Marketing And CRM

TruEarth Healthy Foods

To launch or not to
launch pizza?

 Young (founded in 1993) but organized

company
Producer of healthy gourmet pastas and sauces
from superior ingredients
Product line:
standard pastas
whole grain pastas
tomato-based sauces
refrigerated fresh pastas
pastas with blended ingredients

Home Meal Replacement

increase in dual-income households
time poverty
desire for variety and freshness

Semi-prepared products
Consumers still involved in preparing dinner,
but it is easier

Growth of refrigerated fresh pasta

Awareness of the importance of whole
grains in diet

 Assess the current situation on the market

Analyze the position of TruEarth
Assess whether TruEarth should launch the pizza
concept and what the volume would it be?

Competitive environment
Segments
delivered/takeout(47%)
restaurant pizza (23%)
frozen pizza (19%)
Refrigerated pizza (9%)
homemade pizza (2%)

Competitors
Giants: Nestle and Kraft
Medium-sized: Papa Johns and Pizza Hut
TruEarth-like: the only such competitor is Rigazzi
Brands

Threat!
Rigazzi is about to launch a similar whole grain pizza

Cucina Fresca Experience

Ideas
Quick and tasty home meal replacement
broad range of choices

Preparation
focus groups
market research
advertising and promotion ($10m)
large investment in production facilities

Promising trial results

Performance
$23 million sales in 2007
slowdown in 2008

Risks
Rigazza is not far from launching its whole wheat
pizza

Refrigerated pizza brings up with an association

with frozen pizza

The offered price can be too high

Advantages of our pizza over other refrigerated
pizzas can be overestimated

Whole Grain Pizza Purchase

Volume Estimate, Year 1
Trial Purchase Intent
Definitely Would Buy
% of Definites who actually
buy
Definite Purchases

Probably Would Buy

% of Probables who actually
buy
Pobable Purchases
Trial Rate
Marketing Plan
Adjustment
Projected Consumer
Awareness
ACV

18%
80%
14.40%

43%
30%
12.90%

Repeat Purchase Inputs

Trial HouseHolds

3.21

Repeat Purchase Ocassions

Repeat Transaction Amounts

2
1.25

Repeat Rate, by Product

Scenario
Mediocre Product
Mediocre Product
Excellent Product

21%
37%
49%

27.30%
Repeat Volume, by
Product Scenario
50%
40%
5.46%

Target House Holds

58.8

Trial HouseHolds

3.21

Mediocre Product
Average Product
Excellent Product

1.69
2.97
3.93

Total Forecasted Units of Whole

Grain Pizza

Mediocre
Product
Pizza
Trial Volume
Repeat Purchase Volume
Total Estimated Volume
(MM units)

Average
Product

Excellent Product

3.21
1.69

3.21
2.97

3.21
3.93

4.9

6.18

7.14

Case of the Worst Scenario

Define those who are favorable to product as

participants of the trial period.

Repeat volume = [Trial Hh] * [Repeat Purchase

Occasions] *[Repeat Transaction Amounts] *
[Repeat Rate] = 3.21MM * 2.0 * 1.25 * 0.28=
2.24MM

Hence, Only people who are favorable to

product influence the repeat rate of it.

Whole Volume during financial year = Repeat

volume + Trial Volume = 2.24+ 3.21 =
5.46MM

With given prices 28% of population which is

favorable to product suggested that pizza
needs no improvement (Exhibit 10).

Retail Sale Volume = [Whole Volume] * [price per

kit] = 5.46 MM * $12.38 = $67.56 MM

Gross revenue = Retail Sale Volume * [1- Retailers

Part] = $67.56 MM * 0.65 = $43.9 M

Gross profit = Gross revenue Investments

Hence even in the worst scenario at least

28% of trial households would participate in
repeat period given price unchanged.

The price of the kit (pizza + toppings)

remains unchanged 12.38$

=$43.9 M- 22 M (Assumption) = $21.9M

Conclusions
Even in the worst scenario the firm would meet its
requirements with $21.91 M of gross profit.

The firm definitely should enter this new market.