PDB acquired Crescent Pure, an organic energy drink, and must decide on its market positioning strategy. Market research showed the energy drink market growing at 58.82% by 2018 with opportunities for healthier options. Crescent Pure customer studies found it appealing for its healthy ingredients and slight energy boost across demographics. Optimal positioning is as an organic energy drink due to the growing market, Crescent Pure's organic certification, and differentiation from unhealthy competitors. Pricing Crescent Pure affordably at $2.75 per can would maintain market share while covering costs. Advertising $750,000 in 2014, PDB would need to sell 142,045 cases to breakeven with extra capacity allowing $10,320 in profits.

1. CRESCENT PURE
MARKET POSITIONING STRATEGY : To Maximize Revenue
CASE STUDY

2. PORTLAND DRAKE BEVERAGES (PDB.)
 Portland drake beverages (PDB) is manufacture
of organic juices and sparkling water .
It is known to provide

3. SITUATION ANALYSIS
WHAT IS THE SITUATION?

4. Portland Drake Beverages (PDB) acquired Crescent in July 2013.
The drink’s combination of energy-enhancing, hydrating, and all-organic
ingredients made it a natural extension for PDB’s existing organic product
lines.
The pricing strategy has been decided but the
market target and positioning is yet to be
decided from the available options.
Market research ,analysis and survey has been
run to get an outlook for best possible market
positioning for the drink.

5. PRODUCT ANALYSIS
 Peter Hooper, a native of Crescent, Oregon, saw a market opportunity for a healthy, energizing
drink. He founded Crescent in 2008.
 Crescent pure was created to fulfil the demand for healthier alternative that also relieved fatigue
and replenished energy.

6. POSITIONING ANALYSIS
 Crescent was a non-alcoholic functional beverage with drink’s energizing ingredients,
hydrating elements and organic roots provided with three positioning options.
ENERGY
DRINK
SPORTS
DRINK
Organic
drink

7. PRODUCTION ANALYSIS
 However, production capacity constraints prevented PDB from launching the drink nationally until
early 2015. As a result, PDB planned to embark on a “soft launch” of Crescent in three western
states (California, Oregon, and Washington) in January 2014.
 I T W A N T T O B E AT T H E L A R G E B E V E R A G E C O M PA N I E S T O A L L N AT U R A L
E N E R G Y D R I N K M A R K E T.

8. MARKET TRENDS
 Drinks with low caffeine & sugar Energy Drinks market up by 40%
 Fierce competitions amongst both energy and sports drink segments
 Competitors to launch organic products in 2015
 Negative campaigns against both sports & energy drinks
 Rising sales of healthier beverage choices
 Organic Drinks industry – emerging, growing rapidly

9. OBJECTIVE
WHAT ARE THE MAIN ISSUES?

10. 1. Evaluating the market research ,
analysis and survey carried out by Matt
Levor, PDB’s director and beverage
industry trade association.
2. Optimal positioning strategy to
maximize the sales revenue .
3.Can Crescent pure breakeven?

11. MARKET RESEARCH AND
SURVEYS
I N S I G H T S F R O M T H E S U RV E Y A N D M A R K E T R E S E A R C H C A R R I E D O U T.

12. BEVERAGE INDUSTRY TRADE
ASSOCIATION DATA
ENERGY DRINK
 GROWTH : past-40% in 2010-12
Future- 58.82% in 2018
 DEMOGRAPHICS : Males between 18-24 age
Parents of children
Household with income below $25,000
 OPPORTUNITIES : Increasing demand for low level of
sugar and caffeine and purer ingredients
 THREATS: Only 34% of consumer drank energy drink in
last 6 months with 11% drinking fewer amounts.
SPORTS DRINK
 GROWTH : past-9% only in 2010-12
Future- 52.82% in 2018
 DEMOGRAPHICS : 40% Males
27% females and 62%between 18-24 age.
 OPPORTUNITIES : New diet and low sugar hydrating drink.
Expected growth of low sugar sports drinks :112.14%
 THREATS: High price in comparison to other competitors in
market.

13. SPORTS AND ENERDY DRINK :
CUSTOMER STUDY

14. INSIGHT
The customer perceived sports drink :
REFRESHING
HEALTHY
HYDRATING
FUNCTIONAL
The energy drink market has
perfect spot for entry of a healthy
alternative
as all the customers rated on the
basis of existing alternatives in
markets.

15. CRECENT: CUSTOMER STUDY

16. INSIGHT
focus group
• The healthy ingredients, good taste, and a slight pick-me-up
appeared to
• reflect a focus on health and wellness, and transcended a
specific age or demographic profile.
Customer profile:
• The price of the beverage was considered affordable by most
customer.
Price:
• Most customer found Crescent a healthy alternative to high-
calorie, sugary energy drinks.
• Some younger consumers noted that Crescent had less energy
than they had hoped.
Energy content:

17. RETAILER FEEDBACK
 INCREASING SALES AND POPULARITY AMONG CONSUMER OF ADE 18-30
 HIGH PERCENTAGE OF WOMEN PURCHASED CRESCENT PURE.
 Younger men often purchased six or more cans at a time.

18. IDENTIFYING MARKET SEGMENTS
AND TARGETS

20. • CRESCENT PURE CUSTOMER SEGMENT
INCLUDES 80% FROM 19-34
• AGE GROUP. (TABLE:2)
• C R E S C E N T P U R E P R O V I D E S A
L A R G E C O N S U M E R S E G M E N T
W I T H A LT E R N AT I V E F O R
H E LT H E I R E N E R G Y D R I N K .
• A C C . TO R E TA I L A N A LY S I S T H E
I N C R E A S I N G S A L E O F C R E S C E N T
P U R E R E F L E C T O N I T S
A C C E S S I B I L I T Y TO T H E S E G M E N T.

21. • ALTERNATIVE HEALTHIER
ENERGY DRINK
• CERTIFIED ORGANIC
• LOW SUGAR AND CAFFEINE
• EFFECTIVE PROGRAM CAN
BE FORMULATED TO
ATTRACT AND SERVE THE
SEGMENT.

22. OPTIMAL POSITIONING
W H AT P O S I T I O N I N G I S M O S T B E N I F I C I A L F O R C R E S C E N T P U R E T O
G E N E R AT E M A X I M U M R E V E N U E ?

23. POINT OF DIFFERENCE

24. Crescent Pure vs. Sports Drinks
 HIGH NUTRITION
 HYDRATING NATURE
 LOW SUGAR -80% LESS THAN COMPETITORS
 HEALTHIER ALTERNATIVE

25. Crescent Pure vs. Energy Drinks
 REFRESHING
 CERTIFIED ORGANIC CONTENT
 LOW SUGAR
 HAS CAFFEINE AS MUCH AS A CUP OF COFFEE
OPTIMAL ENOUGH TO KILLS FATIGUE
 HEALTHY
 AFFORDABLE -$2.75 VS. $2.99

26. VERDICT
WHICH OPTION IS MOST PROFITABLE ?

27. POSITIONING
ORGANIC ENERGY DRINK
DUE TO ITS UNIQUE ALL ORGANIC CERTIFICATE AND GROWING ENERGY DRINK MARKET.

28. CRESCENT PURE is a better fit for the energy drink category.
Market has shown growth of 40% in just 2 years between 2010 and 2012 and its projected to grow
58.82% by 2018.
There is much larger opportunity for present pure as an energy drink.
Most other energy drink are full of Un-healthy and Unnatural ingredients which will differentiate
Crescent pure from the competition.
. •First is the Best - Major national food and beverage companies are gearing up to launch their own
organic beverages in 2015.

29. PRICING STRATEGY
VARIABLE COST :$1.02
WHOLESALE PRICE: $1.24
RETAIL PRICE : $2.75
GROSS MARGIN FOR PDB : $1.24
- $1.02
=$0.22=18%
GROSS MARGIN FOR : $1.55
DISTRIBUTER - $1.24
=$0.31=25%
GROSS MARGIN FOR : $2.75
RETAILER - $1.55
=$1.20=77%
Pricing Crescent Pure will maintain their
current affordable pricing strategy.
Costs to wholesalers will be $1.24 per
can, or $29.76 per case
With this lower price strategy we will
be able to stimulate more demand for
our product and gain a greater amount
of market share initially.
Once we are ready for a hard launch in
2015 with a larger
distribution capacity, economies of
scale will decrease our cost even more
and provide us a higher gross profit.

30. DOES CRESCENT PURE
BREAKEVEN?
estimating required sales for PDB to breakeven on 2014 advertising expenditures.

31. BREAKEVEN POINT :
SPEND $750,000 ON
ADVERTISING FOR
CRESCENT IN 2014 AS
BENCH MARK EARNING
GOALS

32. BREAKEVEN POINT :
SPEND $750,000 ON
ADVERTISING FOR
CRESCENT IN 2014 AS
BENCH MARK EARNING
GOALS
PRICING
VARIABLE COST :$1.02
WHOLESALE PRICE: $1.24
RETAIL PRICE : $2.75
BREAK EVEN POINT = $750,000
Revenue of one case for PDB
=( revenue earned on single can )*
( total number of can in one case)
= $0.22 * 24 =$5.28
Number of cases needed to break even =750,000/5.28
=142,045.45
cases

33. BREAKEVEN ANALYSIS
 TOTAL NUMBER OF CASES PRODUCED IN ONE YEAR = 12,000/month
= 144,000 cases/year
 TOTAL NUMBER OF CASES NEEDED TO BREAK EVEN = 142,042.45 CASES
 EXTRA CAPACITY = 1954.55 cases
PROFIT FOR PDB = 1954.55 * 5.28=$10,320.024

34. DISCLAMIER
This presentation has been prepared by Sagar
Panchal, Ramjas College,Delhi University in
fulfilment of the requirements of the Marketing
Management internship pursued under the
mentorship of Professor Sameer Mathur, IIM
Lucknow.