Based on a Harvard Business Case Made by : Tamanna Pahooja, a student of BITS Pilani K.K. Birla, Goa Campus under the guidance of Prof Sameer Mathur during a marketing internship.

1. Harvard Business Case

3. • Executive Vice President, Sales and
Marketing :
Ashley Marne
• Marketing Director :
Brandon Fredrick
• Midwest Division Sales manger :
Wanda Fitzgerald
• President :
Patricia Williams

4. • Snack Food Division of Candler
Enterprises
• Candler : Multinational Beverage and snack
goods manufacturer,quick service
restaurant & pet care division
• Candler 2011 revenue: $18 million
Pamberton’s Share : $5 million
• Pamberton : Market leader of the sweet
snack market
• Company owned Direct Store Delivery
(DSD) distribution system

7. US Cracker Sales: $6.9 billion
Manufacturer sales of "All Other”
Crackers
2009% Share 2010%Share
Kraft 37.8% 37.0%
Kellogg 28.9% 28.1%
Pepperidge Farm 13.9% 14.2%
Private Label 4.6% 4.8%
Other 14.8% 16.0%

9. 2008: Acquisition of Krispy Inc.
3 Production Plants
Focused on Southeastern United
States
Flagship Product : 6 round toasted
cracker sandwiches with cheese
filling, 3 flavors available
Mobile “Grab and Go” snacks
Underperformance was a result of

10. Large Market, Crackers-with-
Filling expected to grow 10-14%
per year
Changes to Marketing Strategy:
 Pemberton R&D labs engaged to
improve product taste and quality
 Rebranding of product to Krispy

12. Product
Objectives
Marketing
Strategy
DistributionPricing
Market Plan
and Results

14. Product strategy objectives
Increasing Package Sizes to multiple-
servings
Improving Taste
100% Whole Wheat and all natural
ingredients
150 calories,6g of fiber, 3g of protein
per serving
Consumer taste test
77-92% positive purchase intent for

15. Product testing summary
Positive Purchase Intent
(Definitely or Probably
Would Buy)
% Testers that preferred
taste of
Krispy Natural over
leading brand
Crackers with Filling
White Cheddar 92% 78%
Smoked Gouda 77% 65%
Chipotle Cheddar 78% 64%
Creamy Swiss 80% 72%
Tomato Basil 85% 75%
Vegetable Herb 77% 50%
Flat Crackers
Smoked Cheddar 81% 61%
Sundried Tomato 80% 58%
Cracked Pepper & Olive Oil 80% 55%
Roasted Garlic 81% 59%

17. Softie Cookies
Heavy Advertising and Promotion
Appealing to trade
Price discounts :10-20% of sales
Year 3 Estimate ($ in millions)
Advertising $33
Merchandising $37
Total = $70

18. Advertising Spending for leading Cracker Brands
($ millions)
Nabisco Ritz Crackers $27.1 $34.6
Sunshine Cheez-It Crackers $27.4 $32.9
Nabisco Wheat Thins Crackers $14.1 $15.8
Goldfish Crackers $12.8 $10.5
Pepperidge Farm
Keebler Town House Crackers
$11.5 $10.2
Nabisco Triscuit Crackers $13.5 $9.5

21. distribution
DSD Distribution
Most trucks had capacity to
accomodatetest market quantities
Optimizing the system for longer
shelf life of crackers versus
baked goods and cookies

23. Premium pricing strategy
 Minimum sales
of $500 million
during year one
of national
distribution
 Steady state
pre-tax profit
contribution of
($ in millions) Year 1 Year 2 Year 3
Dollar Sales $500 $580 $700
Growth 16% 21%
Dollar Share 9% 10% 11%
Pricing of 155% the category average
cost per ounce
Expectations :

24. Krispy natural brand
income statement ($millions)
Year 3
Manufacturer Sales $700
COGS $ 539
Gross profit = $ 161
Advertising $ 33
Merchandising
$ 37
Pretax contribution
$ 91

26. Test market plan
Launched :September 2011
Two test market regions :
Columbus, Ohio
Trio of cities in Southeastern
United States
Objective : To secure 15% of
shelf space in each supermarket’s
cracker section

27. Columbus
Did not have prior presence
5 special “Krispy Force”
representatives
Projection (16 week test
period): 9% share of cracker

28. Advertising
• Television Online Blitz ( Month 1)
• Flighted Television and Online Advertising (Month 2-6)
Social Media
• Facebook Like Us Campaign (Month 3-5)
Trade
• 15% Discount per case (Month 1)
• 12% Discount per case (Month 2-4)
• 8% Discount per case (Month 5-6)
Sampling
• In-Store Sampling with Coupon (Month 1-2)
• Newspaper Sampling : Trial Size with Coupon (Month 4-5)
Couponing
•Newspaper 80ȼ Week 3 (Month 1) ⧭Shelf Pad 2×60ȼ Week 2 (Month 2)
•Electronic 40ȼ Week 3 (Month 3) ⧭Newspaper 50ȼ Week 2 (Month 5)
•Shelf Pad Buy 2 get 1 free Week 3 (Month 6)

29. southeast
Already Established
Test Receptiveness of Trade
and Consumers to higher
priced
Hope to increase share from
9% to 15%
Regular Pemberton DSD route

31. Both test results showed Krispy
Natural to be a serious competitor
Columbus :
Double share target = 18% share
Category Volume = 30%
Southeast :
Share = 10%
Little Category Exapansion
Actual Shelf Space & Display
Activity was below expected
Case discount = 15%

32. Store/Display penetration
% Store Count % of Stores with
Gondola Placement
% of Stores with
End Aisle Display
Columbus 94% 9% 14%
Southeast 12% 12% 10%
Columbus Southeast
Pretest
Market
Post Pretest Market Post
Kraft 40% 33% 34% 32%
Kellogg 25% 22% 23% 22%
Pepperidge Farm 11% 10% 10% 10%
Krispy 0% 18% 9% 10%
Estimateddollar shares of market

33. Annualized national projection
Year 1 Sales (millions)
Columbus Scenario (national extended) $ 1,000
Year 1 Sales (millions)
Southeast Scenario (national extended) $ 550

35. Positive test results based on :
• Price discounts
• Couponing
• Sampling
Not sustainable on a national
level
Taste Preference claims of
Krispy Naturals inflated
Flavor similar to current

37. partial COMPETITIVE ANALYSIS
Company Post-Krispy Natural
trends in Columbus
Potential Competitive Response
Kraft Lost 7% share Short term:
New product testing in process
Increase trade spending and consumer
promotions
Long term:
Spend heavily to counter national roll-out
Kellogg Lost 3% share Short term:
Increase A&M
Long term:
Capitalize on pull
Product line improvements
Pepperidge Farm Lost 1% share Short term:
Increase trade spending
Long term:
Compete on quality and brand reputation

38. Problems to think about
• Lower than expected southeast results
(although achieved with low shelf life
• Southeast results were lower than Columbus’
(lower price in Southeast)
• Total cracker sales estimate in 1 year =
Average of approx share in each test market *
size of total market / size of test market
*sale price
• Frito- Lay introducing a new full line of
crackers by the end of second quarter
• Also, rollout strategy would change if Frito-
Lay introduces new products as Krispy’s
market share would decrease.