This document summarizes a Harvard Business School case study about Pemberton Products, a snack food division of Candler Enterprises that is a market leader in cookies and bakery snacks in the US. It discusses Pemberton's strengths in market share and distribution systems. Previously, Pemberton launched a single-serve Krispy product line that failed due to taste and packaging issues. Now, Pemberton has rebranded the product as Krispy Natural with multiple package sizes, flavors, healthier ingredients and an improved marketing strategy focusing on advertising, pricing and distribution to better compete against other cracker brands. The case will analyze the marketing strategy and performance of the new Krispy Natural product launch.

1. HARVARD BUSINESS SCHOOL CASE

2. • Ashley Marne
- Executive VP, Sales and Marketing, Pemberton Products
• Brandon Fredrick
- Marketing Director ,Pemberton Products

3. • Parent Company Candler Enterprises manufactures beverage and
snacks.
• It also operates in Pet Care and Quick Service Restaurants.
• PEMBERTOM PRODUCTS is its Snack Food Division.
• Sells cookies, bakery snacks and other baked items.
• market leader in the U.S. cookie and bakery snacks segments of the
sweet snack market.
• 5 Billion $ sales revenue in 2011 i.e. 28% of total Candler
Enterprises.
Sales
PEMBERTON

4. Pemberton’s Strength
• Market leader in the U.S. cookie and bakery
snacks segments of the sweet snack market.
• Utilized a company-owned direct store delivery
(DSD) distribution system.
• R&D is given a high priority to produce world
class quality products.

5. • building a collection of attractive, durable brands;
• leveraging leading marketing, sales and DSD(direct store delivery) distributio
systems to increase revenue and profits;
• building or acquiring capabilities in salty snack categories.

6. • To increase the sales revenue of the products of
Pemberton.
• Study the marketing strategy of newly Introduced Krispy
Natural Product in the market.

7. 7
The U.S. Cracker Industry
Mintel study in United States reported that:
• 74% respondents consumed crackers on a regular basis.
• 34% ate them as part of regular weekly diet.
• 53% respondents considered overall healthfulness an important factor.

8. 8
The U.S. Cracker Industry
2009 share 2010 share
Kraft 34.7% 32.7%
lance 31.5% 29.9%
Kellogg 15.5% 21.0%
Private Label 8.0% 8.2%
Other 10.2% 8.1%
Crackers with fillings:
After flat sales from 2005 through 2009, the crackers with fillings segment
experienced strongest growth of approximately 14% in 2010.
Manufacturers sales of Crackers with filling market
share.

9. 9
The U.S. Cracker Industry
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%
“All Other” Crackers:
The broad all other cracker segment experienced a 2.1% CAGR for period
from 2008 to 2010.
Sales of “All Other” Crackers.

10. Launch of Krispy Single-Serve
• first entered the salty snack market with the acquisition of Krispy Inc.
• marketed as mobile, “Grab and Go” snacks.
• Failed to execute its plans due to single line serving, taste problem etc.

11. Plan Actual % to
plan
Krispy Retail $97.5 $50.8 52.1%
Krispy Vend $23.4 $18.0 76.9%
Total Krispy
Single - Serve
$120.9 $68.8 56.9%
2009 Krispy Single – Serve Performance vs. Plan
($ millions)

12. • This time all the shortcomings of the previous launched were solved.
• Research and development activities increased to improve taste, quality and
shelf life.
• Rebranded as ‘Krispy Natural’.
• multiple-serving package sizes and more flavours were introduced.
• Marketing Strategy was completely changed to compete strongly against
competitors.

13. • New flavors were introduced .
• Multiple Serve Packing was initiated.
• 100% Whole wheat and natural ingredients used in
manufacturing.

14. • Effective, efficient and optimal adoption of pull
marketing strategy.
• Hence price discounts offered initially.
• Focused on more and more advertisement and
promotion.

15. • Krispy Naturals adopted the premium pricing strategy.
• Still in the retail market, the prices of their competitor were
matched on a “visual price basis” i.e. less quantity for the same
price so as to maintain their premium product image.

16. • Hired 5 representatives known as “Krispy force for
proper distribution.”
• Effective and efficient direct store delivery (DSD)
distribution system.
• Optimizing product using R&D for longer shelf life of
crackers.

17. Krispy Natural
Multiple serving packages
Targeting health conscious
consumers
More flavour options and
good taste experience
through R&D
Krispy Single Serve
Regional brand
Less flavour option
Single product line

18. Effect on Competitors

19. • Try to develop products in low price category as well by reducing some cost in
R&D budget.
• The company should try to expand its products in developing nations like India
which has a huge market and lot of growing opportunities.
• Try to use its DSD(direct store delivery) distribution systems optimally and
efficiently so that more and more market share can be gained.

20. THANK YOU

21. CREATED BY Pranav Agarwal, IIT KHARAGPUR, during a
MARKETING INTERNSHIP under guidance of Prof. Sameer
Mathur, IIM LUCKNOW.
DISCLAIMER