This document summarizes Krispy's plan to launch a new natural cracker line called Krispy Natural. It discusses the U.S. cracker market and Krispy's failed prior product line. Krispy Natural will feature new flavors, packaging, and marketing focusing on health. A test market in Columbus, Ohio was successful, with Krispy Natural gaining 18% market share and outperforming competitors. The document concludes Krispy Natural has potential for national expansion based on the test market results.

1. KRISPY
NATURAL:
CRACKING THE
PRODUCT
MANAGEMENT
CODE

2. CONTENTS
 INTRODUCTION
 THE U.S. CRACKER INDUSTRY
 KRISPY PRODUCT LINE
 KRISPY NATURAL MARKETING STRATEGY
 TEST MARKET-PLAN & RESULTS
 SALES & CHANNEL RESPONSE
 RAMP UP TO NATIONAL ROLL-OUT?
 CONCLUSION

3. CANDLER
ENTERPRISES
[2011
REVENUE-$18
BILLION]
BEVERAGE DIVISION
PETCARE
DIVISION
QUICK-SERVICE
RESTAURANT DIVISION
PEMBERTON PRODUCTS

4. ABOUT PEMBERTON
 a multinationalbeverage andsnack goods manufacturer
 majorityof Pemberton’s sales were from packagedfoodbars, cookies, and
othersweet baked goods
 utilized a company-owneddirect storedelivery (DSD)distribution system-
products were delivereddirectly to retail outlets, bypassing retailer’s
warehousesand distribution centers
 Pembertonwas a market leader in the U.S. cookieand bakerysnacks
segments of the sweet snack market.

5. KEY STRATEGIC
PRIORITIES
1.Building a collection of attractive,
durable brands
2.Leveraging leading
marketing,
sales and DSD systems to
increase revenue and profits
3.Building or acquiring capabilities in
salty snack categories

6. Pemberton’s income as a percent of sales for 2011:

7. Pemberton had achieved
a compounded annual
growth rate (CAGR) of
14% for revenue over
the past five years

8. RETAIL CRACKER
SALES IN THE U.S
REACHED AN
ESTIMATED
$6.9 BILLION
IN 2011!

9. 2 BROAD
CATEGORIES…

10. “ALL
OTHER”
CRACKERS….

11. …..AND CRACKERS “WITHFILLING” !

12. MARKET SHARE
“ALL OTHERS””
~83%
CRACKERS WITH
FILLING
9% 6%
GRAHAM
CRACKERS BREADSTICKS & MATZOH(1%EACH)

13. 3 LEADING MANUFACTURERS
KRAFT INC. PEPPERIDGE FARMS KELLOGG CO.

14. 0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
CRACKER CONSUMPTION TYPE OF CRACKER ON THE BASIS OF HEALTH
Data from Mintel and Packaged Facts’ survey
REGULARBASIS
PARTOFWEEKLYDIET
STANDALONEFLAVOR
PROPERLYPACKAGEDCRACKERS
TOIMPROVEPHYSICALHEALTH
TOLOSEWEIGHT

15. MANUFACTURER SALES OF “ALL OTHER” CRACKERS
MANUFACTURER SALES OF CRACKERS WITHFILLING

16. KRISPY’S HISTORY
 Pemberton acquired Krispy Inc. in 2008
 Competed in both the cracker segments
 Primarily focused on distribution in Southeastern U.S
 Flagship products-crackers with cheese filling(3 flavors) & flat
crackers(2 flavors)
 Had a strong presence in vending machines and convenience
stores(perceived as a “Grab and Go” product)

17. HOWEVER IN 2009,THE PRODUCT
FELL SHORT OF MANAGEMENT
PROJECTIONS!

18. plan vs. actualsales figures

19. WHY DID KRISPY FAIL
IN ITS FIRST ATTEMPT?

20. MAINLY DUE TO 3
REASONS:
1.IT WAS A REGIONAL
BRAND
2.HAD LIMITED FLAVOR
OPTIONS
3.PRODUCT LINE WAS
ALSO LIMITED.

22. WILL KRISPY NATURAL BE ABLE
TO KEEP UP AND LEAVE A
MARK IN THE EVER GROWING
RETAIL CRACKER INDUSTRY?

24. R&D labs were engaged to
improve the product taste and
quality;rebranding of the
product to Krispy Natural.

25. Extended
product
offerings and
flavor options
to compete
with peer
brands

26. ADVERTISING

27. S
T
R
A
T
E
G
Y

29. EFFECTIVE DIRECT-STORE-DELIVERY DISTRIBUTION

30. PRICING STRATEGY
Premium Pricing Strategy
Pricing of approx. 155% the category
average cost per ounce was reasonable
On a “visual price” basis, Krispy Natural
would be on par with the competition.

31. Krispy Natural salesobjectives
KRISPY NATURAL BRANDINCOMESTATEMENT(IN MILLIONS)

32. TEST MARKET-PLAN

34. TEST MARKET-RESULTS

35. Pemberton sales managers pleased
with NEW product
store managers respected their
knowledgeof the business
Largechain headquarter buyers
impressed withconsumer research
results,inventory turn estimates
promotionalactivityandconsumer
advertisingwere appreciated
PULL MARKETINGCREATED a BUZZ
RESPONSE

36. S
U
C
C
E
S
S
!

38. PARTIAL COMPETITIVE ANALYSIS

39.  KRISPY NATURAL amassed an 18% market share in Columbus,Ohio as a new entrant in the salty
snack market
 Its competitors-Kraft Inc,Kellogg Co and PepperidgeFarm lost 7%,3% and 1% market shares
respectively
 ESTIMATED NATIONAL ROLLOUT SALES FIGURES AT $1000 MILLION(colombus) and $550 million
(southeast)

40. STRENGTHS(+) WEAKNESS(-)
OPPORTUNITIES(+) THREATS(-)
• World renowned product
development labs
• Innovation;variety of product
mix
• DSD owned by company
• Capacity constraints of DSD
• Present capacity of trucks
poor
• Longer shelf life of crackers
• Presently,consumer
dissatisfaction exists with
flavour and taste of
current crackers
• Fritto Lay might enter
with a new line of
crackers
• Losing market share to
competitors

41. DISCLAIMER
These slideswere created by SreelakshmiRajesh(vnit,Nagpur)during a
marketingmanagementinternship under the guidanceof prof.Sameer
mathur,Iimlucknow