Case Study Analysis

1. Crescent Pure: Case Analysis

2. The Situation:

3. • Portland Drake Beverages, a manufacturer of organic drinks and sparklingwaters acquired
Crescent in 2013.
• Crescent Pure (Crescent) wasa non alcoholicfunctional beverage which contained all
organic ingredients which resonated with PDB’s product line.
• PDB’s production capacity prevented it from makinga nationallike allbig competitors.

4. • They decided to embark on a ‘soft launch’ in three western stated in early 2014
• Sarah Ryan, VP of marketing at PDB asked to finalize the product positioning strategy for
Crescent Pure.
• PDB looking to maximize their revenue.

5. The Dilemma:

6. • Ryan presented with short period of time to finalizethe target market for the beverage.
• Ryan presented with two positioning options:
 The drink’s energizing ingredients supported an energy-drink positioning.
 While some thought that drink’s hydrating elements favoured a sports drink positioning.
• Ryan, while wondered whether positioning focusing on the drink’s healthy and organic roots
would make more sense.

7. About Crescent Pure:
• Uses Organiccertified ingredients in thedrink.
• Naturalbeverageinfusedwithorganicjuices andherbalingredients.
• 70%less sugarcontentandmadeofcane sugar.
• Containssamelevel ofcaffeineasa cupof coffee.

8. Crescent as a Sports Drink:
Pros:
• Dominant Age group: 12-24.
• Low content of caffeine asUSP.
• People preferring healthier
alternatives.
• Increase in market expected in
coming years
Cons:
• 94% of market share with two big
players.
• Negative media publicity over obesity
risks.
• Crescent will have to make a casefor
their premium price in the segment.

9. Crescent as an Energy Drink:
Pros:
• Dominant Age Group: 18-24
• It’s caffeine content helps in making
more energetic.
• 42% consumers consider it as an ‘any
time beverage’.
• Market to grow very significantlyin
coming years.
Cons:
• Negative media attention to the
market.
• Big players control 84% of the
market share.
• Difficult to introduce a new
product.

10. Crescent as an Organic Drink:
Pros:
• A new and emerging Market.
• People ready to pay premium
price for products.
• Nomajor competitor.
Cons:
• Broader consumer base due to
which more budget required.
• More distributors needed.

11. Consumer Data and Survey
Results:

12. Percentage of
respondents who
indicated a word
that described
energy or sports
drink:
Energy Drinks0
10
20
30
40
50
60
Chart Title
Energy Drinks Sports Drinks

13. Demographics of Crescent online consumers:
Age Group of Crescent OnlineConsumers:
18-24 25-34 35-44 45-54 55+
Gender of Crescent OnlineConsumers
Male Female
62%of consumershadacollege degree.
Median incomeofconsumerswere$42500.

14. Perceptual Maps:
Hydration vs. Energy Nutritionvs. Taste

15. Conclusion:
• Positioning as anOrganic Drinkwhile
providing a broader marketbase would also
requireveryhigh budget for marketing.
• Positioning as a Sports Drink would result ina
verypremiumdrinkwhile its uncertainthat
whetherCrescent Pure can makea case for it or
not.
• Positioning as anEnergyDrinkwould keepthe
product at a verycompetitive price and would
result in largersales as marketis also growing.
Therefore,Crescent Pureshould bepositioned as
an EnergyDrink.

16. Breakeven Analysis:
• No. of cans ina case – 24
• Production price for a case – 1.02*24= $24.48.
• Selling Price of a case – 1.24*24= $29.76.
• Profit per case -$5.28.

17. Breakeven Analysis:
• Production capacity per month – 12000cases.
• Total cost – $750,000.
• No of cases to besold to breakeven – 750,000/5.28=
142045.45
• Annualcapacity – 144000cases.

18. Breakeven Analysis:
• Surplus capacity – 144,000– 142046= 1954cases.
• Profit Annually– $10,318.

19. Disclaimer:
• CreatedbyVarshitKumar,IIT Bombay,duringamarketing
internshipunderProf.SameerMathur,IIM Lucknow.