Problem Statement
Any company in a dynamically changing market needs to be adaptable, implying the ability to maintain the organization’s competitive viability. The Crescent Pure brand, whose story is described in the proposed scenario, is no exception; Crescent Pure produces low-fructose energy drinks that aim to position the product as a healthier alternative to competitive offerings, after which there can be a decline in work performance. Larger Portland Drake Beverages (PDB) decided to invest in a takeover of Crescent Pure in 2013; a key challenge was determining the proper market positioning to increase the company’s profits. Thus, one of the key challenges for Crescent Pure is determining proper positioning. Meanwhile, one should not ignore the fact of the growing competition that Crescent Pure will have to face in the future. While competition has positive consequences for the end consumer, usually leading to lower prices and higher quality, it can be devastating for an organization if a competitor’s marketing strategies prove more profitable for the customer. For this reason, the second challenge facing Crescent Pure is the need to carefully develop a plan to become more competitive in a densifying market.
Problem Analysis
The first of the problems found is choosing the right positioning strategy, leading to a vector for Crescent Pure’s future development. In a general sense, positioning defines the position of a company’s product in a niche industry market compared with similar products of other manufacturers in the consumer’s mind. As the final link in the supply chain, the consumer must be strictly aware of what exactly they are buying and what effects should be expected from the product. According to the scenario, there are three options for product development ideas at Crescent Pure: selling products as energy drinks, healthy organic drinks, or in the sports nutrition niche. Each of these positioning options leads to diverse types of target audiences to which advertising should be directed. For example, the primary consumers of energy drinks are middle-aged men (18 to 34), among whom the bulk is represented by students and workers who perform strenuous operational tasks; the energy drink is designed to provide a short-term increase in energy reserves for such consumers. Meanwhile, products within sports nutrition are consumed predominantly by men, with the age of the average consumer making slightly less sense than for energy drinks. Sports nutrition products are intended for physically active consumers who spend copious amounts of calories daily on sports; the effects of the drink are not only expected to be dramatic in strength but also healthy in composition. Finally, the healthy organic food audience is interested in consuming a completely healthy beverage with zero sucrose content, whose preparation requires no insecticides or pesticides and fully meets high standards of food safety production (R&M, 2021). Thus, Crescent Pure faced the problem of market self-determination, on the solution of which the company’s further development depends.
If Crescent Pure positions its product as an energy drink, it is evident that the consumer will buy the product based on a desire for a quick burst of energy to accomplish complex tasks. Similar thoughts hold for other positioning areas: depending on the company’s choices, Crescent Pure’s end customer also changes. The scenario shows two perceptual matrices to determine precisely what the consumer expects from the drink. For example, energy drinks must be high in energy and not necessarily hydrating, while not being nutritious, but must have a moderate level of flavor. In contrast, sports nutrition, as perceived by consumers, should be tasty and moderately nutritious, with high hydration and moderate energy transfer. The third positioning option is the perception of the product as a healthy organic beverage with good energy transfer and safe composition. The main threat to this positioning is the high demand of consumers who are not willing to spend money on low-quality products that pose threats, including psychographic, to health.
At the same time, the growing competition is a severe challenge to Crescent Pure because if no preventive measures are taken, the brand could be unattractive to customers. The scenario says that significant market leaders in sports and energy drinks are planning to launch their organic lines by 2015, which implies that Crescent Pure has less than two years to address the threat of intense competition. Moreover, it is reported that the energy drink market has proliferated in recent years and is projected to reach $86.1 billion by 2027 (Fontinelle, 2022). It should be noted that there is increased consumer interest in this niche, and the inclusion of additional stimulating ingredients, such as vitamins or immunomodulators, increases sales. The U.S. is a leader in the consumption of energy and sports drinks, which means there is room for new brands to enter this geographic market. Consequently, the well-being of existing companies, including Crescent Pure, is vulnerable in the absence of proper management.
Suggesting Solutions
The solution to the positioning problem must be based on a carefully thought-out strategy based on market research. The scenario reports that Crescent Pure’s primary audience is now consumers between the ages of 18 and 24, describing the products primarily as refreshing (35%), functional (47%), and natural (38%). Accordingly, the decision seems logical: based on consumer expectations, Crescent Pure should invest in producing healthy organic beverages that bring consumers the desired effects. These should be energy drinks with caffeine that have a flawless composition and give the consumer a sense of freshness. The latter can be achieved by using specific natural ingredients (mint) or selling cold products. Based on market research, a clear positioning strategy will help the company to properly invest in marketing and create the right image in the perception of consumers, which in turn will lead to increased profits through an understanding of what customers are buying. The benefit of this decision will be the affirmation of Crescent Pure’s development path, a deeper understanding of its products, and an anticipated increase in sales in a niche industry. In contrast, if positioned incorrectly and not in line with consumer perception, Crescent Pure risks losing out; in addition, if the chosen niche is overwhelmed by stronger leaders, it is likely that Crescent Pure will lack the resources to become entrenched in the industry.
The problem of increasing competition can also be solved through marketing. By accepting investment in the safe formulation and increased product compliance as unconditional, Crescent Pure should increase its share of spending on advertising, including social media advertising. By now, Crescent Pure’s primary audience is represented by young people who use the digital platforms Facebook (70% of respondents) and YouTube (54%) daily (PRC, 2021). Consequently, increasing the online presence should be aimed at reaching more audiences and creating a sense of ongoing interaction with the consumer. Frequent but unobtrusive targeted advertising will help ingrain the brand in the consumer’s mind, which is expected to increase sales. The advantage of this solution is a closer interaction with the customer, an expected increase in sales, and the collection of statistics on consumer behavior that will allow for more fine-tuning of targeting. In contrast, the company’s spending may be ill-conceived and excessive, resulting in an imbalanced budget and neglecting other areas of the budget; in addition, excessive, intrusive advertising can create a negative perception of Crescent Pure, which will have the wrong effect on sales.
The Bottom-Line Solution
Among the two problem-solving strategies discussed, determining the correct positioning is the most pressing priority. Before investing in a marketing promotion, the brand must complete a self-definition, so it is paramount that Crescent Pure determines which direction the company wants to go next. Overcoming this step will help Crescent Pure understand the path forward for market development and provide insight into what advertising the brand should invest in. This is why this decision is the most critical one, ignoring it is guaranteed to lead to a drop in sales and failure in the competitive race.
References
Fontinelle, A. (2022). Investopedia. The Energy Drinks Industry. Web.
PRC. (2021). Social media fact sheet. Pew Research Center. Web.
R&M. (2021). Global organic soft drinks market report 2021-2030. GNW. Web.