MARKETING MANAGEMENT

COURSE CODE: BPMM 6013

CASE STUDY 2

: CRESCENT PURE

DATE OF SUBMISSION

: 07 JUNE 2015

LECTURER:
PUAN NOR PUJAWATI BINTI MD SAID

GROUP 2
1) MARZIANI BT ABD RASHID

(819430)

2) MAS AYU BT ABDUL LATIFF (819431)

3) LEE SIEW HUI

(819429)

MASTER OF BUSINESS ADMINISTRATION 2014/2015

TABLE OF CONTENT

PAGES

1.0

EXECUTIVE SUMMARY

03

2.0

INTRODUCTION

04

3.0

2.1

Crescent Pure : Company History

2.2

Crescent Pure : Product

2.3

Crescent Pure Acquisition by PDB Beverages

SITUATION ANALYSIS

05-08

3.1

Demograhics of Crescent Consumers

3.2

Market Needs

3.3

Product Pricing

3.4

Advertising Budget

3.5

Competitors

3.6

Product Positoning

4.0

CRESCENT SWOT ANALYSIS

5.0

CRESCENT POSITIONING AS A SPORTS DRINK

10

6.0

MARKETING STRATEGY THE MARKETING MIX

11-12

6.1

Product

6.2

Price

6.3

Place

6.4

Promotion

09

7.0

IMPLEMENTATION CONTROL

13-14

8.0

RECOMMENDATIONS

14

REFFERENCE

15

1.0 Executive Summary

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Portland Drake Beverages (PDB) is a manufacturer of organic juices and sparkling waters. In
July 2013, PDB acquired Crescent, a drink which has a combination of energy-enhancing,
hydrating and all-organic ingredients. The acquisition made it a natural extension for PDBs
existing organic product lines.
Crescent was founded by Peter Hooper, a native of Crescent, Oregon in 2008. He managed to
produce Crescent, an all natural beverage lightly infused with organic juices, herbal
stimulants, electrolytes and low sugar content after much experimentation. Crescent 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.
With consumer demand for organic food and beverage products rising, PDB intend to expand
Crescents presence. However PDBs limited production capacity only enable the company to
embark on a soft launch of Crescent in states geographically adjacent to Oregon (California
and Washington) in January 2014 before expanding it nationally. The states were chosen as it
was projected they represented 15% of the national functional beverage demand in U.S.
PDBs decision to carry out the soft launch in January 2014 was influenced by the intention
to beat other large national beverage companies who also intend to launch their own allnatural versions of sports and energy drinks in the second half of 2015.
With the limited time, constraints of production capacity and limited distributors to engage in
marketing the product, Sarah Ryan, vice president of marketing for PDB is under pressure to
position Crescent either as a sports drink or an energy drink. After careful consideration and
in-depth market analysis which include consumer demographics, market needs,
functionality/content of the product, market opportunities/threats, place of distribution and
promotional/advertisement needs; Ryan has decided to position Crescent as a sports drink.
In order 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 engaged to help in promoting the product during the soft launch in Los Angeles,
California. Other than that PDB would also ensure that its staffs are well prepared and trained
to entertain possible queries about Crescent during the soft launch event.

2.0 Introduction

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2.1 Crescent Pure : Company History

Crescent Pure was founded by Peter Hooper, a native of Crescent, Oregon in 2008. 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 was
unhealthy, too sweet and artificial. Twelve months after launching his small business, Hooper
successfully secured a legal protection for his proprietary recipe. Crescent 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. Distribution eventually grew from a rented
warehouse into two hundred retail outlets (including regional grocery chains and small,
independently owned grocers and cafes), and the company was selling 1000 cases per month.

2.2 Crescent Pure : Product

Crescent is packaged in a sleek, tall silver 8 ounce can with a simple crescent logo and lime
green and orange accents. Its taste included a hint of fruit and is less sweet than most fruit
juice, cola, sports drinks and energy drinks. Crescent has lime juice, lemon juice and small
amounts of raw cane sugar and green tea to make up for its flavour. Its energy content is
made of energy stimulants which included guarana, a plant native to South America whose
seeds contained almost double the concentration of caffeine found in coffee beans and
ginseng, a herbal supplement known to relieve fatigue and boost concentration and
endurance. Each can of Crescent contained 80 calorie per serving and its energy content (80
miligrams of caffeine/serving) is equivalent to the energy level provided by a cup of coffee.
In addition, Crescents ingredients are organic certified which meant that during farming,
harvesting and production, no chemicals were used or applied to alter or enhance their natural
state.

2.3 Crescent Acquisition by PDB Beverages

Portland Drake Beverages (PDB) is a manufacturer of organic juices and sparkling waters
with Michael Booth as its CEO. With consumer demand for organic food and beverage
products rising, PDBs revenue had increased to $120.5 million by 2012. Booth felt that it is
important to expand PDBs trusted line of organic products and he knew that functional
beverages especially energy and low-calorie sports drinks are rapidly growing and sought to
expand into these areas through acquisitions. In July 2013, PDB had successfully acquired
Crescent. PDB hoped that with the right positioning of Crescent (either as sports drink or
energy drink), the product will garner sales and be a market success in the future for PDB.

3.0 Situation Analysis

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3.1 Demographics of Crescent Consumers

Based on an online survey, close to 50% of crescent consumers are aged between 18 - 24
years old, less than 40% are aged between 25 34 years old, 15% aged between 35 44
years old and less than 5% aged between 45 54 and above 55 years old respectively as
shown in the Table 1 below. This shows that Crescent caters mostly to the younger adults
rather than the more senior group. On the other hand, Crescent is almost equally accepted by
male and female drinkers without much difference in their consumption percentage. (See
Table 2).

Age Ranges
Consumption
Percentage

18 -24

25 34

35 44

45 54

55+

44%
36%
15%
3%
Table 1 : Consumption of Crescent according to age groups

Gender

Male

2%

Female

Consumption Percentage
59%
41%
Table 2 : Consumption of Crescent according to gender

3.2 Market needs

Consumers has become more health conscious and they are more willing to switch to
healthier and more natural products. They would also consider to take less sugar in their
drinks. They also have preference to consume sports drink that can provide the energy that
they badly needed. Consumers wouldnt mind buying a cheaper product if it is proven to be
as effective as the premium priced products (products with similar organic and energy
content in the market) and not compromising on the quality of the ingredients in the product.
Besides that, consumers also have preference for sports drinks which have a more favourable
taste. In addition, the U.S market demand for non-alcoholic beverages (including water, dairy,
juice, soda and functional beverages) was projected to be growing, from $131 billion in 2013
to $164 billion by 2018.

3.3 Product Pricing

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PDB Beverages preferred Crescent to be priced lower ($2.75 per can) than other premium
products with similar energetic contents (which are averagely priced around $2.99) to reflect
its pricing strategy that was to deliver quality organic products at an affordable price. Lower
prices can also attract consumers (especially health conscious ones) to switch their
purchasing trends from premium brands once they know the benefits and quality of Crescent
(People normally associate lower pricing with compromising quality of the ingredients). But,
if Crescent is to be positioned as a sports drink, the price of $2.75 per can is higher than other
similarly sized products in the market which is averagely priced at $2.00 per can.

3.4 Advertising Budget

PDB Beverages is having a tight budget and they planned to spend only $750,000 on
advertising for Crescent in preparation for its soft launch by January 2014.

3.5 Competitors
If PDB Beverage positioned Crescent as a sports drink, it will have 2 major competitors in
Gleam and Drip. Gleam and Drip have nice taste and high nutritional content. Drip has high
energy and hydrating content whereas Gleam is only high in hydration but low in energy. If
PDB were to position Crescent as an energy drink it will face competitions from Fright,
Razor, Torque and Stellar. Torque, Fright and Razor are high in energy but contain low
hydrating factor. Stellar on the other hand, has low energy and hydration. Both Fright and
Razor have nice taste but low in nutritional value whereas Stellar and Torque are low in
nutrition and do not have a nice taste. The comparisons are shown in the Diagram 1 and
Diagram 2 below.

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Diagram 1 : Perceptual Map : Hydration vs. Energy for major Sports and Energy Drinks

Diagram 2 : Perceptual Map : Nutrition vs Taste for major Sports and Energy Drinks
Note : Sports drinks are italicized, energy drinks are not.

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3.6 Product Positioning

PDB Beverages has two options to position Crescent either as an energy drink or a sports
drink. Both options have their own advantages, disadvantages, opportunities and threats as
shown in the comparison table below.

Energy Drink
- in 2010 & 2011, continued
growing.
- had grown by 40%.
- estimated $8.5 billion in 2013,
to reach $13.5 billion by 2018.
- 34% consumption in last 6
months of 2013.
- mostly males : aged 18 34.
- also parents.
- by household income earners <
$25, 000 per year.
- ranging from $2 - $5 per can
(for sizes 8oz, 12oz or 16oz)
- average price for 8oz : $2.99
- 4 major competitors : Fright : 34%
Razor : 27%
Torque : 16%
Stellar : 8%
- remaining 15% between 30
independent regional &
national producers.
- higher demand for lower level
of caffeine and purer
ingredients products.

Aspect of
Comparison
Market Size

Consumers

Product Pricing

Competition

- increased 9% between 2007 &

2012.
- $6.3 billion in 2012, to reach
$9.58 billion by 2017.
- 42% consumption.

- males : 50%
- females : 1/3 ( 33%)
- 40% males said refreshing,
27% females.
- 62% from ages 18 24,
77% aged 12 17.
- average $1 - $2 for 12oz and
24oz can.
- 2 major competitors : Gleam : 73%
Drip : 21%
- remaining 6% among 20
producers.

- new demand for diet and lowsugar sports drink.

- market had grown by 33%
between 2010 and 2012.
- market size to increase from
$1.46 billion (2012) to $2.97
billion (2017)
- consumers begin to drink less
Threats
- increasing childhood obesity
due to recent news stories
rates, government mandated
highlighting energy drinks
removing high-calorie sugary
alleged health risks.
drinks from school vending
machines beginning 2014.
Table 3 : Comparison Between Energy Drinks and Sports Drinks Potentials and Threats in
the U.S Market.
BPMM6013 Case Study 2 CRESCENT PURE

Opportunity

Sports Drink

Page 8

4.0 Crescent SWOT Analysis

Strength

- Taste is appealing to most

consumers. No unfavourable
reactions. (35% online
respondents said it is
refreshing; 29% said
hydrating).
- Contains energy stimulant (guarana & ginseng) which is
equal to the caffeine content in
a cup of coffee (75% of face to
face survey respondents agreed
with its energy level content).
- Certified organic ingredients
(healthy; natural - agreed by
38% online respondents).
- Low sugar content.
- Appeal to both genders (59%
male, 41% female) : retailers
indicated that inventory of
Crescent deplete fast.

SWO
T

Threats

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- Consumer doubts of
quality
organic ingredients
due to
lower price.
- 4 major
competitors(Fright,
Razor, Torque, Stellar)
if
positioned as energy

SWO
T

5.0 Crescent Positioning As A Sports Drinks

Based on the positioning options analysis and Crescent SWOT analysis, PDB Beverages
should position Crescent as a sports drink. This is mainly due to the reason that Crescent will
only have two major competitors (Gleam and Drip) as a sports drink producer compared to
four major competitors (Fright, Razor, Torque and Stellar) as an energy drink producer. Even
though the market growth for sports drink products is increasing at a much lower rate (only
9% between 2007 and 2012) compared to energy drink products (grown by 40% between
2010 and 2011), there is still opportunity for sports drink product market to grow in the future
as shown by a research (with estimated growth of sales from $6.3 billion in 2012 to $9.58
billion by 2017).
Overall, Crescent is appealing to both male and female genders as projected from an online
survey with 59% male and 41% female consuming it. Crescent can capitalize on sales to both
genders. This is supported by the fact from a U.S survey on beverage drinkers that close to
50% men and about 33% women consumed sports drinks. In addition, sports beverage
drinkers also considered sports drinks as anytime beverages and not associate them only
with exercise. On the contrary, energy drinks are only more appealing to men especially to
those aged between 18 to 34 years old.
Besides that, Crescent is suitable to be positioned as a sports drink as it is refreshing and
hydrating when consumed after a sporting activity. From an online survey of Crescent
consumption, 35% of the respondents commented it as refreshing and 29% felt it was
hydrating. Additionally, the energy content in Crescent (derived from guarana seeds and
ginseng) is able to provide the energy needed by the consumers when they are engaged in a
sporting activity as one can of Crescent has 80 milligrams of energy quotient which is equal
to the amount of energy provided by a cup of coffee. From a face to face survey conducted by
PDBs director of market research, 75% of the respondents accepted the level of energy
contained in Crescent.
Although Crescent is mostly consumed by young adults (80% aged between 18 34 years
old; results from an online survey), it is hoped that with the right marketing strategy and
advertisement campaigns the consumption of Crescent among children, teenagers and senior
adults can be increased to generate more sales.
Finally, Crescent is not suitable to be positioned as an energy drink at a period where
consumers are beginning to consume less energy drinks due to the emerging news stories
which allegedly highlighted that the drinks were associated with some health risks. The news
can affect the sales of Crescent since it just beginning to enter the market.

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6.0 Marketing Strategy The Marketing Mix

6.1 Product
Crescent is an 8-ounce tall silver, sleek can designed with a simple crescent logo and lime
green and orange accents. It has a mild fruit taste and less sweet. The lower sugary content
serves as a strong differentiating factor from its major competitors (Gleam and Drip) and can
attract consumers who are more conscious about the sugar level in their body. For flavour, the
product comes with a lime juice, lemon juice, small amount of raw cane sugar and green tea.
So far, from a survey, this taste has been found appealing to most customers and there were
no unfavourable reactions. Each can has 80 miligrams of caffeine which is equal to the
amount of caffeine in a cup of coffee. The energy content is derived from guarana, a native
energy-stimulant plant from South America and ginseng, a herbal supplement popularly
known to relieve fatigue and boost concentration and endurance. These serve as an energy
booster which is mainly required from a sports drink and it is on parity with other similar
products produced by its competitors. The product also has a hydrating factor as experienced
by those who drank it (35% from an online survey) including the adult sons of Michael
Booth, CEO of PDB Beverages. Additionally, the most unique differentiating factor is that all
Crescents ingredients were certified as organic which meant that there were no usage or
application of chemicals to alter or enhance the ingredients natural state during their farming,
harvesting and production stage. This caters well to consumers who seek a more natural and
healthier alternative to the usual sports drink products which do not have an organic content.

6.2 Price
Crescent will be sold at $2.75 per can. The price is comparatively higher than other sports
drinks ($2 on average for a similar 8oz can) but with the right marketing strategy and
advertising campaigns it is hoped that the slight difference in price can be justified to the
consumers and change their perception of wasting money due to buying a more expensive
product.

6.3 Place
Crescent will be sold at the following places :

local large supermarkets : have the availability of spaces to display a variety of

products

local groceries : nearer and convenient for customers to buy the products

big sporting events - like baseball, basketball or soccer matches and running events

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: can cater to a wide variety of consumers including sports players/participants; young

adults and family with children who come to watch the events by setting up sales
booth.

sports facilities like gyms, dance/self defence studios, indoor courts (badminton,
basketball) and swimming complex
: vending machines can be placed here to cater to sports enthusiasts of both genders.
These places can help to generate sales since the placement of vending machines in
schools are banned by the U.S government due to the increasing obesity rate in
children.

distributors : good relationship with potential distributors can help to market Crescent
to many smaller retailers and groceries across the region.

6.4 Promotion
PDB Beverages can engage the service of a fairly popular sports personality (either from
California, Oregon or Washington state) as a spokesperson to help promote Crescent during
its soft launch in order to save some costs due to the constraint in budget allocation (i.e
$750,000) for advertising purposes. Free samples can be given during the launch and also at
the food and beverages free testing counters in large supermarkets to introduce the product to
the public. Besides that, PDB can set up sales and promotional booth at big sporting events
such as baseball, basketball or football matches to give out free samples to the patrons. Those
who tasted the samples can be interviewed for immediate testimonies to attract other people
to visit the booth and buy the drinks. Flyers containing complete information of the product
can also be distributed at crowded places such as bus stations, train stations and fresh/wet
markets to inform the public of the emergence of the new product in their area. Banners can
be put up in populous housing estates to inform the residences or passer-by about the
launching of the product and also to promote the product. Other than that, PDB can set up
billboards advertisements with the endorsement of local sports celebrity at strategic major
roads to promote the product.

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7.0 Implementation Control

In order to achieve a successful soft-launch for Crescent, careful and a well planned
implementation plan need to be carried out by PDBs marketing team. Prior to the launching
date, flyers can be distributed at busy public places like train stations, bus stations and
fresh/wet markets to inform the public about the launching of the product. The flyers could
also be slipped into letter boxes at homes or offices. Banners with information about the
activities being held on the launching day can be put up at strategic locations in populous
housing estates to attract as many people to go to the launch. Information such as lucky draw
sessions, fans meet-up session with local sports personality and handing out of free samples
and mystery goodie bags should be clearly and nicely presented on the banner to attract
attention. Other than that, sample of the product can also be given in a few popular
supermarkets to be tried at the food & beverage trial counters to introduce potential buyers of
the emergence of the new product. PDB should also ensure that its sales staffs are well
trained and are well prepared beforehand to handle product queries on the day of the launch.
In order to capture a market size as big as possible, PDB should launch Crescent in the state
of California as it is the most populous state in the U.S (38, 431, 393 people; 2013 estimate)
compared to the state of Oregon and Washington. As for the choice of a city, PDB should
launch Crescent in the city of Los Angeles as it is the most populous city in California (10,
053, 995 people; 2013 estimate). As for the day of launch, if possible, PDB should launch
Crescent on 1st January 2014 as it is a public holiday to capitalize sales as people are not
working and spending time outside and could go to the launch of the product. The next
suitable date will be 20th January 2014 (Martin Lurther Kings birthday) which is also a
public holiday. PDB should also choose a popular supermarket in Los Angeles to launch
Crescent.
On the day of the launch, a fairly popular sports personality from Los Angeles can be invited
as a spokesperson for Crescent. The engagement service of a fairly popular sports personality
could save some cost as PDB is having a tight budget ($750,000) as advertising allocation. A
certified health practitioner could also be invited to the launch to talk about the genuineness
and naturalness of the ingredients of Crescent so as to clear doubts of some people who
usually associate lower priced product with low quality ingredients. At the same time,
Crescent should be launched simultaneously at a few popular supermarkets in the other two
states, Oregon and Washington in a smaller scale without the service of a sports personality
and a health practitioner. Here, Crescent can be given out as free samples to patrons and sold
at a discounted price to customers in order to save costs.
After the launch, flyers can still be distributed and banners put up at strategic location for
continuous advertisement. In addition, big billboards with the endorsement of a sports
personality enjoying the drink with his family can be set up at busy major roads to promote
Crescent as drink suitable for all ages and at all time, not only limited to sports enthusiasts
and sporting activities. PDB could also set up promotional and sale booths during major
sporting events like football, baseball and basketball matches in the states to further promote
Crescent in order to capture sales. Sales booth could also be set up at large food & beverage

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exhibitions happening throughout the year. If sales is promising for the year, PDB could then
plan for the launching of Crescent nationally in 2015.

8.0 Recommendations
Another positioning option for PDB is to position Crescent as an organic refreshment as there
is an increasing market for health, wellness and natural product. Organic beverages also
claimed a price premium (on average 25% higher) over conventional beverages of the same
variety. This will enable the company to obtain a higher revenue if sales is promising.
PDB could also manufacture Crescent in two variants, one variant with a higher organic
content (to capture the sales market of senior adults) and the other variant with a lower
organic content (to capture the sales market of teenagers). However, the acceptance of the
variants will take some time to be researched and tested in the market.
Besides that, PDB could also introduce more flavour in Crescent which can appeal to
younger consumers like children and teenagers who prefer a fruitier taste. The sugar content
in Crescent could also be added in two slight variations, one with a little bit higher sugar
content to attract younger buyers who prefer their drinks to be sweeter and one with lower
sugar content to cater to the needs of more senior buyers and those who are more health
conscious. Again, a period of time will be needed to research and test the market well.

REFFERENCES
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1- SWOT - http://symbolics.com/what-i-learned-today-swot-analysisinmarketing/
2- 4Ps -http://www.mindtools.com/pages/article/newSTR_94.htm
3- Marketing Management, 14e Global Edition by Philip
Kotler,North
Western University & Kevin Lane Keller,
Dartmouth College
4- http://quickfacts.census.gov/qfd/states/06/06037.html
5- http://bankholidaydates.com/UnitedStates/2014.aspx

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