Crescent pure Harvard case analysis.

1. CRESCENT PURE
CASE ANALYSIS
-Suraj Singh

2. PDB’s HISTORY
*Portland Drake Beverages (PDB) is a manufacturer of organic
juices and sparkling
waters.
*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.

3. *The vice president of marketing, Sarah Ryans is
working on the product positioning strategy for
Crescent Pure
*She has just a few weeks to finalize her decision.

4. Before we see what the
dilemma seems to be let’s look at some
history…..

5. *Peter Hooper, a native of crescent,
Oregon, Saw a market opportunity for a
healthy, Energizing drink.
*He found popular enery and
performance drinks unhealthy, too
sweet, artificial.
*Hw experimented, and crafted an
organic, all-natural beverage lightly
infused with organic juices, herbal
stimulants, and electrolytes.

6. PDB Acquires Crescent…
Booth, the CEO of PDB felt it is important to expand PDB’s trusted and popular
Suite of organic products; he knew that functional beverages – specifically energy
And low-calorie sports drinks– were rapidly growing segments, and sought to expand
Into these areas through acquisitions.
PDB thought it could leverage its manufacturing facility, organic suppliers, and
distributers relationships to expand Crescent’s presence geographically only if the drink
perfomed Well in the market of a year.

7. Situational Analysis
Before selecting and negotiating with distributors, PDB needed to determine the
most effective positioning for Crescent. The drink’s positioning would influence
where the Product was sold and therefore, which distributors PDB would select.
There was initially two viable positioning strategies which would maximize
Crescent’s revenues. Some felt the drink’s energizing ingredients supported an
energy-drink positioning, while others felt that due to the drink’s hydrating
elements, a sports-drink positioning made more sense.

8. A third possible positioning strategy would be to place Crescent
focusing on the drink’s healthy and organic roots would attract the most
consumers .

9. Objective of the Case
To develop a successful marketing strategy using:
1. Customer Segmentation
2. Product Differentiation Strategy
3. Evaluation of perceptual maps
The data used has been carried out by the market research wing of
PDB.

10. Customer Segmentation
Customer segmentation is the practice of dividing a customer base into
Groups of individuals that are similar in specific ways relevant to
marketing, such as age, gender, interests and spending habits.

11. Product Differentiation Analysis
Product differentiation (or simply differentiation) is the process of
distinguishing a product or service from others, to make it more attractive to a
particular target market .

12. Perceptual Mapping
A perceptual map is a visul representation of how
target customers view the competing alternatives in a
Euclidean space which represents the market
Pair-wise distances between product alternatives
directly indicate how close or far apart the
Products are in the minds of customers
The axes of the map are a special set of vectors
suggesting the underlying dimensions that
best characterize how customers differentiate
between alternatives .

13. All these marketing techniques will help in determining a
suitable product positioning startegy .

14. Positioning of Crescent can be done under the follwing
headings-
An Energy drink
OR
A Sports drink
OR
An Overall “Health & Wellness” drink

15. Market Research
Ryan knew that good positioning if successful, could shape
potential customers’ opinions about a product or service before
they’d even seen or experienced the product in question.

16. Positioning Analysis for Energy drink Position
Crescent delivers a boost of energy to combat
fatigue and Promote mental focus.
Most people describe Crescent as a refreshing
drink.
Thus it is suitable for an energy drink position.

17. Pricing Strategy
Cheaper than usual energy drinks in market!
Crescent’s price Other energy drinks
$2.75 $2.99
Market for Product
The projected market for energy drinks in 2013 is $8.5 billion.
The market for energy drinks was growing; between 2010 and 2012, the
Market for energy drinks had grown by 40%.

18. Targeted Customers
Most advertising for energy drinks targets the most enthusiastic
consumers, men 18 to 24 years old.

19. Product Differentiator/ Opportunities
Crescent’s organic certification and minimal ( as compared to
leading competitors) Caffeine content provide strong differentiator
for the energy market.
Our drink is a healthier alternative to leading brands, whose
artificial sweeteners and excessive levels of stimulants are likely to
prompt a subset of consumers to switch to healthier options.
Apprehensions/ Threats
Regular consumption of these drinks has fallen because of negative
media attention.
New stories were highlighting the drinks’ alleged health risks.

20. Positioning Analysis for Sports Drink Position
Crescent’s hydrating elements, paired with the mental focus and
energy boost, can enhance athletic performance.
42% of sports beverage drinkers considered sports drink “anytime
beverages” and did not associate them only with exercise.
They attracted a wider consumer base than did energy drinks, and
regular users consumed them more often.

21. Pricing Strategy
Sports drinks come in variety of sizes and average $1.00 to $2.00 for 12-oz. and
24-oz. containers, respectively.
Crescent’s $2.75 price point for an 8-oz. can will be significantly higher than are
those of similarly sized sports drinks, so our positioning and advertising will
have to build the case for its premium price.
Market for Product
In 2012, the market for the sports drinks was $6.3 billion.
They attracted a wider consumer base than did energy drinks.

22. Targeted Customers
Sports drinks appealed to younger consumers—62% of those between ages
18 and 24, and 77% of those ages 12 to 17.

23. Product Differentiator/ Opportunities
New diet and low-sugar sports drinks were growth areas for the industry. Diet and
low-sugar sports beverages, which did not exist before 2009, had grown by 33%
between 2010 and 2012, taking market share from traditional sports drinks.
Apprehensions/ Threats
Concern regarding rising childhood obesity rates resulted in government-
mandated guidelines to remove high-calorie sugary drinks and snacks, including
sports drinks, from school vending machines beginning in 2014.

24. The 3rd Option
Contemplating a broader
Positioning strategy:
Ryan wondered if a third,
“broad appeal” option would make
The most sense for Crescent. What if
Crescent positioned itself as an organic
Refreshment and capitalized on the
Growth of the organic food and
beverage industry.

25. This would easily bring the product in front of more eyes.
Booth wants Ryan to recommend an approach so that he could
identify possible distribution and retail outlets and hire
advertising firms to develop and execute a strategy for the
coming year. A broader approach would complicate these
efforts.
If enough time and distribution channels could be used, these
positioning would have worked. Now that time is short and PDB
does not have enough money to cater to many distribution
channels, this task would be very difficult.
Time and money are the most crucial factors for the launch of
Crescent. Thus this approach should be neglected.

26. we have two viable options for marketing now
Which would serve as better marketing position?
let’s look at some statistics which would help us gauge the two options
And hopefully help us reach a final conclusions.

27. Customer Segmentation
Customers
The largest group of energy-drink consumers were males
between ages 18 and 34. Parents of children were also more
likely to consume energy drinks.
Sports drink appealed to a younger age group of only 18-24.
sports drinks are mostly drunk by males, only a small percentage
of females seemed to enjoy it. Based on the count, energy drinks
will automatically give you a bigger market share.

28. Market Growth
Energy drinks attain revenue up to 8.5 billion dollars and
are expected to grow to 13.5 billion dollars in few years
period.
Sports drinks revenue is much smaller. The market
increased only 9% between 2007 and 2012. In 2012, the
market for sports drink reached $6.3 billion in the united
States and was expected to grow to $9.5 billion by 2017.
This clearly shows sports drink position is a much easier
source of revenue than
Energy drinks and a higher rise in growth energy drinks
are expected.

29. Price
Prices for energy drinks in the U.S. range from $2 to $5 per can, based on can
size (8oz., 12oz., or 16oz.) and retail outlet. The average price for 8oz. Of energy
drink is $2.99, above our $2.75 price point.
Crescent’s $2.75 price point for an 8-oz. can will be significantly higher than are
those of similarly sized sports drinks, so our positioning and advertising will have
to build the case for its premium price.
PDB wants Crescent to reflect PDB’s pricing strategy in other product lines,
which was to deliver quality organic products at affordable prices.
PDB had experimented with premium pricing in previous product launches, and
the strategy had backfired.
Thus a better choice would be a energy drink position, as it provides both a
quality organic juice and affordable prices.

30. Product Differentiation Strategy
We see that Crescent provides a healthy alternative to most energy and
Sports drinks. Product differentiation strategy is to focus on the drink’s
Healthy and organic roots which would attract most customers.
New highlighted energy drinks
Negative aspects can be used positively
for Crescent
School scan be convinced of the healthy
Nature of the drink and thus make it a part
of can be sold at schools

31. The 2 big advantages of Crescent!
Energy Effect
Crescent’s herbal stimulants
(gaurana seed and ginseng)
delivered 80 milligrams of caffeine,
Roughly the same amount of
“energy effect” as a cup of coffee
Sugar Quotient
Crescent’s sugar quotient
(derived from organic, raw cane
Sugar) was 70% less than leading
Energy and sports drinks,
on average.

32. Evaluation of Perceptual Map for Crescent
Perceptual maps measured consumer perception of leading sports drinks
And energy drinks on two sets of paired factors :
1.Energy and hydration, and
2. Nutrition and taste.
These maps have been provide by the market research department of
Crescent Pure.

34. Comprehension of Perceptual Map
Gleam and Drip had 73% and 21% market share, respectively. The remaining 6%
of market share ($378 million) was split fairly evenly among roughly 20
producers.
New diet low-sugar sports drinks were growth areas for the industry. Diet and
low-sugar sports beverages, which did not exist before 2009, had grown by 33%
between 2010 and 2012, taking market share from traditional sports drinks.
This position shows low competition and possibly high growth of Crescent but it
will happen in a very small niche, which does not show much market growth.

36. Comprehension of Perceptual Map
Together, Fright, Razor, Torque, and stellar accounted for 85% of category
revenue (34%, 27%, 16%, and 8%, respectively). The remaining 15% was
split between roughly thirty independent regional and national producers.
Sales of energy drinks with lower levels of caffeine and purer ingredients
were rising due to consumer demand for healthier food and beverage
choices.
Though this position has high competition, Crescent can gain market share
by showing that it has healthy and organic roots. Apprehension regarding
the alleged health risks of energy drinks can be used to its advantage by
showing its healthy side. A much higher growth can be expected in this
position.

37. Results
Customer Segmentation
The position ‘Energy drink’ might capture a bigger customer
base, revenue and has a viable pricing strategy.
Product Differentiation
Both share the same product differentiation strategy but it
would be wiser to show that differentiation strategy in a
bigger market, which is energy drinks.
Perceptual Maps also show how Crescent can gain market
share as a energy drink and
Sport drink.

38. Conclusion
Using all these marketing strategies, we can now conclude
that we should position Crescent Pure as a
Energy Drink!

39. Summary
•History of P.D.B
• History of Crescent Pure
• Situation Analysis
• Positioning Analysis
• Conclusion

40. DISCLAIMER
Created by SURAJ SINGH, under the guidance of Professor SAMEER MATHUR,
IIM Lucknow during marketing internship.