
 Suitable for Teens 7% 22%
 Fun 9% 11%
 Natural 4% 6%
 Hydrating 11% 49%
 None of these 52% 27%

18. Consumer study of Crescent
Percentage of respondents who described Crescent
Descriptor
 Refreshing 35%
 Healthy 22%
 Affordable 29%
 Functional 47%
 Too sweet 9%
 Suitable for teens 8%
 Fun 19%
 Natural 38%
 Hydrating 29%

19. Alternate strategy
Crescent can be positioned as an organic
beverage for the health conscious consumers who were
regular buyers of organic products and their ages were
also more varied and this requires a broader approach
and may require a bigger media campaign which requires
more budget.
But, positioning as a energy drink is the ideal strategy as the
industry is growing and consumers like its Crescent as a
low cost energy drink.