CRESCENT PURE

ASSESSMENT ONE – CASE STUDY

BRADLEY BAILEY
N9153446
TABLE OF CONTENTS
 BRADLEY BAILEY CRESCENT PURE N9153446

1.0 Problem Statement…………..……………………………………......……3

2.0 Analysis of Key Factors…....…………………………………..….…...…..3
2.1 Market………………………………………………………...…3
2.2 Positioning……………………………………………………....3
2.3 Target Audience……….....…………………………………..…4
3.0 Evaluation of Alternative Solution……..…….…………………….….…..4
3.1 Energy Drink……………………………………………………5
3.2 Sports Drink…………………………………………………….5
3.3 Organic Drink…………………………………………………..5
4.4 Broad Appeal…………………………………………………...5
4.0 Course of Action and Justification….………………………………….…6

1.0 Problem Statement

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Portland Drake Beverages (PDB) is a manufacturer of organic juices and sparkling

water, located in the United States (US). In 2008, Crescent Pure (Crescent) was
founded. The beverage was crafted with lightly infused organic juices, herbal
stimulants, and electrolytes due to a recent demand in all-natural, organic food and
beverages. The combination of these ingredients provided a healthy alternative with
80 milligrams of caffeine, helping beat fatigue and boost concentration and
endurance. Conversely, big shot competitors had been rumored to launch their own
all-natural versions of sports and energy drinks mid 2015. As a result, PDB found the
need to soft launch Crescent in January 2014 to three western states, as this would
help establish a competitive edge. The marketing team was given six weeks to create
a strong positioning strategy for the product. Additionally, if profits met or exceeded
advertising expenses of $750,000 PDB would fund Crescent’s expansion in 2015.
With the pressure of a six-week timeframe and multiple attributes dividing the
product into three possible market segments, it has become difficult to place Crescent
within a single positioning strategy.

2.0 Analysis of Key Factors

2.1 Market
In the US, the beverage market had shown promising figures with an estimated $131
billion, with further projections of $164 billion by 2018. When breaking down the
market, ideal segments such as sports, energy, and organic drinks showed promising
results in sales. Between 2010 and 2012, a 40% growth had been seen in energy
drinks, whilst sports drinks had only increased by 9%. Market shares for both energy
and sports beverages showed positive sales projections; 8.5 billion for energy drinks
and 6.3 billion for sports drinks between 2012 and 2013. As society and social norms
were modifying in the US, demands were rising for a beverage with lower caffeine
and healthier ingredients. This resulted in PDB’s revenue to increase to $120.5
million by 2012, as Crescent delivered a high quality organic product at an affordable
price.

2.2 Positioning
Originally the PDB management team decided on two possible positioning strategies,
however after further analysis a third positioning strategy can be considered. Though
energy and health sports drinks are rapidly growing segments, organic drinks were

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becoming high demand in the US. When surveyed at a music festival as an energy
drink product, the results indicated the products most descriptive quality was energy.
Though the energy drink segment had increased, further studies showed consumer
insight had altered due to negative media attention and created concerns of long-term
viability. Whereas, research for sports drinks provided insight of consumers looking
for an ‘anytime beverage’ that did not have to be associated with exercise. The sizing
of sports drinks however was distributed in sizes of 12oz and 24oz, with a price range
of $1 to $2, whereas Crescent’s price point was $2.75 for an 8oz. With the pricing and
size of the product, Crescent would not be ideal to be positioned just as a sports drink.

2.3 Target Segment

Through analysing market demands due to society norms changing, correctly
identifying the target audience will help PDB establish the right positioning strategy
for Crescent. Crescent appeared to be most popular amongst males aged 18 to 30,
however females were not subjective to this, as a higher percentage of females
purchased the product than projected. The analytics presented three possible target
segments for the product, however these varied amongst the three identified
categories of energy, sports, and organic drinks. Energy drinks were found to appeal
to males between the ages of 18 and 34. Though this is appealing, this target audience
was also deteriorating due to negative media coverage on energy drinks with 32%
indicating they had drunk one at least in the past six months. Whilst the target
segment for sports drinks appealed to both males and females aged 18 to 24,
additionally being favourable due to them looking for an ‘anytime drink’. Lastly, the
organic segment was targeted towards health conscious consumers aged 25 to 33, as
older consumers enjoyed the healthier alternative of Crescent whilst still getting the
caffeine boost needed.

3.0 Evaluation of Alternative Solution

From the analysis conducted, four possible positioning strategies have been evaluated
in order to determine which market segment will achieve maximum results.

3.1 Energy Drink

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As the market for energy drinks has been projected for further growth, this segment
becomes irresistible to ignore. With a $5 billion estimate of growth in the forthcoming
years, this showcases the opportunity for Crescent to be an appealing option. Further
opportunities appeal; as advertising and soft launching the product will help the
company gain a competitive edge against other products in this category. The
negative component to this positioning option must consider the impacts of the
negative media attention that has had on social norms, creating psychological
behaviours to influence purchases.

3.2 Sports Drink

With society norms and trends in the US developing, sport drinks have become an
appealing option for consumers as media coverage has helped establish attitudes,
beliefs, and behaviours. The consumer insight found these consumers looked for an
everyday drink, whilst not being associated to exercise. With a growth in healthy
alternatives and Crescent having the attributes of energy, hydration, nutrient, and
taste, this aligned with the criteria for this segment. However the packaging and
pricing of Crescent conflicts with the market segment and may jeopardise in sales.
The idea of the anytime drink may not be considered to be a premium priced
beverage, as this category’s price range was $1 to $2, along with larger sizes.

3.3 Organic Drink

The organic segment will comprise of health conscious consumers, yet limited
information has been gathered at this stage of the specific segment. From the data
analysed, trends and health scares have captured a new target market. When the
product was tested in a focus group, the results showed older demographics to find
Crescent more appealing. Research also provided it as a healthier alternative
compared to options of high calories and sugary energy drinks. From the analysis and
further exploration of energy and sports drink segments, Crescent was found to fit into
these categories however with complications.

4.4 Broad Appeal

In 2013, the organic beverage category had expanded a broad range of other drinks to
include soft drinks, energy drinks, fruit juice and a few more. With the energy drink
market growing by 40% alongside forecasts of the category to be valued at $13.5

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billion by 2018, this market could not be ignored. Thus, a broad appeal for the organic
category expanded. With this specific segmentation, attributes of the product would
not just revolve around energy; the product would be able to expand to attributes such
as: refreshing taste, mild energy boost, hydration, and organic ingredients. The
disadvantage of the broad appeal would push back advertising due to the need of
identifying further retailers and distributers for the positioning strategy, further
weakening the overall marketing strategy of releasing the product in early 2014.

4.0 Course of Action and Justification

As competitors are releasing all-natural versions of their own products mid 2015,
Crescent’s success depends on the soft launch in January 2014. As a result, PDB
should focus on a healthy, organic drink opposed to an energy or sports drink. As
social norms have been persuaded through negative media coverage of energy drinks,
consumers have reacted positively to a healthier oriented beverage. Launching
Crescent before its competitors will be beneficial, as this will provide leverage,
increase success, and enhance potential profit margins. Meeting profit will also allow
PDB to further advertise and research this market well before its competitors launch,
as they will have a more thorough understanding of the target segment along with
their motivations and purchase behaviours.

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