HBR - Crescent Pure Case Analysis
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Harvard Business Review Case analysis for the internship under Prof. Sameer Mathur, IIM Lucknow.
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HBR - Crescent Pure Case Analysis
- 1. CRESCENT PURE CASE ANALYSIS
- 2. PORTLAND DRAKE BEVERAGES Organic juice and sparkling water makers $120.5 million Revenue MICHAEL BOOTH Runs PDB HIGH QUALITY AT AFFORDABLE PRICES IS THEIR CORE VALUE
- 3. Crescent pure Peter Hooper founded Crescent Pure in 2008 All natural organic juice delivering 80mg caffeine Sugar quotient was 70% lesser than sports & energy drinks retailed for $3.75 apiece
- 5. WHY?
- 6. PORTLAND DRAKE BEVERAGES(PDB) ACQUIRED CRESCENT PURE WITH AN AIM OF EXPANDING AND MAXIMIZING REVENUE soft launch in 3 states in January 2014 With an Advertising budget of $750,000 they wanted to define product positioning by 1st october, 2013
- 7. SCENARIO SARAH RYAN, MARKETING VP AT PDB NEEDS TO FINALIZE PRODUCT POSITIONING STRATEGY FOR CRESCENT PURE
- 8. Positioning options ENERGY DRINK SPORTS DRINK ORGANIC DRINK (ALTERNATIVE)
- 10. MARKET OVERVIEW ● $8.5 billion market growing at 40% YoY ● Top 4 brands occupied 85% market share ● highest consumers were Men of 18-24 years old ● Avg price for 8 ounce can - $2.99 ● Sales of energy drinks with low caffeine were rising in demand
- 11. COMPETITION POINTS OF PARITY POINTS OF DIFFERENCE - REFRESHING - IMPROVES MENTAL FOCUS - CAFFEINE - KILLS FATIGUE - HEALTHY - $2.75 VS $2.99 - EQUAL TO 1 COFFEE CUP - LOW SUGAR
- 12. SPORTS DRINK
- 13. MARKET OVERVIEW ● $7.5 billion market, Expected to grow to $9.58 billion in 2017 ● Top 2 brands occupied 94% market share ● highest Consumers were aged b/w 18-24 and b/w 12-17 ● Avg $1 to $2 for 12 & 14 ounce containers respectively ● Increasing demand for diet and low sugar sports drinks.
- 14. COMPETITION POINTS OF PARITY POINTS OF DIFFERENCE - HYDRATING - NUTRITIOUS - PERFORMANCE ENHANCING - GOOD TASTE - EXPENSIVE - LOW SUGAR - HEALTHIER - DIET
- 15. MARKET ANALYSIS
- 16. PERCEPTUAL MAP HYDRATION VS ENERGY
- 17. PERCEPTUAL MAP NUTRITION VS TASTE
- 18. Percentage of respondents who described Crescent Refreshing 35% Healthy 22% Affordable 29% Functional 47% Too sweet 9% Suitable for teens 8% Fun 19% Natural 38% Hydrating 29% Demographics of Crescent Online Customers 36% 15% 44% 3% 2% ANNUAL INCOME $42,000
- 19. ECONOMICS
- 20. area Amount Wholesale price PER can $1.24 Cost price PER can $1.02 Profit PER can $0.22 Number of cans PER case 24 Profit PER case $5.28 Production of number of cases PER month 12,000 Profit PER month $63,360 Profit PER year $760,320 Advertising costs $750,000 Net Profit $10,320
- 21. HOW SHOULD CRESCENT BE POSITIONED? ORGANIC ENERGY DRINK ● Consumers viewed “Energy” as Crescent’s most descriptive character ● Positioning Crescent as energy drink would reinforce existing perceptions from Oregon ● Contains healthy ingredients, low sugar, yet packs a punch – 80mg caffeine ● Crescent, as an organic energy drink IS a healthier alternative to OTHER energy drinks ● Energy drink market is growing at 40% ● wOULD MAKE A NATURAL EXTENSION OF WHAT PDB ALREADY STANDS FOR
- 22. DISCLAIMER CREATED BY VYSHAK K IYENGAR, RNSIT BANGALORE, DURING A MARKETING INTERNSHIP UNDER PROF.SAMEER MATHUR, IIM LUCKNOW