Case Study of Harvard Business Cases

1. Launching Krispy Natural:
Cracking The Product
Management Code
Harvard Business School Case

2. CANDLER
ENTERPRISES
REVENUE -
$18BILLION
PET CARE
DIVISION
MULTINATI
ONAL
BEVERAGE
QUICK
SERVICE
RESTAURA
NT
PEMBER-
TON

3. Pemberton Products
Snack food division.
Sold packaged food bars, cookies
and other sweet baked goods.
Market leader brands were-Softies
cookies and Homestyle muffin and
doughnuts.
Market leader in US cookie and
bakery snacks segment of the sweet
market.
Pemberton Contributes about 28%
of Candler’s total sales.

4. Strategic Priorities Of Pemberton
 Building strong brand values in salty
snack categories.
 Building a collection of attractive
,durable brands.
 Applying leadership marketing and DSD-
Direct Store Distribution system to
increase the revenues and overall profits.
 Building a good brand image in the
market.
 Building or acquiring capabilities in salty
snack categories.

5. Why Pemberton took the
first step to enter the
salty cracker market?

6. US Growing Cracker Industry
 The total retail cracker sale was of about-
$6.9 billion in 2011.
 There was a total 2.2% increase in CAGR
from 2008 to 2010.

7. Research Of Salty Snacks In US
74% of respondents consumed cracker on a
daily basis.
Crackers were the top salty snacks ahead of
potato chips.
Desire of healthy products was driving
cracker industry.

8. Competitors
These three account for 3/4th of the cracker industry

9. In 2008 Pemberton entered the salty snack
market with the acquisition of Krispy Inc
who was a manufacturer of single-serve
cracker packages.
Their Offering: A package containing 6
round toasted cracker sandwiches with
cheese filling available in 3 flavor options.
Marketing: They marketed it as “Grab and
Go” with a major presence in vending
machines and convenience stores.
THE KRISPY PRODUCT LINE

10. 2009 Krispy Single-Serve Sales Performance vs.
Plan ($ millions)
Plan 2009 Actual % to Plan
Krispy Retail $97.50 $50.80 52.10%
Krispy Vend $23.40 $18.00 76.90%
Total Krispy
Single-Serve $120.90 $68.80 56.90%
EXPECTATIONS VS REALITY

11. Why did it not work?
 Limited product line – hence no
command over supermarkets.
Taste- A taste survey showed that the
product did not deliver the flavor scores
that were expected.

12. THE RELAUNCH
 The overall scenario and numbers of the
cracker market were still attractive.
 The overall market was huge and was
expected to grow at 10-14% every year.
 Competitors were not capitalizing on the
market available.

13. ALL OF THE SHORTCOMINGS WERE
ADDRESSED:-
R&D Labs were engaged to improve the
taste.
Product line extended beyond single serve
packaging-to introduce multiple-serving
package sizes.
It was repositioned as KRISPY NATURAL
which was more indicative to its targeted
customer base.
THE RELAUNCH

14. The Relaunch was a
SUCCESS
Result……

15. THE MARKETING
STRATEGY THAT LED TO
IT’S SUCCESS….

16. PRODUCT STRATEGY
1. NEW FLAVOURS.
2. MULTIPLE SERVE PACKAGING
3. USE OF 100% WHOLE WHEAT AND
NATURAL INGRIDIENTS.
RESULTS:-
1. 77-92% Positive purchase intent for its new flavors.
2. Four-to-one preference over the leading
competitive cracker.

17. MARKETING STRATEGY
1. Emphasized on heavy advertisement and
promotion.
2. Effective adoption of pull marketing
strategy.
=>Hence price discounts offered initially.

18. DISTRIBUTION STRATEGY
1. Effective DSD distribution.
2. Optimizing system for longer shelf life of
crackers.
3. Hired representatives known as “Krispy
force for proper distribution.”

19. PRICING STRATEGY
1. Krispy went for a premium pricing
strategy.
2. But on the retail side they matched the
prices of their competitor on a “visual
price basis” that is less quantity or
weight for the same price so as to
maintain their premium product image.

20. Strengths
1. World renowned product
development labs.
2. Product mix
3. Company Owned DSD
Weaknesses
1. Capacity constrains of DSD for
Krispy natural products.
Opportunities
1. Market research shows
consumer dissatisfaction with
flavor and taste experience of
current cracker brands.
2. Cracker market fundamentals
were attractive.
Threats
1. Fritto-lays entering the
cracker market.
2. Modest increase of 1% sale in
southeast.
Swot-Analysis