Schwan Foods


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Schwan Foods

  1. 1. Innovation Through Communication A Case Study Analysis
  2. 2. <ul><li>Joe Gruber, </li></ul><ul><li>New Product Development Manager, Schwan Foods </li></ul>
  3. 3. <ul><li>Background to Schwan Food Company </li></ul><ul><li>Red Baron and Frozen Pizza </li></ul><ul><li>The Need for Product Innovation </li></ul><ul><ul><li>Why the need for innovation? </li></ul></ul><ul><ul><li>SWOT Analysis </li></ul></ul><ul><li>New Product Development at Schwan </li></ul><ul><ul><li>Factors taken into consideration </li></ul></ul><ul><ul><li>Proceeding Forward </li></ul></ul><ul><li>Analyzing Schwan’s New Product Development </li></ul><ul><ul><li>Product Lifecycle of Red Baron </li></ul></ul><ul><ul><li>The Pioneer Advantage </li></ul></ul><ul><ul><li>Stages of New Product Development </li></ul></ul><ul><li>Challenges in Product Development and the Future </li></ul><ul><li>Conclusion </li></ul>Contents
  4. 4. <ul><li>2000 onwards </li></ul><ul><li>Largest frozen food producing company in the US </li></ul><ul><li>Market leader in making and distributing frozen desserts and premium ice creams </li></ul>1952 Schwan’s Home Services is started, an ice-cream home delivery business 1965 Schwan starts selling frozen pizza along with ice creams 1969 Schwan acquires its first pizza factory in Salina (Kansas) Schwan markets its frozen pizzas under three brand names – Tony , Freschetta and Red Baron 1976 Red Baron range is introduced as an umbrella brand to offer ‘throughout the day’ snacking solutions <ul><li>1980s – 1990s </li></ul><ul><li>Schwan establishes its presence in UK, France and Germany </li></ul>
  5. 5. <ul><li>Red Baron range of frozen pizzas launched in 1976 throughout the US </li></ul><ul><li>Started with the Classic 12” Pizza, the product range grew to wide variety by early 21 st century </li></ul><ul><li>Red Baron’s tagline : ‘From Morning to Night, for Every Appetite’ </li></ul><ul><li>Red Baron sold 98 million frozen pizzas in 2001 </li></ul>
  6. 7. <ul><li>Changing dynamics in the frozen pizza business </li></ul><ul><ul><li>Retail sales of frozen foods in 2001: US$ 26.6 billion </li></ul></ul><ul><ul><li>Frozen food sales were one-third of total food service sales </li></ul></ul><ul><ul><li>Over 96% restaurants plan to use frozen foods </li></ul></ul><ul><ul><li>Increased food technology </li></ul></ul><ul><ul><li>Over 94% supermarket shoppers prefer frozen food </li></ul></ul>
  7. 8. <ul><li>Strengths </li></ul><ul><li>First mover’s advantage </li></ul><ul><li>Stress on innovation </li></ul><ul><li>Strong communication channels </li></ul><ul><li>Good understanding of market dynamics </li></ul><ul><li>Weaknesses </li></ul><ul><li>Easy replication of pricing, promotion and distribution models </li></ul><ul><li>Opportunities </li></ul><ul><li>Pizza industry was growing at a 8% per annum </li></ul><ul><li>Pizza selected as most popular food item in the US </li></ul><ul><li>Threats </li></ul><ul><li>Risk of failure </li></ul><ul><li>Competition from bigger players </li></ul>
  8. 10. <ul><li>Establishing R&D facilities </li></ul><ul><ul><li>Schwan invested US$ 15 million in R&D </li></ul></ul><ul><li>Food technology </li></ul><ul><li>Consumer centric product development </li></ul><ul><li>Segmentation and target audience </li></ul>
  9. 11. <ul><li>Marketing mix </li></ul><ul><ul><li>Product focused, price, promotion and place were factors easily replicated </li></ul></ul><ul><li>Product venture teams </li></ul><ul><ul><li>Internal expert teams </li></ul></ul><ul><ul><li>Cross functional teams </li></ul></ul><ul><ul><li>External teams </li></ul></ul>
  10. 13. Source:
  11. 14. M1 M2 M3 P1 P2 P3
  12. 15. 1. Idea Generation Is the idea worth considering? 2. Idea Screening Is the product idea compatible with the company objectives and strategies? 3. Concept development and testing Can we find a good concept for the product that consumers say they would try? 4. Marketing strategy development Can we find a cost effective, affordable marketing strategy?
  13. 16. 7. Market Testing Have product sales met expectations? 8. Commercialization Are product sales meeting expectations? 6. Product Development Have we developed a commercially sound product? 5. Business Analysis Will this product meet our profit goal? 9. Resulting product
  14. 18. <ul><li>Possibility of defects in the product design </li></ul><ul><li>Developing a manufacturing line from scratch </li></ul><ul><li>Establishing a separate R&D centre </li></ul><ul><li>Keeping themselves up-to-date on consumer preferences </li></ul><ul><li>High risk of failure </li></ul>
  15. 19. <ul><li>Increase sales through </li></ul><ul><ul><li>Globalisation </li></ul></ul><ul><ul><li>Product innovation </li></ul></ul><ul><ul><li>Marketing </li></ul></ul><ul><li>Three-pronged approach to achieve sales targets </li></ul>