Analysis of Harvard Case Study

1. -Harvard Business
School Case

2. Sarah Ryan, Vice Presidentof Marketing for PDB.
Michael Booth, PDB’s CEO.
Peter Hooper, Developed Crescent Pure
MattLevor, Director of Market Research.
PLAYERS

3. SITUATION ANALYSIS
Crescent pure, a recent acquisitionofPDB is a
energy-enhancing, hydrating and all organic
ingredients made beverage.
It is being launched sothat PDB couldbeat other
national beverage companies is this new
segment.
Production capacityconstraints prevent PDB
from launching nationally till 2015.So it is going
to make a soft launchin 2014
Sarah has been given the task ofevaluating
positioning opportunities of Crescent. Sarah’s
promotion depend on it.

4. SITUATION ANALYSIS-CRESCENT
Herbal stimulantsdeliver 80milligram of caffeine.
Sugar quotient70% less thanleading energy and sports
drinks.
Organic and healthieralternative.
$2.75 for an 8ounce can.

5. CONSUMER STUDY

6. CONSUMER STUDY

7. PORTLAND DRAKE BEVERAGES
A manufacturerof orange juices and sparkling water.
$120.5million in revenues.
Crescent was acquired as a extensionto organic product
line of PDB.
Strategywas to deliver quality organic products at
affordable prices.

8. OPTIONS FOR POSITIONING
Energy Drink
• $2.99 for a
8 ounce can
• Attracts 18-
24 age
group.
• Market
shrinking
Sports Drink
• $1-2 for 12-
24 ounce
can
• Attracts 12-
20 age
group.
• Market
growing and
already
huge.
Organic drink
• 25%
permium
against
normal
drinks.
• Every age
group.
• Market still
developing.

9. MARKET TRENDS
 PDB sees market opportunity for healthy,
energising drink.
 Market trend of all natural food and beverages has
grown rapidly
 Popular energy and performance enhancing drinks
have seen decline in markets.
 All organic and natural drinks which are energy-
sport drink have not been explored yet

10. MARKETING RESEARCH
 Drinks with low caffeine and natural ingredients
have become more popular.
 People between age groups 18-34 prefer energy
drinks, and those between 12-24 prefer sports
drinks.
 Energy drink market was growing at 40% but
people have started preferring energy drinks with
low caffeine levels and lower health risks.
 Thus market research shows great opportunity for
growth for Crescent.

11. FINANCES
 PDB has earned a revenue of $120.5million.
 In order to compliment it’s surge in revenue PBD is
introducing a functional beverage in the growing
beverages market.
 Prices for Crescent are placed 27% below the
original selling price.
 It is priced $2.75 for 8 ounce can which is
comparatively low in the $13.5 billion energy market
while it is premium price in the $6.5 billion sports
market.

12. COMPETITION
 In the energy market Crescent faces major
competition. Fright, Razor, Torque, and stellar
account for 85% of the market.
 Sports drink category also poses fierce competition
in which Gleam Drip have 73% and 21% market
share.
 Major national food and beverage companies are
gearing up to launch their own organic beverages in
2015.

13. ADVANTAGES
 Crescent pure is certified organic so it can choose
to emphasise the health advantages of consuming
it.
 Also there is a growing market for organic products.
 Crescent pure also contains almost 70% less sugar
than other energy drinks and sports drinks.
 Also it contains 80milligrams of caffeine per serving
which is equivalent to one cup of coffee.

14. DISTRIBUTION
 Crescent pure was being launched in only 15% of
the market(soft launch).
 It is going to be sold to distributors at $1.24 per can
 It is going to be sold at retail price of $2.75.
 Distributors get 25% profit.
 Retailers get a profit of 40%.
 PDB has to yet select the distributors for Crescent
depending upon it’s positioning

15. POSITIONING-ORGANIC ENERGY DRINK
 Crescent Pure should be broadly positioned as a
organic beverage but also an energy drink.
 I.E. It should be positioned as a organic and
healthier alternative to other energy drinks
 It ‘s target market is the young active male and
females in the age group 18-34.
 Even though the energy market is dominated by
large competitors it has the ability to penetrate this
market because of its advantages such as being
healthy organic and hydrating.

16. MARKETING AND PROMOTION
 It must allocate it’s limited advertising budget
efficiently before implementing a soft launch.
 Brand awareness prior to launch is essential to
success of the launch.
 Utilising Social media will be an efficient way to
reach the target market as it’s target market mostly
consists of young tech savvy people.

17. FINANCE AND BUDGET
 Advertising budget is capped at $750,000 and in
first year the plan is to breakeven.
 PDB can produce 12000 cases per month which
means 144000 cases in a year.
 Production cost is $1.02 per can and it made a
profit of $0.22.
 Thus profit per case is $5.28.
 Thus to breakeven they need to sell
750000/5.28=142,045.45.

18. FINANCE AND BUDGET(CONT.)
 If all of its cases are sold then they sell exactly
144000-142045.45=1954.55 cases.
 So net profit made by company if all cases are sold
is 1954.55*5.28=$10320.024.
 Thus the company can definitely breakeven.
 Manufacturer(PDB) have a profit of 18%.
 Distributors get a profit of 25%.
 Retailers earn a price of 40%.

19. CONCLUSION
 Crescent Pure should be positioned as a organic
energy drink which is a broad segment.
 Crescent pure can breakeven with a large margin if
it is marketed properly and every case
manufactured is sold in this year.
 Crescent Pure can be a game changer in the
beverages segment and also improve the fortunes
of PDB.