Launching Krispy Natural: Cracking the Product Management Code

PROBLEM OF THIS CASE

ABOUT PEMBERTON

1) Pemberton was the snack food division of Candler Enterprises, a multinational beverage and snack goods manufacturer

2) The majority of Pemberton’s sales were from packaged food bars, cookies, and other sweet baked goods

3) Pemberton contributing approximately $5 billion in sales

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

DIRECTION FOR PRODUCT DEVELOPMENT

Building a collection of attractive and durable brands

Leveraging leading marketing, sales and DSD systems to increase revenue and profits

Building or acquiring capabilities in salty snack categories

WHAT IS DSD?

Direct store delivery (DSD) is the term used to describe a method of

delivering product from a supplier/distributor directly to a retail store, thereby bypassing a retailer's distribution center. DSD products are typically, but not always, fast-turning,

high velocity, and high consumer demand merchandise.

REASON FOR ACQUIRING KRISPY NATURAL-- US CRACKER INDUSTRY

•Growth of 6.2% in General(All other) in 2010

•Annual growth forecasted between 10-14% for crackers with filling estimated 6.9 billion in 2011

•CAGR of 2.2% from 2008 – 10

A Mintel study of salty snacks in the United States reported that 74% of respondents consumed crackers on a regular basis and 34% ate them as part of regular weekly diet

2009 Krispy Single-Serve S ales 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%

KRISPY 2009 BAD PERFORMANCE

AFTER IT’S FAILIURE IN 2009 MARKETING SURVEYS AND PLANNING WERE DONE IN ORDER TO RELAUNCH THE PRODUCT

RESULT OF MARKETING CAMPAIGN

KRISPY NATURAL PRODUCT STRATEGY

•Increasing Package sizes to Multiple serving

Improving taste by introducing new flavors

•Healthfulness – An important Factor

100% whole wheat

Natural Ingredients

MARKETING STRATEGY

•PULL STRATEGY- 1) Focus on Extensive advertising & merchandising2) Aggressive plans for Trade promotions

•PUSH STRATEGY1) Competitors favored to promote products

COMPETITOR ANALYSIS

SALES ANALYSIS AND POTENTIAL

SWOT ANALYSIS

COMPETITIVE RESPONSE TO NEW BRAND“FRITTO LAY”

Optimization of DSD system for Krispy natural product for cost reductions to a more wider level and expansion

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

CONCLUSION

The large chain headquarter buyers were impressed with the consumer research results and inventory turn estimates.

They also loved all the promotional activity and consumer advertising.

However one industry analyst thought that the positive test market results were driven by significant price discounts, couponing, and sampling, which were not sustainable.

Also, few felt the taste preference claims of Krispy Natural were inflated and the flavor was no better than current brand offerings

THANK YOU-ANIMESH MISHRA IITK IIM MARKETING INTERN

DISCLAIMERThese slides have been prepared by Animesh Mishra,IIT Kanpur under the guidance of Professor Sameer Mathur during an internship of marketing management