crescent pure
TRANSCRIPT
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CRESCENT PUREHARVARD CASE STUDY
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• Peter Hooper founded Crescent in 2008.
• Demand for the product grew locally in Crescent, Oregon.
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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.
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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.
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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.
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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
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ENERGY DRINK V/S SPORTS DRINK
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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.
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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.
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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
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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.
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• 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.
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DISCLAIMERCreated by Anjali Gupta, Delhi Technological University, during a marketing internship under Prof. Sameer Mathur, IIM Lucknow