Transcript
CRESCENTPURE
A Case Study on
B Y K R I S T Y C O O P E R F R O M T H I N K B I G
COMPANIES INVOLVEDPORTLAND DRAKE BEVERAGES01Manufacturer of organic juices & sparkling waters
Revenues increased to $120.5 million by 2012
CRESCENT PURECrescent is a non- alcoholic functional beverage.
The drink was a combination of energy-enhancing, hydrating, and
all-organic ingredients.
PDB acquired Crescent with an aim of expanding and maximising
revenues.
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CURRENT SCENARIO
Production capacity constraints prevented PDB from
launching the Crescent Pure drink nationally until early 2015.
Hence, PDB planned on a "soft launch" of Crescent in
California, Oregon & Washington in January 2014.
PDB projected that these three states represented 15% of
national functional beverage demand.
PDB has allocated $75,000 on ads and has targeted to atleast
breakeven in the first year.
PEOPLE INVOLVED1
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Michael Booth : CEO,PDB
Sarah Ryan : Vice President - Marketing, PDB
Matt Levor : Director of Market Research
Peter Hooper : Developed Crescent Pure
CRESCENT HISTORYFounded by Peter Hooper, a native of Crescent, Oregon in 2008.He wanted to make a refreshing, energizing drink that enhances
mental focus.He manufactured & distributed the drink from a rented warehouse
in Portland, Oregon.Crescent benefited from launching in a region that embraced the
“locavore” movement.After promotion at farmer's markets & local food shows, the
demand grew. The company was selling 1,000 cases per month.
The drink retailed for $3.75 for an 8-ounce can.
INGREDIENTS OF CRESCENT PUREEach can contains an 80 - calorie serving
For flavor, Crescent contained lime juice, lemon juice, and small
amounts of raw cane sugar and green tea.
Energy stimulants included guarana (a plant native to South
America whose seeds contained roughly double the
concentration of caffeine found in coffee beans) and ginseng,
an herbal supplement known to relieve fatigue and boost
concentration and endurance.
A dash of fine-grain salt delivered electrolytes with each
serving.
All Crescent ingredients were “certified organic”.
WHY CRESCENT PURE?Low calorie beverage01
70% less sugar than leading energy andsports drinks.
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Contains as much caffeine as one cup of coffee.
Certified Organic
PROBLEMS
What is the optimal brand positioning?
01
Selecting the right distributors according to thechosen brand positioning.
02
Energy-drink positioningSports-drink positioningOrganic and healthy-drink positioning
03 Will PBD breakeven after the first year?
PRODUCT POSITIONING OPTIONS (1/3)
ENERGY DRINK
Age group : 18-34Top six players account for 85 % of therevenueRising sales of healthier beverage choicesNegative perception campaigns highlightshealth risks
(Avg Price : $2.99/can)
PRODUCT POSITIONING OPTIONS (2/3)
SPORTS DRINK
Age group : 12-24Top two players account for 96% of the revenueRising sales of healthier/low sugar beveragechoicesNegative perception campaigns highlightsincreasing obesity rates
(Avg Price : $1-$2/can)
PRODUCT POSITIONING OPTIONS (3/3)
ORGANIC DRINK
Age group : All agesNew emerging marketHigh inclination amongst consumers to go forhealthier and natural product alternativesHigher budget required for advertising
(Avg Price : 25% Premium)
CONSUMERANALYSIS
CONSUMER DEMOGRAPHICS
PERCEPTUAL MAP (1/2)
PERCEPTUAL MAP (2/2)
CONSUMER REACTIONS
RECOMMENDATIONCrescent Pure should be positioned as a organic and healthier
alternative to other energy drinks. The reasons are:
The market for energy drinks has grown by 40% in two years The average price for 8 oz. of energy drink is $2.99, which is
above the $2.75 price of Crescent PurePriced at $2.75 for 8 ounce can it is quite low in the $13.5
billion energy market while it is a premium price in the $6.5billion sports market.
Major national food and beverage companies are gearing up tolaunch their own organic beverages in 2015, which is a year
after the launch of Crescent Pure.
FINANCESAdvertising Budget01Cases sold per month02Cases sold annually03Drinks per case04Manufacturer's wholesale price to distributors05Variable cost to manufacturer per case06Manufacturer margin07Manufacturer margin %06
$750,00012,000
144,00024
$29.76$24.48$5.2818%
Breakeven cases
Capacity Overage
Profit from capacity
142,045.45
1,954.55
$10,320
PDB BREAKS EVEN!
PROFIT MARGIN ANALYSISManufacturer
Distributor
Retailer
18%
25%
40%
$1.24
$1.65
$2.75
DISCLAIMERThis presentation is made by Akankshi Mody, DJSCE - Mumbai, as
part of a marketing internship by Prof. Sameer Mathur, IIM Lucknow
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