Pemberton, a snack food division of Candler Enterprises, launched Krispy Natural crackers to enter the salty snack market. They reformulated the product to improve taste, extended the product line to include multiple serving sizes and flavors, and utilized a direct store delivery distribution system. In test markets, Krispy Natural doubled its shelf space target in Columbus but saw limited growth in the Southeast. To further improve performance, Pemberton planned to emphasize the product's natural ingredients and health aspects, use segmented advertising, and better differentiate the brand within and outside the company.

1. Launching Krispy Natural:
Cracking the
Product Management Code
CASE STUDY

2. INTRODUCTION

3. Pemberton - the snack food division of Candler Enterprises, a
multinational beverage and snack goods manufacturer.
A market leader in the U.S. cookie and bakery
snacks segments of the sweet snack market.
Pemberton’s sales were from packaged food bars, cookies, and
other sweet baked goods; their market-leading brands were Softies
cookies and Homestyle muffins and doughnuts.

4. Sales 100.0%
COGS 78.8%
Brand Advertising & Marketing 7.7%
Pretax Contribution 13.5%
Profit After Tax 7.7%
Candler’s revenue -$18 billion(2011), with Pemberton
contributing approximately $5 billion in sales.
Pemberton’s income as a percent of sales for 2011

5. OBJECTIVE

6. To develop products that captured a sustainable competitive advantage
In 2008 ,Pemberton , to enter the salty snack market took the acquisition
of Krispy Inc., a privately held manufacturer of single-serve cracker
packages
Hoped to increase volume through wider distribution in supermarkets
and better placement using Pemberton displays

7. When the product fell short of management projections , came the
Krispy Relaunch
KRISPY NATURAL
to gain a foothold in supermarkets and to compete with established
brands.

8. EXECUTION

9. Pemberton R&D labs were engaged to improve the product taste and quality
The product line was extended beyond single-serve offerings
Multiple-serving package sizes and more flavor options
Pemberton utilized a company-owned direct store delivery (DSD) distribution
system in which products were delivered directly to retail outlets
In September of 2011, Krispy Natural was officially launched in two test
market regions: Columbus, Ohio, and a trio of cities in the Southeastern
United States.

10. STRENGTHS

11. Reformulated the product - improving taste to compete
brands at least two-to-one
Product lines -Cracker with filling options , flat cracker flavors
Healthy- Made from 100% whole wheat and other all natural
ingredients

12. “One of our most distinct competencies is our ability to create
products that provide a superior taste experience. We are constantly
improving our recipes and coming up with new products and flavors
to delight our customers.”

13. Pull Marketing strategies,
while the other competitors focused on
Push marketing

14. Heavy advertising and promotion to the end consumer as
well as appealing to the trade.
Advertising $ 33
Merchandising $ 37
$ 70
Pemberton’s projected expenses for Krispy
Natural advertising and merchandising

16. Direct store delivery (DSD) distribution system
DSD representatives delivered products from company distribution
centers to the retail stores and performed critical merchandising functions
DSD maximized sales and profit growth
Greater control of shelf space
More accurate forecasting
Less damage to products

17. Premium pricing strategy
Price fixed to 155% of segmented average
Price similar to competitors with lesser quantity

18. GROWTH

19. Expectation RealityV/S
0%
10%
20%
30%
40%
50%
COLUMBUS
Pretest market
Post test
0%
10%
20%
30%
40% SOUTHEAST
Pretest
market
Post test
Expected 15% of shelf space in
each supermarket’s cracker section
for Columbus and increase share in
the Southeast from its current 9%
share to 15%.
Columbus doubled the share target,
achieving an 18% share but the
Southeast results were not as
impressive, with only a slight
increase to 10% share

20. To get Krispier

21. Emphasizing on the healthier aspects and
use of natural ingredients of product while
creating brand awareness

22. Segmented approach while
product advertising

23. Brand Differentiation
Within company in Southeast to bring about the differences
from Original Krispy into knowledge
Outside company from competitors’ products

25. This presentation is created by
Nikita Sengar , J.E.C. , Jabalpur,
during a marketing internship under the
guidance of Prof. Sameer Mathur,
IIMLucknow.
Disclaimer