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CRESCENT PURE

By
SAUMITH DAHAGAM 17PGP042

GUMMADI KRANTHI KUMAR 17PGP056

SUDHEER KUMAR 17PGP209

SRI SATYA TEJA 17PGP211

DIVYA 17PGP213
Questions for the case: Crescent Pure
1. Given that Crescent id PDB’s first entry in the US sports and/or energy beverage markets, what must
PDB do in regard to Crescent’s pending launch?

A. Before the launch of Crescent Pure, PCB will have to devise a positioning strategy. Given the unique
qualities of Crescent Pure, it can be positioned in three different ways. Crescent Pure contains hydrating
elements which could support the positioning as a sports drink. Crescent’s $2.75 price is relatively higher
than the average price in this segment. If Crescent Pure positions the drink as a sports drink,
they will have to sell the drink at a lower price in order to compete in this sector. While the low sugar
content and certified organic label can be leveraged to gain a competitive advantage.

Another positioning strategy could be to position Crescent as an organic, all-natural drink. As the drink
is certified organic, the company can promote the health advantages of consuming an organic drink
versus non-organic. There is a growing market for organic products, and specialty grocers who only sell
certified organic products can be targeted. However, having a broader range can confuse the product and
drive them towards more specifically positioned products. This will lead to increase in advertising
expenditure and cause delay in the launch of product as there would be more distributers and retailers to
evaluate.

The caffeine content of Crescent is equivalent to a cup of coffee. This could be used to position it as an
energy drink. The energy market showing a 40% growth in two years and a growing health-conscious
market trend. The negative publicity due to alleged health risks related to energy drinks can provides an
opportunity to position Crescent as all-health organic energy drink.

2. What factors should influence the positioning of Crescent?

A. Price Range: The price range for each type of drink is different. Prices for energy drink varies from
$2 to $5 per can, based on can size and retail outlet. The average price for 8 oz. of energy drink is
$2.99, whereas it is relatively lower in sports drink category. The “organic beverages” category enjoy a
premium price range (on average 25 %) over conventional beverages of same variety. The positioning
of Crescent would depend on the price range that company wants to set.

Market growth: The positioning will also depend upon the expected market growth in each
category. Energy drinks market is growing rapidly whereas the growth has been slow in sports
drinks market. But forecasts suggest that both markets are expected to grow in next 4-5 years.
The organic beverage market has also shown growth in 2013.

Competitive structure: The energy drink market is fragmented between various producers
whereas sports drinks market is highly concentrated. This can influence the positioning of
Crescent as gaining market share would be depend upon the competitive structure.

Threats: Negative media attention has affected the regular consumption of Energy drinks. And
government regulations would affect the sales of sports drinks to its largest consumer segment.
These factors do require attention before positioning of the product.
Customer Value: Positioning will also depend on the values customers place for a product
in particular category. Crescent’s organic certification and minimal caffeine content provide
strong differentiation in the energy drinks market. Whereas, it’s hydrating elements, low
sugar content and all-natural ingredients appeal the consumers in sports drinks market.
Company needs to decide that what factors define their product more fittingly and could
help them in capturing market share.

3. How is the market segmented? At what segment should crescent be targeted?

A. Crescent should be targeted at the males aged 18-34 and with household income below
$25000 per year. Since this is the largest group of energy drink consumers and compared to
the average price of 8 oz. of energy drink that is $2.99, the same can is priced at $2.75 by
Crescent which gives an advantage to Crescent as the maximum number of energy-drink
consumers belong to household with income below $25000. These consumers are likely to be
price-sensitive and thus its price below the average market price in energy drinks sector
provides it with an opportunity to acquire new customers and expand its market share.
With people becoming more health-conscious and making their food and beverage choices
accordingly, sale of energy drinks such as those by Crescent with lower levels of caffeine and
organic ingredients, was bound to increase. The segment mentioned above also consists of
people in the age group between 25-34 who were of the opinion that the product offered by
Crescent was healthier compared to other energy drinks as it had less calorie and sugar content.
This segment could also prove to be profitable. As competition here is from Fright (37%),
Razor(27%), Torque(16%), and Stellar(8%) which when compared with the competition in
sports drinks segment, where 94% of the market share is between 2 companies, is more
fragmented and hence there is a better chance for the Crescent to gain a foothold and make
profits in this segment.

4. What are the pros and cons of positioning Crescent as an energy drink, a sports drink, or a
healthy organic beverage?

Pros Cons
Energy Crescent is Low on sugar. Low on Energy. 25% of
Drink 70% less sugar than people in focus group
competitors sessions were concerned
about the low energy content.
Priced at $2.75, less than
average price( $2.99) High Industry Competition
Only 50% caffeine content Negative Media Attention
compared to leading brands, has led to fall in regular
demand for low caffeine consumption of the category.
drinks is increasing. Only 32% respondents
Differentiated Product consumed in last 6 months,
offering. No similar product out of which 11% are
in the category currently. drinking
less frequently
Market expected to grow Customers question the
further from $8.5 bn ability of the company to
(2013) to $13.5bn (2018)
provide quality organic
“Energetic” was the most products at a lower price
associated characteristic with
Crescent in a consumer
survey conducted at Oregon
Sports Category expected to grow Crescent ($2.75 for 8 0z) is
Drink from $ 6.3 bn priced much higher than
(2012) to $ 9.58 bn (2018) other drinks ($1 for 12 oz.) in
the category
Diet & low sugar drinks are Company didn't have good
growing and are expected to experience
more than double from with premium pricing in
$1.2bn (2012)- $2.97bn previous product launches.
(2017) Customers question the
42 % consumers consider ability of the company to
“Sports Drinks” fit to be provide quality organic
consumed at any time and products at a lower price
not just after physical
exercise.
Higher % of consumers buy
the product frequently
Healthy Organic Beverage Low competition: Growing Consumers looking
Industry, not many offerings specifically for sports or
in the current market Energy drink might reject the
Can charge a premium for product
the product as willingness to Category size is small and
pay for organic products is reaching breakeven might be
high difficult

Natural extension of Without focus on a particular


company’s existing product segment, brand may get
lines diluted