How Krispy by Pemberton faced a failure and then relaunched Krispy Natural with innovations and better marketing strategies and principles adopted.

1. Launching Krispy Natural: Cracking
the Product Management Code

2. Pemberton
Products
Beverage Division
Pet Care Division
Quick Service
Restaurant
Candler
Enterprises

3. Pemberton Products
• Ashley Marne – Executive Vice President, Sales and Marketing.
• Pemberton’s Income as a percent of sales(2011) –
Sales 100%
COGS 78.8%
Brand Advertising & Marketing 7.7%
Pretax Contribuition 13.5%
Profit After Tax 7.7%

4. Exclusive Brand Positioning
• Market Leader in U.S Cookie & Bakery Snacks
Segment.
• Operated Dozens of Plants and world renowned
product development labs.
• Constant Innovations in Recipes and New Products.
• Customer friendly and specific to their needs.
• DSD(Direct Store Delivery) distribution system.

5. DSD Distribution System
• Products directly delivered to retail outlets.
• No wholesalars warehouses and distribution
centers involved.
• Common for products with low shelf life.
• Examples – Soft Drinks, Chips, Baked Goods

6. DSD Representatives
• Delivered products(direct)
• In store merchandising
• Price Promotions
• Shelf Inventory

8. • Control of Shelf Space
• More accurate forecasting
• Reduced Stock-Outs
• Quicker turnover of products
Maximization of Sales and Profit
Beneficial for Pemberton as well as Retailer.

10. Priorities
• Building a collection of attractive, durable
brands.
• Leveraging leading marketing/sales.
• Building capabilities in salty snack categories

11. U.S Cracker Industry
• Cracker ?? – > It is an instant snack.
Retail Cracker Sales - $6.9 Billion
Caputured almost 3 quarters of
the market segment

12. Sales
All other Crackers
Saltines
Crackers with Filling
Graham Crackers
Breadsticks/matzoh

13. Top 3 Cracker Manufacturers
• Kraft Food Inc.(Nabisco Brands)
• Kellogg Co. (Sunshine, Keebler, Carrs and
Austin brands)
• Pepperidge Farm(Goldfish brands)

14. Manufacturer sales of “All Other Crackers”
Manufacturer 2009 - % Share 2010 - % Share
Kraft 37.8 37
Kellogg 28.9 28.1
Pepperidge Farm(Goldfish) 13.9 14.2
Private Label 4.6 4.8
Other 14.8 16
Approximately total up to 100%. Errors due to rounding off.

15. In General
• 74% consumers ate crackers on a regularly
basis.
• 34% consumers ate them as a part of weekly
diet.
Hence, they were the top Salty Snack

16. Another Challenge in Cracker Industry
Health !!
53% considered overall healthfulness an important
factor in their cracker purchase decision.

17. • In 2011, retail sales of “all other crackers”
were approx. $5.1 billion, a 6.2% Increase
over 2010.
Manufacturer sales of Crackers with Filling Market Share
Manufacturer 2009 - % Share 2010 - % Share
Kraft 34.7 32.7
Kellogg 31.5 29.9
Pepperidge Farm(Goldfish) 15.5 21
Private Label 8.0 8.2
Other 10.2 8.1

18. Krispy Inc.(2008)
• Pemberton entrance in salty snack market.
• Single serve cracker packages launched.
• Competed with “all other” crackers and
crackers-with-filling.
• A “Grab & Go” Product – Strong presence in
vending machines and convenience stores.

20. Expectations vs. Reality
Sales (2009)
Performance
Planned Sale Actual Sale % Sale to Plan
Krispy Retail $97.5 $50.8 52.1%
Krispy Vend $23.4 $18.0 76.9%
Total Krispy
Sales
$120.9 $68.8 56.9%
Highly Disappointing

21. Reasons
• Limited Product Line
• Lead to less presence in supermarkets
• Very less flavour satisfaction to consumers

23. • To make appropriate tastes and
preferences for consumers.
• To give more options by increasing
product line depth.
• Improvement from quality and
health point of view
• Extensive marketing and sales of
commodities.

24. Relaunch !!
Krispy Natural

25. Product Development Strategy
• Pemberton R&D Labs worked upon product
taste and quality.
• 100% Whole Wheat and Natural Ingredients
• Launched new flavours.
• Multiple serves packaging also adopted.

26. Marketing Plans
• Heavy Advertising, Promotions and market
tests.
• Adoption of Pull Marketing Strategy

27. Distribution
• Continued DSD Distribution effectively
• Optimizing the product for a longer shelf
life.
• Specially hired people – “Krispy Force for
Proper Distribution”

28. • Yes !! It was same as that of competitive
goods in the same segment.
But Weight of Crackers for the
same price was less

29. How were the
Results ?

30. Estimated Dollar
Shares of Market
Columbus
Pretest
Market
Columbus
Post
Southeast
Pretest Market
Southeast
Post
Kraft 40% 33% 34% 32%
Kellogg 25% 22% 23% 22%
Pepperidge Farm 11% 10% 10% 10%
Krispy 0% 18% 9% 10%

31. Recap
• Exclusive Features of Pemberton products.
• DSD Distribution
• Priorities
• Krispy (Entry into cracker industry)
• Relaunch – Krispy Natural
• New Marketing Strategies
• Results which were better than expected.

32. • This analysis was done by Manan Makhija of
IIT Kharagpur, during a marketing internship
under prof. Sameer Mathur, IIM Lucknow.