Michael Booth, CEO of Portland Drake Beverages, tasked Sarah Ryan with recommending a positioning strategy for Crescent Pure, which PDB recently acquired. Ryan was to consider positioning Crescent as an energy drink, sports drink, or healthy organic drink. She conducted market research on each option. Ryan's recommendation was to position Crescent as an organic energy drink. This was seen as the most suitable option as the energy drink market was growing rapidly, Crescent could offer a healthier alternative at a lower price than competitors, and it could be the first organic energy drink. A break-even analysis also showed PDB could profitably produce and sell Crescent at its current production capacity under this positioning.

1. CRESCENT PURE
Harvard Business Case Study

2. Portland Drake Beverages
• Manufacturer of organic juices and sparkling water
• Revenue: $120.5m by 2012
• Features: Quality and Affordability

3. Portland Drake Beverages
acquired
Crescent Pure

4. Michael Booth, PDB’s CEO, had tasked Sarah
Ryan, vice president of marketing for PDB, with
evaluating the positioning opportunities for
Crescent and asked her to recommend a
positioning strategy to the executive team.

5. How to position Crescent ‘s drink

6. ENERGY DRINK
SPORTS DRINK
HEALTHY
ORGANIC DRINK

7. Ryan knew that Booth wanted to hear:
(Objectives)
• Industry specifics related to each of the positioning options
• Potential benefits and drawbacks of each option
• Final recommendation

8. Market
Research

9. Percentage of respondents who indicated a word that
described energy or sports drinks:
Note: Respondents could assign multiple descriptors

10. Demographics of Crescent online consumers
Note: Respondents could assign multiple descriptors

11. Percentage of respondents who described
Crescent
Note: Respondents could assign multiple descriptors

13. • 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.
• Major consumers were males between ages 18 and 34 only.
• Together, Fright, Razor, Torque, and Stellar accounted for 85% of category revenue
• The remaining 15% was split between roughly between others.
• Sales of energy drinks with lower levels of caffeine and purer ingredients were rising
due to consumer demand for healthier food and beverage choices.
• News stories were highlighting the drinks’ alleged health risks.
THREATS (–)
STRENGTHS (+)
WEAKNESSES (–)
OPPORTUNITIES (+)
Energy Drink

14. • Considered as anytime drink
• Large base.
• Gleam and Drip had 73% and 21% market share
• The remaining 15% was split between roughly between others.
• Cheap pricing of other sport drinks.
• New diet and low-sugar sports drinks were growth areas for the industry.
• Concern regarding rising childhood obesity rates.
THREATS (–)
STRENGTHS (+)
WEAKNESSES (–)
OPPORTUNITIES (+)
Sports Drink

15. • Its an emerging market.
• The market is not segmented.
• Healthier drinks are gaining popularity.
• Appealing to broader segment increases advertising budget.
THREATS (–)
STRENGTHS (+)
WEAKNESSES (–)
OPPORTUNITIES (+)
Healthy Organic Drink

16. INFERENCE
• Crescent’s drink share more similarity in consumers’ descriptives with
sports drinks.
• But the competitors are offering the sports drinks at much lesser
price than Crescent.
• Thus Crescent may not be able to sell its drink at premium price
successfully in sports drink category.

18. Positioning Crescent as organic energy drink is
most suitable from the analysis.
• Lower price than its competitors helps in easy penetration.
• People are looking towards healthier alternatives.
• Market is growing rapidly
• Being the first energy drink which is organic.

19. BREAK-EVEN ANALYSIS

20. Can PDB break-even with its production
capacity?
• PDB can produce 12,000 cases per month i.e 144,000 cases annually.
• Variable cost to manufacturer per case is $24.48
• Manufacturer’s price to distributors is $29.76
• Manufacture margin is $5.28
• Advertising budget $750,000
• To break-even the company has to sell 142,045.45 cases which is less
than the company’s production capacity.
• If the company sells all the cases it produced it’ll end up with a profit
of $10,320.024

21. DISCLAIMER:
Created by Shivanand Reddy, MEC Hyderabad, during a
marketing internship by Prof. Sameer Mathur, IIM Lucknow.