2. People Involved in this
case
1.Brandon Fredrick : Marketing
Director for Pemberton
2.Ashley Marne : Executive vice
president
3.Pivey : Chief Operating officer
4.Patricia Williams : President
6. U.S. Cracker Industry
• Estimated $6.9billion in 2011
• CAGR OF 2.2% from 2008-10
• 3 largest competitors –
Kraft Food Inc.
Kellogs Co.
Peepperidge Farm
Market Share
General (all other) Saltines Crackers with fillings Graham crackers Others
7. Krispy Single-Serve was launched in
2008 but underperformed due to limited
product line and low flavor satisfaction
scores.
8. Krispy Natural Product
Strategy
•Krispy re-launch
•Increased package size to multiple servings
•Improved taste by introducing new flavors
•Healthy and natural ingredients
•Made from 100% whole wheat
10. Insights from test market
results
•Krispy Natural was launched in two
test market regions : Columbus,
Ohio and 3 cities in the Southeast.
•Columbus market share results were
double of the expectation
•Results of all the 3 cities of the
Southeast fell well below
11. Expectations
Results
Columbus would
achieve 9% share of
cracker category in
test market.
Increase current 9%
share to 15% in the
Southeast cities
Columbus doubled
the share target to
18% and
Category volume
increased to 30%
Slight increase to
10% in Southeast
and
12. Why were the results so
disparate?
• In Columbus, it was able to double the share from 9% to
18% by stealing share from competitors.
• In Columbus the Krispy brand had no prior presence, so
the company was able to access its ability to sell a
completely new line of cracker product whereas in the
Southeast, Krispy was already established in the market.
• Another added advantage in Columbus was the “Krispy
force” representatives which were not present in the
Southeast.
• This positive test result was driven by significant price
discounts, couponing and sampling (as shown in exhibit
4) which are not sustainable on a national level.
13.
14. would be very risky to start national roll out
of Krispy natural.
There are rumours of Frito-Lay introducing
a new full line of crackers by the end of
the second quarter. One of the biggest,
most successful salty-snack marketers
moving into the space at the same time
would definitely pose a great threat to
Pemberton.
But, if this risk is taken then what would be
the best rollout strategy?
15. 3 key strategic priorities
according to Pemberton’s
President Williams
1.Building a collection of attractive
durable brands
2.Leveraging sales and DSD systems
to increase profit
3.Acquiring capabilities in salty snack
categories
16. Sales of crackers with
fillings2009 %age share 2010 %age share
Kraft 34.7% 32.7%
Kellogg 31.5% 29.9%
Pepperidge farm 15.5% 21.0%
Private label 8% 8.2%
other 10.2% 8.1%
• A focus on the cracker with filling segment
should be prioritized since the expected
growth forecast is 10-14% per year.
• Another segment to focus on due to a
forecasted 6-7% per year growth rate would
17. • Focus on the cracker with filling segment of the
market
• Using a premium pricing strategy
• Adding the special “Krispy Force” representatives
to help the regular DSD system, regional and
sales managers handle the sales of the new
product line.
• Utilizing a pull strategy would be ideal for the
Krispy Natural product line so that consumers
would learn about its value and be motivated
into purchase due to the various flavors, all-
natural ingredients, and multi-serving package
18. From exhibit 5, it can be said that Pemberton needs
to focus on increasing the number of retailers where
Krispy Naturals is found in distribution.
It must place more of the product on end aisle
displays in its retailer locations. Category volume will
increase from this display activity.
