Pemberton reviewed test market results for its new cracker product Krispy Natural. The product exceeded projections in Columbus, Ohio but fell below expectations in the Southeast US. Management developed a strategic plan focusing on product reformulation, premium pricing, aggressive advertising spending, and effective distribution to establish the brand nationally. Test markets in Columbus used dedicated sales representatives and promotional activities. The results were positive but interpreting the mixed results to determine a national rollout strategy would be challenging.

1. Launching Krispy Natural: Cracking
the Product
Management Code
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2. What is
Pemberton?
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3. Harvard Business School Case
Snack Food Division
Food Bars and
Cookies
Softies
Cookies
Doughnuts
5 Billion
Sales
Using Direct
Store
Delivery
Pemberton

4. Pemberton’s different food product

5. O
B
J
E
C
T
I
V
E
Pemberton: Introduction and
Challenges
Market Analysis
Krispy Natural Market Strategies
Result and Conclusion

6. Who are the Players?
Ashley Marne:
executive vice president of sales and
marketing at Pemberton.
Fredrick:
a marketing director for Pemberton.
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7. S
I
T
U
T
A
T
I
O
N
ANALYSIS
Pemberton, was reviewing test
market results for a new cracker
product, Krispy Natural.
Pemberton had just concluded
market tests in Columbus, Ohio as
well as three cities in the
Southeast.
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8. S
I
T
U
T
A
T
I
O
N
ANALYSIS
Pemberton’s income sale as a sale
of 2011 was:
-Sales 100%
-COGS 78.8%
-Brand advertising and marketing 7.7%
-Pretax Contribution 13.5%
-Profit After Tax 7.7%

9. Krispy
Products

10. Central
Problem?
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11. Columbus market share
results were double what the
company had projected.
However, the Southeast
results fell well below
management’s expectations.
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12. Key Strategic Priorities of Pemberton?
Building a collection of
attractive and durable
brands.
Leveraging leading Marketing ,sales
and DSD systems to increase revenue
and profits.
Building or acquiring capabilities in salty
industries.
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13. RELEVANT
ISSUES?
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14. Harvard Business School Case
Reasons For the above Discrepancy:
-Limited Product line offering in the target segment.
-Limited Flavor offering in the target segment.
-Lack of flavor satisfaction.

15. Harvard Business School Case
Other Brands:
Dropped or
remained same
increased
All other brands fell in market share

16. ALTERNATIVES
?
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17. Premium
Price
Positioning
Pros:
-Better able to compete with major
brands.
-High profit margin.
Cons:
-Low economy of sales.
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18. Premium
Price
Positioning

19. Feature
Based
Positioning
Pros:
-Health conscious food trend.
-Aligned with company strength in
R&D.
Cons:
-Crackers may not be healthy for long.
-Healthy Substitute snacks.
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21. Krispy Natural
Marketing
Strategy??
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22. Product
Marketing
Distribution
Pricing
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24. Product
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25. The product strategy was to focused on increasing package sizes to
multiple-servings .
Improving taste so that consumers would prefer Krispy Natural to
competitor.
The Pemberton R&D lab worked tirelessly to reformulate the
product. The latest consumer taste.
Test showed a 77%–92% positive purchase intent for new Krispy Natural
flavors.
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26. Harvard Business School Case
Setting effective product strategy and R&D of flavors to high positive purchase intent

27. Marketing
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28. Push and
Pull
Strategy

29. Advertising and
Promotion

32. The company wanted to extend this strategy to crackers with aggressive
plans for pull spending and trade promotions.
Discounts were pervasive in the industry with trade spending often
representing 10–20% of sales.
Many companies in the cracker market favored a push strategy to
promote products, but Marne believed a focus on pull efforts would help
quickly establish the Krispy Natural brand .
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33. Harvard Business School Case
Spending on Advertisement by other firms:
Pemberton’s plan was to spent $70 million on
Advertising

34. Distribution
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35. Management believed effective DSD distribution would be a critical
component in the overall Krispy Natural program strategy
An operational test was completed in 2010 to analyze
the distribution logistics of the new product mix of crackers and
cookies/sweet baked goods
The company found most trucks had capacity to accommodate test
market quantities.
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36. Harvard Business School Case
Management believed effective DSD distribution would be a
critical component in the overall Krispy Natural program
strategy.

37. Pricing
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38. Krispy Natural sought a premium pricing strategy. Management felt pricing
of approximately 155% the category average cost per ounce was
reasonable considering the product’s superiority.
the retail price for each package would be similar to competitors in
the category, but there would be less quantity or weight in the Krispy
Natural package.
Krispy Natural sales objectives were based on expectations of minimum
sales of $500 million during year one of national distribution.
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39. Harvard Business School Case

40. Test Market
Plan
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41. In Columbus, the Krispy brand did not have any prior presence, so the
company was able to assess its ability to sell a completely new line of
cracker products.
Five special “Krispy Force” representatives were hired for this
region, which were separate from the traditional DSD route
delivery representatives. These “Krispy Force” reps worked with
Pemberton regional and district sale managers and focused
solely on selling the new Krispy Natural product line
Pemberton projected by the end of the 16-week test period,
Columbus would achieve a 9% share of the cracker category in the
test market.
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42. Harvard Business School Case
Krispy Natural’s promotional plan in
Columbus and Ohio

43. National
Roll out
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44. -Fredrick knew interpreting the Krispy Natural test market
results and deciding how to roll out the product nationally (if
at all would be no easy task.
-He knew these figures were achieved with lower shelf space
than projected. Fredrick also felt it was understandable that
the Southeast results were lower than Columbus .
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45. Harvard Business School Case
Result of Marketing Campaign

46. Summery
Pemberton’s Product
Krispy Natural’s
Product
Management
Test Market
Plans And
Results
Strategic
Priorities
National roll
out
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47. Submitted by,
Aisha Mehboob
Bit Mesra