CASE 2 : CRESCENT PURE

1. Executive summary
Product positioning is an important element of a marketing plan. Product positioning is
the process marketers use to determine how to best communicate their products' attributes
to their target customers based on customer needs, competitive pressures, available
communication channels and carefully crafted key messages. Effective product
positioning ensures that marketing messages resonate with target consumers and compel
them to take action. (by Leigh Richards).
Portland Drake Beverages (PDB) acquired Crescent in July 2013 in order to extension its
existing organic product lines by launching a product which combines energy-enhancing,
hydrating, and all-organic ingredients. Ryan, the vice president of marketing for PDB,
was asked to provide recommendation on the positioning strategies. Two options are as
follow:
* Energy-drink positioning,
* Sports-drink positioning.
In order to have a good positioning, we have to analyze the customer needs, competitive
pressures, communication channel and conveying the differentiating of the products
through the selected communication channels.
Based on the observations and analyzing the case .(we need to write here which
product is better in the positioning segmentation)

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2. Case analysis
2.1 Crescent Pure (a company)
Peter Hooper, a native of crescent, Oregon, saw a market opportunity for a healthy,
energizing drink. He founded Crescent in 2008. Organic, all natural food a beverages
became ubiquitous in the Pacific Northwest region in the 1990s and early 2000s, and
Hooper found popular energy and performance-enhancing drinks unhealthy, to sweet, and
artificial. He began experimenting with different ingredients in order to craft an organic,
all natural beverage lightly infused with organic juices herbal stimulants, and electrolytes.
He wanted a drink that would refresh, energize, and enhance mental focus. What began as
a hobby became a business as Hooper saw growing local demand for his product.
Portland Drake Beverages (PDB) recent acquisition of Crescent Pure is a very interesting
move that could boost the companys current market. However, due to Crescents
versatility Sarah Ryan has been charged with figuring out whether they should position the
drink as an energy drink or sports drink.
2.2 Customers
Mostly, Crescent have two group of consumers which is energy drinks consumers and
sport drinks consumers. The largest groups of energy drink consumers were males
between 18 and 34. Parents of children were also more likely to consume energy drinks.
The highest volume of energy drinks consumed was by respondents with a household
income below $25,000 per year.
For sports drinks consumer, roughly half of men drank sports drinks, while only a third of
women did. Although 40% of men found sports drinks refreshing, only 27% of females
did. Sports drinks appealed to younger consumers; 62% of those between ages 18 and 24,
and 77% of those ages 12 to 17.

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2.3 Distributors
In this industry, the distribution will involve moving products from manufacturing to
distributors and then the distributors will sell the products to retailer before the products
deliver to consumers. Usually, distributors will markup 25% from manufacturer while
retailer will markup 40% from distributors. Because of limited production capacity and in
order to ensure distributors profitability sold out, PDB only used three distributors. The
distributors monthly cost would $34,000 during Cresents first year. The cost includes cost
of goods, marketing materials, employee training and compensation. PDB will decide
which distributors to select after determine the most effective positioning for Crescent
because the drinks positioning would influence where the product was sold and which
distributors that PDB would select.
2.4 Competitors
There are two leading energy beverages on the market, Fright and Razor followed by
Torque and Stellar. Table 1 and Table 2 shows the market share for each energy drinks and
sports drink.
Competitors
Fright
Razor
Torque
Stellar
Others

Market Share
34%
27%
16%
8%
15%
Table 1: Energy Drink

Competitors
Gleam
Drip
Others

Market Share
73%
21%
6%
Table 2: Sports Drink

3. Market research

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Research provided from three consumer surveys conducted by a private research firm,
several academic reports and industry media coverage. We are using SWOT analysis to
summarize the surveys.

3.1 SWOT Analysis comparison between Energy drinks and Sport drinks
STRENGHT
The market for energy drinks was growing for the period 2010 and 2012, had grown
by 40%. It was estimated to be $8.5 billion in the United States in 2013 and forecasts
projected that figure to reach $13.5 billion by 2018.
The market for Sport drink increased only 9% between 2007 to 2012. In 2012, the
market for sports drinks reached $6.3 billion in the United States and was expected to
grow to $9.58 billion by 2017.
From the above, Energy is expected to grow bigger in value compare to Sport drinks.

WEAKNESSES
Energy drinks market share where Fright, Razor, Torque, and Stellar accounted for 85% of
category revenue (34%, 27%, 16%, and 8%, respectively). The remaining 15% was split
between roughly thirty independent regional and national producers.

Gleam and Drip had 73% and 21 % market share, respectively. The remaining 6% of
market share ($378 million) was split fairly evenly among roughly 20 producers.
From the above, Energy have more competitors and larger market compare to Sport
drinks market share and competitors.

OPPORTUNITIES
Sales of energy drinks with lower levels of caffeine and purer ingredients were rising
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due to consumer demand for healthier food and beverage choices.
New diet and low-sugar sports drinks were growth areas for the Sport drink industry. Diet
and low-sugar sports beverages, which did not exist before 2009, had grown by 33%
between 2010 and 2012, taking market share from traditional sports drinks. The market size
for diet and low-sugar sports drinks was expected to increase from $1.4 billion in 2012 to
$2.97 billion in 2017.
Energy drinks demand will be increasing as people wants more healthier food and
beverage compare to sport drinks which is high in chemicals from labs engineered
nutrition.

THREATS
News stories were highlighting the drinks' alleged health risks: 32% of consumers over 18
indicated they drank an energy drink in the last six months, 11% of whom were drinking
fewer energy drinks than they had a year earlier, due to concerns about health and safety.
Sport drinks is creating concern regarding rising childhood obesity rates resulted in
government-mandated guidelines to remove high-calorie sugary drinks and snacks,
including sports drinks, from school vending machines beginning in 2014.
The above threats shows that energy drinks create less health risk compare to sport
drinks.

4. Segmentations and Targeting

Segmentation and Targeting Portland Drake Beverages (PDB) recent acquisition of
Crescent Pure is a very interesting move that could boost the companys current market.
However, due to Crescents versatility Sarah Ryan has been charged with figuring out
whether they should position the drink as an energy drink or sports drink. The main age
range of energy drink consumers are between 18-34 years old and are typically male,
while the sports drink market is larger, including a larger male and female population
ranging from age of 12-24. Hooper had set up an online store, anticipating a future focus

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on online sales. Chart 1 and chart 2 shows the study of online sales based on gender and
ages.

Gender of Crescent Online Consumer

Female; 41%

Male; 59%

Chat 1: Gender of Crescent Online Consumer

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Age Range of Crescent Online Consumer

45-54; 3% 55 +; 2%
35-44; 15%

18-24; 44%

25-34; 36%

Chart 2: Age Range of Crescent Online Consumer

Based on the chart above, it shows that most of the consumers are male because male
actively involved in sports. In term of age, 44% of the consumers are age ranges from
18-24 years old while 36% are age ranges from 25-34 years old. Market research has
found that the largest group of energy-drink consumers were males between ages 18
and 34. Parents of children were also more likely to consume energy drinks. Besides,
the highest volume of energy drinks consumed was by consumers with households
income below $25,000 per year. Roughly half of men drank sports drink, while only a
third of women drank sports drink. Although 40% of men found sports drinks
refreshing, only 27% of females did. Sports drink appealed to younger consumers
62% of those between ages 18 and 24 while 77% of those ages 12-17. So that, PDB
determined that younger, health-conscious consumers who regularly consumed energy
or sports drink were potential prospects for Crescent.

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Compare to other competitors, most products they offered is not a healthy alternative
for energy drinks. Most of these drinks are full of high fructose corn syrup and loaded
with extreme amounts of caffeine. Crescent give the consumers a healthy alternative
to this option. The trend these days is towards more organic and healthier choices.
Crescent gives the option for a healthy version of an energy drink which is much
needed. The Energy Drink market is growing at a much faster rate than the sport drink
market as well as the fitting into a much better price point for marketing. With the
market for these energy drink being on average $2.99 the price of $2.75 for crescent is
below the market average as well as being a slight bit different by marketing a healthy
alternative option to most other sport drinks on the market now.
5. Positioning
Definition on Positioning by Wikipedia:
The marketing activity and process of identifying a market problem or opportunity,
and developing a solution based on market research, segmentation and supporting
data. Positioning may refer the position a business has chosen to carry out their
marketing and business objectives. Positioning relates to strategy, in the specific or
tactical development phases of carrying out an objective to achieve a business' or
organization's goals, such as increasing sales volume, brand recognition, or reach in
advertising.

The positioning charts are extremely helpful in attempting to figure out where there
are new opportunities in the market and also what consumers typically like. For
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example, in Exhibit 1 there is a big space in the low energy, low hydration quadrant.
However, that does not seem like it would be a very popular drink. Instead, there is a
large market opportunity for a hydrating drink with a medium amount of energy
attached. In Exhibit 2, we once again find a large.
Crescent is an all-nature organic energy drink and that is how it should be positioned.
This positioning strategy reaches our target market and falls into locvore movement
that is trending throughout the US. Energy drinks are often packed with chemicals
that lead to serious health issues. Crescent will be launched as a healthier alternative
to other energy drinks but still at a very affordable price. Often times people chose to
avoid organic products because of the price but if the drinks are positioned at a
moderate and affordable price than Crescent will be able to be profitable and
successful with their drink

Though the market is dominated by a few large competitors, Crescent Pure has the
capability of penetrating the market with competitive advantage of being healthier,
more hydrating, organic and cheaper than the competition. Crescent Pure has an
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energy drink that is more suitable to consumer trends than the competitors brands.
With low brand recognition, Crescent Pure will face a tough time educating
consumers who are scared from the bad media attention in the energy drink segment.
To be successful, they will need to successfully communicate to the consumers that it
is a healthier and certified organic alternative to the industry average. Another
competitive disruptance Crescent faces is the consumer perception that the drink does
not provide enough energy. Crescent will need to communicate that they supply the
same amount of energy in a bottle/can of their product as a cup of coffee. With limited
marketing budget of $750,000, Crescent will need to be a effective as possible in
educating their targeted consumers with their products features and benefits.
6. Recommendations
The recommended plan of action for PDB is to market Crescent Pure as an energy
drink
Ability to boost energy and mental focus
Health benefits where contain no artificial chemical and uses caffeine from

natural products with much less sugar together with natural flavors
Pricing advantage as it sell it at a lower cost
Trending market growth by 40% between 2010-2012

7. Conclusion
As a conclusion, the Crescent Pure as well-known as beverage which delivers a boost
of energy to combat fatigue and promote mental focus Positioning Crescent as on energyenhancing beverage.With the passage of time they increases its strength and reduces the

weaknesses. The company very much emphasis on the energy drinks to keep its name
in the market.

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8. References

1.
2.
3.
4.
5.
6.
7.

Marketing Management by Kotler Keller

http://en.wikipedia.org/wiki/Marketing
http://www.marketingmagazine.co.uk/
http://www.businessdictionary.com/definition/marketing.html
https://quizlet.com/71569488/crescent-pure-case-hbs-flash-cards/
https://prezi.com/_msrkrod9m3o/crescent-pure/
http://writingbureau.net/case-analysis-crescent-pure/

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