Launching Krispy Natural: Cracking the product management code

1. HARVARD BUSINESS CASE STUDY
 Launching Krispy Natural: Cracking The Product
Management Code

2. CANDLER ENTERPRISES
 A Multinational beverage and snack goods manufacturer
 Operates BEVERAGE DIVISION , RESTAURANT DIVISION ,
BEVERAGE DIVISION , PEMBERTON PRODUCTS.

3. PEMBERTON
 Snack food division of Candler Enterprises.
 Was a market leader in US cookie and bakery snack segments
 Had sales of 5 billion USD
 Has achieved a compounded annual growth rate of 14% for revenue over
the past 5 years.
 Company utilized its own Direct Store Delivery system in which products
were delivered directly to retail outlets.

4. PEMBERTON : Key priorities
 Sustaining the growth of its product in the market
 Building collection of attractive, durable brands.
 Building acquiring capabilities in salty snack categories
 Leveraging leading marketing, sales and DSD systems to
increase revenue and profits.

5. PEMBERTON’S TEAM

6. PATRICIA WILLIAMS
PRESIDENT
THREE KEY STRATEGIC PRIORITIES
1) BUILDING A COLLECTION OF
ATTRACTIVE, DURABLE BRANDS
2) LEVERAGING LEADING
MARKETING, SALES AND DSD
SYSTEM TO INCREASE REVENUE.
3) BUILDING CAPABILITIES IN SALTY
SNACK CATEGORIES.

7. BURT SPIVEY
CHIEF OPERATING OFFICER
“ONE OF OUR MOST DISTINCT
COMPETENCIES IS OUR ABILITY TO
CREATE PRODUCTS THAT PROVIDE A
SUPERIOR TASTE EXPERIENCE. OUR
DSD SYSTEM IS A MAJOR FACTOR IN
THE COMPANY’S GROWTH AND
LEADING MARKET SHARE POSITION,
PROVIDING WITH A SIGNIFICANT
ADVANTAGE OVER THE
COMPETITION”

8. ASHLEY MARNE
Executive Vice- President marketing and sales

9. BRANDON FREDERICK
MARKETING DIRECTOR

10. The US Cracker Industry
 Reached 6.9 billion in 2011.
 Growth rate of the overall market from 2008-2010 was 2.2% CAGR
 Crackers with fillings sector is expected to grow 10-14% in the next few years

11. COMPETITORS
Three basic competitors account for ¾ of the cracker brands
 Kraft food Inc
 Kellogs Co.
 Pepperidge farm

12. MARKET TREND
 A health trend in Ameica.
 53% of respondents considered healthfulness an important factor when
purchasing crackers.
 Packaged facts survey showed that 60% of respondents indicated that they were
trying to improve their physical health and 51% were trying to lose weight.

13. MARKETING STRATEGY

14. PRODUCT
 Multiple serving packaging
 Focused on improving taste
 Health conscious

15. MARKETING
 Emphasized on heavy advertising
 Promotion to the end customer and appealing to the trade
 Extend strategy to crackers with aggressive plans for pull spending and trade
promotions.

16. DISTRIBUTION
 Effective DSD distribution
 Optimizing the system to account for longer shelf life of crackers

17. PRICE
 Sought a premium strategy
 Retail price similar to competitors but less quantity.

18. SWOT

19. STRENGTHS
INNOVATIVE
ESTABLISHED REPUTATION AS
MARKET LEADER
WORLD RENOWNED PRODUCT
DEVELOPMENT LABS

20. WEAKNESS CAPACITY CONSTRAINTS OF
DSD

21. OPPORTUNITY MARKET RESEARCH SHOWS
CONSUMER DISSATISFACTION
WITH FLAVOUR AND TASTE
OF CURRENT CRACKER
BRANDS

22. THREAT LOSING OF MARKET SHARE
HIGH COMPETITION

23. RESPONSES
 The pull marketing created buzz with customers coming to stores asking for
KRISPY NATURAL by name.
 Buyers were impressed
 They also loved advertising activities.

24. However industry analyst thought that the
positive test market results were driven by
significant price , discounts, couponing,
and sampling which were not sustainable
Few also felt that taste and flavour was no
better than current brand offerings

25. Recommendations
 Different marketing strategies should be used for different areas such as different
strategies for Columbus and Southeast.
 Innovation and development of products to beat other products in the market.
 Diversification of products
 Alliance with different entertainment centres.

27. DISCLAIMER
 Created by Shubhdeep Singh, PGDAV New Delhi, during
MARKETING INTERNSHIP with Prof. Sameer Mathur, IIM
Lucknow.