Launching Krispy Natural:Cracking the product management code

LAUNCHING KRISPYNATURAL : CRACKINGTHE PRODUCTMANAGEMENT CODE

CASE STUDY

introduction

PEMBERTON WAS THE SNACK FOODDIVISION OF CANDLER ENTERPRISES, AMULTINATIONAL BEVERAGE AND SNACKGOODS MANUFACTURER

main players

CANDLER ENTERPRISESSnack food division

Beverage division

Quick service restaurant

Pet care division

PEMBERTON PRODUCTSFood bars, cookies and sweet baked foods

Softies cookies

Homestyle muffins

Doughnuts

PEMBERTON FOOTPRINTSDirect Store Delivery (DSD System)

Representatives performed critical merchandising functions

U.S. CRACKER INDUSTRYCAGR : 2.2% from 2008-2010

Reached 6.9 billion in 2011

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

KRISPY SALES PERFORMANCE(2009)

COMPETITORS

MARKET AND CONSUMERSMINTEL STUDY

74% respondents consumed crackers on regular basis.

34% ate them as part of regular diet.

53% considered overall healthfulness.

KRISPY PRODUCT LINE

KRISPY SINGLE-SERVE

&

KRISPY RELAUNCH

PRODUCT STRATEGYMultiple Servings

New Flavours

Healthfulness

MARKETING STRATEGYPULL STRATEGY helped in quick establishment of the brand.

Aggressive plans for PULL spending and trade promotions with pervasive price discounts.

DISTRIBUTION STRATEGY

DSD System was not suitable for Cracker business.

Optimization for longer shelf life of crackers.

Krispy Natural sought a premium pricing strategy.

Prices were fixed by considering the product’ssuperiority.

Minimum sales of $500 million.

National distribution of crackers.

Steady state pre-tax profit of atleast 13%.

SWOT ANALYSIS

STRENGTH

DSD

R&D LABS

PRODUCT MIX

WEAKNESS

CAPACITY CONSTRAINTS

OPPORTUNITIES

CONSUMER DISSATISFACTION WITH CURRENT

BRANDS

THREAT

COMPETITORS AND THE SOUTHEAST

CONSUMERS’ NEGATIVE RESPONSE

LEVERAGE

PROBLEMS

SALES CHANNEL AND RESPONSE

1• The PULL marketing was successful

2• But, a less sustainability on a National Level

3

• The flavour was no better than the current brandings

RAMP-UP TONATIONAL ROLLOUT?

INDICATIONS

Positive purchase intent of 81%

Crackers with filling preferred on a ratio of 2 : 1

CONTRADICTIONS

Entry of Frito-lays into the market

Varying consumer preferences and the competitor’s products may decrease the sales

SUMMARY

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•INTRODUCTION•COMPANY BACKGROUND

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•PRODUCTS & COMPETITORS•MARKETING STRATEGY

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•MARKET ANALYSIS•NATIONAL ROLLOUT

DISCLAIMERCreated by Divya Priya K, PSG College of Technology,Coimbatore, during a marketing internship byProf. Sameer Mathur, IIM Lucknow.