crescent pure: a harvard business school case analysis
TRANSCRIPT
Title LayoutSUBTITLE
Crescent Pure:Case Analysis
Companies Involved
CRESCENTPURE
PDB
01CEO : PETER HOOPER
02
03
MANUFACTURES OF NON ALCOHOLIC ORGANIC BEVERAGE
FOUNDED IN 2008
Crescent Pure
01 CEO : MICHAEL BOOTHMARKETING VP : SARAH RYAN
02
03
MANUFACTURES OF ORGANIC JUICES AND SPARKLING WATER
LARGE PRODUCT DISTRIBUTION NETWORK
PORTLAND DRAKE BEVERAGES
SITUATION ANALYSIS
• PDB acquired Crescent Pure in July 2013
OBJECTIVEChoose a suitable brand positioning for Crescent Pure by analysing the
available data
Word with which consumers describe Energy or Sports drinks
Refreshing Healthy Affordable Functional Too sweet For teens Functional Natural Hydrating None0
10
20
30
40
50
60
Energy Drinks Sports Drinks
perc
enta
ge
Demographics of Crescent Online Customers
18-2425-3435-4445-5455+36%
15%
3% 2%
Age Range
44%
Add a Slide Title - 3INCOME: $42500
Demographics of Crescent Pure Consumers
Gender
Male41%
59%
Product Positioning Options
1. •Energy Drink
2. •Sports Drink
3. •Organic Drink
• SPORTS DRINKS PERCEIVED AS HIGH HYDRATION AND LOW ENERGY DRINKS.
• ENERGY DRINKS PERCEIVED AS LOW HYDRATION AND HIGH ENERGY DRINKS.
PERCEPTUAL MAP
• SPORTS DRINKS PERCEIVED AS HIGH NUTRITION AND GOOD TASTING DRINKS.
• ENERGY DRINKS PERCEIVED AS LOW NUTRITION AND GOOD TASTING DRINKS.
PERCEPTUAL MAP
ENERGY DRINKS
Positioning as Energy drinkPROS CONS
• Fierce industry competition• Publics disapproval of new drink on the market• Potentially stricter government regulation• Consumption has lowered after negative media attention
• 42% consider them as “any time beverage”• Market growing at the rate of 40%• Price of Crescent pure ($2.75) will be less than industry average of $2.99
Sports Drinks
Positioning as Sports drinkPROS
CONS
• Health risks associated with them• Fierce competition• 85% of category revenue with big players• $2.75 price is higher then industry average
• Large expected market growth • Low caffeine content acts as point of Difference• Diet and low sugar sports drinks are growth areas in the industry
ORGANIC DRINKS
Positioning as Organic drinkPROS CONS
• Large advertising budget required• Larger consumer base, thus, larger distribution channels needed.
• No competition from big firms• Premium pricing can be done, thus, large revenues• Attracts health conscious consumers
Hypothesis
Organic drinks market is very diverse and hence will require large advertising expenditure
Average price for 12 and 24 Oz can is $1 and $2 respectively. Thus this positioning will not be very lucrative.
Crescent should be positioned as healthy energy drink
Crescent’s organic certification and minimum caffeine provide strong differentiators in energy drinks market
Analysis
Advertising Expenses = $750000Variable cost per can = $ 1.02Variable cost per case = 24*1.02
= $24.48Selling price per case = 24*1.24
= $29.76
Profit per case = $5.28
Analysis (1/3)
Number to be sold to break even= 142046 Cases to be sold per month= 11838 Production capacity per month= 12000
Analysis (2/3)
Profit per month = $(12000-11838)* 5.28
= $ 855.36
Annual Profit = $855.36*12 = $ 10264.32
Analysis (3/3)
This presentation was created by Ramji Binnani, SGSITS, Indore during a marketing internship under the guidance of Prof. Sameer Mathur, IIM
Lucknow.