A Harvard Business Case Study- CRESCENT PURE along with detailed analysis of revenues

1. Harvard Business
Case Study :
CRESCENT PURE

2. Crescent Pure
An organic , functional,
energy - enhancing and
hydrating drink

3. History :
Peter Hooper , a native of
Crescent, Oregon founded it in
2008

4. Acquired Crescent pure in July 2013
PDB
(Portland Drake Beverages)

5. WHY CRESCENT PURE ?
1) Organic
2) Low sugar
3) Hydrating
4) Energy
5) Non-alcoholic
6) Mental focus
7) Refreshing

6. COMPOSITION…

7. Lime and lemon
juice
Raw cane sugar
Green tea
FOR FLAVOUR

8. Guarana -
As an energy stimulant
Ginseng -
To relieve fatigue

9. How to Analyze a case
Situation Hypothesis Proof & Actions

10. MAIN
MOTIVE [1/2]
To be the largest national
marketer of energy
drinks

11. SHORT-TERM
MOTIVE [2/2]
SOFT LAUNCH :
Launch of Crescent in 3
Western States-California ,
Oregon , Washington
In January , 2014.

12. Crescent Pure’s
positioning options

13. There are three
positioning options
available

14. [1/3] ENERGY DRINK

15. Energy Drink (i/ii)
PROS :
▪ Less sugar
▪Natural stimulants
▪Most descriptive
character of Crescent
▪Average price for 8oz can
of drink:
Others - $2.75
Crescent - $2.99

16. Energy Drink (ii/ii)
CONS
▪ Demand for healthy drinks
on increase
▪Not much room for new due
to tough competition
▪Only 32% consumed energy
drink in past 6 months
▪Tough job to provide such a
drink only for $2.75

17. [2/3] SPORTS DRINKS

18. Sports Drinks (i/ii)
PROS
▪Growing demand for diet and
low sugar sports drink
▪Market is 46.3 billion
▪Regular users
consume frequently

19. Sports Drink (ii/ii)
Cons
▪Crescent’s $2.75 price for 8oz
can is higher than others
▪Market is $2.2 billion less than
energy drink market
▪There are other similar drinks in
the market

20. [3/3] ORGANIC DRINK

21. Organic Drink (i/ii) PROS
▪Capitalize on growth of
organic food and beverage
industry
▪Organic beverages claim
price premium(25%) over
other beverages
▪Allow wider range of
customers

22. Organic Drink (ii/ii)
CONS
▪Critical time of “SOFT
LAUNCH” operation
▪$75000 advertising budget
may no longer be feasible
▪Might lose important
customer segments

23. SWOT ANALYSIS
Weaknesses
ThreatsOpportunities
Strengths

24. S
• Organic, lower sugar quotient
• Herbal stimulants
• Healthier drink alternative
W
• Higher price than most sports drink
• Little public awareness as a new brand
• Many other competitors
O
• Increase in number of health conscious consumers
• Emerging diet and low sugar drink industry
• Wide customer base
T
• Competition from pre-existing companies
• Negative perception of energy drinks
• Stricter Government regulations

25. STATISTICAL
ANALYSIS

26. 2 3 8
13
4
10
9
21
28
2
Beverage distribution in US Market
Coffee
Tea
Whole milk
Reduced fast milk
Skim milk
100% fruit juice
Fruit drink,regular
Alcoholic beverages
Soda,regular
Other

27. U.S. Beverage Industry
$ 131 billion $ 164 billion2013 - 2018

28. 0
5
10
15
20
25
30
35
40
45
50
Percentage of correspondents who described Crescent

29. 0
10
20
30
40
50
60
Energy Drinks
Sports Drinks
Percentage of respondents who described energy or sports drinks

30. 0%
10%
20%
30%
40%
50%
18-24 25-44 35-44 45-54 55+
Demographics of Crescent
online consumers
Male
Female

31. 18% - $1.24Manufacturer’s profit margin
40% - $2.75Retailer’s profit margin
25% - $1.65Distributer’s profit margin

32. Break even analysis
 Advertising Budgets
 Cans per case
 Cases sold per month
 Cases sold annually
 Variable cost per can
 Variable cost per case
 Manufacturer’s wholesale price
to distributer per case
 Manufacturer’s margin per case
 Manufacturer’s margin per case
monthly
 Manufacturer’s margin per case
annually
$750,000
24
12000
144000
$1.2
$24.48
$29.76
$5.28
$63,360
$760,320
NET PROFIT $10,320
BREAK EVEN NUMBER OF CASES 142046

33. SUMMARY
Introduction
History
Positioning
Strategies
SWOT Analysis
Evaluation

34. CONCLUSION
This presentation is created by
ADITI SINGH , BIT SINDRI ,
during a marketing internship under
Prof. Sameer Mathur , IIM Lucknow.