Analyzing the given case of launching a salty snack product nationwide, pros and cons, marketing strategy, competition

1. LAUNCHING KRISPY NATURAL : CRACKING
THE PRODUCT MANAGEMENT CODE
Harvard Case Study

2. THE PLAYERS
➤ Ashley Marne
Executive Vice President of Sales and Marketing
➤ Patricia Williams
President
➤ Burt Spivey
Chief Operating Officer
➤ Brandon Fredrick
Marketing Director

3. ➤ Snack food division of Candler Enterprises
➤ Majority sales in packaged food bars, cookies and other sweet
baked goods
➤ Contributed 5 billion dollars in sales for Candler Enterprise
➤ Market Leader is US Cookie and bakery snack segment of the
sweet snack market
PEMBERTON
Income as percentage of sales

4. Marketing Strategy and Priorities
➤ DSD (Direct Store Delivery)
➤ Representatives managed promotions, shelf inventory and
merchandising
➤ DSD costed 20 cents on every sales dollar. Benefits
outweighed the added costs
Priorities
➤ Building a collection of attractive, durable brands
➤ Leveraging leading market sales and DSD systems to increase
revenue and profits
➤ Building or acquiring capabilities in the salty snack category

5. THE US CRACKER
INDUSTRY

6. ➤ Retails Cracker Sales —> 6.9 Billion in 2011
➤ ‘All other' Cracker segment - Majority share
Cracker with filling - 9%
Saltines - 9%
Graham Crackers - 6%
Bread Sticks and Matzoh Crackers- >1%
➤ Top 3 market leaders
1.Kraft Food Inc
2.Kellogg Co
3.Pepperidge Farm

7. ➤ 74% of the respondent consumer crackers on a regular and 34%
ate them as part of regular weekly diet
➤ Standalone Flavours and portable packaging were the most
preferred
➤ 53% considered overall healthfulness as an important factor
➤ A packaged facts survey showed - 69% were trying to improve
physical health and 51% trying to lose weight
Market Research

8. GROWTH
➤ “All Other” Cracker Segment
- CAGR of 2.1% from 2008 to 2011
- Segment forecasted to grow 6-7% driven by
healthier, premium priced products along with
increase in flavour-focused products lines
➤ Crackers with fillings segment
- Annual growth of 10-14%

9. KRISPY PRODUCT LINE

10. KRISPY SINGLE SERVE
➤ Regional brand with focus on the Southeastern United States
➤ Packaged as 6 round toasted cracker sandwiches with cheese
fillings—> in 3 flavours
➤ Marketing as “Grab and Go” with prominence in convenience
stores and vending machines
BUT
NOT ENOUGH SALES

11. KRISPY RELAUNCH
➤ Rebranding to KRISPY NATURAL
➤ Multiple serving package sizes with more flavour options
➤ New Marketing Strategy

12. Marketing Strategy
➤ PRODUCT
- Multiple Serving and improved taste —> Aiming at 2:1 preference over the competitors
- Variety of filling flavour options
- Variety of Flat cracker flavours as well acting on the market trends
Consumer test
-showed 77-92% positive purchase interest

13. ➤ MARKETING
-PULL STRATEGY : Heavy advertising and Trade Promotions
➤ DISTRIBUTION
- DSD
- Still Needs Optimising
➤ PRICING
-Premium Pricing Strategy
-155% the category average cost per ounce
- Same “Visual Price” but less quantity

14. ➤ PROJECTIONS
➤ TEST ROLL OUT
- To Columbus,Ohio, and a Trio of Cities of Southeastern United States (16 week period)
Expectation Reality
-Achieve 9% Market Share
in Columbus
-Increase of Market Share
from 9% to 15% in the
Southeastern region
-Achieved 18% Market Share
in Columbus
-Increase of Market Share
only to 10% from 9%

15. PROMOTIONAL PLAN FOR COLUMBUS

16. WHAT HAPPENED IN THE SOUTHEASTERN REGION?
➤ Low introductory trade case discount of 15%
➤ Lower Shelf Space
➤ Product had a foothold at a lower price point

17. COMPETETION

18. POSSIBLE ROLL OUT OF CRACKERS BY FRITO LAY

19. STRATEGIES/OPTIONS TO CONSIDER
➤ National Roll Out is viable as it is consistent with the data
(Columbus Marketing Strategy is Preferred)
➤ In light of competition from Frito Lay, we could consider the
following options
- Regional tastes roll out of products
- Increase in End Aisle Display
- Better DSD distribution
- Celebrity Endorsements
- Emphasising on the Health Side of the Products

20. SUMMARY

21. CREATED BY MOHAMMED JAWAD ALI AS PART
OF THE INTERNSHIP BY PROF. SAMEER
MATHUR, IIM LUCKNOW
DISCLAIMER