This is my case analysis submission for Marketing Management Class at California State University East Bay (Winter 2018), by Professor Yi He.

1. Case Analysis:
Crescent Pure
Name: Danh Do
NetID: hw6733
Class: MKTG 6215
Professor: Dr. Yi He

2. 1. Overview
In 2013, Portland Drake Beverage (PDB), a manufacturer of organic juices and sparkling
waters, acquired Crescent, a non-alcoholic functional beverage with a combination of energy-
enhancing, hydrating and all-organic ingredients. This is a strategic move to expand their product
portfolio especially in the functional beverage segment. However, the executives already forecast
to face strong competition from other big players in this segment once these companies launch
their own natural versions of sports and energy drinks in the 2nd half of 2015.
Given a total of $750,000 budget for 2014 and a 6-week planning time frame, PDB’s vice
president marketing, Sarah Ryan, was tasked to recommend a strong positioning for Crescent’s
soft launch to meet its benchmark earnings goal: a profit of $750,000 – its own allocated
advertising budget in 3 western states (California, Oregon, and Washington).
PDB’s executives already decided the following position for Crescent to reflect its own
pricing strategy: “quality organic products at affordable price”. Crescent was testified in its
“quality organic” in two distinct areas: (1) Its herbal stimulants gave the same “energy effect” as
that of a cup of coffee, and (2) Its organic raw cane sugar quotient was only 30% compared to its
leading competitors. Crescent’s retail price was $2.75 per can. This is a 27% below the drink’s
original selling price ($3.75). Through the initial launch prior to the acquisition, we know that its
original price was accepted by its market already. This was proven by the retailers’ quick inventory
depletion despite their own 25% mark-up to its original price. According to the focus group later,
we were assured of “affordable” by the respondents’ expectation of min $3.00 benchmark for
organic products.
Ryan initially had 3 options in her plan to position Crescent:
Option 1: as a healthier choice for energy-enhancing beverages
Option 2: as a premium & healthier “anytime” beverage
Option 3: as an affordable organic & healthy refreshment
2. Problems
According to Table 2.1. Calculation of Target vs. Wholesale Plan, Ryan was expected to
be able to distribute almost 100% production plan by the director before it can go national. She
had to maximize its capabilities at the moment. This should be always at the back of her thought.
No. Item Description
1 Gross profit target $750,000.00
2 Variable cost per can $1.02
3 Variable cost per case [(2) x 24 can] $24.48
4 Total cases production for 2014 144,000
5 Total variable cost for production [(3) x (4)] $3,525,120.00
6 Target revenue [(1) + (5)] $4,275,120.00
7 Wholesale price per case $29.76
8 Wholesale revenue [(3) x (7)] $4,285,440.00
9 % difference between Target & Wholesale [1 - (6)/(8)] 0.24%
Table 2.1. Calculation of Target vs. Wholesale Plan
Although each option has its own pros and cons, the positioning plan should respond to the
following questions:
Question 1: How competitive is Crescent in the chosen market?
An actionable positioning plan right now should address this first because Ryan only has
one year to prove its profitability, especially its price competitiveness because the retail price was

3. already decided. Even though she can recommend to either raise or lower the price, it should not
be discussed at the moment. By lowering the price, Crescent needs to lower its variable cost or
increase the production to hit the target profit; which cannot be done for the time being. If she
recommends to increase the price, she would have had a different challenges to prove its
competitiveness in the premium price segment (which PDB itself already experienced backfire in
the past).
Secondly, as they plan to expand nationwide before other competitors upgrade their
portfolio, it is better if they can prove to gain faster and better share. What can Crescent leverage
right now in terms of PDB’s brand equity and its initial brand perception to help it establish itself
in the chosen market faster? We understand the pressure of the upcoming competition from the
industry’s big players.
Question 2: How risky is Crescent’s positioning plan?
This will address the threats that Crescent will face when the positioning plan is rolled out.
It will also address its resources to carry this plan out and to counter attack the associated risks
coming with it.
We will analyze each option using the above 2 questions, then we will draw a “perceptual
map”: Competiveness vs. Risk as below Exhibit 2.1. Ideally we prefer High Competitiveness Low
Risk plan, but we can will evaluate to see if there can be a better Option 4.
Competitiveness - High
Risk-Low
Risk-High
Competitiveness - Low
Exhibit 2.1. Framework of Reference: “Perceptual Map”- Competiveness vs. Risk
3. Option Analysis
Option 1:
a healthier choice
for energy-
enhancing
beverages
Option 2:
a premium &
healthier “anytime”
beverage
Option 3:
an affordable
organic & healthy
refreshment
Competitiveness Growing market by
40% for the last
two years.
Projected growth to
$13.5 billion in
2018.
More fragmented
than sports drink
market. Leading
company only
Growing market
size for diet and
low-sugar sports
drink. Projected
growth to $2.97
billion in 2017.
Dominated by
Gleam with 73%
and Drip with 21%
market share. To
Although this is a
growing market. %
consumers of
organic nonfood
product is still low
(9% of total
organic) (3.1). This
might be a block to
its national
expansion plan.
(Exhibit 3.1.)

4. captures 34%
market share. There
is higher chance for
Crescent to
compete in this
segment.
Consumer profiles
seem to match
those of Crescent’s
current consumers.
Price is competitive
because it is 10%
lower than average.
enter this segment,
Crescent needs to
build its awareness
first as sports drink
and second as
healthy sports
drink.
Consumer profiles
do not seem to
match since sports
drink is more
appealing to teens
from 12 to 17 while
80% of Crescent
consumers range
from 18 to 34.
Price is considered
premium as it is 2
times the average
price.
Health-conscious
consumers who
avoided energy and
sports drink and
prefer organic
products. Although
Crescents can
leverage current
strength of PDB’s
in organic drinks, it
will also need to
compete with its
own category.
This will leave out
an important
segment in which
PDB wants to enter
which is energy
and sports drink.
.
Risk / Threats Dropping in energy
consumption due to
health and safety
concerns.
 Crescent can
address this
directly by its
natural
ingredients and
make this its
unique
differentiation.
Due to concern
regarding obesity
for kids and teens,
sports drinks are
removed from
vending machines.
 To address this
problems by
both publicity
and government
policy, Crescent
needs to require
more resources
and more time.
Premium price
competition.
Because this
segment believes in
“better quality
more expensive”.
 PDB knew that
they would get
backfire in
premium
category.
Note: 3.1. Total US Organic Sales and Growth 2005 – 2015. Source:
https://www.foodnavigator-usa.com/Article/2016/05/19/US-organic-food-drink-sales-11-
to-39.8bn-in-2015-OTA#
Using the framework in Exhibit 2.1., we assign 3 options.

5. Competitiveness - High
Risk-Low
Risk-High
Competitiveness - Low
Exhibit 3.1. Applied Framework of Reference: “Perceptual Map”- Competiveness vs. Risk
4. Recommendations:
Based on Exhibit 3.1., it is recommended that Ryan should go with Option 1: She can
position Crescent as “a healthier choice for energy-enhancing beverages”, which means Crescent
will compete in the energy segment. This is also supported by the fact that majority of Crescent
consumers already defined it as an “energy” booster. To strengthen its positioning, we can utilize
the research and survey responses:
Energy Drinks(4.1) Crescent(4.2) Difference
Natural 4% 38% 34%
Functional 22% 47% 25%
Affordable 5% 29% 24%
Refreshing 12% 35% 23%
Hydrating 11% 29% 18%
Healthy 6% 22% 16%
Suitable for Teens 7% 22% 15%
Fun 9% 19% 10%
Too Sweet 9% 8% -1%
Table 4.1. Percentage of respondents who indicated a word that describe the drinks.
Source: 4.1. Energy drinks in U.S.2013, Mintel. Accessed April 2014. 4.2. Percentage of
respondents describe Crescent. Accessed Feb 7, 2018.
Notes: These two surveys were conducted at different times for different purposes.
Combination of these two survey only serves for purpose of references in this practice to conclude
a brand positioning.
Instead of using “healthier” which is only 16% difference in consumers’ description, we
can strengthen the difference by using the word “natural” to be the key differentiation. We will
use the top 3 differences to write the positioning statement.
“To energy-drink consumers from 18-34, Crescent is a healthier and affordable choice
that use only natural ingredients.” Or “Get energized, naturally”
5. Obstacles to Implementation:
With the option to enter energy drink segment with a product differentiation of natural
ingredients, Crescent can easily leverage its parent company PDB’s profile of organic products
together with Crescent’s own reputation of “energy” among its initial consumers.
However, during the implementation of this strategy, it may face the following challenges:
1
2
3

6. 1. Fright or Razor (2 biggest players) can launch their own natural versions earlier than
expected to protect its market share. They already lost market due to the concerns
regarding health and safety. With the acquisition of Crescent by PDB, they can choose
to launch earlier and through their distribution, they can go national first.
2. Negative press about energy drinks increases, which may lead to a more challenging
go-to-market for new energy drinks despite its natural ingredients.