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Launching krispy natural
- 2. Introduction • Pemberton was the snack food division of Candler Enterprises. • Had a revenue off 5 billion USD with 7.7% PET(profit after tax). • Compounded annual growth rate (CAGR)-14% over the past five years. • Harnessed its own Direct Store Delivery (DSD) distribution system to deliver products directly. • It was a market leader in the US cookie and bakery snacks segment.
- 5. US Cracker Industry Overview • 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. • Largest Competitors are: Kraft Food Inc, Kellogs Co. and Pepperidge Farm.
- 6. US Cracker Industry Overview
- 7. Strategic Priorities Building strong brand values in salty snack categories. Applying leading marketing and DSD systems to increase the revenues and overall profits. Building a good brand imaging in the market.
- 9. Product • Multiple serving package • Focused on improved tasting • Health conscious
- 10. Marketing • Emphasized on heavy advertising • Promotion to the end customer and appealing trade • Aggressive plan for pull spending and trade promotions
- 11. Distribution • Effective DSD distribution system • Proper management of shelf inventory and in-store merchandising • Optimizing the system to account for longer shell life of crackers
- 12. Price • Sought a premium strategy • Priced at 155% above the category average cost per ounce • Same retail price as that of competitors but lesser quantity
- 13. Krispy Natural Brand Income Statement
- 18. Market Plan-COLUMBUS • 5 special “Krispy Force”’ representatives were hired in Columbus • They worker with Pemberton regional and district sales managers and focused solely on selling the new Krispy Natural product line
- 19. Market Plan-SOUTHEAST • In Southeastern cities, the company was able to test its ability to reposition the product to a more premium offering • Here regular Pemberton DSD route delivery representatives worked with regional and district sales managers, handling sales and service of the new Krispy Natural Line.
- 21. Expectation • Columbus would achieve a market share of 9% • Southeast’s market share will rise from 9% to 15% • The company hoped for 15% shelf space in both the markets Reality • Columbus doubled the share target, achieving 18% market share with 30% category expansion.. • Southeast had a slight increase to just 10% with little category expansion.
- 22. WHY? • Columbus was able to achieve an 18% market share by stealing share from other competitors • However in Southeast the trade was generally receptive to the new Krispy Natural Line due to the relatively low introductory trade case discount of 15%
- 23. Conclusions • Grabbed 18% market share in Columbus as a new entrant in salty snacks business. • Kraft, Kellogg and Pepperidge in total lost 10% of market share, despite higher demands. • Possible competitive responses to new brand “Frito lay” • Launching more new product mix as per customer taste and keeping health as a priority concern.
- 24. Recommendations • Extensive marketing in Southeast cities • Contemporize brand engagement • Tailor the Krispy Natural to different need states
- 25. SUMMARY • Introduction • Marketing analysis • Strategic priorities • Marketing strategy • Results • Expectation vs Reality • Conclusions • Results
- 26. Disclaimer Created by M ALEKHYA DEVI, CBIT Hyderabad, during a marketing internship under Prof. Sameer Mathur, IIM Lucknow.