Launching Krispy Natural :Cracking the product management code

Pemberton products

All of the shortcomings were addressed :

• R&D labs were engaged to improve taste and quality.

• Product line was extended beyond single serving line to multiple serving lines.

• It was repositioned as “Krispy Natural” which connected better with the consumers.

Krispy Single Serve

Krispy Natural

• Regional brand• Limited flavour

options• Limited product line

• Multiple serving packages

• Targeting health conscious consumers

• More flavour options and better taste experience through research

Plan Actual % to planKrispy 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%

2009 Krispy Single – Serve Performance vs. Plan ($

millions)

Strategic Priorities

Marketing, sales and DSD systems

Marketing ApproachHeavy advertising and

promotionPull strategy

Direct Store Delivery(DSD)Greater control of shelf space

Accurate forecastingReduced stock outs

Quicker turnover of products

Capabilities in salty snack categories

High desire for healthy products

74% consume crackers on a regular basis

34% consume crackers as a part of regular weekly diet

Competitors analysisKraft, Kellog, Pepperidge farm,

others

Attractive and durable brands

Marketed as mobile grab and go snacks

Improve product taste and quality

Increasing the packaging size

Available in three flavours

Product Strategy

New flavours

Multiple Serve packaging and improving taste

Use of 100% whole wheat and other natural ingredients to promote healthy lifestyle

R&D lab worked tirelessly to reformulate the product

Product testing summary

Marketing Strategy

Push Strategy :Competitors favoured to promote products

Marketed it as “Grab and Go” with a major presence in vending machines and

convenience stores

Pull Strategy :Focus on extensive advertising and

merchandising

Aggressive plans for trade promotions

Six month period promotional plan, 2011

Distribution strategy

Effective DSD distribution

Optimizing system for longer shelf line of crackers

Hired representatives known as “Krispy force” for systematic distribution

Pricing Strategy

Krispy went for a premium pricing strategy

But on a “visual price” basis, Krispy would be on par with the competitors as the retail

price would remain same as the competitors

Provide less quantity or weight in each Krispy Natural package.

Sales Objectives

National distribution of crackers

Minimum sale of $500 million

Steady state pre-tax profit of at least 13%

Partial competitive analysis

2:1 ratio in taste

preference

World renowned R&D labs

Pemberton is already a market leader in USA

Capacity constraints of DSD for Krispy natural products

Strengths Wea

knes

s

Cracker market fundamentals are

attractive

Market research shows consumer dissatisfaction with flavour and taste of

current other brands

Modest increase of sales by 1% in south

east

Frito lays entering into the market

Opportunitie

sTh

reat

s

Conclusions

• Grabbed 18% market share in Columbus as a new entrant in salty snacks business

• Others in total lost 10% of market share, despite of higher cracker product demands

• Forecasted National roll out sales figure in Columbus and southeast scenario for third year depicts PBT (Profit before tax) more than 13% and sales more than $500 millions.