Candler Enterprises is launching Krispy Natural crackers to enter the salty snack market. They will use their DSD distribution system and focus on product innovation, advertising spending, trade promotions, and premium pricing. Test launches in Columbus and Southeast regions showed the product achieved double the target share in Columbus by taking from competitors, but underperformed in Southeast with only a 15% discount. Competitors may respond aggressively given their large market share.

1. Launching Krispy Natural:
Cracking the Product Management Code

2. Pemberton Introduction

3. Introduction
• Snack Food Division of Candler Enterprises.
• Market Leader in the US in the sweet snack market.
• Revenue of $5 Billion with a 7% PAT (Profit After Tax)
• Annual Compounded Growth Rate (CAGR) of 14% for revenue over the past
five years.
• Owns and uses Direct Store Delivery (DSD) system to increase revenue and
profits.
Pemberton’s income Statement (% of Revenue)

4. Key Players
● Patricia Williams
○ President
● Ashley Marney
○ Executive VP of Sales & Marketing
● Brandon Fredrick
○ Marketing Director

5. Challenges

6. How to Launch and
Sustain Growth of Krispy
Natural
in the Salty Snack Market?

7. Understanding the US Cracker Industry

8. Overview
• Cracker Sales reached an estimated sales of $6.9 Billion in 2011.
• The Compounded Annual Growth Rate (CAGR) from the year 2008 to 2010
was circa 2.2% for the overall cracker industry.
Market Share

9. “All Other Crackers” Overview
• Experienced a 2.1% CAGR from the period 2008-2010.
• Retail sales of 5.1 Billion USD in 2011 in USA
• Expected to grow by 6-7% per year
Manufacturer Sales of “All Other” Crackers

10. “Crackers With Fillings” Overview
• Although experienced flat sales during 2005-2009, but later became the
strongest segment
• Retail sales of 660 Million USD in 2011 in USA
• Had a growth rate of 14% in 2010
Manufacturer Sales of “Crackers with Fillings”

12. Competitor Analysis
• Main Competitors:
• Kraft
• Kellog
• Pepperidge Farm (Goldfish)
• These Competitors accounted for over 79% of the Cracker Market in 2010
Manufacturer Sales % in 2010

13. Advertising Spending by Competitors
An Overall amount of $219.9 Million were spent by the
competitors from 2008-2009 in Advertising

14. Understanding the Market

16. Product Strategy
• Increased size for multiple servings
• Improvisation in the taste
• Inclination towards making the product healthy
• New Flavours
Results of Introducing new Flavors

17. Marketing Strategy
• Heavy Advertising Spending
• Promotion to the end consumer as well as appealing to the trade.
• Aggressive plans for pull spending and trade promotions.
Advertising and Merchandising Budget

18. Distribution Strategy
• Effective DSD (Direct-Store Delivery) distribution system.
• Optimizing the system to account for the longer shelf life of crackers
DSD Distribution System

19. Pricing Strategy
• Sought a premium pricing strategy
• Pricing would be 155% above the category average cost per ounce.
• Retail Price would be similar to the competitor products but would be less in
quantity.

20. Promotion Strategy

23. Conclusion
• They were able to Achieve double the target share in Columbus by taking up
share from the competitors
• The results in Southeast were less than targeted share due to low discount of
15%

24. Competitive Response

25. Disclaimer
Created by Mehul Sharma, Chitkara University during a Marketing Internship by
Prof. Sameer Mathur, IIM Lucknow.