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Mktg6210 - Week 4 Assignment 2: Cresent Pure Case

Essay by   •  April 15, 2019  •  Case Study  •  1,114 Words (5 Pages)  •  65 Views

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Lindsay Schiller

MKTG 6210 Sec. 2

4/10/2019

Week 4 Assignment 2: Cresent Pure Case

Problem

Portland Drake Beverages (PDB) founded in 2008 as a manufacturer of organic juices and sparkling water, had acquired Cresent Pure in July of 2013, because they wanted to expand into the beverage sector. The problem was that Cresent’s beverage product didn’t have any solid brand positioning within the beverage sector. Therefore, the purpose of the report is to choose suitable brand positioning for Cresent by analyzing the available data. Their product positioning options are energy drink, sports drink, organic drink, or any combination of these. Portland Drake’s CEO, Michael Booth has entrusted the VP of Marketing, Sarah Ryan with brand positioning of Cresent with an advertising budget of $750,000 and a deadline of October 2014.

Compared to their competitors most products offered are full of high fructose corn syrup and loaded with extreme amounts of caffeine, but Crescent provides a healthy alternative with organic ingredients and much less sugar. Cresent has followed today’s consumption trends of more organic and healthier choices with being an all-natural organic energy drink, yet a decision with the product’s market position needs to be taken with PDB. Suitable brand positioning requires an analysis of the customer needs, competitive pressures, communication channels and conveying the differentiating of the products within the market.

Analysis

Research is provided from three consumer surveys conducted by a third party private research firm, several academic reports, and industry media coverage. They found that most of Cresent’s consumers are male and actively involved in sports. In terms of age, 44% of their consumers are 18-24 years old (majority) and 36% are 25-34 years old. Below are PDB’s three options to position the Cresent drink product and pros and cons of each.

Energy Drink

The target age group for energy drinks is 18-24 years old and a typical can costs $2-$5. The top four competitors account for 85% of the sector’s revenue and the market is estimated to grow to $13.5 billion by 2018. The benefits of Cresent positioning as an energy drink are reinforcing perceptions from Oregon, the rate of the market is quickly growing by 40%, the price per unit would be less than other energy drinks at $2.75 per can, and the drink contains much less sugar compared to other energy drinks. The shortfalls are this market’s cut throat competition, the general negative perception of energy drinks, and their alleged health risks from the media.

Sports Drink

The target age varies from 12-24 years old, but is preferred more by teenagers. The top two competitors possess 95% of the market share, this market is estimated to grow to $2.97 billion in 2017. The benefits of Cresent positioning as an energy drink are that 45% of sports beverage drinkers consider them as “anytime beverages”, the increasing demand of low-sugar sports drinks, a wider target market of ages 12-24 years old, and the association of the drink with increased mental focus and hydration. The shortfalls are the cut throat competition, more expensive cost per unit compared to other drinks, stringent government regulations, relations to raising childhood obesity, and a slowing market growth rate of only 9% (from 2007 to 2012).

Organic Drink

It’s preferred by all ages and it’s a newly emerging product in the beverage market. They include soft drinks, tea, energy drinks, and milk. Organic drinks hold a 25% price premium (on average) over other conventional beverages. The benefits of Cresent positioning as an organic drink are the rising trends in the organic beverage market, secure premium prices over other beverages, ability to target all age groups, taking advantage of PDB’s established brand name in this space, and a smaller scope of competition. The downfalls are by focusing on health conscious consumers it may alienate other consumer segments, insufficient advertising funds to enter this large of a space since it appeals to all consumers, requiring more distributors and retailers, and extensive amounts of time to execute this type of campaign.

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