Case Study

Analysis: Crescent
Pure
AMB320 Advertising Management
Assessment1
Student Name: Jina Kim
Student Number: n8421901
Due date: 14/4/2016
Tutor time: 11am~12pm
Tutor: Ana Lia Marx
1. Problem Statement
Portland Drake Beverages (PDB) where is one of the beverages companies in U.S,
produces a Crescent that is non-alcoholic functional beverage. The company creates
plans to lunch this product in California, Oregon and Washington and to improve
campaigns with advertising company. However, the PDB still consider positioning of this
beverage, because some members select to put positioning as energy drink, but others
choose to locate position as sports drink.

The main problem is undecided positioning of Crescent that impacts on plans for
distribution of Crescent in three western states and employment of advertisers. This
issue will be significant and influential factors in order to maximize the recent product’s
profits and to create suitable advertisement for reaching an advertising goal and
appropriate target audience in U.S markets.

2. Analysis of the Key factors

Drink materials
Drink materials are one of the main factors for determining position. The key features of
Crescent are a mixed of energy-reinforcing, hydrating and all natural food materials.
These characters can involve to stand comparison with in both industry of energy and
sport drinks. For example, hydrating is beneficial and necessary elements as sport drink
and energy-enhancing is powerful and successful factors as energy drinks.

Consumers
In accordance with online sale and retailers, buyers aged 18 to 30 is main purchasers of
Crescent and both genders favour the product. All generation consumers are interested
in health and wellness. In the area of energy drinks, the main consumers aged 18 to 24
years is males and consumed by 34% people. However, the sport drinks have more wide
range of consumers and earn higher revenue than energy drinks. Also, consumers prefer
more to repurchase sports drinks. Thus, sports drinks have more powerful awareness to
consumers and capture extensive consumers.

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Price of product
Position in energy drinks fixes a price depends on size of beverages, between $2 and 5$.
Generally, cost of 8oz drink is $2.99 and the price of Crescent is $2.75 that is lower than
average price. While, positioning in sport drinks has numerous sizes and sets the price
from $1.00 (12oz) to $2.00 (24oz). The cost of Crescent for 8oz puts a price as $2.75
because of the lower sugar and organic ingredients. The price is higher than other
drinks. According to consumers, they understand high price for their products by high
quality materials, but they desire more to consume as cheaper price. Therefore,
difference price based on price will impact on the consumption and the preference of
target audience.

Image of different drinks

A variety of customers describe both sport and energy drinks as several words such as
refreshing, healthy, affordable, functional, too sweet, appropriate for teenagers, fun,
organic, hydrating and others. As a result, many purchasers explain sport drinks as more
positive words than energy drinks. Also, consumers describe about Crescent as similar
words with sport drinks such as refreshing, functional and natural. According to
consumers’ responses, the product is more close to image of sport drinks.

Market Size
Market for sport drinks grow slowly from 2007 to 2012 and U.S. predicts to increase
market size than before because they create new category which is diet and low-sugar.
Conversely, market size of energy drinks is more widely and produce more profits.
Besides, they expect to increase this market consciously. Both areas will offer
advantages to the PDB by wide market size.

Competitors
There are five main companies in market for energy drinks and they occupy around 85%
of market share. The rest of percentages occupy by other producers. This mean is that
this area shows quite high level of competition. On the other hand, sport drinks’ area
has less competitors. For example, two main firms own 94% of market share and other
20 producers own remaining portion.

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3. Development and Evaluation of Alternative Solution
The PDB suggests two main options for positioning strategy which includes the industry
of energy drinks and sports drinks. Also they considers additional positioning for the
product as organic beverages. Each positioning indicates different strengths and
weaknesses.

In case of locating the beverage in energy drink part, the firm can achieve effective
opportunities and product differentiation than other competitors by organic certification
and minimum standards of caffeine. Also, business can engage consumers and change
images of energy drink positively by emphasis of differentiation. However, the
consumption of drinks are decreased by negative media attention and consumer
unsatisfied the level of energy than other energy drinks. In addition, uncertainty of long-
term viability in this industry provide negative impacts and has more competitors than
other positions.

In case of selecting the position of product as sport drink, the PDB can capture a wide
variety of people and increase possibility of re-purchase about the Crescent. Ingredients
of the drink which involves hydrating elements, low amount of sugar and natural
material, engage customers to think the good assisted their body to become healthily
and athletically. Moreover, this position has less competitors than energy drink and
expected to grow market size about new diet and low sugar sport drinks. Otherwise,
expensive price of Crescent than other drinks will effect on consumption negatively.
Also, they may need to invest more in positioning and advertisement because of
premium price. Furthermore, raising the rate of childhood obesity impact negatively,
because this issue is associated with sport drinks.

If they place Crescent position as organic beverages, this area will help firm to increase
a quality of the products and to emphasize organic ingredients more easily and quickly
than other areas. Despite, they have to fix a price highly than other beverages which has
common attribute. In addition, the rage of target audience will be limited and the
budget for promotion is not enough to inform the product in other areas. Therefore, this
position is not suitable to employ for the Crescent and they are hard to implement their
plans with this position.

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4. Course of Action Recommendation and Justification
Each positioning has different benefits and drawbacks. Therefore, the PDB is difficult to
decide positioning quickly and easily. This analysis will recommend one of position for
the PDB to accomplish their goals and plans.

Positioning in energy drink is useful way to realise their plans. There are several
reasons. Firstly, market size is wider than other position, so the PDB is able to approach
more retailers and manufacturing for their distribution in other states. Another reason
is that Crescent is a low involvement product, thus consumers are learning by their
action (Belch, Belch, Kerr & Powell, 2014). At that time, they do not spend considerable
time for evaluating and analysing the product. Therefore, cheaper price than average
cost can be one of influential engagement factors. Moreover, they can be differentiated
their product from other competitors. Also they are able to emphasis the differentiation
by high-quality campaign lengthily. As a result, locating in energy drinks part might be
more advantageous decision to the PDB.

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Reference
Belch, G. E., Belch, M. A., Kerr, G., & Powell, I. (2014). Advertising: An integrated marketing
communication perspective (3e. ed.). North Ryde, NSW: McGraw-Hill Education
Australia.