Krispy group5

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LAUNCHING KRISPY NATURAL CRACKING THE PRODUCT MANAGEMENT CYCLE - GROUP 5

description

Krispy naturals relaunched itself against certain strong competitors.

Transcript of Krispy group5

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LAUNCHING KRISPY NATURAL

CRACKING THE PRODUCT MANAGEMENT CYCLE

- GROUP 5

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BACKGROUND

CANDLER ENTERPRISES

REVENUE - $18BILLION

PET CARE DIVISION

MULTINATIONAL BEVERAGE

QUICK SERVICE

RESTAURANT

PEMBERTON

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PEMBERTON FOOTPRINT

Snack Food Division

Food Bars, Cookies & Sweet Baked foods

Softies Cookies

Home style Muffins & Doughnuts

5 Billion in Sales (2011)Own & Uses Direct Store

Delivery DSD

•Acquisition of Krispy Inc. in 2008 – First step to enter Salty Snack Market

Category Extension

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SPECIFIC DIRECTION FOR PRODUCT DEVELOPMENT

BUILDING A COLLECTION OF ATTRACTIVE DURABLE BRANDS

DSD SYSTEMS TO INCREASE REVENUE & PROFITS

BUILDING OR ACQUIRING CAPABILITIES IN SALTY SNACK CATEGORIES

- Pemberton’s President

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US CRACKER INDUSTRY• Estimated 6.9 billion in 2011• CAGR of 2.2% from 2008 – 10• Increased growth of 6.2% in General(All other) in 2010• Annual growth forecasted between 10-14% for crackers with

filling

75

99

61

Market Share

General(All Other)

Saltines

Crackers with fill-ings

Graham crackers

OthersAll figures are in %

Three Largest Competitors:•Kraft Food Inc ( Nabisco Brands)•Kellogs Co. •Pepperidge Farm

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2009 Krispy Sales Performance

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%

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MARKET & CONSUMERS

Mintel Study• 74% respondents consumed crackers on

regular basis.• 34% ate them as part of Regular Diet• 53% considered overall Healthfulness

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MARKET TREND

Healthier & Conveniently packaged Crackers for the Consumers

PEPPERIDGE FARM

GOLDFISH (2010)

KELLOGS KEEBLER

TOWNHOUSE FLATBREAD

(2010 )

KRAFT’S NABISCO

WHEAT THINS FLATBREAD

(2009)

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Krispy Single Serve v/s Krispy Natural

Krispy Natural Re Launch Krispy Single Serve

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KRISPY NATURAL PRODUCT STRATEGY

• Increasing Package sizes to Multiple servings• Improving taste by introducing new flavors• Healthfulness – An important Factor 100% whole wheat Natural Ingredients

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MARKETING STRATEGY

PUSH STRATEGY • Competitors favored to promote products

PULL STRATEGY• Focus on Extensive advertising

& merchandising• Aggressive plans for Trade

promotions

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DISTRIBUTION

• DSD system –May not work for Cracker business. So Pemberton hired “Krispy force” for distribution system.

• Longer Shelf life of Crackers• Present capacity of Trucks poor

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SALES OBJECTIVES

• National Distribution of crackers.• Minimum Sales of $500 million.• Steady state pre-tax profit of at least 13 %.

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SWOT AnalysisStrengths1. World renowned product

development labs.2. Product mix3. Company Owned DSD

Weaknesses1. Capacity constrains of DSD for Krispy

natural products.

Opportunities1. Market research shows consumer

dissatisfaction with flavor and taste experience of current cracker brands.

2. Cracker market fundamentals were attractive.

Threats1. Fritto-lays entering the cracker

market.2. Modest increase of 1% sale in

southeast.

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Product Testing Summary Positive Purchase Intent % Testers that preferred taste of (Definitely or Probably Would Buy) Krispy Natural over leading brand

Crackers with Filling White Cheddar 92% 78% Smoked Gouda 77% 65% Chipotle Cheddar 78% 64% Creamy Swiss 80% 72% Tomato Basil 85% 75% Vegetable Herb 77% 50% AVERAGE 82% 67%

Flat Crackers Smoked Cheddar 81% 61% Sundried Tomato 80% 58% Cracked Pepper & Olive Oil 80% 55% Roasted Garlic 81% 59% AVERAGE 81% 58%

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MARKET SHARE

All other Cracker Buisness(in Millions) 5100

Ceackers with fillings(In Millions) 660

Manufacturer sales of "All Other" Crackers % Lost

In 2009 In 2010

Kraft 37.80% 37.00% -0.80%

Kellogg 28.90% 28.10% -0.80%

-1.60%

Market loss in Millions -81.60

In 2010Manufacturer sales of Crackers with Filling

2009% Share 2010% Share

Kraft 34.70% 32.70% -2.00%

Lance 31.50% 29.90% -1.60%

-3.60%

Market loss in Millions -23.76

Crackers with filling segment growth of opportunity is 10-14%

Estimated Dollar Shares of Market

In 2011 in 2011

Columbus Southeast

Pretest Market

Post % Market lost

Pretest Market Post

Kraft 40% 33% -7% 34% 32%

Kellogg 25% 22% -3% 23% 22%

Pepperidge Farm 11% 10% -1% 10% 10%

Krispy 0% 18% 18% 9% 10%

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SALES POTENTIALS

Columbus Scenario(in billions)At 18 % Market share

Sales 1.30

COGS 0.98496

Gross Profit 0.31

Advertising 0.033

Merchandising 0.037

PBT 0.24

Pretax Contribution 18% of sales

Southeast Scenario(in billions)

At 9 % Market share

Sales 0.65

COGS 0.49248

Gross Profit 0.16

Advertising 0.033

Merchandising 0.037

PBT 0.09

Pretax Contribution 13% of sales

At 14% market share

Sales 1.01

COGS 0.76608

Gross Profit 0.24

Advertising 0.033

Merchandising 0.037

PBT 0.17

Pretax Contribution 16% of sales

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CONCLUSIONS

INTERPRETING MARKET RESULTS

1. Grabbed 18% market share in Columbus as a new entrant in salty snacks business.

2. Kraft,Kellogg and Pepperidge in total lost 10% of market share, despite of higher demands cracker products since 2010 . ( 6.2% for “All other crackers and 14% for chacker will fillings).

3 Forecasted National roll out sales figures in Columbus and Southeast scenario for 3rd year depicts PBT more than 13 % and sales more than $500 millions.

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POSSIBLE COMPETITIVE RESPONSES TO NEW BRAND “FRITTO-LAY”

• Launching more new product mix as per customer taste and keeping health as a priority concern.

• Optimization of DSD system for Krispy natural product for cost reductions.

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RECOMMENDED FOR A NATIONAL ROLLOUT

KEY INDICATORS

1. More than 60% tasters preferred taste of Krispy natural over other leading

brands.

2. Positive Purchase intent of 81%.

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THANK YOU