Crescent Pure is a specialty organic beverage that is about to be launched by Portland Drake Beverages (PDB). The top executives of the company are going to meet to identify the proper positioning of the product in the market as well as to plan for the advertising campaign for the product launching. They are considering positioning Crescent Pure as an energy drink, a sports drink, or as an "organic health and wellness" beverage. They would have to agree on a choice.
John A. Quelch; Alisa Zalosh
Harvard Business Review (915539-PDF-ENG)
September 10, 2014
Case questions answered:
Case study questions answered in the first solution:
- Conduct a market audit to identify the key influences that offer the opportunity for PDB’s first entry into the U.S. sports and/or energy beverage markets. This includes a macro and micro audit, existing strategy, and SWOT analysis. (Present Situation)
- What factors should influence the positioning of Crescent Pure? (What strategy)
- How is the market segmented? At what segment should Crescent be targeted? (What strategy)
- What must PDB do in regard to Crescent’s pending launch? What implementation strategy should they pursue? (What is the implementation strategy?) Do you wish to position Crescent as an energy drink, a sports drink, or a healthy organic beverage?
Case study questions answered in the second solution:
- What factors should influence the positioning of Crescent Pure?
- How is the market segmented?
- What are the advantages and disadvantages of positioning Crescent as an energy drink, a sports drink, or a healthy organic beverage?
- Which of the customer segments and which positioning strategy should Crescent go for? Give your recommendation for both.
- Write a positioning statement for your chosen positioning strategy and target market.
- How would your chosen positioning impact other parts of the marketing mix – Price, Place (where / how the product is sold), and Promotion? Assume that the Product itself is fixed and cannot be changed.
- Calculate how many cases of Crescent cans the company would have to sell to recover the cost of the initial advertising campaign (and take into account variable costs). Does the target sound reasonable, considering the size of the chosen market?
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Crescent Pure Case Answers
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Executive Summary – Crescent Pure
A company of organic juices and sparkling waters called Portland Drake Beverages (PDB) acquired Crescent Pure in 2013, which is a drink combination of energy-enhancing, hydrating, and all-natural and organic ingredients. A natural extension on the lines of organic products was made through the new acquisition.
Due to the booming demand for organic food and beverages, the aim of PDB is to expand Crescent’s presence. However, the capacity for production is limited; therefore, they need a soft launch to beat other large national beverage companies. Lightly infused organic juices, herbal stimulants, electrolytes, and low sugar content were the combination of Crescent.
Sarah Ryan, the Vice President of marketing in PDB, is under pressure and facing a tough decision related to the strategic position of Crescent, either as a sports drink or an energy drink. In-depth analysis of consumer trends, market needs, competition pressure, market opportunities/threats, advertisement, and place of distribution; our product will be positioned as a Sports Drink.
To ensure the success of the soft launch, PDB would engage the use of flyers, banners, and free samples. The service of a sports personality and a certified health practitioner will also be involved to help promote the product during the soft launch. Other than that, PDB will also ensure that its staff are well prepared and trained to entertain possible queries about Crescent during the soft launch event.
SITUATIONAL ANALYSIS
According to (Lake 2018), before developing any marketing strategy, it is important to conduct a situation analysis. A situational analysis is an essential part of any business or marketing plan and should be reviewed periodically to ensure that it is kept current.
Market Trends
Crescent Pure was founded by Peter Hooper in Oregon in 2008. He understood the market opportunity for a healthy and energizing drink. After much experimentation, he managed to produce Crescent, an all-natural beverage lightly infused with organic juices, herbal stimulants, electrolytes, and low sugar content.
This was because Hooper found out that popular energy and performance-enhancing drinks were unhealthy, too sweet, and artificial. He wanted a drink that would refresh, energize, and enhance mental focus. Hooper saw a growing local demand for his product.
Twelve months after launching his small business, Hooper successfully secured legal protection for his proprietary recipe. Crescent Pure was a success in Portland, Oregon, as a high percentage of Oregonians supported healthy, organic food choices and the local businesses that made them available.
After Hooper promoted his drinks at farmers’ markets and local food shows and pursued local retailers in Oregon, demand grew in the Portland area for Crescent. Distribution eventually grew from a rented warehouse into two hundred retail outlets, amongst others, such as regional grocery chains, independently owned grocers, and cafes (Quelch and Zalosh 2014).
Positioning
PDB has recently acquired Crescent Pure, a non-alcoholic functional brand, as PDB manufactures organic juices and sparkling waters and is struggling with the market position of Crescent Pure. The one-thousand-dollar question is the fact that Crescent has both energizing and hydrating elements, which makes a difficult choice of product should be positioned as an energy drink or as a sports drink.
The critical point is that PDB considers a third, broader category organic refreshment positioning option possible as well. The due date to define the product is October 1. In order to negotiate with beverage distributors and retailers, advertisers must be hired to develop ad campaigns.
The initial amount to spend was $750,000 on advertising for Crescent in 2014. If the profits meet or exceed the goal, PDB will fund Crescent’s national expansion in 2015. Sarah Ryan has been charged with figuring out whether they should position the drink.
Market Research
According to (Hague et al. 2016), market research is the process of collecting valuable information to help find out if there is a market for your suggested product or service. The information gathered from market research helps to craft a comprehensive positioning strategy.
Sarah Ryan needed an in-depth analysis of market sizes, competitors, and consumer preferences. Matt Levor is the director of market research in PDB, and drawing from a combination of techniques and methods of the beverage industry, Levor could…
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