Case Assignment : Crescent Pure

Target Market

The target market most receptive to the positioning of an energy drink is those between the ages of 18-34 though the product has also supported by older generation. Female drinkers are also present that the expected. So target market should consider both males and females of all age that are health conscious, and active. The company has limited funds for their advertising campaign, so their resources must be allocated wisely.

Attributes CrescentPure

Watr+ Swish Drip Razor Fright Torque

Hydration Low High High High Low Low Low

Energy High Low Low Medium High High High

Nutrition Low High Medium High Low Low Low

Taste High Medium Medium High High High Low

Organic Yes No No No No No No

POD :

Crescent is POD in “Energy” with Watr+, Swish, and Drip.

Crescent is POD in “Taste” with Watr+, Swish, and Torque.

Crescent is POD in “Organic” with all drinks

POP :

Crescent is POP in “Energy” with Razor, Fright, and Torque.

Crescent is POP in “Taste” with Drip, Raor, and Fright.

Positioning

Energy drinks are often packed with chemicals that can lead to serious health issues. Crescent will be launched as a healthier alternative to other energy drinks but still at a very affordable price. Often times people chose to avoid organic products because of the price but if the drinks are positioned at a moderate and affordable price than Crescent will be able to be profitable and successful with their drinks.

The drink contains energizing elements which could support the positioning for a sports drink. If Crescent Pure positions the drink as a sports drink, they will have to sell the drink at a much lower price in order to compete in this sector where fierce competition already exists.

Submitted By : Pawan Kumar Verma (Roll # 70)

With the energy market showing a 40% growth in two years and a growing health-conscious market trend, the energy drink and organic markets present great opportunities for Crescent Pure.

Recommendation:

After carefully observation, as Crescent has both features as Energy and sports drink. Moreover, this has unique features of Functional, Natural, organic and affordable features which makes the difference as POD and provide the competitive market. Secondly, in order to capture both the market segment and Crescent should launch its product as “Organic energy drink” and that is how it should be positioned & advertised as “The Drink: Organic energy Something special, Just for you” because the drink is certified organic. They even can go for charging an additional amount as premium for being an natural and organic beverage.

Marketing Budget and Breakeven Analysis (For First Year)

Advertising budget: $750,000

Retailer Price: $ 2.75

Variable Cost: $ 1.02 per can

Wholesale price: $ 1.24 per can

Profit: $ 0.22 per can or 5.28 per case

Contribution Margin per case: $ 5.28

So breakeven quantity: 142045 Units

Factory capacity: 12,000 a month or 144,000 annually.

Manufacturer sale price: $1.24

Cost of Goods Sold: - $1.02

Producer’s Gross Margin : $.22/$1.24 = 18%

Distribution sale price: $1.65

Cost of Goods Sold: -$1.24

Dealer’s Gross Margin : $.41= 25%

Retail sale price: $2.75

Cost of Goods Sold : -$1.65

Retailer’s Gross Margin : $1.10= 40%

It is evident from the Gross margin figures that the producer is taking less margin compare to its dealers and Retails to promote them for maximum efforts for selling the product in to the market. Retailers make the highest margin on Crescent Pure, creating more incentive to push the beverage toward consumer purchases and forward value chain will also be happy with such margins.

Submitted By : Pawan Kumar Verma (Roll # 70)