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Crescent pure
- 1. Crescent Pure “Make theright choice” Case Study Analysis
- 2. Opportunity Statement Sarah Ryan,Vice President of marketing for Portland Drake Beverages, is positioning the beverage line, Crescent Pure, but must decide whether the drink should be positioned in the sport drink market or energy drink market.
- 3. In the beginning... •Peter Hooper, founder of Crescent • Organic energy drink • Started in Oregon • Michael Booth, CEO of Portland Drake Beverages(PDB), discovered Crescent, acquired the product in July of 2013.
- 4. Why Crescent Pure? •Low calorie beverage • 70% less sugar than leading energy and sports drinks • Contains as much caffeine as one cup of coffee • Energy boost is delivered through all-natural herbal stimulants, guarana seeds and ginseng • At a lower price of $2.75 per 8oz can consumers will be able to get a quality, organic product at an affordable price
- 5. Decision To BeMade Sarah Ryan, vice president of marketing for PDB, must now decide how to position Crescent Pure. Sports Drink Positioning vs Energy-Drink Positioning • “soft launch” of the product in January of 2014 in three western states • $750,000 advertising budget • If profits reach or exceed this, Crescent Pure will be launched nationally in 2015.
- 6. Sports Drink PositioningStrategy Sports Drink Pros • 42% of sports beverage drinkers considered sports drinks “anytime beverages” and did not associate them only with exercise. • Attract a wider consumer base • Regular users consume sports drinks more often • Hydrating elements paired with the mental focus and energy boost features make it very attractive in this market • Market is $6.3 billion • Study showed consumers described sports drinks with words such as refreshing, healthy, affordable, functional, fun and hydrating more often than energy drinks
- 7. Sports Drink Cons •Market is $2.2 billion less than energy drink market • Crescent’s $2.75 price point for an 8 oz. can is significantly higher than other competing sports drinks of that size • Recent government-mandated guidelines to remove sugary, high calorie drinks from school vending machines including sports drinks pose a threat.
- 8. Energy Drink PositioningStrategy Energy Drink Pros • Unique in this market as it contains much less sugar than competing energy drink (about 70% less) and the caffeine in the product is delivered from natural herbal stimulants (guarana seed and ginseng) unlike other energy drinks • Market is growing for energy drinks (between 2010 and 2012 it grew 40%) • Consumers viewed “energy” as Crescent’s most descriptive characteristic • The average price for an 8 oz. can of an energy drink is $2.99, above the $2.75 price point of Crescent Pure, allowing PDB the opportunity to possibly raise the price
- 9. Energy Drink Cons •Regular consumption of energy drinks has fallen due to negative media attention about health risks • Competitors – 85% not much wiggle room for new • Only 32% of consumers said they have consumed an energy drink in the past 6 months • 11% of people are drinking less energy drinks because of the associated health risks • Some people question the company’s ability to deliver a quality product with all organic, healthy ingredients for just $2.75 • Some younger consumers think that Crescent has less energy than they had hoped
- 10. Crescent Pure vsEnergy Drinks Points of Parity – • Refreshing • Mental focus • Energizing • Has caffeine • Kills fatigue Points of Difference – • Healthy • $2.75 vs $2.99 • Organic • Caffeine content as 1 cup coffee • Low sugar
- 11. Crescent Pure vsSports Drinks Points of Parity – • High nutrition • Hydrating nature • Enhance performance Points of Difference – • Expensive • Low sugar • Healthier alternative
- 14. Organic Refreshment Positioning Organic RefreshmentPros • Capitalize on growth of the organic food and beverage industry over the past few years • Ability to have a more premium price in this market as the focus is on quality ingredients and target consumers would be willing to pay more • Organic beverages claim a price premium over conventional beverages of the same variety (on average 25%) • Would allow for a much wider range of consumers
- 15. Organic Refreshment Cons •By focusing on just the health attributes , PDB might risk excluding important customer segments • Timing is critical and the broad approach would complicate efforts to develop and execute a marketing strategy in time for the “soft launch” • With such a wide range of consumers, the $750,000 advertising budget may no longer be available • More distributors and retailers would be necessary and would need to be evaluated
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- 24. Recommendation The recommended planof action for PDB is to market Crescent Pure as an energy drink. • Ability to boost energy and mental focus • Health benefits • Pricing advantage • Trending market growth
- 25. Thank You! A presentationcreated on the Harvard Case Study of Crescent Pure by Indraneel Dey, VIT University Vellore during a marketing internship under the guidance of Prof. Sameer Mathur, IIM Lucknow.