CRESCENT PURE - Harvard Case Study Analysis, by Guhapriya Sridhar, during an internship with Prof. Sameer Mathur, IIM-Lucknow.

2. WHAT IS CRESCENT PURE?
Peter Hooper founded Crescent
in 2008.
PROPERTIES:
• Non-alcoholic functional
beverage.
• Energy enhancing.
• Hydrating.
• Consisting of 100% organic
ingredients.
• Acquired by Portland Drake
Beverages in 2013.

3. To create a drink that could –
• Refresh
• Energize
• Enhance
The mental focus
WHAT IS CRESCENT PURE?
WHAT IS THE AIM OF THE PRODUCT?

4. WHAT IS CRESCENT PURE?
WHAT IS ITS PRODUCT DIFFERENTIATION?
VS.
An organic, all-natural beverage,
lightly infused with organic juices,
herbal stimulants and electrolytes.
Has roughly the same energy effect as
one cup of coffee.
Most popular energy and performance
enhancing drinks were found to be
unhealthy, too sweet and artificial.

5. WHAT IS CRESCENT PURE?
WHAT WAS ITS MARKETING STRATEGY BEFORE ITS ACQUISITION?
Crescent benefitted from launching in a region that
embraced the ‘Locavore’ movement.
Hooper raised the demand for his product by promoting it
at farmers’ markets, local food shows and pursued local
retailers in Oregon.

6. WHO ARE
PORTLAND DRAKE
BEVERAGES?
• CEO: Michael Booth
• VP, Marketing: Sarah Ryan
• Manufacturers of organic juices and
sparkling waters.
• High quality at affordable prices is
their core value.

7. WHY DOES
PBD WANT TO
ACQUIRE
CRESCENT
PURE?
• Crescent Pure was a natural extension of PBD’s
existing organic product lines.
• The product differentiation was striking – healthier
than other mainstream beverage alternatives.
• Energy and sports drinks are growing segments and
Booth wanted to expand into them.
• Early entrants would be in a good position to steal
market share from competitors.

8. CONFLICTING LAUNCH
STRATEGIES FOR CRESCENT
PURE AFTER ACQUISITION
• To position Crescent Pure as an ENERGY DRINK – due to
its energizing ingredients?
• To position Crescent Pure as a SPORTS DRINK – due to
its hydrating elements?

9. Initial launching
decision
• Certain product capacity constraints
prevented PBD from launching the product
nationally until 2015.
• The strategy was to work on a ‘Soft Launch’,
in California, Oregon and Washington (these 3
consisted of 15% of the national beverage
demand).

10. PRODUCT
EXPECTATIONS
• $750,000 was estimated for
advertising of the product and this is
quite the small amount.
• This figure was used as the
benchmark earnings goal for
Crescent Pure.
• If PBD broke even or profits
exceeded, then PBD would fund
Crescent Pure national expansion in
2015.

11. INSIGHTS FROM THE
CASE
• Sarah Ryan had to generate the following
results by the end of the research:
• Industry specifics related to each of the
positioning options.
• Potential benefits and drawbacks of each of
the positioning options.
• A final recommendation.

12. THE POSSIBILITY OF A
THIRD POSITIONING
OPTION?
• This third positioning option was derived from
focusing on the drink’s healthy and organic
roots would attract the most customers.
• POSITIONING THE PRODUCT NOT AS AN
ENERGY OR SPORTS DRINK BUT JUST AS AN
ORGANIC BEVERAGE.
• This would open up a wider target customer
segment and preserve the uniqueness of the
product.

13. UNDERSTANDING THE
MARKET ENVIRONMENT
NON-ALCOHOLIC
BEVERAGE INDUSTRY
• Non-alcoholic beverage market includes – water,
dairy, juice, soda and functional beverages.
• This industry was estimated @ $131 billion and
expected to grow to $164 billion by 2018.

14. BEVARGE
DISTRIBUTION
INDUSTRY
• Distribution involves – moving
products from the manufacturing
site to the hands of the consumer.
• Manufacturers retain distributors
to initiate the process of getting their
products on the shelves.
• Relationships are established
between retails and manufacturers
on a niche segment.

15. PRICING STRATEGY
• PDB placed Crescent Pure at 27% below the
drink’s original price. It wanted Crescent to
reflect its pricing strategy for all its other quality
organic products at affordable prices.
• For all of PDB’s other products, volume drove
the sales.

16. WHY IS
CRESCENT
PURE’S
POSITIONING
SO
IMPORTANT?
• Before selecting and negotiating with distributors ,
PDB decided that the positioning option of the brand
was to be decided on first.
• This is because the drink’s positioning would help
influence where the product was sold and which
distributors to use.

17. CRESCENT PURE:
PACKAGING AND
BRAND RECOGNITION
• It was packaged in a tall, sleek, 8-
ounce can with a simple logo and lime
green and orange accents, Crescent
was a clear coloured liquid.
• Flavours included lime juice, lemon
juice and small amounts of raw cane
sugar and green tea.

18. PRODUCT POSITIONING
INSIGHTS: PRODUCT
POSITIONED AS AN
ENERGY DRINK
• POSITIVES:
• ‘ENERGY’, was viewed as Crescent’s most
descriptive characteristic from surveying
Oregon.
• Its price was lower than the price of an
average energy drink.
• NEGATIVES:
• Energy drinks are viewed as encouraging
reckless, dangerous activities.
• Crescent’s organic certification and
minimal caffeine content, separate it from
energy drinks. (Healthier alternative)
• Long-term viability of the energy drink
market is questionable due to negative
media attention

19. MARKET RESEARCH:
ENERGY DRINKS
• Market Size: 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.
• Consumers Data: The largest group of energy-drink
consumers were males between ages 18 and 34.
• Competition: Together, Fright, Razor, Torque, and
Stellar accounted for 85% of category revenue (34%,
27%, 16%, and 8%, respectively).
• Opportunity: Sales of energy drinks with lower levels
of caffeine and purer ingredients were rising due to
consumer demand for healthier food and beverage
choices.
• Threats: News stories were highlighting the drinks’
alleged health risks

20. PRODUCT POSITIONING
INSIGHTS: PRODUCT
POSITIONED AS A
SPORTS DRINK
• Consumer Data: Roughly half of men
drank sports drinks, while only a third of
women did.
• Competition: Gleam and Drip had
73% and 21% market share, respectively.
• 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.
• Opportunity: New diet and low-sugar
sports drinks were growth areas for the
industry.

21. CONSUMER
STTUDY:
SPORTS AND
ENERGY
DRINKS

22. THE 3RD POSITIONING
STRATEGY
• Crescent’s prospective buyers – younger,
health conscious consumers, who regularly
consumed energy or sports drinks.
• But there was also a second market segment –
those who consistently purchased organic and
all-natural products.
• This was the third ‘BROAD APPEAL’ strategy.
Positioning that focused on – health, wellness
and natural ingredients.

23. INTRODUCING THE 4TH
POSITIONING: THE
HYBRID STRATEGY
• Sports drinks are niche and narrow the segment.
• Energy drinks are garnering bad press.
• The organic beverage strategy is too ‘broad’ with
no particular target segment and could get lost in
the wide organic market.

24. CRESCENT
PURE: HEALTHY
ALL THE WAY . . .
• This is the 4th Hybrid strategy.
• CRESCENT PURE MUST BE
LAUNCHED IN THE ENERGY DRINK
MARKET:
• Crescent Pure’s biggest advantage
in the energy drink market is that
there is no fall in energy or adverse
effect after the effect of the energy
drink as worn off, as it happens
with other drinks (Point made by
Booth’s sons). There is no collapse
in energy and this will be their
biggest selling point!
• Secondly, the company does not
have to spend money to create a
new market.