This document discusses options for positioning a new beverage, Crescent, in the market. It provides details on Portland Drake Beverages' proposal to manufacture and distribute Crescent as either an energy drink or sports drink. The vice president, Sarah Ryan, is evaluating the industry specifics and potential benefits and drawbacks of each positioning option to make a final recommendation. The document includes market research on energy drinks and sports drinks, as well as a financial analysis of Portland Drake Beverages' manufacturing and distribution proposal for Crescent.

1. Crescent Pure

2. Portland Drake Beverages(PDB)
Sarah Ryan
(Vice President)
Michael Booth
(CEO)
2012
revenue
$
120.5m

3. Crescent
LOCAVORE PETER HOOPER

4. Portland Drake
Beverages (PDB)
Crescent
Energy drink Sports drink

5. Target by Portland Drake Beverages(PDB) for
Crescent
• 12000
cases/month
• $ 2.75
per can
• Advertising
$750,000

6. Questions
• Industry specifics related to each of the two
positioning options
• the potential benefits and drawbacks of each
option
• Ryan final recommendation

7. Industry specifics related to each of the two
positioning options
U.S. BEVERAGE INDUSTRY - NON ALCHOLIC
PRICEINBILLION
$0.00
$42.50
$85.00
$127.50
$170.00
YEAR
2013 2018
$131
$164

8. Market Research
Energy Drink Sport Drink
Can price $2.99 - 8oz $1 - 12oz
Population 34% 42%
Market 2013- 8.5 billion 2012- 6.3 billion
Gender male 18-24
1/2 of male and 1/3
of women

9. Benefits
Energy Drink Sport Drink
In Demand
Expected $1.4 billion - 2014 to
$2.97 - 2017 billon
Large per unit cost with lesser
customer group
Lesser per unit cost with larger
customer group

10. Drawbacks
Energy Drink Sport Drink
Health risks Childhood Obesity
Consumption reducing
Decrease in market - removal
from vending machines

11. Ryan final recommendation
THIRD POSITIONING
HEALTHY AND ORGANIC

12. Advertising
CRESCENT PDBENERGY ORGANIC

13. Crescent current market
• 200 retail
outlets
• 1000 cases
per month
• $3.75 for an
ounce can

14. PDB price set for Crescent
• Variable cost
$1.02
• 12000 cases
per month-
Each case 24
cans
• $2.75 for an
ounce can

15. MANUFACTURER
DISTRIBUTOR
RETAILER
25%
40%

16. FIXED COST
Distributor cost $34000
Advertisement $750000
TOTAL $784,000

17. VARIABLE COST
Manufacture Distributor Retail
Maximum
price
$1.696 $2.12 $2.98
Current price $0.992 $1.24 $1.736
Average price $1.334 $1.66 $2.33

18. REVENUE FOR ONE MONTH
CANS PER MONTH
MANUFACTURE
PRICE
TOTAL
REVENUE 12000(cases)*24=288000 $1.334 $384192

19. BREAK EVEN ANALYSIS
FIXED COST
MANUFACTURE
PRICE
VARIABLE
COST(ASSUMPTION)
TOTAL
MARGIN 784000 $1.334 $0.80 $0.544
BREAK EVEN ANALYSIS = Should sell 1441177 cans = 4 months (appro)

20. DISCLAIMER
Created by Abilash
Rajasekaran, during the
marketing internship by Prof.
Sameer Mathur, IIM Lucknow