A case study on Launching Krispy Naturals, cracking the Product Management Code

1. KRISPY NATURAL– A CASE STUDY
CRACKING THE PRODUCT MANAGEMENT CODE

2. Goals & Objectives
 Pemberton: Introduction & Challenges
 Market Analysis
 Krispy Natural Marketing Strategies
 Result and Conclusions

3. Introduction
 Pemberton was the snack food division of Candler
Enterprises, a multinational beverage and snack goods
manufacturer.
 Had a revenue of 5 Billion USD with 7.7% Profit After Tax
(PAT)
 It has experienced a compounded annual growth rate
(CAGR) of 14% for revenue over the past 5 years
 Pemberton was a market leader in the U.S. cookie and
bakery snacks segments of the sweet snack market.
 Company harnessed its owned Direct Store Delivery
(DSD) distribution system to deliver products directly from
the distribution centers to the retail stores.

4. Candler
Enterprises
Quick
Service
Restaurant
Multinational
Beverage
PET Care
Division
Pemberton

5. Strategic Priorities
Building strong brand values in salty snack
categories
Applying leading marketing and DSD systems
to increase the revenues and overall profits
Building a good brand imaging in the market.

6. HIGHER BRAND VALUE
Consumer Research
High desire for healthy
products.
74% consume crackers
on regular basis
34% consume crackers
as part regular weekly
diet.
Competitors
Analysis
Kraft Food, Kellogg Co,
Pepperidge Farm
Market Test
Columbus, Ohio,
Southwest

7. Direct Store Delivery (DSD)
Greater Control of Shelf Space
Accurate Forecasting
Reduced Stockouts
Quick turnover of products

8. Attractive and durable
brands
Marketed as mobile “Grab and Go”
snacks
Strong presence in vending machines
and convenience stores
Improve product taste & quality
Increase the packaging size
Made from 100% whole wheat and other
natural ingredients
Available in 3 flavour options

13. Strategy
Marketing
Price
Product
Distribution

14. Krispy Natural Marketing Strategy
 Product
• Multiple serving package
• Focused on improved tasting
• Health conscious

15. Krispy Natural Marketing Strategy
 Marketing
• Emphasized on heavy advertising
• Promotion to the end customer and
appealing trade
• Aggressive plan for pull spending and
trade promotions

16. Krispy Natural Marketing Strategy
 Distribution
• Effective DSD distribution system
• Proper management of shelf inventory
and in-store merchandising
• Optimizing the system to account for
longer shell life of crackers

17. Krispy Natural Marketing Strategy
 Price
• Sought a premium strategy.
• Priced at 155% above the category average
cost per ounce
• Same retail price as that of competitors
but lesser quantity

18. Krispy Natural Brand Income
Statement

21. Market Plan - Columbus
 5 special “Krispy Force” representatives were hired in
Columbus
 These “Krispy Force” reps worked with Pemberton
regional and district sales managers and focused solely
on selling the new Krispy Natural product line.

22. Market Plan – Southeast
 In Southeastern cities, the company was able to test its
ability to reposition the product to a more premium
offering
 Here regular Pemberton DSD route delivery
representatives worked with regional and district sales
managers, handling sales and service of the new
Krispy Natural line.

24. EXPECTIATION REALITY
• Columbus would achieve a
market share of 9%
• Southeast’s market share
will rise from 9% to 15%
• The company hoped for
15% shelf space in both the
markets
• Columbus doubled the
share target, achieving
18% market share with
30% category
expansion.
• Southeast had a slight
increase to just 10%
with little category
expansion.

25. WHY?
 Columbus was able to achieve an 18% market share by
stealing share from other competitors.
 However in Southeast the trade was generally receptive
to the new Krispy Natural line due to the relatively low
introductory trade case discount of 15%.

27. CONCLUSIONS
Grabbed 18% market share in Columbus as a new entrant in salty
snacks business
Kraft, Kellogg and Pepperidge in total lost 10% of market
share, despite higher demands
Possible competitive responses to new brand “fritto-lay”
Launching more new product mix as per customer taste and
keeping health as a priority concern Conclusions

29. Recommendations
 Extensive marketing in southeast cities
 Contemporize brand engagement
 Tailor the Krispy natural to different need
states

31. Presented by Aravind Menon, NITK Surathkal as a part
of summer internship under Prof. Sameer Mathur, IIM
Lucknow