TruEarth Healthy Foods is considering launching a new line of whole grain pizzas. The document analyzes market research data to determine the potential sales volume of the new product line. It considers customer penetration rates, repeat purchase rates, and sales at different price points. Based on the analysis, the document recommends TruEarth launch the product line, estimating sales of $12.16 million assuming an 11% customer penetration rate and the ability to price between $11.38 to $12.38. Key learnings highlighted are understanding market research assumptions, analyzing data to decide on new products, and recognizing limitations of decisions based on available data.

1. TruEarth Healthy Foods:
Market Research For A New Product
By :
Lokesh Sharma
IIT Kanpur

2. Topics Covered:
Consumer marketing, Market research, New product introduction, Quantitative analysis
Actors:
GARETH DE ROSA – Founder at TruEarth
ISABEL ECKSTEIN – Brand manager
ROSIE CARLTON – Director of business development
Company Background:
 Founded in 1993 by De Rosa
 Offer healthy, tasty, high in quality gourmet pasta, sauces & meals
 Successfully launched whole grain pasta( Cucina Fresca) in 2006
 Now considering to launch whole grain pizza product line
Objective:
Decide whether to launch or not the pizza product and at what volumes

3. STRENGTH
- High quality durum wheat & highly selective about
ingredients of sauce
- Brand equity with customer & stores
- Existing (highly invested) manufacturing equipment &
distribution infrastructure
- Systematic 4-step process for R&D of products
- Existing infrastructure of magazine ads, promotional
programs, coupons & in store demonstrations
- Tastier product line with customized options
- Product for the whole family(8.6/10 in Mall intercept)
- 28% of home trial users believe there is no need for
improvement
- 33% of people favorable to concept in mall intercept
considered TruEarth name a considerable advantage
WEAKNESS
- Narrow product line with limited no. of toppings
- Higher price($12.38 vs. $10.09 for refrigerated pizza &
$11.72 for takeout)
- Separate purchase of toppings and crust
- Only 10% favorable to product in overall taste, texture&
quality
- Limited time to product expiration
- Pizza kit only feeds 2-3(No individual or family pack options)
OPPORTUNITIES
- Gain first mover advantage
- Expansion in product line
- Leverage TruEarth brand name to enter the pizza market
- Expansion in serving size option(individual & family pack)
- Come up with combos of Cucina Fresca & pizza kit
THREATS
- Demographic variation in pizza demand due to different
mindsets regarding health
- Consumers ma not purchase additional toppings
- Rigazzi is preparing to introduce a pizza product line
- Big players of frozen pizza market: Nestle & Kraft
- Failure of pizza product line can make it harder to launch new
product in future
-
SWOT

4. Trial Purchase Intent
CUSTOMER(X%) NON-CUSTOMER((100-X)%) Exhibit
Definitely would buy 26% 15% 7
% of “Definites” who actually buy 80% 80% 5
“Definite” Purchase 20.8% 12% Methodology
Probably would buy 53% 39% 7
% of “Probables” who actually buy 30% 30% 5
“Probable” Purchase 15.9% 11.7% Methodology
Trial Rate (Definite + Probable) 36.7% 23.7% Methodology
Marketing Plan Adjustment
Projected Consumer Awareness 50% 12% Table B
ACV distribution 40% 40% Table B
Marketing Adjusted Trial Rate 7.34% 1.14% Methodology
Target Households(MM) 0.588X 0.588(100-X) Table B (target HH =58.5 MM)
Trial Households(MM) 0.0432X 0.0067(100-X) Methodology
Repeat Purchase Inputs
Repeat Purchase Occasions 2.0 2.0 Table B
Repeat Transaction Amounts 1.25 1.25 Table B
Repeat Rate Y% Y% (Table B, 49% excellent product)
Repeat Volume(MM) 0.0011XY 0.00017(100-X)Y Methodology
Trial Volume(MM) 0.0432X 0.0067(100-X)
TOTAL VOLUME(MM) (0.0011XY+ 0.0432X) + (0.00017(100-X)Y+ 0.0067(100-X)) Methodology
Average spend per purchase(Retail) $12.38 Table B
Retail Sales Volume(MM) $12.38*TOTAL VOLUME
Retailers Gross Margin 35% Page 7, paragraph 2
TruEarth Sales Volume(MM) $ 0.65*12.38*TOTAL VOLUME
Reference: Methodology, Page 9, Footer section

5. 5% 11% 15%
21%(Mediocre) $10.52 million $13.22 million $15.02 million
37%(Average) $13.31 million $16.73 million $19.01 million
49%(Excellent) $15.39 million $19.36 million $22.00 million
Customer Penetration(X)RepeatRate(Y)
TruEarth Sales Volume in different situation
Recommendations:
They should launch the product
Assuming 11% penetration rate they can safely play with price in between $11.38 to $12.38 which gives TruEarth
sales volume $12.16 million
Learning Points:
Understand the assumptions & techniques for estimating markets and projecting sales
Analyze and interpret data to decide whether to bring a new product to market
Recognize the importance of perceived value to consumers for a new product as compared with existing products
Understand the limitations of making decisions based on research and available data

6. Thanks…