CRESCENT PURE HARVARD BUSINESS SCHOOL
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Crescent Pure is a non-alcoholic beverage company founded in 2008 that aims to create healthy, organic drinks. Vice President of Marketing Sarah Ryan is evaluating positioning options of positioning the drink as a sports drink, organic drink, or energy drink. Market research found the target demographic is ages 18-34 and that consumers described the drink as refreshing, healthy, and natural. The optimal positioning is as a healthy organic energy drink, as it is in an emerging market with less competition compared to the crowded sports and energy drink categories. The drink will be launched priced higher than sports drinks but lower than energy drinks and heavily promoted through digital channels.
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CRESCENT PURE HARVARD BUSINESS SCHOOL
- 3. • Founded by Peter Hooper in 2008. • Manufacturing Non-Alcoholic Beverages. • Hooper found popular energy drinks unhealthy, sweet and artificial therefore he began experimenting with different ingredients to craft an organic, refreshing, healthy drink.
- 4. The People Michael Booth CEO, PDB Sarah Ryan Vice President, Marketing, PDB Matt Levor Director, Market Research,PDB
- 5. RYAN’S OBJECTIVES 1 Industry Specifics of the Positioning options. 2 3 Final Recommendation Potential Benefits and Drawbacks of each option
- 7. 1.
- 8. PROS CONS • Fierce industry competition • Publics disapproval of new drink on the market • Potentially stricter government regulation • Consumption has lowered after negative media attention • 42% consider them as “any time beverage” • Market growing at the rate of 40% • Price of Crescent pure ($2.75) will be less than industry average of $2.99
- 9. 2.
- 10. PROS CONS • Health risks associated with them • Fierce competition • 85% of category revenue with big players • $2.75 price is higher then industry average • Large expected market growth • Low caffeine content acts as point of Difference • Diet and low sugar sports drinks are growth areas in the industry
- 11. 3.Organic drink
- 12. PROS CONS • Large advertising budget required • Larger consumer base, thus, larger distribution channels needed. • No competition from big firms • Premium pricing can be done, thus, large revenues • Attracts health conscious consumers
- 13. 2.Market growth Sports Drink - 9%growth Energy Drink - 40% growth 4.Target market Age group 18-34 Health concious 5.Threats Negative campaign against sports and energy drinks 6.Competitive advantage Competitors to roll out health drinks only in mid 2015 7.Point of difference Low sugar and caffeine content
- 14. 1. Matt Levor’s first Market Research Outcomes 2. Matt Levor’s second Online Market research 3.MAPS DATA ANALYSIS
- 15. 0 5 10 15 20 25 30 35 40 45 50 Refreshing Healthy Affordable Functional Too sweet Natural Hydrating 12 6 5 22 9 4 11 34 16 11 28 8 6 49 Percentage of respondents who indicated a word that described energy or sports drinks Energy Drinks Sports Drinks
- 16. 0 5 10 15 20 25 30 35 40 45 18-24 25-34 35-44 45-54 44 36 15 3 2 Demographics of Crescent online consumers Age Ranges 55+
- 17. 0 5 10 15 20 25 30 35 40 45 50 Refreshing Healthy Affordable Functional Too Sweet Fun Natural Hydrating 35 22 29 47 9 19 38 29 Percentage of respondents who described Crescent
- 18. Perceptual Maps Fig.1:Energy and Hydration Fig.2:Nutrition and Taste
- 19. Perceptual Maps: Insights • The red area in Fig.1 is the ideal positioning for Crescent where no energy drink is present but a Top sports drink brand is. • The red area in Fig.2 indicates that all the top brands have great taste and hence consumers prefer taste over nutrition. Crescent is good in both.
- 21. Fast Growing Market. Estimated 8.5 Billion consumers by 2013 Low Energy content Consumption reduced due to negative media attention Increasing Demand of healthier alternative 40% growth of market in 2yrs Reduction in consumption due to health related issues
- 22. High Hydrating Quality Consumer base is not segmented even women consume this. Price higher than competitors 9% growth in 5 years Requirement for healthy alternative 2 competitors have 94% market share
- 23. Emerging Market Less competition Caffeine present No consumer base Increasing demand of a healthier drink Less advertising budget may cause a problem
- 25. ENTITY AMOUNT Cases predicted to be sold monthly 12,000 Cases predicted to be sold annually 144,000 Cans per case 24 Manufacturer’s profit per can $ 0.22 Manufacturer’s profit per case $ 5.28 Manufacturer’s annual profit $ 760,320 Breakeven Point $750,000 Annual Profit $10,320
- 28. Product Launched as a organic, healthy energy drink Price Priced at $2.75 which is above the general sports drinks and lower than the energy drinks Promotion Heavily promoted over social media,event sponsorships and other digital forms to reach the younger target audience Distribution Focus on Washington, Oregon and california. Distributed through big box stores like WalMart.
- 29. CONCLUSION Crescent Pure should be positioned as healthy organic energy drink.
- 30. DISCLAMER Created by Harsh Agarwal FDDI Chennai during a marketing internship by Prof. Sameer Mathur IIM LUCKNOW