RSM 332 Marketing Research

Fall 2011 Thursday 1:00 pm - 3:00 pm WO 20 Professor: Mengze Shi

Project: TruEarth Healthy foods case
Chernenko Kirill 998581510

Year 1 Trial Purchase intent (Pizza Survey) Definitely would buy % of "definites" who actually buy "Definite" purchases Probably would buy % of "Probabels" who actually buy "Probabels" purchase Trial Rate Target households Trial households(MM) Repeat purchase occasions Repeat purchases Total purchases Marketing Plan Adjustment 18% 80% 14. Therefore. offering healthy and gourmet whole grain products consisting of only highest-quality ingredients. TruEarth is planning to extend the product line introducing fresher than frozen and healthier than delivered pizza.2% 40% (from table B) 27.49(excellent product) = 1 (1+1.38(retail)=26MM . the demand for healthy pizza will be growing in US together with popularity of diets and products targeting authenticity and quality.9+14.4= Marketing27.9% Customers of Cucina Fresca Customer awareness Non-customers of Cucina Fresca Non-customer awareness Projected Customer Awareness ACV 11% 50% 89% 12% 11x0.how to launch it (competition and recommendations) People need healthy and tasty pizza.how favorable is the market (dynamics and volume) .8 %=1.2%x40%= 1. To predict the demand for a new TruEarth's product we have to make simple calculations. Table A. Whole wheat pizza Purchase Volume Estimate.1)x12.12= 16.8MM (from table B) 58. consumers have too many choices by powerful giants like Kraft and Nestle.3% Adjusted Trial Rate 58. The question is launching this Italian-American product into market or not.4% 43% 30% 12. After the huge success in making fresh and tasty pasta in 2006.8x1.8%(rounded) 12. In the first place. which will be easy to prepare and made of only high-quality ingredients (no dried spices and sweeteners).TruEarth it is the" strong player" company.how favorable is the product in market (demand and return) .3%x16.0 (from Table B) 2x0.1(MM) 2. Unfortunately. we have to focus on 3 things .5+89x0.

But still there is 4MM profit.88+0. Average 37%. Therefore profit will be $26MM -12MM = $14MM. Let's show the link between 3 types of pizza's volume (Mediocre 21%.9%x40%= 1.88(MM) 2x0. Cucina Fresca Pasta Customers 5%.1 MM This is the worst case scenario when the product is below average in quality and number of customers who is aware of TruEarth is only 5%.3%x13.38(r etail)= 16. 10% and 15%) 1st case. Cucina Fresca Pasta Customers 5%.8x1.9% 27.12= 13.5%(rounded) 58.9% 27.5%(rounded) 58.8x1.88(MM) . assuming that customers will find the product excellent.5 %=0. 2nd case.21(mediocre product) = 0.42)x12. Conclusion: launch the product as soon as possible before competitors! Unfortunately.88+0.5+95x0.9%x40%= 1.5+95x0.38(r etail)= 20 MM 3rd case.So.12= 13. Excellent 49%) and 3 types of penetration (5%. As Eckstein estimated that 12million is needed to meet company's return requirements. this is only the prediction.42 Total purchases (0.9%x40%= 1.5 %=0.8x1.5+95x0.9% 27. there is $26 million of revenue.88(MM) 2x0.5%(rounded) 58.5 %=0. Cucina Fresca Pasta Customers 5%. What if the penetration will not be exactly 11%? TruErth's evaluation is the range between 5% and 15%.37(average product) = 0.74 Total purchases (0.74)x12.3%x13. Excellent 49% Projected Customer Awareness MarketingAdjusted Trial Rate Trial households(MM) 5x0.12= 13. Mediocre 21% Projected Customer Awareness MarketingAdjusted Trial Rate Trial households(MM) Repeat purchases 5x0. Average 37% Projected Customer Awareness MarketingAdjusted Trial Rate Trial households(MM) Repeat purchases 5x0.3%x13.

38(r etail)= 23 MM 4th case.38(reta il)= 21.8%x40%= 1. Cucina Fresca Pasta Customers 10%.49(excellent product) = 0.7%(rounded) 58.3%x15.8x1.8x1.Repeat purchases Total purchases 2x0. Mediocre 21% Projected Customer Awareness MarketingAdjusted Trial Rate Trial households(MM) Repeat purchases Total purchases 10x0. Excellent 49% Projected Customer Awareness MarketingAdjusted Trial Rate Trial households(MM) 10x0.98 (0.8%x40%= 1.42 (1+0.5 MM 5th case Cucina Fresca Pasta Customers 10%.42)x12.12= 15.7%(rounded) 58.7 %=1(MM) 2x0.98)x12.8% 27.12= 15.3%x15.7%(rounded) 58.37(average product) = 0.5 MM 6th case Cucina Fresca Pasta Customers 10%.38(reta il)= 17.5+90x0.74)x12.12= 15.5+90x0.8x1.7 %=1(MM) 2x0.8%x40%= 1.8% 27.7 %=1(MM) . Average 37% Projected Customer Awareness MarketingAdjusted Trial Rate Trial households(MM) Repeat purchases Total purchases 10x0.88+0.5+90x0.74 (1+0.3%x15.8% 27.21(mediocre product) = 0.

Excellent 49% Projected Customer Awareness MarketingAdjusted Trial Rate 15x0.38(reta il)= 24.13+0.7%x40%= 1.13+0.12= 17.38(r etail)= 19.7%x40%= 1.93 %=1. Mediocre 21% Projected Customer Awareness MarketingAdjusted Trial Rate Trial households(MM) Repeat purchases Total purchases 15x0.42)x12.37(average product) = 0.74 (1.74)x12.38(r etail)= 23.7% 27.7% 27.8x1.42 (1.98)x12.93%(rounded) 58.3%x17.2 MM 8th case Cucina Fresca Pasta Customers 15%.5+85x0.93%(rounded) 58.93%(rounded) .93 %=1.98 (1+0. Average 37% Projected Customer Awareness MarketingAdjusted Trial Rate Trial households(MM) Repeat purchases Total purchases 15x0.3%x17.7%x40%= 1.5+85x0.12= 17.12= 17.5 MM 7th case. Cucina Fresca Pasta Customers 15%.7% 27.3%x17.5+85x0.13(MM) 2x0.49(excellent product) = 0.13(MM) 2x0.21(mediocre product) = 0.Repeat purchases Total purchases 2x0.8x1.15 MM 9th case Cucina Fresca Pasta Customers 15%.

which means that the world must see healthy and tasty TruEarth pizza.Trial households(MM) Repeat purchases 58. interviewees generally consider pizza as easy-to-prepare and conveniently accessed product for the whole family. If TruEarth is first in market (3-6 months before Rigazzi).93 %=1. if it were launched.13(MM) 2x0. to satisfy the needs of customers and increase the chances of success TruEarth has to concentrate on freshness. which gives it the competitive advantage. refrigerated and frozen pizzas TruEarth team should maintain mind-catching price*(see Table B) as "consumers have so many options we need to compete against" (Rose Carlton.98)x12. the director of business development). in any case total revenue exceeds total cost. In addition. collecting the essential experience and getting into scale production with lowering prices in the future. TruEarth pizza scored 9. whole wheat crust and high-quality ingredients" TruEarth will be unbeatable (Eckstein.13+0.1 out of 10 (even higher than takeout) for the healthy ingredients.98 Total purchases (1. No doubt that these product categories are slightly different from each other. before taking for credit the suggestions above TruEarth have to launch product first (before Rigazzi!). convenience and easy-to-prepare concept. Exhibit 6 is showing that 17% of interviewed principal grocery shoppers would switch to TruEarth. those customers who prefer to make pizza at home or order from restaurant are less likely to change their purchase behavior if TruEarth pizza is available on shelves.21(excellent product) = 0. to take and keep the competitive advantage over delivered.12 MM This case is the best but it requires best product and best prices. takeout pizza earned the highest consumers' evaluation in freshness and variety choices. Nevertheless. refrigerated and Truearth Pizza. the company focused on food made of superior ingredients offering greater quality and authenticity. Unfortunately. it will earn the competitive advantage. Past experience of consumers shows us that takeout pizza is most convenient and accessible. in spite of this. Moreover. Furthermore. All things considered.38(r etail)= 26. However. brand manager) . In terms of quality attributes. To determine the consumer's point of view on whole grain pizza Truearth team conducted 300 mall intercept interviews comparing takeout. This fact can be influenced buy the brand image of TruEarth. Positioning product is also very important part. consumers rated the highest both takeout and TruEarth pizza because of high-quality ingredients. TruEarth has to say "No" to remorse and "Yes" to providing pleasure and satisfaction.8x1. Introducing "guilt-free gourmet pizza with healthy.

Make more precise positioning Higher Increase the quality.*Table B. Recommendations in terms of quality and prices by competitors Quality/Prices by competitors' pizza Lower Quality Same Price Same Reduce the price Reduce the price Lower Do not change price Do not change quality Higher Do not change price. Make analysis of the prospects within the market Make a product of higher quality in the competitors' segment . Increase the variety of ingredients.

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