Marketing Crescent Pure Assignment

1a. Place Crescent Pure in the perceptual maps on Exhibit 1 and Exhibit 2 to visualize where Crescent Pure stands relative to competitors in those maps. Explain your reasoning briefly. 1 points Exhibit 1: Based on the percentage of responders’ answers, Crescent has 29% hydration while energy drinks 11% and sports drinks 49%, which leaves Crescent Pure drink in the middle. Energy content was also taken into account- the energy content is equal to the caffeine found in a cup of coffee, is a healthy alternative to high-calorie, sugary energy drinks, has less energy than young consumers had hoped, which leaves Crescent in the middle of the energy chart as well. Exhibit 2: When it goes to taste it appears that Crescent’s taste appeals to most consumers. There were no unfavorable reactions and some participants were notably more pleased with the taste. All Crescent ingredients were certified organic to alter the ingredients’ natural state. Preventing chemicals in the farming, harvesting and production process can suggest that Crescent was the most nutritious drink available from the group. 1b. Consider Crescent Pure’s attributes and its tangible and intangible benefits: what are Crescent Pure’s strengths and weaknesses relative to existing products in each functional beverage category (energy drinks vs. sports drink)? 3 points Strengths Weaknesses Healthier than other mainstream beverage alternatives while being refreshing and energizing Significantly more expensive compared to sports drinks Certified organic product Consumption of energy drink is noticeably decreasing Only 80 milligrams of caffeine per serving which is corresponding to 1 cup of coffee Competition may launch a similar/alternative product to the market and take control of the consumers Lower amount of sugar, natural & functional Little consumer’s knowledge about the product Sleek, tall packaging A bit less expensive than energy drinks 2. PDB has identified three targeting scenarios: (1) sports drinks consumers, (2) energy drinks consumers, and (3) organic beverages consumers. Focus on these three options – If you had to choose one segment to target, which one would you choose? Base your answer on an in-depth analysis combining both data from the case and what you have learned about targeting. Take into account: (1) the match between your product benefits and consumers’ needs/expectations (i.e., the extent to which your product can fulfil these needs and expectations). 3 points (1) these segments’ attractiveness. 9 points 1. Crescent for a sports drink consumer: Between 2007 and 2012 the market increased only by 9 %. The trend changed later, as a sports drink, Crescent could have access to a market worth around $ 9.58 billion by 2017. Moreover the market size for diet and low-sugar sports drinks is expected to increase from $1.4 billion in 2012 to $2.97 billion in 2017. Aside from the booming market, there are several benefits that can be linked to its introduction as a sports drink. Such product might be appeal to consumers seeking hydration, high nutrition products which may not only enhance performance but also be consumed outside of exercise hours. The size of the market appears to be wider than the one of energy drinkers. The main target of consumers are younger people aged 12 to 24 ( 62% of those between ages 18 and 24, and 77% of those ages 12 to 17). This age group responded positively to Crescent as an energy drink and rated it highly. However what’s surprising is that only 27% of consumers are female, so Crescent Pure as a sports drink would mostly target male consumers. Most of the sports drinks on the market have been found to consist mainly of water, salt and sugar. Crescent has the ability to hydrate, increase mental concentration, reduce fatigue, and create an energy boost that would attract athletes. Its fatigue-reducing and energy-boosting properties would encourage consumers to drink the beverage after hours of work or at any time of the day as normal consumers. Its organic nature would also attract health-conscious customers. Since the introduction of diet and low-sugar sports beverages in 2009, there has been a 33% market growth which only proves that consumer demand for such drinks is increasing. Crescent's positioning as a sports drink exposes it to several inconveniences due to different market forces. There are two main competitors Gleam and Drip, who have 73% and 21% of overall market shares, so in total they occupy even 94%. There are also concerns regarding rising childhood obesity rates guiding which may negatively influence the perception of such products in general. Moreover the price of the sports drinks average $1.00 to $2.00 for 12-oz. and 24-oz. containers and they come in a variety of sizes, which is much lower that for a Crescent product. 2. Crescent for an energy drink consumer: The main target group for energy drinks are men between the ages of 18 and 34, the most popular Crescent age group. The herbal stimulants used in Crescent provide 80 milligrams of caffeine, which is a much smaller amount than found in competitors drinks. Lower caffeine levels along with a lower sugar content make Crescent attractive to consumers as a healthier alternative. Given the current retail price range of energy drinks, which is $ 2 to $ 5 (priced per can size). The current price of the 8-ounce can of Crescent is $ 2.75, which is lower than average competition’s energy drink- $ 2.99. Lower prices may attract to choose the the cheapest energy product available in the market. Consumer at the Oregon festival confirmed that Crescent's advantage is the energy it gives to consumers. However there are a few challenges that may hinder Crescent's success as an energy drink. One downside is the negative media which are highlighting the drinks' alleged health risks. For this reason, in 6 months, 11% of the main energy drinks dropped due to consumer concerns. The projected market value of $ 13.5 billion in 2018 may not be accurate and may not be reliable and still decrease in the end. Moreover the healthier beverage sales are growing noticeably growing these days. Another disadvantage is the strong competition that a product would face on the market. The five major companies, Together, Fright, Razor, Torque, and Stellar have 85% of the current market share and are considered major players in the market, while the thirty independent companies have the remaining 15%. 3. Crescent for a organic beverage drink consumer: The natural ingredients of Crescent would allows it to enter the healthy, organic market. Considering that this is an emerging market for products a target is a wider consumer base. The age target will not be limited since the product can be accessible to all. This segment avoided traditional energy and sports drinks because of their ingredients and perhaps also the crash effect that other similar high fructose drinks cause. The guarana seed used in making deliver to consumer the same energizing effect as a cup of coffee. In addition, in might be that organic beverage consumers are purchasing products corresponding to their beliefs and mental position. Organic beverages are on average 25% more expensive than conventional beverages, so the price would speak for itself. The focus group will be looking on the quality of ingredients, so they will be willing to pay more. Crescent was found to be less sweet than most of the beverages available in the market. Its low sugar quotient (derived from organic, raw cane sugar) content would place it at a disadvantage since people tend to are more appealing and drink more of sweeter beverages. On the other hand if Crescent would only focus on health and good quality there is a risk of loosing important customer segment which was seeking for something else. Also wide range of customers means that $750,000 dedicated to advertising might not be sufficient. Conclusion: Taking into account the conclusions each targeted segment it would be most profitable for Crescent Pure to be introduced as a sports drink. The potential market seems to be very attractive at the moment and grew by 33% only in two years (between 2010 and 2012). Moreover the market size for diet and low-sugar sports drinks is expected to increase from $1.4 billion in 2012 to $2.97 billion in 2017. There are also several other opportunities like emerging diet and low-sugar sports drink industry as well as having a wider consumer range who are more eager to drink a sport beverage anytime. Regular drinkers consumed sports drinks more often than energy drinks as this area appealed to a fairly wider potential consumer base who did not exclusively associate sports drinks with exercising. All Crescent ingredients highlighted its certified-organic roots. This is why the product will attract athletes and sport amateurs but also a larger group of health-conscious consumers . 3. Given your targeting decision above 3a. Write a clear positioning statement for Crescent Pure. 1 point I decided to position Crescent Pure as organic and low-sugar sports drink. This functional beverages’ purpose is to help athletes replace water, electrolytes, and energy before, while or after the training or competition. Research studies suggest that consuming extra carbohydrates while exercising may be increasing performance, meanwhile, one in maintaining optimal blood glucose levels. 3b. Explain your reasoning for each component in your positioning statement. 1 point Crescent Pure contains hydrating elements which are paired with the mental focus, energy boost and can enhance athletic performance. Consumption after exercise can help prevent post-workout fatigue. Crescent has a low sugar content and is free of artificial colors. It may be appealing to health-conscious consumers looking for healthier drinks at any time. Such positioning might encourage consumer to drink the Crescent even more often. The price is $ 2.75 for the 8-ounce, which is relatively high compared to other sports drinks of similar size. Positioning and advertising this healthier alternative will have to justify its premium price. 4. Use a priori (i.e., ex ante) segmentation, define one additional segment that might be potentially interesting for PDB. This segment should be clearly differentiable from the segments that PDB is currently considering. Describe this segment briefly and explain why it is differentiable. 2 points. One additional segment that could be added to PDBs current segment is healthy diet drinks consumers. These are the consumers who tend to make all their food and beverage choices based upon being healthy and eating well. Crescent is an excellent and healthy alternative to high-calorie, sugary energy drinks since it contained lime juice, lemon juice, and small amounts of raw cane sugar and green tea. Energy stimulants included guarana, ( a plant whose seeds contained roughly double the concentration of caffeine found in coffee beans) and ginseng (an herbal supplement known to relieve fatigue and boost concentration and endurance). These natural and good quality ingredients would be appealing to healthy drinks consumers. We can assume that this is the most conscious segment who is reading the product labels and analyzing the ingredient list. Making a wise choice which is true to health-seeker’s beliefs is mostly what would differentiate from energy or sports drink consumers. What’s different from the organic beverage consumers is that healthy diet drinks consumers would focus mostly on the nutritious benefits for the body, not only if the ingredient is certified or not. Crescent Pure can each contained a 80-calorie serving, which is not a high number considering the content of raw cane sugar. Even though healthy drink consumers are most likely to want keep a stable amount of calorie income in order to maintain a proper BMI, they would not purchase products with artificial sweeteners. Those products have zero calories and are far from being considered healthy- they lead to increased risk of many diseases, in particular: heart disease, metabolic problems, brain and liver disease. The pricing could also be potentially attractive because for healthy alternatives people are usually willing to pay more. I would assume that $ 2.75 for Crescent Pure would be a lower or an average price for a healthy drink. The age target might be tough to estimate since healthy drinks might be appealing to many age groups, so a detailed analysis should be performed.