Krispy Natural: Cracking the Product Management Code

1. LAUNCHING KRISPY
NATURAL
Cracking The Product Management Code

2. Objectives
• To analyse the launch of Krispy Natural.
• To analyse Pemberton’s marketing strategies.
• To determine whether the end result was successful or not.

3. INTRODUCTION
• CANDLER Enterprises – multinational beverage and snack
good manufacturer
• Pemberton, snack good division of CANDLER
• Pemberton accounts for $5 billion out of $18 billion revenue in
2011.

4. Pemberton
• Market leader in cookies and bakery snack segment.
• World renowned product development labs.
• Utilised DSD (Direct Store Delivery) distribution system.
• Revenue of $5 million in which 7.7% is profit after tex.

5. PembertonRevenueBreakdown

6. The Cracker Industry
• Estimated industry worth $6.9 billion in 2011.
• CAGR from 2008 to 2010- 2.2%
• Top 3 manufacturers
-Kraft Food Inc.
-Kellogg Co
-Pepperidge Farm

7. ‘All Other Crackers’
• ‘All other crackers’ had CAGR of 2.1% from 2008-2010.
• $5.1 billion industry in 2011.
• Estimated growth of 7-6% a year.

9. ‘Crackers with Fillings’
• Sales of $660 million in 2011.
• Growth rate of 14% in 2010.

11. Krispy Single Serve
• Established in 2008 when Pemberton acquired Krispy Inc.
• Product fell short of management projections
• Customers felt product lacked
- in taste
- in variety

12. TheKrispySingleServefailedtoliveuptoexpectations.

13. Krispy Natural: The Relaunch
• Name changed to Krispy Natural.
• Multiple serve packaging.
• Different Flavour Offerings.

14. Product Advertising
Distribution Pricing
Marketing
Strategy

15. Product Strategy
• Increased Package Sizes.
• Made of whole wheat and natural ingredients.
• Flavours such as White Cheddar, Smoked Gouda, Chipotle
Cheddar.

16. Shows77-92%positivepurchaseintent.

17. Advertising Strategy
• Focus on heavy advertising
• Focus on pull strategy unlike other brands.

18. AnalysingtheCompetition

19. Distribution Strategy
• DSD (Direct Store Delivery) used.
• Proper management of shelf space and inventory.
• Longer shelf life of crackers.

20. Pricing Strategy
• Premium Pricing Strategy.
• 155% average cost per ounce.
• Pricing same as competitors however, quantity would be
lesser.

21. Promotional Plan

22. Test Market Plan
• Launched in Columbus Ohio and trio of cities in S.E United
States.
• Five special ‘Krispy Force’ representatives hired.
• 9% share of cracker market was projected.

23. Test Market Results
• Columbus doubled share target, achieving 18%.
• South Eastern expansion showed only a slight increase to 10%.

24. Sales and Channel Response
• Pemberton sales managers impressed by product.
• Large chain headquarter buyers impressed with consumer
research results as well as inventory turn estimates.
• Pull Marketing created a buzz.

25. Illusion?
• One industry analyst claimed that the positive test results
were because of unsustainable price discounts, coupons and
sampling.
• Taste preference claims of Krispy Natural might be inflated.

26. Competitive Analysis

27. Future Steps
• More intensive campaigning in South Easter Region.
• More flavours based on regional preferences.

28. Disclaimer
• This project was made by Aditya Gupta Raut of Amity
University, Kolkata, under the guidance of Prof. Sameer
Mathur for a research based internship.