Pemberton, a snack food company, launched Krispy Natural crackers to enter the salty snacks market. They tested the product in Columbus, Ohio and Southeast cities. In Columbus, aggressive promotions helped Krispy Natural gain 18% market share in year one. In Southeast, a premium pricing strategy led to 10% market share. Overall, the test was successful. Pemberton recommends further marketing in Southeast and tailoring Krispy Natural to different consumer needs to sustain long term growth. Competitors may respond by increasing promotions and investing in new products.

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2. 2

3. 1. Pemberton: Introduction & Challenges
2. Market Analysis
3. Krispy Natural market strategy
4. Result and Conclusion
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4. 4
INTRODUCTION

5. 5

6.  Pemberton was the snack food division of Candler
Enterprises, a multinational beverage and snack
food manufacturer
 Pemberton was a market leader in the U.S. Cookie
and bakery snacks segment of the sweet segment
market
 It has experienced a compound annual growth rate
(CAGR) of14% for revenue over the past 5 years
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7.  Key Strategic Priorities:
• Building a collection of attractive, durable brands
• Leveraging leading marketing, sales and DSD
system to increase revenue and profits
• Building capabilities to have strong brand values in
salty snack categories
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8. Pemberton’s income statement(% of revenue):
Sales 100.0%
COGS 78.8%
Brand advertising & Marketing 7.7%
Pretax Contribution 13.5%
Profit After Tax 7.7%
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9. 9
CHALLENGES

10. 10
How to launch and sustain the growthof Krispy
Natural in the Salty Snack Market?

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MARKET ANALYSIS

12.  US Cracker industry overview
 Product purchasing intent
 Competitors Analysis
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13. 13
U.S. CRACKER
INDUSTRY OVERVIEW

14.  Retail cracker sales in the United States
reached an estimated $6.9 billion in 2011
 The growth rate for the overall cracker
industry from 2008 to 2010 was approx.
2.2% CAGR
 A Mintel study of salty snacks repoted that
74% of respondents consumed crackers on
the regular basis and 34% ate them as a part
of regular weekly diet
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15. 75%
9%
9%
6%
1%
Sales
all other
saltines
cracker with fillings
graham cracker
bread stics
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16. “ALL OTHER” crackers:
 Experienced a 2.1% CAGR from the period 2008-
2010
 Retail sales of 5.1 billion USD in 2011 in USA
 Expected to grow by 6.7% per year
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17. “ALL OTHER” crackers:
Manufacturer Sales of “All OTHER” crackers
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2009% Share 2010% Share
Kraft 37.8% 37.0%
Kellogg 28.9% 28.1%
Pepperidge
Farm(Goldfish)
13.9% 14.2%
Private Label 4.6% 4.8%
Other 14.8% 16.0%

18. Crackers with fillings:
 Became the strongest segment after 2009
 Retail sales of 660 Million USD in 2011 in USA
 Had a growth rate of 14% in 2010
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19. Cracker with fillings: Manufacturer Sales of
Cracker with fillings Market Share
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2009% Share 2010% Share
Kraft 34.7% 32.7%
Kellogg 31.5% 29.9%
Pepperidge
Farm(Goldfish)
15.5% 21.0%
Private Label 8.0% 8.2%
Other 10.2% 8.1%

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PRODUCT PURCHASE INTENT

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Product Testing Summary

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COMPETITOR ANALYSIS

23.  Top 3 cracker manufacturers are:
 Kraft Food Inc
 Kellogg Co.
 Pepperfridge farm
 They account for approx. 75% of the cracker
market in 2010
 Frito-Lay is going to be introducing a new
full line of crackers by the end of second
quarters
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24. 2008 2009
Nabisco Ritz Cracker $27.1 $34.6
Sunshine Cheese-It Cracker $27.4 $32.9
Nabisco Wheat Thins
Cracker
$14.1 $15.8
Pepperidge Farm Goldfish $12.8 $10.5
Keebler Town House $11.5 $10.2
Nabisco Triscuit $13.5 $9.5
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Advertising Spending for Leading Cracker Brands ($ millions)

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MARKETING STRATEGY

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PRODUCT MARKETING
DISTRIBUTION PRICE
STRTEGY

27.  PRODUCT
 Multiple serving packaging
 Focused on improving taste
 Health conscious
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28.  MARKETING
 Emphasized on heavy advertising
 Promotion to the end customer and appealing to
the trade
 Aggressive plans for product expansion by
spending and trade promotions
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29.  PRICE
 Sought a premium strategy
 Priced at15% above the category average cost per
ounce
 Same retail price as that of competitors but lesser
quantity
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30. 30
PROMOTIONALPLAN

31. 31
2011 Promotional Plan-Columbus, Ohio

32. Advertising $ 33
Merchandising $ 37
$ 70
($ in million) Year 1 Year 2 Year 3
Dollar Sales $500 $580 $700
Growth $16% 21%
Dollar Share 9% $10% 11%
Estimates ( $ in Million )

33. Year 3
Manufacturer Sales $ 700
COGS $ 539
Gross Profit $ 161
Advertising $ 33
Merchandising $ 37
Pretax contribution $ 91
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35. % Store Count
% of Stores with
Gondola
Placement
% of Stores with
End Aisle
Display
Columbus 94% 9% 14%
Southeast 85% 12% 10%
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Stores/Display Penetration

36. Columbus Southeast
Present Market Post Present Market Post
Kraft 40 33 34 32
Kellogg 25 22 23 22
Pepperidge farm 10 10 10 10
Krispy 18 18 9 10
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Estimated Dollar Share of Market ( in percentage )

37. Year 1 Sales ( millions )
Columbus Scenario
( national extended)
$ 1,000
Year 1 Sales( millions )
Southeast Scenario
( national extended)
$ 550
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Annualized National Projections

38.  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
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39.  In Southeast 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
services of the new Krispy Natural Line
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41.  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
expansionC
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43.  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%
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44. 44
CONCLUSION

45.  The large chain headquarters buyers were
impressed with the customer research and
inventory turn estimates
 They also loved all the promotional activity
and consumer advertising
 The pull marketing really created a buzz and
customers were coming to the stores asking
for Krispy Natural by name
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46.  Some industry analyst thought that the
positive test market results were driven by
significant price, discounts, couponing, and
sampling, which were not sustainable
 Also, few felt the taste preference claims of
Krispy Natural were inflated and the flavour
was no better than current brand offerings
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47. COMPANY Post-Krispy Natural
trends in Columbus
Potential Competitive Response
Kraft Lost 7% share
Short term:
New products testing in process
Increase trade spending & promotions
Long term:
Spend heavily to counter national roll-out
Kellogg Lost 3% share
Short term:
Increase A&M
Long term:
Capitalize on pull
Product line improvements
Pepperidge
Farm
Lost 1% share
Short term:
Increase trade spending
Long term:
Compete on quality and brand reputation
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Partial Competitive Analysis

48. 48
RECOMMENDATIONS

49.  Tailor the Krispy Natural to different need
states
 Extensive marketing in Southeast cities
 Contemporize brand engagement
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51. CREATEDBY KAJOL PANDEY,CCET,DURING A MARKETING
INTTERNSHIPBY
PROF. SAMEER MATHUR,IIM LUCKNOW.
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