Made during an internship offered by Prof. Sameer Mathur IIM Lucknow

2.  Pemberton is the snack food division of
Candler Enterprises, a multinational
beverage and snack goods manufacturer.

3.  The majority of Pemberton’s sales were from
packaged food bars, cookies, and other
sweet baked goods; their market-leading
brands were Softies cookies and Homestyle
muffins and doughnuts.

4.  In addition to Pemberton, Candler also
operated a beverage division, a quick
service restaurant division and a pet care
division. Candler’s 2011 revenue was $18
billion, with Pemberton contributing
approximately $5 billion in sales.

5. What is the present
situation?

6. Situational analysis 1/4

7.  direct store delivery (DSD) distribution
system
Situational analysis 2/4

8.  Spivey cited the system as a “major factor in
the company’s growth and leading market
share position, providing us with a significant
advantage over the competition.” It was
estimated the DSD system cost Pemberton
approximately 20 cents of every sales dollar.
Situational analysis 3/4

9. • culture of innovation.
Strengths of Pemberton
Situational analysis 4/4

10.  Pemberton had achieved a compounded
annual growth rate (CAGR) of 14% for
revenue over the past five years.
Sustaining this growth was central to the
company’s annual and long-term
objectives.

11.  building a collection of attractive, durable
brands;
 leveraging leading marketing, sales and
DSD systems to increase revenue and
profits;
 building or acquiring capabilities in salty
snack categories.

12. Cracker Brands Market share
All others 75%
saltines and crackers with
filling
9%
graham crackers 6%
bread sticks <1%
matzoh crackers <1%

13.  standalone flavor
 the desire for healthy products.

15.  Product: The product strategy for Krispy
Natural focused on increasing package sizes
to multiple-servings and improving taste so
that consumers would prefer Krispy Natural
to competitor brands at least two-to-one.

16.  emphasized heavy advertising and
promotion to the end consumer as well as
appealing to the trade.
 extend this strategy to crackers with
aggressive plans for pull spending and trade
promotions.

17.  Management believed effective DSD
distribution would be a critical component in
the overall Krispy Natural program strategy.

18.  Krispy Natural sought a premium pricing
strategy.
 Management felt pricing of approximately
155% the category average cost per ounce
was reasonable considering the product’s
superiority.

19.  This meant the retail price for each package
would be similar to competitors in the
category, but there would be less quantity or
weight in the Krispy Natural package.

20.  Krispy Natural sales objectives were based
on expectations of minimum sales of $500
million during year one of national
distribution and a steady-state pre-tax profit
contribution of at least 13%.

23.  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

24.  In Columbus, the brand was able to sell a
completely new line of cracker products.
 Five special “Krispy Force” representatives
were hired who focused solely on selling the
new product line.

25.  Pemberton projected by the end of the 16-
week test period, Columbus would achieve a
9% share of the cracker category in the test
market. Exhibit 4 shows the promotional
plan for 2011.

27.  The company was able to reposition the
product to a more premium offering.
 DSD route delivery representatives worked
with regional and district sales managers.
 Advertising and promotion for the Southeast
was similar to Columbus plan.

28.  Krispy Natural hoped by the end of the 16-
week test period to increase share in the
Southeast from its current 9% share to 15%.

29.  Columbus doubled the share target,
 achieving an 18% share category
 volume had increased by 30%.
 The Southeast results were not as impressive
 slight increase to 10% share
 little category expansion
 actual shelf space and display activity was low
due to low introductory trade case discount of
15%.

30.  Exhibit 5 provides test market result
highlights for store and display penetration,
test market share estimates, and two
scenarios for annualized national sales
projections based on test market
performance.

33.  A comprehensive sales presentation with
category expansion estimates was created
 They also loved the promotional activity and
consumer advertising.
 The pull marketing really created a buzz
andcustomers were coming to the stores
asking for Krispy Natural by name.

34. Price discounts,
Couponing
Sampling

43. Made by Tanishk Deoghare, BITS Hyderabad
during a marketing internship by Prof. Sameer
Mathur, IIM Lucknow.