Pemberton acquired Krispy Inc. and rebranded its flagship product as Krispy Natural to enter the salty snack market. It extended the product line and launched Krispy Natural in test markets in Ohio and Southeast U.S. Analysis of the test market results showed the product achieved an 18% market share in Columbus but only 10% in the Southeast due to existing competition. Based on the average performance, national sales projections of $550 million minimum and $775 million maximum make a nationwide rollout worthwhile to combat major competitors like Kraft and Kellogg. An aggressive marketing strategy focusing on taste, variety, and value will be used.
3. Pemberton took the step to enter Salty Snack Market. It
acquired Krispy Inc. and plans to tweak its product and
marketing strategy to succeed.
R&D of the product to improve quality. Product rebranded as
Krispy Natural. Product line extended for more options.
Launched the product in 2 test market regions of Columbus,
Ohio and three cities in Southeast U.S.
Test results have been obtained to decide the strategy to roll
out the product natinally(if at all).
4. • Analysis of product
performance in test
market and
interpretation.
• Decision to roll out the
product nationally.
5. • Rationalization of future
Projections.
• Zeroing on a roll out
strategy.
•Plan to combat rivals.
6.
7. • Understanding the U.S Cracker Industry and Assessment of
rivals.
• Marketing plan of Krispy Natural.
• Analysis of Test Market results.
• What should be the National roll out strategy?
8. Cues from Cracker Industry(1/2)
Consumption of
crackers was
frequent and
regular.
A Mintel study of salty snacks in the U.S reported
that 74% of respondants consumed crackers on a
regular basis and 34% ate them as part of regular
weekly diet.
Consumers liked
convenient and
portable packages.
50% of respondants liked crackers that were
conveniently packaged in easily portable
quantities.
Emergind desire
of healthy
products.
53% respondents considered overall
healthfulness an important factor in cracker
purchase decision.
9. Cues from Cracker Industry(2/2)
Premium priced
products were
being
introduced.
Kraft's Nabisco Wheat Thins Flatbread(
launched in 2009) and Kellogg's Keebler
Townhouse Flatbread(launched in 2010) were
healthier and upscale options.
Growth was
driven by new
flavour focussed
product lines.
Market share for Pepperidge Farm Goldfish
grew from 13.9% to 14.2% by focussing on new
flavours.
Cracker with
fillings were
gaining
popularity.
The segment was having flat sales from 2005 to
2009. It experienced the strongest growth of
14% approx in 2010. Annual growth forecast
was between 10-14% for the next several
years.
11. Analysis of rivals- Some statistics
• Kraft and Kellogg's market share
was declining.
• Kraft appeared to be complacent
as they continued to lose share
to Pepperidge and smaller
brands.
• Launch of Krispy Natural led to a
7% share decline of Kraft in
Columbus.
Columbus Southeast
Pretest Post Pretest Post
Kraft 40% 33% 34% 32%
Kellogg 25% 22% 23% 22%
Pepperidge
Farm
11% 10% 10% 10%
Krispy 0% 18% 9% 10%
12. Krispy Natural Marketing Strategy(1/2)
Product- The strategy focussed on increasing package sizes and introducing new and healthy filling options
as per the industry's preference. Internal market research suggested consumer dissatisfaction with the
flavor and taste experience of current cracker brands.
However, the test summary shows, taste preference is less than purchase intent and the product pricing is
not included in taste test.
13. Krispy Natural Marketing Strategy(2/2)
• Marketing- Focus on pull spending and trade promotion
to help quickly establish the brand.
• Distribution- Optimizing the DSD distribution would be a
critical component for the overall Krispy Natural Program
Strategy.
• Pricing- Adopted a premium pricing strategy as per the
market trends.
14. • Columbus had no prior presence of Krispy. Here
special Krispy forces were formed seperate from
DSD route.
• They doubled the share target achieving an 18%
market share.
15. • Here, Krispy was already established as single serve
product at a lower cost.
• So it was challenging to reposition at a premium
range.
• Actual shelf space and display was below
expectations.
• Only 10% increase in market share. It can be
attributed to low introductory trade discount of
16. If an average is taken for poor performance national extended and good
performance national extended sales of $ 775 million can be expected. However
even in the worst case sales projection is $ 550 million,well above the expectation
of $ 500 million. Thus, the product should be rolled out nationally.
17. • Pull Strategy was proving to be effective and hence to be used to
combat competitors response.
• Since price discounts, coupons and sampling could not be
sustained at a national level. It should be aggressive in places
where it was previously positioned at a lower cost.
• Continuous R&D to come up with newer and better flavours and
strong brand building to go head to head with Frito-Lay.
18. Created by Yavantika
Malani, St. Xaviers
College Kolkata, during a
marketing internship, by
Prof. Sameer Mathur, IIM
Lucknow.
