Hbr case analysis

1. HBR Case Study
‘Launching Krispy Natural: Cracking the
product Management code’

2. What is Krispy Natural?
‘Krispy natural’ is the name of
cracker (food) brand of the
food company called
‘Pemberton’

3. Pemberton Overview
● Snack Food Division of Candler
Enterprises.
● Revenue of 5 billion USD in 2011
● Market leader in the U.S. cookie and
bakery snacks segments of the sweet
snack market.
● Acquired Krispy Inc. in 2008 - First
step to enter Salty Snack Market.

4. Three key strategic priorities for the
company
● Building a Collection of Attractive and Durable Brands
● Direct Store Delivery (DSD) systems to increase
revenue.
● Building or Acquiring Capabilities in Salty Snack
Categories.

5. US CRACKER INDUSTRY
● Estimated 6.9 Billion USD
in 2011.
● Cumulative Annual Growth
Rate of 2.2% from
2008-10
● Increased Growth rate of
6.2% in 2010.

6. Who is Frederick?
Frederick is the marketing Director of
Pemberton.

7. What is the situation that Frederick is facing?
● Has to draw conclusions from the
test market results for a new
cracker product, Krispy Natural
and present feasible
recommendations and strategies
to make the product succeed in
the national market.

8. LET US FOCUS
THIS ANALYSIS
ON 4 FRONTS
● LAUNCH OF KRISPY NATURAL
● TEST MARKET RESULTS
● PROBLEMS IN NATIONAL ROLLOUT
● POSSIBLE RECOMMENDATIONS TO
SUCCEED AT THE NATIONAL LEVEL

9. LAUNCH OF KRISPY NATURAL
1ST

10. FAILURE OF KRISPY AFTER ACQUISITION
● Krispy’s single serve product failed miserably after acquisition by
pemberton in 2008. ( Exhibit 1)

11. WHAT NEXT?
Krispy relaunched as
‘Krispy Natural’

12. Marketing strategies for Krispy Natural
● Product: Improved taste and increased packet sizes
● Marketing: Used ‘Pull Marketing Strategy’ and spent
heavily on advertising
● Distribution: Used DSD mode of distribution.
● Pricing: 155% of other brands because of superior taste
and quality.

13. TEST MARKET RESULTS AND ANALYSIS
2ND

14. TEST MARKET PLAN
● Krispy Natural officially launched in: Columbus, and a trio of cities
in the Southeastern United States.
● 16 week Test market period
● In Columbus region, Krispy was a new product and hnece five
special “Krispy Force” representatives were hired and they were
separate from the traditional DSD route.

16. TEST MARKET RESULTS
● In Columbus, the test market results were very positive
as Krispy natural grabbed a market share of 18%.
● In Southeast, the results were not as much as expected.

18. Possible reasons for the results
● Krispy Natural was a newly introduced brand in Columbus. So
superior taste and quality combined with coupons, etc would have
attracted consumers to try it out.
● Whereas, Krispy is an already established brand in southeast. So
many of the consumers would have thought that Krispy Natural was
just an addition to the existing brand.

19. PROBLEMS IN NATIONAL ROLLOUT
3RD

20. SUSTAINABILITY AT NATIONAL LEVEL
● Coupons, Discounts,etc. which
were used at the test markets
may not help in the
sustainability of the company
in the national level.
● Very difficult to provide big
discounts at the national level

21. REVAMPED STRATEGIES FROM BIG COMPANIES
● The already established companies like Kraft, Kellogg and Pepperidge farm may
formulate new strategies to withhold their market shares.

22. COMPETITION FROM FRITO-LAY
● Fritolay, a well known brand is set to release its
full range of cracker products into US markets.
● Krispy Natural may not be able to cope up with
this competition.

23. POSSIBLE RECOMMENDATIONS TO
SUCCEED IN THE NATIONAL LEVEL
4TH

24. ADVERTISING
● Pemberton should rely more on ‘Pull Strategy’ for marketing which means it has to
spend a lot of money on advertising since the rival companies already spend huge
sums to maintain their brand image.
● More emphasis should be laid on social media marketing.
● Table below shows the amount spent by the cracker companies ( in million USDs) in
the year 2008 and 2009:

25. MORE EMPHASIS SHOULD BE GIVEN ON TASTE
● Testing results proved that
improved taste attracted consumers
towards Krispy Natural.
● So if even better tastes are
engineered in the R&D of
Pemberton, it can pay huge
dividends in the long run.

26. MORE EMPHASIS ON INCREASING NUTRIENT VALUE
● Market Research revealed that US citizens are moving towards a healthier diet.
● So Krispy Natural will be a huge success if it builds and maintain its brand as a
cracker of high nutritious value.

27. USE OF A CATCHY TAGLINE
● Pemberton should discover a catchy tagline which would demonstrate Krispy
Natural’s superiority over other brands.
● Its tagline should particularly be based on nutritive value of the Krispy Natural
crackers.

28. POSSIBLE COMPETITIVE RESPONSE TO FRITTO-LAY
● Launching more product mix and changing it
frequently according to the tastes of
customers.
● Optimisation of DSD to reduce the cost of the
cracker products.

30. STRENGTHS
● World renowned product R&D labs.
● Product Mix
● Company owned DSD

31. WEAKNESS
Capacity constraints of DSD for
Krispy Natural Products:
So Pemberton has to expand
its capacity in order to meet such
constraints.

32. OPPORTUNITIES
Market research shows
customer dissatisfaction when it
comes to taste of cracker
products in US. So
Krispy Natural capitalise on this.

33. THREATS
● Competition from Fritto-lays.
● Modest increase of sales in
southeast in the test market
conditions

34. WHY RECOMMEND
NATIONAL ROLLOUT?

35. ● Test results revealed that
more than 60% of testers
preffered Krispy Natural’s
taste over other brands.
● More than 80% showed a
positive purchase intent.