CASE ANALYSIS :CRESCENT PURE

PORTLAND DRAKE BEVERAGES (PDB)

CRESCENT PURE

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THE COMPANIES

PDB : PROFILE

01 CEO : MICHAEL BOOTHVP (MARKETING) : SARAH RYAN

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LARGE PRODUCT DISTRIBUTION NETWORK AT DISPOSAL

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MANUFACTURES OF ORGANIC JUICES AND SPARKLING WATER

REVENUES INCREASED TO $120.5 MILLION BY 2012.

CRESCENT PURE : PROFILE

01CEO : PETER HOOPER

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MANUFACTURES OF NON ALCOHOLIC FUNCTIONAL BEVERAGE

FOUNDED IN 2008 IN OREGON

TIMELINE OF EVENTS

2000

Lorem Ipsum CRESCENT PURE FOUNDED

ORGANIC DRINKS BECOME POPULAR

2008 2012

PDB DISCOVERS CRESCENT PURE

2014

PDB ACQUIRES CRESCENT PURE

2014 2015

PLANNED “SOFT LAUNCH”

CRESCENT PURE’S NATIONAL EXPANSION

WHY CRESCENT PURE?

80 GMS OF CAFFEINEAS MUCH AS A CUP OF COFFEE

LOW CALORIES AND ORGANIC INGREDIENTSGOOD CHOICE FOR HEALTH CONSCIOUS CUSTOMERS

AFFORDABLE PRICELESS EXPENSIVE THAN ENERGY DRINKS, SPORTS DRINKS AND OTHER ORGANIC DRINKS

LOW SUGAR CONTENT70% LESS SUGAR THAN ANY OTHER SPORTS AND ENERGY DRINK

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PRODUCT LAUNCH

DISTRIBUTION NETWORK BUYERS

POTENTIAL ENTRANTS

SUBSTITUTES

FACTORS AFFECTING PRODUCT LAUNCH?

PRODUCT POSITIONING

OPTION 2

OPTION 3

OPTION 1

ORGANIC DRINK

ENERGY DRINK

SPORTS DRINK

ORGANIC DRINKENERGY DRINKSPORTS DRINK

• $1-2 PER CAN. • AGE

GROUP-12-24 • TOP 2 BRANDS

CONSTITUTE 94% MARKET SHARE.

• $2.99 PER CAN. • AGE

GROUP-18-24 • TOP 6 BRANDS

ACCOUNT FOR 85% OF THE REVENUE.

• 25% PREMIUM CAN BE EARNED PER DRINK.

• AGE GROUP- ALL • MARKET

OPPORTUNITIES ARE STILL OPEN.

FACTORS AFFECTING

PRODUCT POSITIONING

• BRAND IMAGE AND PERCEPTION • PRICE OFFERING • MARKET PRICE • TARGET AGE GROUP • MARKET SIZE • PRESENT COMPETITORS • SURVEY OPINIONS AND RESULTS • PROFIT MARGINS • POINTS OF PARITY OVER COMPETITORS

POSITIONING AS SPORTS DRINK

POSITIVES NEGATIVES

• 42% OF SPORTS DRINKS ARE CONSIDERED “ANYTIME BEVERAGES”.

• CONSUMPTION IS MORE THAN ENERGY DRINKS.

• WIDER CONSUMER BASE THAN ENERGY DRINKS.

• SMALLER MARKET SIZE - $6.3 BILLION.

• PRICING OF $2.75 FOR AN 8 OZ. CAN IS SIGNIFICANTLY HIGHER THAN SIMILAR SPORTS DRINKS.

• 94% MAKET SHARE ALREADY UNDER TOP 2 PLAYERS IN THE SEGMENT.

• LESSER MARKET GROWTH AT 9%.

POSITIONING AS ENERGY DRINK

POSITIVES NEGATIVES• BIGGER MARKET SIZE THAN

SPORTS DRINKS - $8.5 BILLION.

• PRODUCT PRICING AT $2.75 PER AN 8 OZ. CAN IS BELOW SEGMENT AVERAGE OF $2.75.

• CRESCENT’S ORGANIC CERTIFICATION AND MINIMAL CAFFEINE CONTENT ARE STRONG POINTS OF DIFFERENCE.

• LARGER MARKET GROWTH AT 40%.

• 85% OF THE MARKET SHARE ALREADY UNDER TOP 4 COMPETITORS.

• ALLEGEDLY ASSOCIATED HEALTH RISKS MIGHT UNDERMINE SALES.

POSITIONING AS ORGANIC DRINK

• PREMIUM PRICING WILL HELP IN INCREASED REVENUE GENERATION AND BRAND PERCEPTION MIGHT BE AS A TOP OF THE LINE BRAND.

• ORGANIC DRINKS ARE LIKELY TO HAVE A BROADER CONSUMER BASE AS COMPARED TO SPORTS AND ENERGY DRINKS.

• PDB MIGHT NOT BE ABLE TO EXPAND BEYOND ITS ORGANIC DRINK MANUFACTURER IMAGE.

• SINCE CUSTOMER BASE WILL BE MORE, LARGER DISTRIBUTION CHANNELS WILL BE REQUIRED WHICH WILL DELAY PRODUCT LAUNCH.

POSITIVES NEGATIVES

CONSUMER STUDY

FEMALE MALE

41 59

1%11%

26%

31%

31%18-2425-3435-4445-5455+

AGE RANGES

HOUSEHOLD INCOME

$42,500

COLLEGE DEGREE HOLDERS

62%

CONSUMER PERCEPTION

• SPORTS DRINKS ARE GENERALLY PERCEIVED AS HIGH HYDRATION AND LOW ENERGY DRINKS.

• ENERGY DRINKS ARE GENERALLY PERCEIVED AS LOW HYDRATION AND HIGH ENERGY DRINKS.

CONSUMER PERCEPTION

• SPORTS DRINKS ARE GENERALLY PERCEIVED AS HIGH NUTRITION ANDGOOD TASTING DRINKS.

• ENERGY DRINKS ARE GENERALLY PERCEIVED AS LOW NUTRITION AND GOOD TASTING DRINKS.

THE DECISIONPRODUCT IS BEST SUITED TO BE POSITIONED AS ENERGY

DRINK• GREATER MARKET GROWTH THAN SPORTS DRINK MARKET AT 40%. • LARGER MARKET SIZE THAN SPORTS DRINK MARKET AT $8.5

BILLION. • PRODUCT PRICING AT $2.75 FOR AN 8 OZ. CAN BELOW MEAN

INDUSTRY PRICING WHICH CAN BE FURTHER INCREASED FOR MAXIMIZING PROFITS.

• ORGANIC ELEMENTS IN THE ENERGY DRINK WILL SURELY RESULT IN A BROADER CUSTOMER BASE WHO MIGHT ALSO BUY DRINKS AS HEALTHY SUPPLEMENTS.