Crescent Pure Case Analysis
The Lisbon MBA Part-Time 15/17
Point of Parity with Energy Drinks
Point of Parity with Sports Drinks
Point of Differentiation from both categories
Recommendation to Management
Sarah Ryan, VP of Marketing for Portland Drake Beverages is facing a tough decision of
deciding the positioning and overall strategy for the impending launch of ...view middle of the document...
PDB is under pressure to define the product by October 1 in order to negotiate with
beverage distributors and retailers, and to hire advertisers to develop ad campaigns in
time for the January 2014 launch. PDB planned to spend $750,000 on advertising for
Crescent in 2014 and used that figure as a benchmark earnings goal. If 2014 profits
met or exceeded the goal, PDB would fund Crescent’s national expansion in 2015.
Peter Hooper, a native of crescent, Oregon, saw a market opportunity for a healthy,
energizing drink. He founded Crescent in 2008. Organic, all natural food and
beverages became ubiquitous in the Pacific Northwest region in the 1990s and early
2000s, and Hooper found popular energy and performance-enhancing drinks
unhealthy, to sweet, and artificial. He began experimenting with different ingredients
in order to craft an organic, all natural beverage lightly infused with organic juices
herbal stimulants, and electrolytes.
He wanted a drink that would refresh, energize, and enhance mental focus. What
began as a hobby became a business as Hooper saw growing local demand for his
Crescent benefited from launching in a region that embraced the sale of local
products. 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 pursuing local retailers in Oregon,
demand grew in the Portland area for Crescent. Distribution eventually included two
hundred retail outlets (amongst others) and the company was selling 1,000 cases per
month with a retail price of $3.75 for an 8-ounce can.
After Michael Booth, CEO of PDB Beverages, noticed his adult sons drinking Crescent.
Crescent was a good fit for PDB’s strategy of expanding their trusted and popular suite
of organic products; specially because Booth knew that functional beverages,
specifically energy and low-calorie sports drinks, were rapidly growing segments.
Crescent was acquired by PDB in mid 2013. The plan was to leverage Crescent’s
manufacturing facility, organic suppliers and distributor relationships to expand its
presence in states geographically adjacent to Oregon in 2014 and then nationally in
However, short term production capacity restraints limited PDB’s production of
Crescent to 12,000 cases per month in 2014.
Looking at the Energy Drinks market, we find that the largest group of energy-drink
consumers were males between ages 18 and 34. Parents of children were also more
likely to consume energy drinks. The highest volume of energy drinks consumed was
by respondents with a household income below $25,000 per year, quite lower than
Crescent’s customer base with a median of $42,500.
Regarding the Sports Drink market, roughly half of men drank sports drinks, while only
a third of women did. Although 40% of men found sports drinks refreshing, only 27%
of females did....