launching krispy natural: cracking the product management code

HARVARDBUSINESS SCHOOL CASE

LAUNCHING KRISPY NATURAL Cracking the Product Management Code

WHAT IS KRISPY NATURAL ?

• Krispy Natural is the upcoming Blockbuster Product of Pemberton which will dominate the salty snack market.

• Pemberton was the snack food division of Candler Enterprises, a multinational beverage and snack goods manufacturer

THE PLAYERS Ashley Marne Executive vice president of sales and marketing at Pemberton Products

Brandon Fredrick Marketing Director for Pemberton

This Test was conducted as the as the company was going to launch its new product “KRISPY NATURAL” in the market.

SITUATIONAL ANALYSIS(1/2)Pemberton conducted a market test in

Ohio,Columbus as well as other Cities of South-East Asia.

Columbus market share results were double what the company had projected but the Southeast results fell well below management’s expectations.

SITUATIONAL ANALYSIS(2/2)

Pemberton’s income as a sales of 2011 was-

• Sales 100.0%• COGS 78.8%• Brand Advertising & Marketing

7.7%• Pretax Contribution 13.5%• Profit After Tax 7.7%

PEMBERTON’S STRENGTH

• Market leader in the U.S. cookie and bakery snacks segments of the sweet snack market• Utilized a company-owned

direct store delivery (DSD) distribution system• Culture of Innovation

Strategic for the Company

1)Building a collection of attractive, durable brands

2)Leveraging leading marketing, sales and DSD systems to increaserevenue and profits.

3)Building or acquiring capabilities in salty snack categories

Why Study This Case?

OBJECTIVES OF THE CASE(1/3)

Illustrate the design, implementation, and interpretation of research surveys

o Evaluate primary research studies,

o Setting research objectives,

o Questionnaire design,

o Data analysis and interpretation.

OBJECTIVES OF THE CASE(2/3)

How to increase the sales revenue of the products of Pemberton?

OBJECTIVES OF THE CASE(3/3)

MARKETING of its newly Introduced Krispy Natural Product In the market

FEW INSIGHTS OFTHE CRACKER SALES

Manufacturer sales of "All Other" Crackers 2009% Share 2010% Share Kraft 37.8% 37.0% Kellogg 28.9% 28.1%Pepperidge 13.9% 14.2% Private Label 4.6% 4.8% Other 14.8% 16.0%

Manufacturer sales of “Crackers with Filling” Market Share 2009% Share 2010% Share Kraft 34.7% 32.7% Lance 31.5% 29.9% Kellogg 15.5% 21.0% Private Label 8.0% 8.2% Other 10.2% 8.1%

Launch of Krispy Product Line

Krispy Product line was launched in

• 2008 • In 3 flavour options• Was marketed as mobile “Grab and Go” Snacks

BUT FAILED

2009 Krispy Single-Serve Sales Performance vs. Plan ($ millions)

Plan 2009 Actual % to Plan Krispy Retail $97.5 $50.8 52.1%

Krispy Vend $23.4 $18.0 76.9%

Total Krispy Single-Serve $120.9 $68.8 56.9%

Krispy Natural Marketing Strategy

•PRODUCT•MARKETING•DISTRIBUTION •PRICING

Insights from its New Marketing strategy

Crackers with Filling Positive Purchase Intent % Testers that preferred taste of KrispyNatural over leading brand

White Cheddar 92% 78% Smoked Gouda 77% 65% Chipotle Cheddar 78% 64% Creamy Swiss 80% 72% Tomato Basil 85% 75% Vegetable Herb 77% 50%

Flat Crackers Smoked Cheddar 81% 61% Sundried Tomato 80% 58% Cracked Pepper & Olive Oil 80% 55% Roasted Garlic 81% 59%

TEST MARKET PLAN AND RESULTS

Plan 2009 Actual % to Plan Krispy Retail $97.5 $50.8 52.1%Krispy Vend $23.4 $18.0 76.9% Total Krispy Single-Serve $120.9 $68.8 56.9%