This Harvard Business Case was analysed by Shubham Roy, from Netaji Subhas Institute of Technology during a remote internship under Prof. Sameer Mathur, IIM Lucknow.

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

2. Pemberton Prducts and the Players
 Pemberton was the snack food division of Candler
Enterprises, a multinational beverage and snack goods
manufacturer.
 Pemberton's sales mainly included packaged food bars,
cookies and sweet baked goods.
 Ashley Marne, executive vice president of sales and
marketing.
 Brandon Fredrick, marketing director for Pemberton

3. Scenario at hand
 A new cracker product, Krispy Natural to be launched.
 Market tests had been conducted at Columbus, Ohio as
well as three cities in the Southeast.
 Columbus market results were double that of
expectations while that of South East fell far below.
Marne wanted to make the roll-out of Krispy
Naturals a success.

4. Plus Points of Pemberton
• A market leader in the U.S. cookie and
the sweet snack market.
• Boasts of a superior taste experience.
• Direct store delivery (DSD) distribution
system.
• Innovataion led to a CAGR of 14% for
revenue over past 5 years.

5. Increasing Revenues and Profits
Acquiring Salty Snack Categories
Building Brand ValueA
B
C
Priorities for Pemberton

6. 1 2 3 4 5 6 7
Growth rate
was 2.2%
CAGR from
2008-10
74% consumed
crackers
regularly.
34% ate them
weekly.
53% of
respondents
desired
healthier
snacks
Crackers
with filling
expected a
growth of
10-14% over
the coming
years.
Top contenders:-
1.Kraft Food Inc
2.Kellogg Co
3.Pepperidge Farm
Standalone
flavours and
portable
packaging
was desired.
Crackers
with filling
experienced
strongest
growth.
The US Cracker Industry

7. Krispy's fate in 2008
• The first steps to enter the salty snack
market.
• Single-serve cracker packages.
• The product fell short of management
projections.
• Underperformance was a result of the
limited product line and poor taste.

8. 2009 Krispy Single-Serve Sales Performance vs. Plan
($ millions)
Plan 2009 Actual
Krispy Retail $97.5 $50.8
Krispy Vend $23.4 $18.0
Total Krispy Single Serve $120.9 $68.8
PLAN
$millions
PLAN
$millions

9. Crackers-with-
filling were
expected to
grow 10-14% per
year
Kraft was
losing
shares to
Pepperidge
Farm
Customer
dissatisfaction
with current
flavours
Scope of Krispy Relaunch

10. Plan of Action
• Pemberton R&D labs were engaged to
improve the product taste.
• Rebranding of the product to Krispy
Natural.
• The product line would be extended
beyond single-serve offerings.
• Multiple-serving package sizes and more
flavor options.

11. 3 4
2
1
Distribution
Marketing
Product
Marketing
Krispy Natural Marketing strategy

12. A
B
C
D
77%–92% positive
purchase intent
Healthier Snack option
Improving taste
Increasing package sizes to
multiple-servings
Product (1/4)

13. Marketing (2/4)
• Heavy advertising and promotion to the
end consumer.
• A focus on pull efforts would help
quickly establish the Krispy Natural
brand
$33 millions on advertising and $37 millions on merchandising

14. Distribution (3/4)
• DSD distribution would be a critical
component.
• Optimizing the system to account for the
longer shelf life of salty snacks.

15. Pricing (4/4)
• A premium pricing strategy considering
its superior taste.
• A“visual price”basis, similar price,
lesser quantity.

16. Test Market Plan and Results (1/2)
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.
The company hoped to secure 15% of shelf
space in each supermarket’s cracker
section.

17. Results
Plan in Columbus
No prior presence. Special
“Krispy Force”
representatives were hired.
Plan in SouthEast
Krispy was already
established. Regular DSD
representatives handled
the sales.
Results in Columbus
An 18% share against an
expected 9%..
Results in SouthEast
Shares rose to 10% from
previous 9% against an
expected 15%.
Test Market Plan and Results (2/2)

18. Response
Pemberton sales
managers were pleased
Midwest division sales
manager praised the
work of DSD reps
Another said that positive
response was just due to
significant price discounts,
couponing, and sampling
Some also felt that taste
was not as expected and
was over hyped
Sales and Channel Response

19. Problems faced
Poor SouthEast results:-
• Lower shelf space than projected.
• The original Krispy product had a
foothold in the Southeast at a lower
price point.
• Once the sampling, dealing, and coupons
tapered off, sales would decrease.
• Frito-Lay all set to enter the market.

20. Strategy (1/3)
Specially in SouthEast, End Aisle Display and Gondola Placement must be
increaed to have greater shelf space.

21. Strategy (2/3)
Since Krispy already had a foothold in SouthEast at a
lower price, to show the worth of the present snacks
variety, effective marketing must be used.
A similar marketing strategy
can be used in SouthEast to
show how the new variety is
better off than the old one. They
must be informed why the
higher price.

22. Strategy (3/3)
More stress must be paid on the R&D work so that the
taste is superior and even better than expectations.
Health quotient must be highlighted well.By the time
Frito-Lay enters the Market, Krispy should set up a
strong brand equity among customers.
Response of competitors can
act as a guideline to counter
their actions as well compete
with Frito-Lay

23. Was the roll-out a success?
The launch was indeed successful in Columbus, Ohio, it
failed terribly in SouthEast.Marne's forecast of $500
millions could not possibly be met. The above mentioned
strategies could be suggested by Frederick to fill in
the looholes.

24. This Harvard Business Case was
analysed by Shubham Roy, from Netaji
Subhas Institute of Technology during
a remote internship under Prof.
Sameer Mathur, IIM Lucknow.