The case analysis of the HBR case file on Crescent Pure.

1. CRESCENT
PURE
HARVARD BUSINESS SCHOOL CASE

3. • Peter Hooper, a native of Crescent, Oregon, founded Crescent in
2008.
• Hooper found popular energy and performance-enhancing drinks
unhealthy, too sweet, and artificial.
• He wanted a drink that would refresh, energize, and enhance
mental focus.
CRESCENT PURE

4. • He manufactured and distributed Crescent from a rented
warehouse, in small batches to regional outlets.
• Hooper promoted his drinks at farmer’s markets and local food
shows.
• Distribution eventually included two hundred retail outlets.
• The company was selling 1,000 cases per month.

5. • Portland Drake Beverages (PDB) is a manufacturer of organic juices
and sparkling waters.
• Michael Booth (CEO) felt it important to expand PDB’s trusted and
popular suite of organic products.
• Energy and low-calorie sports drinks are rapidly growing segments.
• PDB was looking to expand these areas through acquisitions.
PDB

6. THE
ACQUISITION
After months of research and
negotiations, PDB acquired
Crescent.

7. CURRENT SITUATION

8. • PDG currently falls short on production capacity.
•They are hence planning a soft launch in 2014 for areas
close to Oregon.
•Based on the result, future of Crescent Pure for 2015
will be decided.
•Has allotted $750,000 for ads.
•Fixed retail price at $2.75

9. SO……WHAT’S THE ISSUE HERE?

10. POSITIONING!!!

11. OUR PROTAGONIST – SARAH RYAN
• Vice President of
Marketing, PDB.
• Given the responsibility of
choosing the right
position for Crescent Pure.
• Has 6 weeks.

12. OPTIONS
ENERGY
DRINK
SPORTS
DRINK

13. NEED MORE DATA TO CHOOSE!

14. MATT LEVOR CAME
UP WITH THE
NECESSARY
STATISTICS WHEN
HE GOT A REQUEST
FROM RYAN!

15. LETS COMPARE USING THE OBTAINED DATA

17. •$8.5 billion in 2013.
•$13.5 billion forecast for 2018.
•Males between 18-34 are the major
consumers.
•Top 4 companies have 85% market share.
•Avg. price per can (8 oz.) is $2.99.
•Rising demand for healthier variations.

18. SPORTS
DRINK

19. •Only 9% growth in 5 years.
•$9.85 billion forecast for 2017.
•More youngsters make up the target market.
•Top 2 companies have 94% market share.
•Avg. price per can (12 oz.) is $1.
•Low sugar sports beverages have seen 33%
growth in 2 years.

20. PERCEPTUAL MAPS

21. MOST WERE ABLE TO
CONNECT WITH
SPORTS DRINKS
COMPARED TO ENERGY
DRINKS.
A MARKET STUDY

22. HOW DOES CRESCENT PURE MATCH UP
AGAINST THESE???
LETS TAKE A LOOK…..

23. OVERVIEW

24. OBSERVATION.
•Crescent Pure satisfies all the criteria energy drinks do
and also stays natural.
•They even seem to satisfy certain characteristics
significantly better than Energy drinks!
•They fall behind sports drinks in a few areas. Most
importantly, not as hydrating.
•Crescent pure seems to be associated with many
fields!!

25. WAS THERE A POSSIBILTY
TO POSITION THE
PRODUCT UNDER A 3rd
CATEGORY?
USING A BROADER
APPEAL AS A HEALTHY
DRINK?
THE STATS SHOW A
DEFINITE POSSIBILTY…..

26. HOWEVER…
THE ONLY
PROBLEM IS THE
FUND FOR
ADS…….$750,000
IS NOT NEARLY
ENOUGH FOR A
BROADER
CAMPAIGNING
STRATEGY!!

27. BREAK EVEN ANALYSIS
EXPENSES AMOUNT ($)
VARIABLE COST PER CAN 1.02
WHOLESALE PRICE PER CAN 1.24
PROFIT PER CAN 0.22
PROFIT PER CASE
(24 CANS PER CASE)
5.28
PROFIT PER MONTH
(12,000 CASES PER MONTH)
63,360
PROFIT PER YEAR 760,320
ADVERTISING COST FOR 2014 750,000
NET PROFIT 10,320

28. DECISION
•Crescent Pure should be positioned as an organic energy
drink.
•It satisfies all conditions for being an energy drink.
•It is a healthy variety.
•It costs less.
•The market has potential for large growth.
•Would work well with PDB’s current ideals.

29. CREATED BY SARAT M NANDA,
MBCET, TRIVANDRUM, DURING A
MARKETING INTERNSHIP UNDER
PROF. SAMEER MATHUR, IIM
LUCKNOW.