hbr - crescent pure case analysis
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CRESCENT PURE CASE ANALYSIS
PORTLAND DRAKE BEVERAGESOrganic juice and sparkling water makers
$120.5 million Revenue
MICHAEL BOOTH Runs PDB
HIGH QUALITY AT AFFORDABLE PRICES IS THEIR CORE VALUE
Crescent purePeter Hooper founded Crescent Pure in 2008
All natural organic juice delivering 80mg caffeine
Sugar quotient was 70% lesser than sports & energy drinks
retailed for $3.75 apiece
Pdb acquired
crescent pure in july 2013
WHY?
PORTLAND DRAKE BEVERAGES(PDB) ACQUIRED CRESCENT PURE WITH AN AIM OF EXPANDING AND MAXIMIZING REVENUE
soft launch in 3 states in January 2014
With an Advertising budget of $750,000 they wanted to define product positioning by 1st october, 2013
SCENARIOSARAH RYAN, MARKETING VP AT PDB
NEEDS TO FINALIZE PRODUCT POSITIONING STRATEGY FOR
CRESCENT PURE
Positioning optionsENERGY DRINK
SPORTS DRINK
ORGANICDRINK(ALTERNATIVE)
ENERGY DRINK
crescent
MARKET OVERVIEW
● $8.5 billion market growing at 40% YoY● Top 4 brands occupied 85% market share● highest consumers were Men of 18-24 years old● Avg price for 8 ounce can - $2.99● Sales of energy drinks with low caffeine were rising in
demand
COMPETITIONPOINTS OF PARITY
POINTS OF DIFFERENCE
- REFRESHING - IMPROVES MENTAL FOCUS
- CAFFEINE - KILLS FATIGUE
- HEALTHY - $2.75 VS $2.99
- EQUAL TO 1 COFFEE CUP - LOW SUGAR
SPORTS DRINK
MARKET OVERVIEW● $7.5 billion market, Expected to grow to $9.58 billion in
2017● Top 2 brands occupied 94% market share● highest Consumers were aged b/w 18-24 and b/w 12-17● Avg $1 to $2 for 12 & 14 ounce containers respectively● Increasing demand for diet and low sugar sports
drinks.
COMPETITIONPOINTS OF PARITY
POINTS OF DIFFERENCE
- HYDRATING - NUTRITIOUS- PERFORMANCE ENHANCING - GOOD TASTE
- EXPENSIVE - LOW SUGAR
- HEALTHIER - DIET
MARKET ANALYSIS
PERCEPTUAL MAP HYDRATION VS ENERGY
PERCEPTUAL MAP NUTRITION VS TASTE
Percentage of respondents who described Crescent
Refreshing 35% Healthy 22% Affordable 29% Functional 47% Too sweet 9% Suitable for teens 8% Fun 19% Natural 38% Hydrating 29%
Demographics of Crescent Online Customers
36%
15%
44%
3% 2%
ANNUAL INCOME$42,000
ECONOMICS
area AmountWholesale price PER can $1.24
Cost price PER can $1.02Profit PER can $0.22
Number of cans PER case 24Profit PER case $5.28
Production of number of cases PER month 12,000Profit PER month $63,360Profit PER year $760,320
Advertising costs $750,000Net Profit $10,320
HOW SHOULD CRESCENT BE POSITIONED?
ORGANIC ENERGY DRINK● Consumers viewed “Energy” as Crescent’s most descriptive character● Positioning Crescent as energy drink would reinforce existing perceptions
from Oregon● Contains healthy ingredients, low sugar, yet packs a punch – 80mg caffeine● Crescent, as an organic energy drink IS a healthier alternative to OTHER
energy drinks● Energy drink market is growing at 40% ● wOULD MAKE A NATURAL EXTENSION OF WHAT PDB ALREADY STANDS FOR
DISCLAIMERCREATED BY VYSHAK K IYENGAR, RNSIT BANGALORE, DURING A MARKETING INTERNSHIP UNDER
PROF.SAMEER MATHUR, IIM LUCKNOW
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