Created by Anurag Palaparthi, CBIT Hyderabad, during a marketing internship by Prof. Sameer Mathur, IIM Lucknow.

1. CRESCENT PURE
A Harvard Business
School Case Analysis
-Anurag Palaparthi

2. Portland Drake Beverages
Bagged $120.5 m revenue by 2012
Values-To deliver quality organic products at affordable prices
Manufacturer of organic juices and sparkling water

3. Crescent Pure
Organic, all natural beverage lightly infused with organic juices, herbal stimulants and electrolytes.
Crescent’s sugar quotient was 70% less than leading energy and sports drinks, on average.
Delivers 80 milligrams of caffeine, roughly the same amount of “energy effect” as a cup of coffee and 50% of
the energy contained in a similar serving of the two leading energy beverages on the market, Fright and
Razor
Company sells 1000 cases per month at $3.75 for an 8-ounce can.
Peter Hooper found Crescent Pure in 2008.

4. Crescent acquisition by PDB Beverages
With consumer demand for organic food and beverage products rising, PDB felt that it is important to expand its
trusted and popular suite of organic products and decided to expand through acquisitions.
PDB thought it could leverage its manufacturing facility, organic suppliers and distributor relationships to expand
Crescent’s presence in states geographically adjacent to Oregon and then nationally.
After months of research and negotiations, PDB acquired Crescent .

5. Situation
Sarah Ryan, vice
president of marketing
for Portland Drake
Beverages has to
finalize a product
positioning strategy for
its recent acquisition
Crescent Pure by
September.
PDB planned to spend
$750,000 on
advertising for
Crescent in 2014 and
used that figure as a
benchmark earnings
goal. If 2014 profits
meet or exceed the
goal, PDB would fund
Crescent’s national
expansion in 2015.
Production constraints
prevented PDB from
launching in 2015
instead it planned to
embark a “Soft
Launch” in 2014 with
production of 12000
cases per month at
$2.75 per can.

6. Questions

7. How should the product be positioned?
Energy Drink
Positioning
Sports Drink
Positioning Organic Drink
Positioning
Alternatives?

8. What are the Market
trends ?
Increase in demand for drinks
with low caffeine and sugar
Organic industry emerging
and growing rapidly
Launch of organic drinks by
market leaders in 2015

10. Market Research - Energy Drinks
• Between 2010 and 2012, the market for energy drinks had grown by 40%. It was
estimated to be $8.5 billion in the United States in 2013; forecasts projected that
figure to reach $13.5 billion by 2018.
Pros
• Average price of an 8-ounce can is $2.99 which is 8.7%
more that Crescent’s retail price $2.75.
• Sales of energy drinks with lower levels of caffeine and purer
ingredients were rising due to consumer demand for
healthier food and beverage choices.
Cons
• 32% of consumers over 18 drank an energy drink in the last
six months, 11% of whom were drinking fewer energy drinks
than they had a year earlier, due to concerns about health
and safety.
• Top 4 brands occupy 85% of the market share.

11. Market Research - Sports Drinks
• 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.
Pros
• Sports drinks attract wider customer base than Energy
drinks does.
• New diet and low-sugar sports drinks were growth areas for
the industry and its market size was expected to increase
from $1.4 billion in 2012 to $2.97 billion in 2017.
Cons
• Sports drinks come in a variety of sizes and average $1.00 to
$2.00 for 12-oz. and 24-oz. containers, respectively which
make Crescent’s 8-ounce can at $2.75 a premium product.
• Top 2 brands occupy 94% of the market share.

12. Crescent Pure – Consumer
Survey

13. Retailer Feedback
• 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.
Focus Group Feedback
• Crescent’s taste appealed to most of the consumers. And
there were no unfavourable reactions .
• Older consumers liked Crescent as a healthy alternative to
high-calorie, sugary energy drinks, while some younger
consumers noted that Crescent had less energy than they
had hoped.
• Several consumers said that Crescent was exactly what they
wanted in a beverage which reflected their focus on health
and wellness, and transcended a specific age or
demographic profile.
• Most were happily surprised when they got to know the
price of the product, but some questioned PDB’s ability to
deliver quality organic ingredients at $2.75.

14. Demographics – Crescent Pure
Age Range
18-24 44%
25-34 36%
35-44 15%
45-54 3%
55+ 2%
Male
59%
Female
41%
• College Degree holders – 62%
• Median Household income - $42,400

15. Perceptual Map
Hydration vs Energy
Perceptual Map
Hydration vs Energy

16. Customer perception-Energy vs Sports vs
Crescent
12
6 5
22
9
7
9
4
11
34
16
11
28
8
22
11
6
49
35
22
29
47
9 8
19
38
29
0
10
20
30
40
50
60
Refreshing Healthy Affordable Functional Too Sweet Suitable fpr teens Fun Natural Hydrating
Chart Title
Energy Drinks Sports Drinks Crescent Pure

17. How is Crescent different
from existing drinks ?

18. Points of Difference
Healthier
alternative to
existing energy
and sports drinks
Less expensive
compared to
existing energy
drinks
Low Sugar and
low caffeine
content
Certified Organic
product

19. Final positioning strategy
PROOF
• Energy drinks market is large and growing at 40%
where customers are looking for healthier alternatives
like Crescent Pure.
• $2.75 per 8 ounce can makes it affordable for everyone
in Energy drinks market whereas it will be a premium
product in Sports drinks market since price of 12 and
24 ounce cans ranges from $1 to $2
• This positioning reinforces the existing customer
perception about PDB and Crescent Pure as Organic
and Natural drinks.
Energy
Drink
Organic
Drink
Organic
Energy
Drink

20. Cost Area Amount
Variable Cost / can $1.02
PDB’s whole sale price / case $29.76
PDB’s whole sale price / can $1.24
Number of cans / case 24
Profit / can $0.22
Profit / case $5.28
Number of cases produced / month 12000
Profit / month $63,360
Profit / year $760,320
Advertising Costs $750,000
Net Profit $10,320
Can this positioning achieve break even ?

21. DISCLAIMER
Created by Anurag Palaparthi, CBIT Hyderabad, during a marketing
internship by Prof. Sameer Mathur, IIM Lucknow.