CRESCENT PUREHARVARD CASE STUDY

• Peter Hooper founded Crescent in 2008.

• Demand for the product grew locally in Crescent, Oregon.

PRESENT SITUATION• Michael Booth PDB’s CEO

acquired Crescent Pure in July 2013.

• Sarah Ryan, Vice- President of marketing for PDB has to develop a positioning strategy for Crescent.

• PDB has to choose between energy drink, sports drink or a healthy organic drink positioning.

Why CRESCENT PURE?• Organic and natural energy –enhancing drink and sports drink.• Contains Ginseng and Guarana and 80 mg. caffeine.• Sugar content is 70% less than leading energy and sports drink on

average.• Available at low price of $2.75 per 8 oz.

Objectives• Identify industry specifics, related to each of the two positioning

options.• Do comprehensive strength and weakness analysis.• Designing positioning strategy.• Designing user surveys.• Recommendation.

BREAK-EVEN ANALYSIS

In order to Break-even net- revenue from the sales must be greater than $750,000

Variable cost for 1 can=$1.02Selling price for 1 can=$1.24 In order to break-even 11837.2 cans per month needs to be sold

ENERGY DRINK V/S SPORTS DRINK

SPORTS DRINK POSITIONINGPROS CONSIn 2012: Market for sports drink $6.3 billion. Government mandated guidelines to remove sports

drink from school vending machines; courtesy high calories.

42% sports beverage drinkers have sports drinks as any “anytime beverage” and not only for exercise.

Crescent’s $2.75 is higher than other competitors.

Attract wider consumer base than any energy drink and regular consumer consumes them more

Market is $2.2 billion less than energy drink market.

Available in variety of sizes and average $1-$2 for 12-oz and 24-oz containers, respectively.

Similar drinks are also available in market.

Hydrating elements+ mental focus+ energy boosters = very attractive drink.

ENERGY DRINK MARKETPROS CONS

Uniqueness less sugar, more caffeine. Negative media attention for health risk.

All natural stimulants for energy booster. Only 32% consumers consumes energy drink in past six months.

Consumer viewed “energy “ as Crescent’s most descriptive characteristics.

Doubts on company ability to deliver healthy organic product for just $2.75

Average price of 8 oz. can of energy drink: Crescent=$2.75, others=$2.99

Competitors 85% not much wiggle room for new.

Market sizeForecast predicted the

market for energy- drink to reach $13.5

billion y 2018

Consumer dataLargest group: males

between 18-34, parents of children.

The highest has been consumed by household

income below $25000 p.a

Competition Together, Fright, Razor,

Torque and Steller accounts foe 85%

market

OpportunitySales of organic

energy drink with lower levels of

caffeine is rising

ThreatsDrinks alleged health

risks 32% drink energy drink once in six

months.

ENERGY- DRINKS

SPORTS DRINK

Market sizeExpected to grow to $9.58 billion by 2017

Consumer data40%males found it

refreshing while only 27% of female did

62% of those between 18 & 24 and 77% b/w

12-17

CompetitionGleam and Drip had

73% and 21% market share, remaining 6% is

shared by 20 producers

ThreatsGovernment

mandated guidelines due to increasing

obesity among children

OpportunityThe market size was expected to increase from $1.4 bn in 2012 to $2.97 bn in 2017.

• Position Crescent Pure as an energy drink• Opportunity to provide this market with a healthier alternative.• Market growth of 40% between 2010-2012.• Pricing advantage.• Forecast to reach $13.5 billion in 2018.• Suitable for targeted market based on age and gender.

DISCLAIMERCreated by Anjali Gupta, Delhi Technological University, during a marketing internship under Prof. Sameer Mathur, IIM Lucknow