Launching Krispy Natural : Cracking the Product Management Code

Launching Krispy Natural : Cracking the Product Management Code

Candler Enterprises• A Multinational beverage and snack goods Manufacturer with 18

billion in sales (2011)

• Pemberton is snack food division of Candler Enterprises.

• Candler Enterprises also operates – • A beverage Division• Pet Care Division• Quick Service Restaurant Division

Pemberton Products• Food Bars, Cookies, Sweet Baked goods• Market leaders with Softies Cookies and Homestyle muffins and

Doughnuts

• $5 billion in sales (2011) – 28% of Candler Enterprises sales

• Market Leader of sweet snack Market in U.S cookie and bakery Snacks• Dozens of plants• Uses Direct Store Delivery (DSD)

Key People• Patricia Williams – President• 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.

• Burt Spivey – COO (Chief Operating Officer)• “One of our most Distinct Competencies is our ability to create products that

provide a superior taste experience”.• Our DSD system is a major factor in the Company’s growth and leading market

share position, providing a significant advantage over the competition.

Key People

• Ashley Marne – Executive Vice-President (Marketing & Sales)• “Krispy Natural will provide Pemberton with its next generation blockbuster

product and provide a foothold we need to dominate the salty snack market”

• Brandon Fredrick – Marketing Director

Attractive and Durable Brand:• “ Grab and Go” snacks, in vending machines and convenience stores.

• Improve Product taste and quality.

• Made from whole wheat and Natural Ingredients.

• Increase Package size, Availability in flavours.

Marketing, Sales and DSD System

• DSD :• Control of Shelf space.• Accurate Forecasting.

• Marketing :• Heavy Advertising and Promotion• Pull Strategy.

Capability in salty snack Category• Market test: • Columbus, Ohio, South west.

• Competitors :• KraftFood, Kellogg Co. , Pepperidge Farm

• Consumer :• Healthy Product demand is high• 74% consume crackers at regular basis.• 34% consume as a regular diet.

Cracker IndustryReached 6.9 billion in 2011.

Growth rate of overall market from 2008-2010 was 2.2% CAGR

Crackers with filling sector expected to grow 10-14% in next few years

Product – Krispy Natural• Krispy Natural• Targets health Conscious Consumers• Multiple servings, More Flavour Options• Trying to go National

• Krispy Inc.• Did not Target the health conscious

Consumers• Single Serving, Not many Flavours• Regional Product

Launching Krispy Natural Nationally• Product Test :• Positive purchase intent of 77% - 92% .• 2:1 ratio in taste preference for crackers with filling.

Launching Krispy Natural Nationally• Estimated Dollar Shares:• Test in Columbus, Ohio and trio of cities in the southeast.• 18% of market in Columbus.• Only 1% increase in Southeast

Promotional Plan used

Competitive Analysis

World Renowned Product Development Labs.

Innovation, variety of product mix.

DSD owned by the company.

Capacity Constraints of DSD, Present Capacity of Trucks is Poor.Longer Shelf Life of Crackers.

Presently,Consumer

Dissatisfaction is there with Flavour and Taste of current Crackers.

Frito-lays is Entering with a new full line of crackers.Losing Market Share to Competitors.

What Recommendations for National Rollout?

What Marketing Strategies for Krispy Natural to get higher sales?

How to Position Krispy Natural in Cracker Industry?

How to Neutralize Competition from others?

National Rollout ?Indications :• Positive Purchase Intent of 81%.• Over 2:1 ratio in taste preference in crackers with filling, this segment

is expected to grow from 10% to 14% in next few years.

Contradictions:• Flat Crackers taste preference fell below 2:1 ratio compared to

competitors, this segment is largest part of market.• Uncertain about Frito-lays entrance into the Market.

• Introducing Krispy Naturals into the national market seems like a good move to make immediate and apparent success.

• Challenges to face in the long-term that will ensure failure• May not be cost-effective to hire more sales representatives to promote the

product in the Southeastern cities. • Pull marketing strategy may not work as well as expected. • If they were to focus on one segment, be it the crackers with filling or the “all

other crackers” segment, there is a possibility of varying consumer preferences or the Competitor’s products may decrease its success.• Consumers will not be willing to pay the industry price for less quantity in a

package than other competitors.

Different Roll-out Strategies should be applied for different regions.

Presently, Marketing Strategy in Columbus is working very well, so it can be continuedBut, for regions like southeast, Company can try different strategies like Push Strategy.

What Marketing Strategy ?

Positioning in the Market ?Feature – Based Positioning :

• Highlight the use of natural ingredients.• Strong R&D will assure good competition to other brands.• Continuously improve quality and taste.

• Implement by using marketing techniques like in-store samples, displays and through grocery stores.

Neutralizing Competition ?• Continue with Innovation and introduce

different kinds of products.

• Crackers with less sweet or salt for Diabetic people.

• Collaboration with Cinema halls, Parks etc.

DisclaimerCreated by Vishnuvardhan T P, BITS Pilani K K Birla Goa Campus

For the partial fulfilment of marketing internship under Prof. Sameer Mathur, IIM Lucknow