Analysis of Harvard Business School case study "Crescent Pure" during "Marketing Management" Internship, IIM- Lucknow under Prof. Sameer Mathur.

1. CRESCENT
PURE

2. WHAT IS
PDB?
WHAT IS
CRESCENT
PURE?
THE COMPANIES

3. PORTLAND DRAKE
BEVERAGES (PDB)
ACQUIRED
CRESCENT PURE

4. THE PLAYERS OF PDB
•SARAH RYAN- VICE
PRESIDENT, MARKETING
•MICHAEL BOOTH- CEO
•MATT LEVOR-
DIRECTOR, MARKETING
RESEARCH

5. CRESCENT PURE: THE PRODUCT
NON ALCOHOLIC BEVERAGE
ENERGY-ENHANCING,
HYDRATING, ALL ORGANIC
INGREDIENTS
ORGANIC, “ALL NATURAL
BEVERAGE”
LESS SUGAR CONTENT
COMPARED TO OTHER
ENERGY DRINKS

6. 1
2
3
CRESCENT PURE: HISTORY
PETER HOOPER
FOUNDED
CRESCENT IN 2008.
DEMAND FOR THE
PRODUCT GREW
LOCALLY IN
CRESCENT, OREGON.
ACQUISIION BY PDB IN
JULY, 2013.

7. LEMON JUICELIME JUICE RAW CANE SUGAR
GINSENG
GREEN
TEA PINCH
OF SALT
CRESCENT PURE:INGREDIENTS

9. CRESCENT PURE:THE SITUATION
PDB PLANNED TO EMBARK ON A “SOFT
LAUNCH” OF CRESCENT IN CALIFORNIA,
OREGON AND WASHINGTON IN JANUARY
2014
PROJECTIONS THAT THESE THREE STATES
REPRESENTED 15% OF NATIONAL
FUNCTIONAL BEVERAGE DEMAND
SARAH RYAN WAS ASSIGNED WITH
EVALUATION OF THE PRODUCT’S
POSITIONING AND RECOMMEND IT TO THE
EXECUTIVE TEAM BY OCTOBER 1, 2013
PLANNED TO SPEND $7,50,000 FOR AD
CAMPAIGNS, THEREFORE THIS DEADLINE
WAS NECESSARY TO COMMENCE EARLY
NEGOTIATIONS WITH DISTRIBUTORS AND
RETAILERS

10. OBJECTIVES

11. CRESCENT PURE:RYAN’S OBJECTIVES
IDENTIFY INDUSTRY SPECIFICS OF EACH
POSITIONING
POTENTIAL BENEFITS AND DRAWBACKS
OF EACH OPTION
FINAL RECOMMEMDATION

12. BRAND POSITIONING: 3 OPTIONS

13. ENERGY DRINK

14. SPORTS DRINK

15. ORGANIC DRINK

16. INSIGHTS

17. ENERGY DRINKCOMBATS FATIGUE AND PROMOTES MENTAL FOCUS
PRICE RANGE $2-$5
PODs WITH OTHER ENERGY DRINKS: ORGANIC NUTRIENTS, MINIMAL CAFFEINE,
LESS ARTIFICIAL SWEETENERS
MARKET FOR ENERGY DRINK RISING. GROWN BY 40% BETWEEN 2010 AND 2012
TARGET GROUP – 18 TO 24 YEARS OF AGE
COMPETITION- TOP COMPANIES LIKE FRIGHT, RAZOR, TORQUE, STELLAR ACCOUNT FOR 85%
OF THE TOTAL REVENUE
OPPORTUNITY- DEMAND FOR HEALTHIER OPTIONS
THREATS- NEWS STORIES HIGHLIGHTING NEGATIVE IMPACTS POST CONSUMPTION OF
ENERGY DRINKS
*GREEN: NO WORRIES
*RED: WORRY

18. SPORTS DRINK
“ANYTIME BEVERAGE”- DESIGNATED BY 42% OF SPORTS BEVERAGE DRINKERS
HYDRATING ELEMENTS PAIRED WITH THE MENTAL FOCUS CAN ENHANCE ATHLETIC
ACHEIVEMENT
ONLY 50% OF MEN AND 33.33% OF WOMEN CONSUME IT
COMPETITION- TOP COMPANIES LIKE GLEAM (73%) AND DRIP (21%)
OPPORTUNITY- APPEAL TO HEALTH CONSCIOUS CUSTOMERS. AREA OF GROWTH
SPOTTED FOR LOW SUGAR SPORTS DRINKS
THREATS- INCREASING RISKS OF CHILDHOOD OBESITY, THEREFORE, REMOVAL OF
SPORTS DRINKS FROM SCHOOL VENDING MACHINES ALONG WITH OTHER SOFT DRINKS
*GREEN: NO WORRIES
*RED: WORRY

19. ORGANIC DRINK
APPEAL TO YOUNG, HEALTH CONSCIOUS CUSTOMERS WHO DO NOT OPT FOR
SPORTS/ ENERGY DRINK
CLAIMED A PRICE PREMIUM OVER CONVENTIONAL PRICES OF SAME VARIETY
CAFFEINE CONTENT (80 mg) NOT SUITABLE FOR CONSUMPTION BY CHILDREN
THREATS- LOSE OUT ON A LUCRATIVE CUSTOMER SEGMENT WHILE APPEALING TO HEALTH
CONSCIOUS SEGMENT
*GREEN: NO WORRIES
*RED: WORRY

20. CONSUMER
STUDY

21. CRESCENT PURE:THE STUDY
AGE RANGES
18 -24 years
25-34 years
35-44 years
45-54 years
58+ years
MALES VS FEMALES
MALES
FEMALES
DEMOGRAPHICS OF CRESCENT ONLINE CONSUMERS (TO BE DISCUSSED LATER IN DETAIL)

22. CRESCENT PURE:THE STUDY
CRESCENT MOST POPULAR AMONG
THESE TWO AGE GROUPS
CRESCENT CONSUMED MORE BY
MALE CUSTOMERS
DEMOGRAPHICS OF CRESCENT ONLINE CONSUMERS

23. CRESCENT PURE:THE STUDY
DESCRIPTOR
AFFORDABLE
FUNCTIONAL
TOO SWEET
SUITABLE FOR TEENS
FUN
NATURAL
HYDRATING
PERCENTAGE OF RESPONDENTS WHO DESCRIBED CRESCENT (TO BE DISCUSSED IN
DETAIL LATER)

24. CRESCENT PURE:THE STUDY
MAJORITY CONSUMERS FOUND THIS
DRINK REFRESHING, HEALTHY,
FUNCTIONAL, NATURAL,HYDRATING
– DESIRABLE ATTRIBUTES IN A DRINK.
PERCENTAGE OF RESPONDENTS WHO DESCRIBED CRESCENT

25. CRESCENT PURE:THE STUDY
0%
10%
20%
30%
40%
50%
60%
PERCENTAGE OF RESPONDENTS WHO INDICATED A WORD
THAT DESCRIBED THE DRINKS
ENERGY DRINKS SPORTS DRINKS

26. CRESCENT PURE:THE STUDY
RETAILER FEEDBACK:
INVENTORY DEPLETED QUICKLY
PRICE RAISED BY 25%, BUT STILL DRINKS SOLD OUT
POPULAR AMONG THE AGE GROUP 18 TO 30 YEARS
HIGHER THAN EXPECTED WOMEN CUSTOMERS FOR
THE PRODUCT

27. CRESCENT PURE:THE STUDY
FOCUS- GROUP FEEDBACK:
 TASTE LIKED BY ALL NO UNFAVOURABLE REACTIONS
 ENERGY CONTENT EQUAL TO A CUP OF COFFEE, HENCE
NO CONCERNS
 CUSTOMERS FOCUSSED ON HEALTH AND WELLNESS
SATISFIED
 OPTIMAL PRICING AT $3.00

28. CONSUMER
PERCEPTION

29. CRESCENT PURE:THE STUDY
CONSUMER PERCEPTUAL MAP 1
IDEAL POSITIONING REGION.
NO COMPETITOR IN THE
“HIGH HYDRATION- HIGH ENERGY”
CATEGORY.

30. CRESCENT PURE:THE STUDY
CONSUMER PERCEPTUAL MAP 2
CRESCENT EQUALLY PLACED
IN “HIGH TASTE- HIGH
NUTRITION” CATEGORY
IN COMPARISON TO
COMPETITORS

31. FINAL
RECOMMENDATION?

32. ENERGY
DRINK!!

33. CRESCENT PURE:ENERGY DRINK
WHY ENERGY DRINK?
1. MARKET SIZE FOR ENERGY DRINK IS ON THE RISE. ESTIMATED TO BE $13.5 BILLION BY 2018
2. DEMAND FOR HEALTHIER OPTIONS IN ENERGY DRINK INCREASING
3. SUITABLE PLACEMENT IN THE “HIGH-HYDRATION, HIGH- NUTRITION” CATEGORY
WITHOUT ANY COMPETITION
4. OPTIMAL PRICING WITH QUALITY INGREDIENTS
5. ORGANIC NUTRIENTS, MINIMAL CAFFEINE CONTENT (80 mg) AND LESS AMOUNT OF ARTIFICIAL
SWEETENERS THAN OTHER ENERGY DRINKS MAKE IT A HEALTHIER OPTION
6. LESS COMPETITION FROM SPORTS DRINKS INDUSTRY
7. ONLINE CONSUMERS AND ENERGY DRINK CONSUMERS FALL IN THE SAME AGE GROUP
8. SUITABLE FOR TEENS, AN ESSENTIAL SEGMENT OF ENERGY DRINK CUSTOMER DUE TO
OPTIMAL CAFFEINE LEVELS

34. WILL THEY
BREAK EVEN?

35. COST AREA AMOUNT
CASES MANUFACTURED / MONTH 12,000
CASES MANUFACTURED / YEAR 1,44,000
CANS / CASE 24
WHOLESALE PRICE / CAN $ 1.24
COST PRICE / CAN $ 1.02
PROFIT / CAN $ 0.22
PROFIT / CASE $ 5.28
PROFIT / MONTH $ 63,360.00
PROFIT / YEAR $ 7,60,320.00
BREAK EVEN POINT $ 7,50,000.00
NET INCOME $ 10,320.00
BREAK EVEN
ANALYSIS
ACHIEVED!!

36. RECAP

38. DISCLAIMER
THESE SLIDES HAVE BEEN DESIGNED BY SHUBHRA SEAL, MESAGC, PUNE, IN ORDER TO ANALYSE
THE HARVARD BUSINESS SCHOOL CASE “CRESCENT PURE”, ASSIGNED DURING “MARKETING
MANAGEMENT” INTERNSHIP UNDER PROF. SAMEER MATHUR (IIM- LUCKNOW).