Question

What is the issue this company is currently going through and what are some recommendations to help resolve the issue? thank you!

Crescent Pure

Crescent: Ingredients and packaging

Packaged in a sleek, tall silver 8 - ounce can w ith a simple crescent logo and lime gree n and orange accents, Crescent was a clear - colored liquid. Its taste included a hint of fruit and was less sweet than most fruit juice, cola, sports drinks, and energy drinks. Each can contained one 80 - calorie serving. For flavor, Crescent contained lime juice, lemon juice, and small amounts of raw cane sugar and green tea. Energy stimulants included guarana, a plant native to South America whose seeds contained roughly double the concentration of caffeine found in coffee beans, and ginseng, an herbal supplement known to re lieve fatigue and boost concentration and endurance.. A dash of fine - grain salt delivered electrolytes with each serving.

All Crescent ingredients were “ccertified organic,” which meant that during farming, harvesting, and production, no chemicals were used or applied to alter or enhance the ingredients’’ natural state; the drink’s label highlighted its certified - organic roots. In addition to the nutritional information included on each can, the drink also listed its energy content (880 milligrams of caffeine p er serving).

Crescent product positioning: Options

Ryan agreed that Crescent’s product attributes could support positioning in one of two functional beverage categories: energy drinks or sports drinks. However, she needed in - depth research on market sizes, competitors,, and consumer preferences , in order to craft a comprehensive positioning strategy. Ryan knew that good positioning , if successful , could shape potential customers’’ opinions about a product or service before they’d even seen or experienced the product in question.

Ryan asked Matt Levor, PDB’s director of market research, for help. After calling to explain her needs and timing, she e mail ed him to summarize her thoughts on potential approaches.

July 20 , 2013

Hi Matt,

Thanks for helping me with my research requests on such short notice. Your insight into consumer demographics, perceptions, consumption habits, and the competitive landscape for both energy and sports drinks, is appreciated. My high - level thoughts on approaches are below:

Energy Drinks: Crescent delivers a boost of energy to combat fatigue and promote ment al focus. Positioning Crescent as an energy - enhancing bevera ge would reinforce existing perceptions from Oregon,, where an informal consumer survey conducted at an outdoor music festival indicated consumers viewed “eenergy”” as Crescent’s most descriptive characteristic. Prices for energy drinks in the U.S. range fro m $22 to $55 per can, based on can size (88 oz., 12 o z., or 16 oz.) and retail outlet. The average price for 8 oz. of energy drink is $22.99, above our $22.75 price point.

Thirty - four percent of the population said they consumed an energy beverage in the last six months; the projected market for energy drinks in 2013 is $88.5 billion. 7 Most advertising for energy drink s targets the most enthusiastic consumers, men 18 to 24 years old. Visually startling images — think extreme sports participants — paired with loud rock music (wwhen audio is available), reinforce a message that implies “ Our drinks help you do everything you want to do (even risky things!) . ”

I think Crescent’s organic certification and minimal (as compared to leading competitors) caffeine content provi de strong differentiators for the energy market. Our drink is a healthier alternative to leading brands, whose artificial sweeteners and excessive levels of stimulants are likely to prompt a subset of consumers to switch to healthier options.

of these drinks has fallen because of negative media attention. If you could find out more about current and projected consumption patterns, as well as the impact of negative media attention, I’d greatly appreciate it. I look forward to reading your research on these issues next week..

Sports Drinks: In 2012, the market for sports drinks was $66.3 billion; 42%% of sports beverage drinkers consider ed sports drinks “anytime beverages ” and did not associate them only with exercise. They attracted a wider consumer base than did energy drinks, and regular users consumed them more often. Sports drinks come in a variety of sizes and average $11.00 to $22.00 for 12 - oz. and 24 - oz.. containers, respectively. Generally, ingredients include water, sugar, and salt.

Crescent ’s hydrating elements, paired with the mental focus and energy boost, can enhance athletic performance. It can also stave off post - workout fatigue if consumed after exercise. (Fright and Razor, the market leader, are touted as performance enhancing by “extreme sports” professionals.) Perhaps Crescent ’ss low sugar content and all - natural ingredients can appeal to health - conscious consumers seeking healthier “anytime” beverages that are free from artificial ingredients and sweeteners. Crescent ’ss $22.75 price point for an 8 - oz.. can will be significantly higher than are those of similarly sized sports drinks , so our positioning and advertising will have to build the case for its premium price.

Again, thanks for your help . I look forward to following up with you next week.

Sarah

Market Research

Levor had limited time in which to do research and therefore relied heavily on third - party sources. Drawing from a “state - of - the- industry” study published by a beverage industry trade association, three consumer surveys conducted by a private research firm, several academic reports, and industry media coverage, Levor provided Ryan with most of the market information she requested .

Energy drinks: Market and consumer data, competition, threats, and opportunities

 Market size : The market for energy drinks 9 was growing; between 2010 and 2012 , the market for energy drinks had grown by 40%. It was estimated to be $88.5 b illion in the United States in 2013; forecasts projected that figure to reach $113. 5 billion by 2018 .

 Consumer data: 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 $225,000 per year .

 Competition: Together, Fright, Razor, Torque, and Stellar accounted for 85%% of category revenue (334%, 27%, 16% , and 8% , respectively). The remaining 15% was split between roughly thirty independent regional and national producers.

 Opportunity: Sales of energy drinks with lower levels of caffeine and purer ingredients were rising due to consumer demand for healthier food and beverage choices.

 Threats: New stories were highlighting the drinks’’ alleged health risks : 32% of consumers over 18 indicated they drank an energy drink in the last six months, 11% of whom were drinking fewer energy drinks than they had a year earlier, due to concerns about health and safety .

Sports drinks: Market and consumer data, competition, threats, and opportunities

The market increased only 9% between 2007 and 2012 . In 2012, the market for sports drinks reached $66.3 billion in the United Stat es and was expected to grow to $99.58 billion by 2017.

 Consumer data:: R oughly 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. Sports drinks appealed to younger consumers — 62% of those between ages 18 and 24,, and 77% of those ages 12 to 17.

 Competition: Gleam and Drip had 73% and 21%% market share, respectively. The remaining 6% of market share ($3378 million) was split fairly evenly among roughly 20 producers.

 Threats: Concern regarding rising childhood obesity rates resulted in government - mandated guidelines to remove high - calor ie sugary drinks and snacks , including sports drinks, from school vending machines beginning in 2014..

 Opportunity: New diet and low-sugar sports drinks were growth areas for the industry. Diet and low - sugar sports beverages, which did not exist before 2009, had grown by 33% between 2010 and 2012, taking market share from traditional sports drinks. The market size for diet and low - sugar sports drinks was expected to increase from $11.4 billion in 2012 to $22.97 billion in 2017.

Sports drinks and energy drinks: consumer studies

Levor uncovered a consumer study that examined how consumers perceived energy drinks and sports drinks.. See Table 1 for percentages of respondents who felt a specific word was reflective of energy and sports drinks in 2013. (Respondents could assign multiple descriptors to each category.)

Answer 1

The company needs proper positioning for it's product-Cresent. For product positioning, Ms. Ryan requires market related data. The company has some data only, this will not suffice the need for completing her task. Hence she requested Matt Levor, PDB’s director of market research to help her with all the necessary data

During market research , Mr. Matt Levor has done a SWOT analysis and collected customer-related data. The following are recommendations based on the data received for energy drinks:

1. Promote Energy drink no. 9
2. Expand to female consumers
3. Concentrate on competing with Fright, Razor, Torque, and Stellar
4. Promote your brand as a healthier drink in comparison with the competitors
5. Provide safety alerts on the packaging and advertisements to make people aware about the impact of drinking these beverages above recommended levels.

The following are recommendations based on the data received for sports drinks:

1. The scope of product is high and market penetration is required.
2. Expand to female and middle-aged consumers
3. Concentrate competing with Gleam and Drip who have 73% and 21%% market share, respectively.
4. Improve the sports drink to cater to the health-related requirements. Reduce sugar content in the drink and replace it with natural sugars which don't cause obesity.
5. Advertising the benefits of diet or low sugar sports drinks