Introduction
Conduct a market audit to identify the key influences that offer the opportunity for PDB's first entry in the U.S. sports and energy beverage markets. This includes a macro, micro audit, existing strategy, and swot analysis (Present Situation).
Situational Analysis
The Crescent pure products were established to fulfil the demand for the beverage, healthy alternatives while at the same time replenishing energy and removing fatigue from its consumers. The drinks are organic in addition to the fact that they are a healthier alternative. Each element which is found in the drinks has a purpose. The drinks are infused with an electrolyte which is meant to keep body organs fully functional and healthy. The Crescent drinks are lighter compared to those of the competitors. There are only 80 calories per cube in the can and comes with modern, clean silverfish can which is very simple in design (James, 2018). Due to the Crescent products, one can adequately think of how much opportunity there is in the energy drink market.
Market Research
The sales of energy drinks with lower levels of caffeine and unnatural ingredient have been decreasing in the recent past. This is according to research which has been conducted on beverages. The energy drinks have a wider market range compared to the sports drinks. The people who prefer to use the products are the young adults who are between 24-35 years for the energy drinks and 13-25 years in the sports drinks. The best way in which Crescent products can easily breakthrough in the market is by offering products which are much healthier and natural while ensuring that the pricing is not very high. It should be noted that the two most prominent companies in the industry owns more than 94% of the total market. As such, it is competitive, and a newer product entry needs to tread carefully.
Target Market
The prime target for the products is those who are between the ages of 18 to 24 years. These are consumers who are not young and many in the population, but they are also active and very health conscious. They are active, hence they will always need products which will help in replenishing their energy. They need such products to do so. Also, it has been found through research that the males are better consumers of the Crescent products than the females. As such, they are targeted more together with the consumers who give high attention to product credibility and label.
Competition and Competitive Advantage
Crescent faces significant competition in both the sports and energy drink categories. In the latter, there is competition from Stellar, Torque, razor and Fright which account for almost 80% of the total market share. The remaining share is for the other companies to fight for (Albers, 2000). The value of the products such as low sugar content and being natural can appeal more to the health-conscious people, hence making the Crescent products get larger market shares.
The products are unique, hence making it possible to establish ahead of its competitors. There are a lot of health advantages associated with the products since they are organic. The products contain more than 60% less sugar than the other products. As such, this can easily appeal to most people once they gain trust from the manufacturers (Keister, 1990). These qualities can be used by Crescent Pure to position the drinks in the market.
SWOT Analysis
Strengths
- PBD's 2012 revenues were $120.5 million
- The products are fairly priced
- The sugar content of the Crescent products is in 70% less than the other leading sports and energy drinks
- The drinks have 80mg of caffeine, which is equivalent to a cup of coffee
- It is a healthier alternative to the similar kind of products from the other companies
- Its low sugar content and having natural ingredients appeal to the consumers who are health-conscious
Weaknesses
The brand awareness is lacking when it is compared to the competitors.
- The amount of caffeine is not enough to appeal to the young people who want a lot of energy
- There is still confusion between energy and sports drink
Opportunities
- There is still less competition in the market, especially in the mid to higher positioning in the sports and energy drinks
- There is low competition for the high tasting opportunities for the energy drinks
- The opportunity is the market for healthy, affordable energy, and sports drinks are vast
- Within the last two years alone, the market opportunity has grown by more than 40%
- It is expected that the market would grow to 13.5 billion by the end of the year
- There is a high potential for both the female and males' targets in the market
- In the general population, the energy drinks capture more than 30%
Threats
- Selling the brands at a lower price will give the products a cheaper vibe to the consumers
- Since the organic products are always expensive, someone may question the credibility of the Crescent products since they are sold at relatively low prices
- The younger population needs products which have more energy than what the company offers at the moment
- The health and safety risks which are associated with the energy drinks have become a concern in the current years
- There is negative media attention towards the energy drinks
- There is 21% and 73% market share for Drip and Gleam respectively. The 6%, which is remaining is shared among 20 other products, very few significant products account for the total revenue
SWOT Summary
The company has been noted for possessing valuable strengths such as hydration, energizing qualities and great taste which all come at a reasonable price. This shows the prominent indicator of the products in the market concerning positioning. It is also taking advantage of the low competition in the market. The company, however, needs to do a lot more in establishing itself as a leader in the industry. It should be noted that the confusing product positioning of the company can make the customers opt for products from other companies other than crescent pure. The crescent should higher it's products' value so as to fit in the highly competitive market and ensure that the needs of the young population are fulfilled. The weaknesses of the company make it vulnerable. It faces a threat from media attention as it gives negative energy. The media has created an image that the energy drinks are unnatural, thus unhealthy to the consumers. The company needs to establish its positioning in the market as there are alternatives which the consumers can get from the market. The strength of the products will be discredited if the company fails to implement position. This involves doing away with any negativity which has been associated with the company.
What Factors Should Influence the Positioning of Crescent? (What Strategy)
The potential for growth and the market size are some growth factors which should be given a lot of priority when thinking about or when coming up with a positioning decision. The threats, opportunities, competition, and the market size as analyzed from the "Crescent Pure" document and the state of the industry, the studies reveal that the Crescent prefers to concentrate more on the energy drinks than the sports drinks. Taking the statistics, in 2013 the energy drinks market was $8.5 B and had been forecasted to be at around $15.6 B by the end of this year. Between 2011 to 2012, there was an increase of 40 % regarding sales. On the other hand, the sports drinks market had only expanded by 7% from 2008 to 2012. While being the value of $6.5 billion in 2012, the projections and expectation were forecasted to reach $9.6 million as of 2017. This is an overall proof that the growth and the potential of growth of the energy drinks are much higher compared to the sports drinks. The comparison only helps in establishing that not only does the energy drinks have a higher growth opportunity, but it also has a higher growth rate prediction which makes it optimistic for this brand to enter into new markets. Consequently, the data competition for the products illustrates that the chances of energy drinks, developing a new product from within are much higher than the sports drinks (Crawford, Admire and Dengler, 2017). There are 85 % sales accounted for by the top 5 brands which deal in the energy drinks business. The 15%, which is remaining is shared among almost 30 other different and independent brands. It should be noted that the sports drinks, Drop and Gleam, are the two top brands of the brand and has a 94% market share. This means that it only leaves the other brands the remaining 20 brands in sports drinks. After this analysis, it is proper to argue that the Crescent company positioning the energy drinks rather than the sports drinks on higher priority has more chances of succeeding hence greater profits in the same or newer markets.
How the Market Is Segmented
From the state of the industry study, the collected consumer data reveals that the largest consumer of the energy drinks is males who are between the age of 17years to 35 years. Consequently, the people whose household income is below $25,000 annually had the highest possibility of using the consumer energy drinks contrary to those who had a higher income range. On the other hand, the consumer data reveal that the population, which is more likely to use sports drinks are the males in the range of 12 to 25 years. To explain this, the outcome of the study is substantial because this age group is where the humans are more active during their lifetimes. They are, more likely to need the energy for their daily activities or even for enjoyment. Similarly, the lesser age of the people who mainly use the sports drinks can be attributed to the fact that it is at this age that people who are not playing professionally more involved in the sporting activities. The study was, however, more focused on the males than their counterparts. There are psychographic and demographic data provided by the Crescent online customer study. The survey allows for free expression of the respondents' feeling, allowing them to give their opinion without any bias or fear. The study reveals that the market segmentation has to be based on target customers' characteristics based on the socioeconomic/demographic and lifestyle factors. Looking at table 2, one could see that 18 to 35 years, consumers are 80 % of the total thus showing how much the company should concentrate and pay more attention to the younger population in the society.
The feedback from the consumers showed that the retailers and the company should also focus more on the female customers. Out of the people who took the study, a mere 29 percent was the only of the view that the products are relatively affordable. As such, the strategy which the company can cultivate from here is ensuring that all its potential customers are covered. This is to provide that they tap the whole market. The competition with other products would be less if the company used this strategy to create a link with the customers in the market. In this case, the company has to concentrate more the females now that it already has a lot of male consumers. The females of the right age group will make it possible for the company to be more innovative and in that case, may come up with other sets of products. The profitability of the company will also be improved. Both the customer groups, that is, females and males from low-income families or neighbourhoods should be targeted so to fulfil the demand in the market.
Moreover, more people are becoming concerned with healthier beverages and food today. The table 3 given in the attached document shows that 22 % of the respondents felt that Crescent is healthy, 38% thought that it is natur...
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