Nestle (1)

MARKETING MANAGEMENT

Nehal Sharma SMBA08292Nikhil Bhatt SMBA08293

April 11, 2023

Nestle Refrigerated Foods: CONTADINA Pasta & Pizza

ContentsContents

1

4

2 Overview

Company Profile

Volume Estimate

SWOT Analysis

Overview

Company Profile

Volume Estimate

SWOT Analysis

3

Exhibit Analysis5Recommendation6Annexure7

OVERVIEW & COMPANY PROFILEOVERVIEW & COMPANY PROFILE

BRIEFBRIEF

The case is based upon the various studies and market researches which have

been conducted for the introduction of refrigerated pizza in the U.S. markets by

NRFC(Nestle Refrigerated Food Company in 1990.

The company had already established itself in the refrigerated market by the

introduction of Contadina pasta and sauce in the late 1980s .

Nestle Refrigerated Foods (“NRFC”) must determine whether or not to introduce

a refrigerated “Pizza Kit” product.

Nestle should bring the Pizza Kit concept to market and position it as a high

quality, reasonably priced alternative to both the takeout/delivered and frozen

pizza segments.

COMPANY PROFILECOMPANY PROFILE- Overview

Nestle Nestle USA has diversified into the following:

1. Nestle Beverage Company

2. Nestle Food Company

3. Nestle Frozen Refrigerated & Ice Cream Companies.

4. Nestle Brands Food Service Company.

5. Wine World Estate

Between 1980 and 1984, the company divested a number

of non-strategic or unprofitable businesses. In 1984,

Nestle acquired Carnation the American Food giant. NRFC – Nestle Refrigerated food Company is located in

Glendale California. NRFC became the part of Nestle

Frozen Refrigerated and Ice Cream Company. In 1990 NRFC contemplated the introduction of the

refrigerated Pizza Product to the US market.

- Evolution

1866 • In the 1860s Henri Nestlé, a pharmacist,

developed a food for babies.

• In 1905 Nestle merged with the Anglo Swiss Condensed milk company

1918 • After the war the revenues dried up and the management responded by streamlining operations and reducing debt.

1944 - 1975 • Growth accelerated and companies were acquired. • In 1947 came the merger with Maggi seasonings and

soups. Crosse & Blackwell followed in 1960, as did Findus (1963), Libby's (1971) and Stouffer's (1973). • Diversification came with a shareholding in L'Oreal in

1974.

Today •Nestlé is today the world's leading nutrition, health and wellness company. • Sales for 2008 were CHF 109.9 bn, with a net profit

of CHF 18.0 bn. • Nestle employ around 283 000 people and have

factories or operations in almost every country in the world.

Pizza ConceptPizza Concept

Pizza Kit

1. It consists of Crust, Cheese & Sauce separately.

There are two types of sauces available i.e.

Tomato and Pesto.

2. The pizza kit costs $ 6.4, Additional Toppings of

Pepperoni and Sausage veg and extra cheese is

available for $1.3 each.

3. The Pizza is available in two sizes small ( 8

inches) and large (12 inches).

Pizza Kit

1. It consists of Crust, Cheese & Sauce separately.

There are two types of sauces available i.e.

Tomato and Pesto.

2. The pizza kit costs $ 6.4, Additional Toppings of

Pepperoni and Sausage veg and extra cheese is

available for $1.3 each.



Pre Assembled Pizza

1. It is available in varieties like Italian Pepperoni ,

Italian Sausage , Italian Cheese and Italian

mushroom and bell pepper.

2. It is priced at $ 7.60, no additional toppings are

available.



Pre Assembled Pizza

1. It is available in varieties like Italian Pepperoni ,

Italian Sausage , Italian Cheese and Italian

mushroom and bell pepper.

2. It is priced at $ 7.60, no additional toppings are

available.



Volume Estimates – Pizza Kit & Pizza Only

CONCEPT PURCHASE INTENTPizza Kit Research Results : 17% Definitely will buy59% Probably will buy

CONCEPT PURCHASE INTENTPizza Kit Research Results : 17% Definitely will buy59% Probably will buy

Trial Rate

CONCEPT PURCHASE INTENTPizza Only Research Results : 15% Definitely will buy43% Probably will buy

CONCEPT PURCHASE INTENTPizza Only Research Results : 15% Definitely will buy43% Probably will buy

ADJUSTED TRIALIndustry Rule of Thumb:80% “ Definite” Actually buy30 % of “ Probable's” BuyTherefore, Adjusted Trial:(80%)(17%) + (30%)(59%) = 31.3%




ENVIRONMENT ADJUSTMENT SeasonalityENVIRONMENT ADJUSTMENT Seasonality

ENVIRONMENT ADJUSTMENT SeasonalityENVIRONMENT ADJUSTMENT Seasonality

MARKETING PLAN ADJUSTMENT$ 9MM Advertising = 37 % Awareness

58% ACV(31.3%)(37%)(58%) = 6.72 %


58% ACV(31.3%)(37%)(58%) = 6.72 %


58% ACV(24.9%)(37%)(58%) = 5.34%


58% ACV(24.9%)(37%)(58%) = 5.34%

Target Household

95.5 million

Average Trial Unit Purchased

1.1unit at Trial

Target Household

95.5 million

Average Trial Unit Purchased

1.2unit at Trial

TRIAL VOLUME TRIAL VOLUME

REPEAT VOLUME

Trial householdsPizza Kit(95.5 Million)(6.72%) = 6.42 Million

Pizza Only(95.5 Million)(5.34%) = 5.11 Million

Repeat RatePizza Kit22 %

Pizza Only22%

** **

# Repeat Purchase OccasionPizza Kit2

Pizza Only2

**

Average Repeat Transaction AmountPizza Kit1

Pizza Only1

==

Pizza Kit2.82 Million units

Pizza Only2.25 Million Units

Volume Estimates – Contd.. Volume Estimates – Contd..

SWOT ANALYSISSWOT ANALYSIS

SWOT Analysis of Pasta SWOT Analysis of Pasta

Strengths:

1. First Mover Advantage2. Quick & Convenient to make3. Good Quality4. A formidable market share.5. Efficient Supply Chain Management6. Adopted the Component Marketing

Weakness :

1. Stagnant Sales -The proportion of profit to sales has remained the same.

2. Short Shelf life

Opportunities:

1. Market Leader 2. Established Brand

Threats:

1. Entry of strong competitor in the market2. It’s a Cash cow.

Success of PastaSuccess of Pasta

The success of Pasta can be attributed to the following reasons:

1. First Mover Advantage

2. Strong Research methodology adopted prior to launch

3. Its refrigerated and not frozen

4. Majority of the population was in favour of the concept

5. Large variety

6. Good Quality and Fresh

7. Quick and Convenient to make.

8. Efficient Supply Chain Management

SWOT Analysis of Pizza SWOT Analysis of Pizza

Strengths:

1. Established Brand2. Market of $5.15 billion3. Large variety4. Good Quality and Fresh5. Quick and Convenient to make

Weakness :

1. Established competitors2. The survey classifies only the niche market and

doesn't give a holistic view of the market.

Opportunities:

1. A strong market of 28% to be explored.2. NRFC generating new revenue stream.

Threats:

1. Launching of product by competitors2. Market Reaction

Exhibit Analysis

Exhibit 13,14 & 15…Exhibit 13,14 & 15… From the all the three exhibits we can infer that “ Takeout” pizza is the most popular

pizza.

The Pizza Kit lags behind by a huge margin on the following counts: Taste Crust Special Meal

The Assembled Pizza lags behind by a huge margin on the following counts: Lack of Customization Soggy Crust Taste factor Special meal

Exhibit 15 clearly indicates that if the CONTADINA pizza is introduced in the market the market share of all the other pizzas already available decrease.

Exhibit 19,20 & 21…Exhibit 19,20 & 21… Among the Pizza and toppings & Pizza only, Pizza and Topping are a clear favorite.

The concept interview for the Pizza Only was very brief.

An extensive behavioral study has been conducted on Pizza and topping.

The likeability towards Pizza and toppings was unanimous amongst both users and non

users of Contadina Pasta , the same doesn’t hold true for Pizza only.

In the pre product launch research of Pasta there is a lot of emphasis of the USP of the

product which is not being replicated while launching the pizza.

The point of understanding the market perception with regards to the packing of the

product at hand has not been taken care of in the case of pizza.

Exhibit 23 & 24…….Exhibit 23 & 24…….

The survey sample for the In house testing was in complete agreement with the taste

and convenience of Contadina Pizza.

No improvement is required in the marketed product.

The majority of the sample was in favour of the Pizza.

The mean price of the Contadina Pizza and the delivered take out Pizza is almost

similar which indicates that the product is competitively priced.

Recommendations

RecommendationConcentrate on existing customer

Audit, Accounting &

Regulatory

Launch the Pizza Kit

HR Advisory

Use the existing sales platform to

gauge initial response

Provide the Toppings free of

cost initially

Eliminate “ Test Market” in Product

Development

Recommendations

AnnexureAnnexureNestlé Refrigerated Foods: Contadina Pasta & Pizza (A)

1. Using the BASES model described in Exhibit 9, forecast the estimated demand (trial and repeat) for the two Pizza

options under consideration: Pizza and Topping and Pizza Only. Most of the data needed for the forecasting exercise

is available on pages 15 34 (Exhibit 21).

2. What can one learn from Exhibits 13, 14, and 15?

3. How does the pizza concept test data (Exhibits 19, 20, and 21) compare to the pasta concept test data (Exhibit 6)?

4. What is your reading of Exhibits 23 and 24 (include Exhibit 18 if you wish)?

5. In general, how would you compare the pizza opportunity to the pasta opportunity? What are the similarities?

Differences?

6. Why was the pasta product so successful?

7. How do you like Nestlé’s new product development process? For pasta? For pizza?

8. Would you launch the pizza?

Its all about the taste , honey!Its all about the taste , honey!

Thank You

Nestle (1)

Documents

Transcript of Nestle (1)