A case study about Krispy narurals.

1. Harvard Business School Case
Launching Krispy Natural:
Cracking The Product
Management Code

2. A out Pe erto Produ ts….
CANDLER ENTERPRISES- Multinational beverage and snack goods
manufacturer.
PEMBERTON PRODUCTS-Snack food division

3. Snack food division.
Sold packaged food bars, cookies and other sweet baked goods.
Market leader brands were-Softies cookies and Homestyle muffin and
doughnuts.
Market leader in US cookie and bakery snacks segment of the sweet market.
Pemberton Contributes about 28% of Candler’s total sales.
Sales
Rest Of Candler Pemberton

4.  Building strong brand values in salty snack categories.
 Building a collection of attractive ,durable brands.
 Applying leadership marketing and DSD- Direct Store Distribution system to
increase the revenues and overall profits.
 Building a good brand image in the market.
 Building or acquiring capabilities in salty snack categories.
Strategic Priorities Of Pemberton

5. Pemberton took the first step
to enter the salty cracker market.
Why?

6. •The total retail cracker sale was of about-$6.9 billion in 2011.
•There was a total 2.2% increase in CAGR from 2008 to 2010.
1. US Growing Cracker Industry

7. 74% of respondents consumed cracker on
a daily basis.
Crackers were the top salty snacks ahead
of potato chips.
Desire of healthy products was driving
cracker industry.
2. Research Of Salty Snacks In US

8. KRAFT FOOD INC.
KELLOGGS CO.
PEPPERIDGE FARM
THESE 3 LARGEST BRANDS ACCOUNT FOR 3/4TH OF THE
CRACKER INDUSTRY.
Who are the competitors?

9. 1.In 2008 Pemberton entered the salty snack market with the acquisition of Krispy
Inc who was a manufacturer of single-serve cracker packages that competed in the
cracker-with-filling and “all other” cracker segment.
1.Their Offering: A package containing 6 round toasted cracker sandwiches with
cheese filling available in 3 flavor options.
2.Marketing: They marketed it as “Grab and Go” with a major presence in
vending machines and convenience stores.
THE KRISPY PRODUCT LINE

10. EXPECTATIONS VS
REALITY

11. Limited product line – hence no command over
supermarkets.
Taste- A taste survey showed that the product did not deliver
the flavor scores that were expected.
WHY DID IT NOT WORK?

12. The overall scenario and numbers of the cracker market were
still attractive.
The overall market was huge and was expected to grow at 10-
14% every year.
Competitors were not capitalizing on the market available.
THE RELAUNCH-WHY?

13. ALL OF THE SHORTCOMINGSWERE ADDRESSED:-
1.R&D Labs were engaged to improve the taste.
1.Product line extended beyond single serve packaging-to
introduce multiple-serving package sizes.
1.It was repositioned as KRISPY NATURAL which was more
indicative to its targeted customer base.
THE RELAUNCH-
HOW?

14. IT'S A SUCCESS!!!
TIME FOR THE
RESULTS…..

15. THE MARKETING STRATEGY THAT LED
TO ITS SUCCESS….

16. 1.NEW FLAVOURS.
1.MULTIPLE SERVE PACKAGING
1.USE OF 100% WHOLE WHEAT AND NATURAL
INGRIDIENTS.
1. PRODUCT STRATEGY
RESULTS:-
1.77-92% Positive purchase intent for its new flavors.
2.Four-to-one preference over the leading competitive cracker.

17. 1.Emphasized on heavy advertisement and
promotion.
2.Effective adoption of pull marketing
strategy.
-Hence price discounts offered initially.
2. MARKETING STRATEGY

18. 1.Effective DSD distribution.
1.Optimizing system for longer shelf life of
crackers.
1.Hired representatives known as “Krispy force for
proper distribution.”
3. DISTRIBUTION STRATEGY

19. 1.Krispy went for a premium pricing strategy.
1.But on the retail side they matched the prices of
their competitor on a “visual price basis” that is less
quantity or weight for the same price so as to
maintain their premium product image.
4. PRICING STRATEGY

20. Strengths
•World renowned product development
labs.
•Pemberton is already a market leader.
•Company owned DSD.
•Good Product Mix.
Opportunities
•Cracker market fundamentals are
attractive.
•Market research shows consumer
dissatisfaction with flavor and taste
experience of current cracker brands.
Threats
•Fritto-lays entering the cracker market.
•Modest increase of 1% sale in
southeast.
Weaknesses
•Capacity constraints of DSD for
Krispy Natural products.
S W
TO
SWOT ANALYSIS

21. Created by UTKARSH VARDHAN of BIT MESRA,
during a marketing internship Under Prof.
Sameer Mathur, IIM Lucknow.
DISCLAIMER