Case Study Analysis

1. Launching Krispy
Natural: Cracking the
Product
Management Code

4. Patricia Williams (President)
Ashley Marney (Executive VP
–Sales & Marketing)
Brandon Fredrick (Marketing
Director)
Burt Spivey (Chief Operating
Officer)
Characters of
Case @
Pemberton

9. Goals and Objectives
building a collection of attractive, durable
brands
 leveraging leading marketing, sales and DSD
systems to increase revenue and profits
building or acquiring capabilities in salty snack
categories

11. The U.S. Cracker
Industry Overview

18. Krispy’s Product Line

19. Krispy Single-Serve
 Pemberton enters the salty snack market with
the acquisition of Krispy Inc., in 2008
 Krispy was a regional brand with distribution focused
primarily in the SoutheasternUnited States
 Flagship product was a package containing six round
toasted cracker sandwiches with cheese filling
 Marketed as mobile, “Grab and Go” snacks with a strong
presence in vending machines and convenience stores

20. Krispy Single-Serve
Plan 2009 Actual % of 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 %
2009 Krispy Single-Serve Sales Performance vs. Plan ( $ millions)

23. Overall Crackers market was large and segments like
crackers -with-filling & “All others” Crackers were expected
to grow 10-14% and 6-7 % per year respectively with
growth driven by healthier, premium-priced product
introductions

24. Pemberton R&D labs were engaged to
improve the product taste and quality.
This would lead to a rebranding of the
product to Krispy Natural

25. Product line would be extended beyond single-serve offerings to multiple-
serving package sizes and more flavor options that were critical to gain a
foothold in supermarkets and to compete with established brands.

36. Test Market Plan
 Launch Krispy Natural in two test market regions:
Columbus and a trio of cities in the Southeastern
United States
 Hoped to secure 15% of shelf space in each
supermarket’s cracker section
 16-week test period to see markets showed Krispy
Natural to be a serious competitor in the space

43. Product Purchasing Intent

46. Competitors Advertising Spending

47. Competitors Response

50. Points to Remember
 With CAGR of 2.2%, US Crackers Industry will reach
an estimate $ 7.052 billion in 2012
 Pemberton’s income as a percent of sales :
 Pemberton’s projected expenses for Krispy Natural
advertising and merchandising :

51. Sales Potential

52. Conclusions – Interpreting Market Results
 Grabbed 18% market share in Coumbus as a new entrant in
salty snacks business
 Kraft,Kellogg and Pepperidge in total lost 10% of market
share,despite of higher demands cracker products since
2010.(6-7 % for ‘’All other’’ and 10-14% for cracker with filling)
 Forecasted National roll out sales figures in Columbus for 3rd
year depicts PBT > 13% but not for Southeast whereas sales >
$500 million in both scenarios

53. Possible Competitive Response to New
Brand “Fritto-Lay’’
 Launching more new product mix as per
customer taste and keeping health as a
primary concern
 Optimization of DSD system for Krispy natural
product for cost reductions

54. Recommended for National Rollout
 Keep focusing on R&D as more than 60% tasters preferred
taste of Krispy Natural over other leading brands
 Extensive marketing and product supply due to positive
purchasing intent of 81%
 Pull strategy in the cities where Krispy Natural is coming as
new entrant as in case of Columbus
 Push Strategy in the cities where Krispy Natural is already
present as in case of Southeast

56. DISCLAIMER
Created by Siddharth Agrawal,
Bits Pilani, during Marketing
Internship under Prof. Sameer
Mathur, IIM Lucknow