Harvard Business School Case

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3. To develop a successful marketing strategy
using:
1. Customer Segmentation
2. Product Differentiation Strategy
3. Evaluation of perceptual maps
The data used has been carried out by the
market research wing of P.D.B.
HARVARD BUSINESS SCHOOL CASE

4. Crescent Pure is a Non Alcoholic
Beverage Acquired by Portland
Drake Beverages
HARVARD BUSINESS SCHOOL CASE

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Crescent was a non-alcoholic functional beverage
All natural organic juice infused with herbal
stimulants, delivered 80mg caffeine
Sugar quotient was 70% lesser than sports and
energy drinks on average
Sold 1,000 cases per month. 8-ounce can retailed
for $3.75 apiece
Sold out before inventory was replenished, sold
out even when retailers hiked prices by 25%
The drink’s combination of energy-enhancing,
hydrating, and all-organic ingredients made it a
natural extension for PDB’s existing organic product
lines.

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db)
Manufacturer of organic juices and sparkling
water
Revenues hit $120.5 million in 2012
Part of the $131 billion beverage industry
Wanted to expand into the functional beverage
(sports and energy) sector through acquisition
Acquired Crescent in July 2013
CEO of PDB, Michael Booth entrusted Sarah
Ryan, VP of Marketing with the brand positioning
of Crescent.

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PDB planned to embark on a “soft
launch” of Crescent in 3 western states
(California, Oregon, and Washington) in
January 2014. PDB projected that these
states represented 15% of national
functional beverage demand.

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PDB planned to spend $750,000 on advertising
for Crescent in 2014 and used that figure as a
benchmark earnings goal. If 2014 profits met or
exceeded the goal, PDB would fund Crescent’s
national expansion in 2015.

9. In 2013, the non-alcoholic beverage market—which
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 This
market had suffered due to restrained consumer
spending during the economic recession, but the
trend was slowly reversing as the economy recovered.
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Beverage Distribution in the US Market

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Peter Hooper founded CrescentPure
in 2008
Product demandgrew inCrescent
andOregon
Michael Booth,CEO of Portland
Drake Beverages (PDB) acquired
Crescent Pure in July, 2013
MichaelBooth

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Crescent acquisition by PDB Beverages
With consumer demand for organic food and beverage products rising, PDB’s
revenues had increased to $120.5 million by 2012. Booth felt it important to expand
PDB’s trusted and popular suite of organic products; he knew that functional
beverages—specifically energy and low-calorie sports drinks—were rapidly growing
segments, and sought to expand into these areas through acquisitions. Short-term
production capacity restraints limited PDB’s production of Crescent to 12,000 cases
per month in 2014. PDB management decided that Crescent’s retail price would be
$2.75, or 27% below the drink’s original selling price.

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Crescent: Ingredients and packaging

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Crescent Pure bought by PDB.
Sarah Ryan has to develop a
positioning strategy for Crescent.
She has to choose between
Energy drink, Sports Drink or a
healthy organic drink positioning
Crescent was a non-alcoholic
functional beverage

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MARKET POSITIONING

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ENERGY DRINK POSITIONING
Pros
Projected market -$8.5 billion, growing at
40%, to reach $13.5 billion by 2018
Uniqueness ( Less sugar more Caffeine)
Enthusiastic consumers – Men of 18-24
years old
Consumers viewed “energy” as crescent’s
most descriptive characteristic.
Sales of energy drinks with lower levels of
caffeine and purer ingredients rising due
to demand for healthier drinks
Cons
Negative marketing leads to health risks
Competitors-85% not much wiggle room for
new
Only 32% of consumers had an energy drink in
past 6 months
Question on company’s ability to deliver
healthy, organic product for just $2.75
11% of them decreased consumption due to
health risks

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SPORTS DRINK POSITIONING
Pros
Market revenue -$7.5 billion
Expected to grow to $9.58 billion in 2017
Attracted a wider consumer base than
energy drinks
42% sports beverage drinkers have sports
drinks as “anytime beverages”; not only for
exercise
Hydrating elements + Mental focus + energy
boosters = Very attractive drink
Market size for diet sports drinks expected to
increase from $1.4 to $2.97 billion in 2017
Cons
Government mandated guidelines to
remove sports drink from school vending
machines; courtesy high calorie.
Negative marketing – Childhood obesity.
Top 2 brands occupied 94% market
share.
Slowing market – increased only by 9%
between 2007 and 2012
Avg $1 to $2 for 12 & 14 ounce
containers respectively
Similar drinks in the market

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STATISTICAL ANALYSIS

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Map of sports and energy drinks w.r.t. hydration vs energy

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Map of sports and energy drinks w.r.t. nutrition vs energy

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A third possible positioning strategy would be
the Organic Market. Crescent’s focusing on the
drink’s healthy and organic roots would attract
the most consumers.

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Pros
Capitalize on growth of organic food and
beverage industry
More premium price for focus on quality
ingredients and target customers
Command a premium pricing (25% more
than conventional beverages)
Focus is one quality ingredients. Hence
target consumers who are willing to pay
more for quality
Cons
Focusing on health attributes only,
might lose important customer
segments
Sole focus on health and quality - lose
out on other important customer
segments
Appeal to wide range of customers not
feasible on $750,000 budget
Critical time for “soft launch”
execution of marketing strategy
ORGANIC DRINK POSITIONING

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CONSUMER STUDY OF CRESCENT

27. Percentage of respondents who indicated a word
that described energy or sports drinks
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RETAILER FEEDBACK
Levor contacted ten large Portland-area retailers
that carried Crescent. Retailers indicated that their
inventory of Crescent depleted quickly; some had
increased the price by 25%, and still sold out before
inventory was replenished. Crescent appeared to be
most popular among consumers aged 18 to 30, and
retailers indicated that a higher percentage of
women purchased Crescent than they expected.
Younger men often purchased six or more cans at a
time.

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CUSTOMER FEEDBACK
Taste appeals to most consumers
Only 25% remained concerned about lower
amount of caffeine
Perceived well as a healthy alternative to energy
drinks
Good taste, healthy ingredients and slight pick-
me-up : consumer thumbs up.

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RECOMMENDATION
I would recommend to position Crescent Pure as an Organic Energy drink in
consideration of the following
1.Consumers viewed “Energy” as Crescent’s most descriptive character
2.Contains healthy ingredients, low sugar, yet packs a punch – 80mg caffeine
3.Crescent, as an organic energy drink can be a healthier alternative to these
energy drinks
Advantages :
1. Average pricing of energy drinks are $2.99 per 8 ounce can. Crescent, at
$2.75 is a cheaper and lucrative option
2.Can make inroads into the organic drink market by brand extension

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SUMMARY
What is crescent pure
About crescent pure
About PDB
Beverage dist. In US
Crescent acquisition by PDB Beverages Crescent ingredients and packaging Market Positioning
Statistical Analysis

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DISCLAIMER
Created by Vaishnav Shankar , a student studying at Manipal Institute of Technology
during a marketing internship under Prof. Sameer Mathur, IIM – Lucknow.