The VP of marketing for PDB is deciding how to position Crescent Pure. There are two options - as an energy drink or sports drink. Market research shows the energy drink market is larger and growing faster. While sports drinks have less competition, their market is smaller. Perceptual maps also indicate Crescent could gain market share by positioning as a healthier energy drink. After analyzing customer segments, differentiation strategies, and perceptual maps, the document recommends positioning Crescent as an energy drink to target the larger, faster growing market.

1. CRESCENT PURE
Analyzing Crescent’s Product Positioning
at P.D.B (A Specialty Beverage Company)
HARVARD BUSINESS SCHOOL CASE
-By Chinmaya Lovekar, MIT Manipal

2. PDB BACKSTORY
• Portland Drake Beverages (PDB) is a manufacturer of organic juices
and sparkling waters.
• PDB acquired Crescent in July 2013.
• The drink’s combination of energy-enhancing, hydrating, and all-
organic ingredients made it a natural extension for PDB’s existing
organic product lines.

3. • The vice president of marketing, Sarah Ryans
is working on the product-positioning
strategy for Crescent Pure
• She has just a few weeks to finalize her
decision.

4. Before we see what the
dilemma seems to be let’s look
at some history..

5. • Peter Hooper, a native of Crescent,
Oregon, saw a market opportunity for
a healthy, energizing drink.
• He found popular energy and
performance-enhancing drinks
unhealthy, too sweet, and artificial.
• He experimented, and crafted an
organic, all-natural beverage lightly
infused with organic juices, herbal
stimulants, and electrolytes.

6. PDB Acquires Crescent..
Booth, the CEO of PDB felt it important to expand PDB’s trusted and
popular suite of organic products; he knew that functional beverages—
specifically energy and low-calorie sports drinks—were rapidly growing
segments, and sought to expand into these areas through acquisitions.
PDB thought it could leverage its manufacturing facility, organic
suppliers, and distributor relationships to expand Crescent’s presence
geographically only if the drink performed well in the market for a year.

7. Situational Analysis
Before selecting and negotiating with distributors, PDB needed to
determine the most effective positioning for Crescent. The drink’s
positioning would influence where the product was sold and, therefore,
which distributors PDB would select.
There were initially two viable positioning strategies which would
maximize Crescent’s revenues. Some felt the drink’s energizing
ingredients supported an energy-drink positioning, while others felt
that due to the drink’s hydrating elements, a sports-drink positioning
made more sense.

8. A third possible positioning strategy would be to place
Crescent focusing on the drink’s healthy and organic roots
would attract the most consumers.

9. Objective of the Case
To develop a successful marketing strategy using:
1. Customer Segmentation
2. Product Differentiation Strategy
3. Evaluation of perceptual maps
The data used has been carried out by the market research wing of
P.D.B.

10. Customer Segmentation
Customer segmentation is the practice of dividing a customer base into
groups of individuals that are similar in specific ways relevant to
marketing, such as age, gender, interests and spending habits.

11. Product Differentiation Analysis
Product differentiation (or simply differentiation) is the process of
distinguishing a product or service from others, to make it more
attractive to a particular target market.

12. Perceptual Mapping
A perceptual map is a visual
representation of how target
customers view the competing
alternatives in a Euclidean space
which represents the market
Pair-wise distances between product
alternatives directly indicate how
close or far apart the products are in
the minds of customers
The axes of the map are a special set
of vectors suggesting the underlying
dimensions that best characterize
how customers differentiate
between alternatives
An Example of perceptual mapping:
X axis :Age
Y axis :Nutrition

13. All these marketing techniques will help in determining a suitable
product positioning strategy.

14. Positioning of Crescent can be done under the following headings-
An Energy drink
OR A Sports drink
OR An Overall “Health &Wellness” drink

15. Market Research
Ryan knew that good positioning, if successful, could shape potential
customers’ opinions about a product or service before they’d even
seen or experienced the product in question.
CRESCENT PURE
All Organic & All Natural Beverage

16. Positioning Analysis for Energy Drink Position
Crescent delivers a boost of energy to
combat fatigue and promote mental
focus.
Most people describe Crescent as a
refreshing drink.
Thus it is suitable for an energy drink
position.

17. Pricing Strategy
Cheaper than usual energy drinks in market!
Crescent Price Other Energy Drinks
$2.75 < $2.99
Market for Product
The projected market for energy drinks in 2013 is $8.5 billion.
The market for energy drinks was growing; between 2010 and 2012, the market for
energy drinks had grown by 40%.

18. Targeted Customers
Most advertising for energy drinks targets the most enthusiastic
consumers, men 18 to 24 years olds.
“Our drinks help you do everything you want to do (even risky
things!).”
CRESCENT

19. Product Differentiator/ Opportunities
Crescent’s organic certification and minimal (as compared to leading
competitors) caffeine content provide strong differentiators for the
energy market.
Our drink is a healthier alternative to leading brands, whose artificial
sweeteners and excessive levels of stimulants are likely to prompt a
subset of consumers to switch to healthier options.
Apprehensions/ Threats
Regular consumption of these drinks has fallen because of negative
media attention.
News stories were highlighting the drinks’ alleged health risks

20. Positioning Analysis for Sports Drink Position
Crescent’s hydrating elements, paired with the mental focus and
energy boost, can enhance athletic performance.
42% of sports beverage drinkers considered sports drinks “anytime
beverages” and did not associate them only with exercise.
They attracted a wider consumer base than did energy drinks, and
regular users consumed them more often.

21. Pricing Strategy
Sports drinks come in a variety of sizes and average $1.00 to $2.00 for
12-oz. and 24-oz. containers, respectively.
Crescent’s $2.75 price point for an 8-oz. can will be significantly higher
than are those of similarly sized sports drinks, so our positioning and
advertising will have to build the case for its premium price.
Market for Product
In 2012, the market for sports drinks was $6.3 billion.
They attracted a wider consumer base than did energy drinks.

22. Targeted Customers
Sports drinks appealed to younger consumers—62% of those between
ages 18 and 24, and 77% of those ages 12 to 17.

23. Product Differentiator/ Opportunities
New diet and low-sugar sports drinks were growth areas for the
industry. Diet and low-sugar sports beverages, which did not exist
before 2009, had grown by 33% between 2010 and 2012, taking
market share from traditional sports drinks.
Apprehensions/ Threats
Concern regarding rising childhood obesity rates resulted in
government-mandated guidelines to remove high-calorie sugary drinks
and snacks, including sports drinks, from school vending machines
beginning in 2014.

24. The 3rd Option
Contemplating a broader
positioning strategy:
Ryan wondered if a third, “broad
appeal” option would make the
most sense for Crescent. What if
Crescent positioned itself as an
organic refreshment and
capitalized on the growth of the
organic food and beverage
industry.

25. This would easily bring the product in front of more eyes.
Booth wants Ryan to recommend an approach so that he could
identify possible distributors and retail outlets and hire advertising
firms to develop and execute a strategy for the coming year. A
broader approach would complicate these efforts.
If enough time and distribution channels could be used, these
positioning would have worked. Now that time is short and PDB does
not have enough money to cater to many distribution channels, this
task would be very difficult
Time and money are the most crucial factors for the launch of
Crescent. Thus this approach should be neglected.

26. We have 2 viable options for marketing now
Which would serve as a better marketing position?
Let look at some statistics which would help us gauge the two options
and hopefully help us reach a final conclusion.

27. Customer Segmentation
Customers
The largest group of energy-drink consumers were males between ages 18
and 34. Parents of children were also more likely to consume energy drinks.
Sports drink appealed to a younger age group of only 18-24. Sports drinks
are mostly drunk by males, only a small percentage of females seemed to
enjoy it. Based on this count, energy drinks will automatically give you a
bigger market share.

28. Market Growth
Energy drinks attain revenue up to 8.5 billion dollars and are expected
to grow to 13.5 billion dollars in a few years period.
Sports drinks revenue is much smaller. The market increased only 9%
between 2007 and 2012. In 2012, the market for sports drinks reached
$6.3 billion in the United States and was expected to grow to $9.58
billion by 2017.
This clearly shows sports drink position is a much easier source of
revenue than energy drinks and a higher rise in growth of energy drinks
is expected.

29. Price
Prices for energy drinks in the U.S. range from $2 to $5 per can, based on
can size (8 oz., 12 oz., or 16 oz.) and retail outlet. The average price for 8
oz. of energy drink is $2.99, above our $2.75 price point.
Crescent’s $2.75 price point for an 8-oz. can will be significantly higher
than are those of similarly sized sports drinks, so our positioning and
advertising will have to build the case for its premium price.
PDB wants Crescent to reflect PDB’s pricing strategy in other product
lines, which was to deliver quality organic products at affordable prices.
PDB had experimented with premium pricing in previous product
launches, and the strategy had backfired.
Thus a better choice would be a energy drink position, as it provides both
a quality organic juice and affordable prices.

30. Product Differentiation Strategy
We see that Crescent provides a healthy alternative to most energy and
sports drinks. Product differentiation strategy is to focus on the drink’s
healthy and organic roots which would attract more customers.
News highlighting energy drinks
negative aspects can be used
positively for Crescent
Schools can be convinced of the
healthy nature of the drink and
thus make it a part of can be sold
at schools

31. The 2 big advantages of Crescent!
Energy Effect
Crescent’s herbal stimulants
(guarana seed and ginseng)
delivered 80 milligrams of caffeine,
roughly the same amount of
“energy effect” as a cup of coffee.
.
Sugar Quotient
Crescent’s sugar quotient (derived
from organic, raw cane sugar) was
70%less than leading energy and
sports drinks, on average

32. Evaluation of Perceptual Map for Crescent
Perceptual maps measured consumer perception of leading sports
drinks and energy drinks on two sets of paired factors:
(1) energy and hydration, and
(2) nutrition and taste.
These maps have been provided by the Market Research Department
of Crescent Pure.

33. Perceptual Map for Sports Drinks

34. Comprehension of Perceptual Map
Gleam and Drip had 73% and 21% market share, respectively. The
remaining 6% of market share ($378 million) was split fairly evenly
among roughly 20 producers.
New diet and low-sugar sports drinks were growth areas for the
industry. Diet and low-sugar sports beverages, which did not exist before
2009, had grown by 33% between 2010 and 2012, taking market share
from traditional sports drinks.
This position shows low competition and possibly high growth of
Crescent but it will happen in a very small niche, which does not show
much market growth.

35. Perceptual Map for Energy Drinks

36. Comprehension of Perceptual Map
Together, Fright, Razor, Torque, and Stellar accounted for 85% of
category revenue (34%, 27%, 16%, and 8%, respectively). The
remaining 15% was split between roughly thirty independent
regional and national producers.
Sales of energy drinks with lower levels of caffeine and purer
ingredients were rising due to consumer demand for healthier food
and beverage choices.
Though this position has high competition, Crescent can gain market
share by showing that it has healthy and organic roots.
Apprehension regarding the alleged health risks of energy drinks can
be used to its advantage by showing its healthy side. A much higher
growth can be expected in this position.

37. Results
Customer Segmentation
The position ‘Energy drink’ might capture a bigger customer base, revenue
and has a viable pricing strategy.
Product Differentiation
Both share the same product differentiation strategy but it would be wiser
to show that differentiation strategy in a bigger market, which is energy
drinks.
Perceptual maps also show how Crescent can gain market share as a
energy drink and sports drink.

38. Conclusion
Using all these marketing strategies, we can now
conclude that we should position Crescent Pure as a
Energy Drink!

39. Summary
• History of P.D.B
• History of Crescent Pure
• Situation Analysis
• Positioning Analysis
• Conclusion

40. Disclaimer
Created by Chinmaya Lovekar from MIT Manipal under the guidance of
Professor Sameer Mathur, IIM Lucknow during a marketing internship.