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Transcript of Krispy group5
LAUNCHING KRISPY NATURAL
CRACKING THE PRODUCT MANAGEMENT CYCLE
- GROUP 5
BACKGROUND
CANDLER ENTERPRISES
REVENUE - $18BILLION
PET CARE DIVISION
MULTINATIONAL BEVERAGE
QUICK SERVICE
RESTAURANT
PEMBERTON
PEMBERTON FOOTPRINT
Snack Food Division
Food Bars, Cookies & Sweet Baked foods
Softies Cookies
Home style Muffins & Doughnuts
5 Billion in Sales (2011)Own & Uses Direct Store
Delivery DSD
•Acquisition of Krispy Inc. in 2008 – First step to enter Salty Snack Market
Category Extension
SPECIFIC DIRECTION FOR PRODUCT DEVELOPMENT
BUILDING A COLLECTION OF ATTRACTIVE DURABLE BRANDS
DSD SYSTEMS TO INCREASE REVENUE & PROFITS
BUILDING OR ACQUIRING CAPABILITIES IN SALTY SNACK CATEGORIES
- Pemberton’s President
US CRACKER INDUSTRY• Estimated 6.9 billion in 2011• CAGR of 2.2% from 2008 – 10• Increased growth of 6.2% in General(All other) in 2010• Annual growth forecasted between 10-14% for crackers with
filling
75
99
61
Market Share
General(All Other)
Saltines
Crackers with fill-ings
Graham crackers
OthersAll figures are in %
Three Largest Competitors:•Kraft Food Inc ( Nabisco Brands)•Kellogs Co. •Pepperidge Farm
2009 Krispy Sales Performance
2009 Krispy Single-Serve Sales Performance vs. Plan ($ 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%
MARKET & CONSUMERS
Mintel Study• 74% respondents consumed crackers on
regular basis.• 34% ate them as part of Regular Diet• 53% considered overall Healthfulness
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)
Krispy Single Serve v/s Krispy Natural
Krispy Natural Re Launch Krispy Single Serve
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
MARKETING STRATEGY
PUSH STRATEGY • Competitors favored to promote products
PULL STRATEGY• Focus on Extensive advertising
& merchandising• Aggressive plans for Trade
promotions
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
SALES OBJECTIVES
• National Distribution of crackers.• Minimum Sales of $500 million.• Steady state pre-tax profit of at least 13 %.
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.
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%
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%
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
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.
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.
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%.
21
THANK YOU