HBS Case

1. CRESCENT PURE
Harvard Business School Case

2. What is
Crescent
Pure

4. Company History
Founded by
Peter Hooper,
a native of
Crescent, Oregon
in 2008

5. What is
Portland
Drake
Beverages

7. The
Situation

8. Portland Drake Beverages
acquired Crescent to
expand into the rapidly
growing functional
beverage segment
(energy and sports drinks)

9. Embark on a soft launch of
Crescent Pure in three states
Spend $750,000 on advertising
Use that figure as benchmark
earning goal
PDB plans to…

10. The
Decision

11. Which positioning
strategy maximizes
Crescent’s revenues?

12. A closer look
at
Crescent

14. Herbal stimulants delivered
80mg of caffeine, roughly the
same as a cup of coffee

16. All Crescent’s ingredients
are certified organic

17. Priced at $2.75
per can, Crescent
reflects PDB’s
strategy of
delivering
quality organic
products at
affordable prices

18. Who are Crescent’s
consumers and what do
they think about it?

21. So,
How to
position
Crescent?

22. 3 Options
Energy
Drink
Sports
Drink
Organic
Beverage

24. Market Size
40% growth within 2
years
Estimated to reach $13.5
billion
Consumer Data
Males between ages
18 and 34
Parents of children
Competition
Fright, Razor, Torque
and Stellar account for
85% market share
Opportunity
Consumers are
demanding healthier
food choices
Threats
Decrease in
consumption due to
concerns about safety

25. 



26. x Low energy content
x Consumption has fallen due to
negative media attention about
health risks

27. Sports drink

28. Market Size
Only 9% growth in 5 years
Expected to reach $9.58
billion
Consumer Data
50% of men and 30% of
women
Appeals to younger
customers (ages 12 – 24)
Competition
Gleam and Drip have
73% and 21% market
share respectively
Opportunity
Diet and low sugar
sports drinks are
growth areas
Threats
Concern regarding
childhood obesity and
high calorie drinks

29. 


30. x Crescent’s price is significantly
higher that of competitors
x Two competitors have a total of
94% market share

31. Organic beverage

32. Reinforces original
positioning of PDB
Organic beverages
claim a 25% price
premium

33. x Caffeine is typically not present in
organic beverages
x Product is poorly differentiated
x Implementation is difficult due to
limited budget and short time constraint

34. The
Recommendation

35. Position Crescent
as a
Healthy
Energy Drink

36. Target segment
Young
health conscious
consumers

38. Crescent is
positioned as
a healthier
alternative to
leading
brands

39. Will also attract
consumers who
consistently
purchase organic
or all-natural
products

40. Break even
analysis

41. Margin per can $1.24- $1.02 = $ 0.22
Margin per case = $0.22 x 24 = $5.28
Earning goal = $750,000
Number of cases to be sold to breakeven=
142046

42. Production Capacity
12000 cases per month
=
144000 cases per year
If all cases are sold, profit will be
(144000-142046) x 5.28
= $10317.12

43. Breakeven is
possible

44. Created by Lorraine Alvares, NIT Goa,
during a marketing internship under the
guidance of Prof. Sameer Mathur,
IIM Lucknow.