Launching Krispy Natural

Cracking The Product Management Code

Candler Enterprises

Pemberton

Pet Care Division

Quick Service

Restaurant

Multinational Beverages

Background Information

Pemberton

Packaged food bars, cookies and other sweet-baked goods

Softies Cookies

Homestyle muffins and doughnuts

$5 billion in sales

Owns and utilizes a direct store delivery

(DSD) system

Strategic Priorities for Product Development

Building a collection of attractive, durable brands

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

Building or acquiring capabilities in salty snack categories

Retail cracker sales an

estimated $6.9 billion

CAGR of 2.2% from 2008-2010

Annual growth

forecasted between 10-

14%

Increase of 6.2% in all brands in 2010

US Cracker Industry

Top 3 US Cracker

ManufacturersPepperidge

Farm

Kellogg Co.

Kraft Food Inc.

Cracker Segments General

Saltines

Crackers with

filling

Graham

Crackers

Others

2009 Krispy Sales Performance

Plan 2009 Actual % to Plan

Krispy Retail $97.5 $50.8 52.1%

Krispy Vend $23.4 $18 76.9%

Total Krispy Single-Serve

$120.9 $68.8 56.9%

Mintel Study

Standalone flavours were the number 1 criterion to purchase crackers.

53% considered

overall healthfulness

34% ate them as a part of a regular

weekly diet

34% ate them as a part of a

weekly diet

74% consumed

crackers on a regular

basis

Responding To Market Trends

Kraft Nabisco Wheat Thin Flatbread

Pepperidge Farm

Goldfish

KelloggKeebler

Townhouse

Flatbread

Healthier,

premium-priced

products for

consumers.

Flavour-focused

product lines

Krispy Single Serve

Krispy Natural

Krispy Natural

vs Krispy Single Serve

Krispy Natural Product Strategy

Increased package size to multiple servings

Improving taste and introducing new flavours

Targeting health conscious customers

Krispy Natural Marketing Strategy

Quickly establish Krispy Natural brand

Aggressive plans for pull spending and trade promotions

Heavy advertising and promotion

Employs a Pull strategy

Krispy Natural Distribution

DSD

•Longer shelf life of crackers

•Low storage capacity of trucks

Krispy Natural Pricing Strategy

Premium pricing strategy

Retail price on par with competition

Less quantity in Krispy Natural Package

Sales Objectives

•Nationwide distribution of crackers

•Minimum sales of $500 million

SStrengths

• World renowned

product development

labs.

• Extensive product mix.

• Owns and controls

DSD.

• Innovates.

WWeaknesses

• Longer shelf life of

crackers.

• Capacity constraints of

DSD for Krispy Natural

products due to truck

limitations.

TThreats

• Frito-lays is entering the

market.

• Growth in the Southeast

is slow.

• Losing market share to

competitors.

OOpportunities

Market research shows

consumer dissatisfaction with

the flavor and taste

experience of the current

brands.

Interpreting Market Results

Kraft, Kellogg and Pepperidge lost a total of 11% share despite the market demand

18% share in Columbus market as a new entrant

Competing with

Frito-Lay Encourage health

awareness as main concern

Optimize DSD

system with cost reduction

Launch new

products

National Rollout

Recommended due to positive response in market test results

Summary

• Background Information

• Pemberton

• US Cracker Industry

• Krispy Sales Performance

• Responding To Market Trends

• Krispy Natural Marketing Strategy

• SWOT Analysis

• Interpreting Market Results

• Competing with Frito-Lay

• National Rollout

DISCLAIMERCreated by Swaha Kar, MIT Manipal, during a Marketing Internship under the guidance of Professor Sameer Mathur,

IIM Lucknow.