Case Analysis: Crescent Pure Harvard Case Solution & Analysis

Case Analysis: Crescent Pure Case Solution

Problem Statement

Portland Drake Beverages (PDB) has recently acquired a new energy drink and wants to add the same to its existing product line. The reasons behind this acquisition include the market recovery from recession, potential growth in the energy drinks’ segment and enormous market size, which is expected to grow by the end of 2018. However, the market currently has a size of $131 billion, which is supposed to increase to $164 billion. Moreover, the company wants to launch this drink in three core regions in January 2013. The company is considering making a soft launch in order to identify the potential profitability of the product.

The energy drink namely, Crescent Pure, had a real market demand for the acquisition, and the owner of that drink was also making acceptable returns from the product,as the previous owner was selling almost 1000 cases of the drink before the acquisition. Michael Booth, the CEO of PDB, first saw the drink when his son was drinking it and was very satisfied with the taste. He identified that the drink was a low calorie drink and light sweetening composition compared to other traditional energy drinks. Booth saw this drink as an opportunity and estimated that the economy was recovering from the recession and he expected that it would start growing again after some time. In addition to this,if PDB adds this potential product to PDB’s traditional non-alcoholic beverages, then the company would be able to take first mover advantage, and this strategy will also allow the business to capture the market share from the rivals.

After months of research and negotiations, the company acquired Crescent Pure. Currently,the company is considering launching the product nationally, but the marketing and sales executives want to make a pilot launch to identify the market demand for the product and they have suggested to make a soft launch of Crescent Pure in January 2014 and afterwards, by getting the results the product will be launched nationally. However, the results are expected to boost the company’s overall revenue and brand recognition as the company is launching the product below its original price, which will increase the sales volume and ultimately the overall profitability.

At present the main problem is that the company’s marketing executives are confused among the three critical situations. This is because some of them see the product to be positioned as an energy drink. On the other hand,some of them consider it as a sports drink, and the remaining look at it as an organic drink.
Sarah Ryan, the vice president of marketing, is confused as she had only six weeks to finalize the strategy and to present it to the CEO. However, Ryan is considering all three options and to choose one among them. On the other hand,she also had to make a strategic marketing plan for the product. The marketing plan, positioning strategy and recommendations regarding the product will be discussed in this study, later in following sections. Moreover, this study will also allow the reader to understand the industry dynamics, break-even analysis of the product and future strategies.

SWOT Analysis for Crescent Pure

Strengths

The product before coming into PDB’s product line was performing tremendously and made an excellent market position,as it has been discussed earlier that almost 1000 cases of the product were sold annually. Moreover, PDB also has a favorable brand recognition among the non-alcoholic beverage industry, and the company can easily sell up to 12000 cases per year. Furthermore, the energy drink’s market is expanding and expected to grow in the future as well. Therefore, strong distribution channel, strong formulation of the product and brand recognition will be accounted for the product’s strength and future growth prospects for the company. However, the quality of the product at such affordable prices also differentiates it from its rivals..............

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