MARKETING

STRATEGY CASE STUDY

April 23, 2012

Patrick Sollars
Lydia Ellison
Patti McCormick
Alex Calkins

Page 1

PROBLEM STATEMENT
TruEarth has developed a frozen pizza product, but the brand manager and other
executives are struggling with the decision to launch the product or not. Poor forecasting in
the past has lead TruEarth to misstep with previous product launches; judging the correct
volume will be critical. The team is aware that their rival, Rigazzi, has also tested a pizza
concept and is not far from a product launch.

EXECUTIVE SUMMARY
The ready-made or semi-made meals market is mature, now reaching the late
majority segment of the product life cycle. A segment of the ready made foods market is
shifting away from mass produced, highly processed foods toward greater quality and
authenticity. TruEarth has managed to differentiate itself and its products by targeting this
niche, a segment of ready-made foods that is still experiencing sustainable growth.
TruEarth is on the offensive with their business strategies and it shows with their
innovativeness in creating ready-made fresh pasta dishes and pizza. TruEarth is a whole
grain leader in the ready-made industry.
Consumers generally consider pizza as a family treat, which they can conveniently
access and easily prepare. The new pizza concept product has high market potential among
our top two consumer segments, family pizza pleasers and pizza lovers. Combined they
create nearly half (47%) of the revenue targeted in this market. family pizza pleasers
will be the main target segment for the product launch. TruEarth Pizza differentiates itself
from others with kit style presentation. This is a unique adaptation on a product in which
the market is saturated.
We believe TruEarth is in a good position to go ahead with the product launch,
conditionally. Their top rival, Rigazzi is likely to release a close substitute product soon.
For any chance of success TruEarth needs to have a product in this market as soon as
possible. Move forward with product launches in high profitability test-markets,
Chicagoland, Milwaukee, Twin Cities, etc.

SITUATION ANALYSIS
COMPANY
TruEarth is a manufacturer of gourmet pastas, sauces, and meals. They produce
their products from high quality ingredients like durum wheat from North Dakota. The
company sells and distributes their products to retailers. Several mainstream supermarket
chains (Meijer, Kroger, Trader Joes) have stocked as well as a number of gourmet grocers
in the Midwestern United States have stocked TruEarth products.
TruEarths products appeal to a narrow niche market. They are positioned as a
healthy gourmet choice relative to other ready-made meal choices. Their products reflect
this positioning with low or no preservatives, whole-wheat pasta, and a premium price
Page 2

point. This niche differentiation strategy represents TruEarths primary sustainable

competitive advantage.
In order to compete in the food
manufacturing industry companies must
establish an efficient distribution
network to keep their product on the
shelves at all times. Demand forecasting
is critical, and it is something that
TruEarth has struggled with in the past.
They now work with Nielson BASES to
help estimate potential sales.

TRUEARTH MISSION STATEMENT

Everyone has the right to healthy food. We love being able to give people all-natural,
minimally processed foods that are free of highly refined sugars, artificial additives, and
preservatives. Because when we eat well, we feel well.

SWOT ANALYSIS
STRENGTHS

WEAKNESSES

Successful launch of Cucina Fresca allowed

company to establish market share and
distribution network
Strong position within niche market

Market Potential forecasting

Small relative market share within ready
made meals

OPPORTUNITIES

THREATS

New product offers a different approach to

ready-made pizza

Big player competition from Nestle and Kraft

MI based Riggazi, is equally matched within
niche
Frozen pizza market is saturated and market
growth is slow

Page 3

INDUSTRY ANALYSIS
TruEarth sources their high quality durum wheat from North Dakota. The company
sells and distributes their products to retailers. Several mainstream supermarket chains
(Meijer, Kroger, Trader Joes) have stocked as well as a number of gourmet grocers in the
Midwestern United States have stocked TruEarth products.
TruEarth developed strength in their distribution network by being a first mover in
ready-made pasta market. It also resulted in a stronger market share, which is still
growing.
Demand for healthy gourmet products is rising. Shifting consumer focus away from
mass-produced, highly processed foods. This can be credited to customer awareness of the
health effects of over processed foods as well as key influencers, like Dr. Atkins. In general
Americans are trending towards fresher, healthier food choices provided that it is
accessible and affordable.
The market for healthy foods has continued to grow over the past decade and is
projected to keep on doing so in the future. The needs and wants of consumers to look good
and to live longer by eating healthier is at a peak today in the United States. The industry of
healthy foods is going to continue to grow and become an even bigger competitive market
as it is right now. Competitive threats will become more increasing as the industry grows
and TruEarth will have to plan ahead to stay above the new and up and coming companies
in the same industry.

COMPETITOR ANALYSIS
TruEarth faces strong competition from huge players Kraft and Nestle. They have
the market share and the power to compete with a broad cost leader strategy. Michigan
based, Rigazzi is a competitor of similar size and market share to TruEarth. They target the
exact same market with quality gourmet pasta meals.
Rigazzi, a Michigan based company introduced their own line of whole grain fresh
pasta in late 2007. Rigazzi marketed itself as using only traditional pasta-making
techniques and vintage Italian equipment. Rigazzi is the only competitor on a similar scale,
meaning they sell all the same products as TruEarth. Some of the supermarkets are fine by
carrying both of the products; however, some just prefer one or the other. If they do allow
both, we are competing with very little shelf space.
Buitoni refrigerated pastas and sauces reflect the growing emphasis on the
nutritional value of whole grains, with some pastas made from 100% whole durum wheat
flour, which contain 4-8g of fiber per serving. Buitoni makes sure every meal is sure to
deliver homemade taste your family will love. The products Buitoni are made with only the

Page 4

finest ingredients, then refrigerated and dated for freshness. Buitoni products are available
throughout Europe and the United States.
Kraft Pizza Company is the leader in the U.S. frozen pizza category. DiGiorno is
Kraft's largest pizza brand, but also includes California Pizza Kitchen, Tombstone, and
Jacks. Kraft Foods just introduced DiGiorno Flatbread Melts, which are premium, single-
serve meals that cook up in the microwave in less than four minutes, and DiGiorno Crispy
Flatbread pizza, featuring an extra-thin crispy crust with Italian-inspired toppings.

PORTERS FIVE FORCES

1. Bargaining power of suppliers
Strength: 4
a. Factor 1: No substitute input, TruEarth is very selective of its ingredients, have to have
specific high quality ingredients therefore supplier power is higher in this scenario than it
might normally be.
b. Factor 2: Importance of quality suppliers goes hand in hand with the first factor. The
raw material in this industry is the most important part and it demands a premium price.

2. Bargaining power of buyers
Strength: 4
a. Factor 1: Huge buyer independence in both US and global ready-made meal, however
stores will need to stock brands preferred most by consumers.
b. Factor 2: Retailers are unlikely to be swayed by brand loyalty, therefore this market
experiences high price sensitivity and tenancy to switch.

3. Threat of substitute products or services
Strength: 3
a. Factor 1: Low cost switching for buyers, pizza is not a significant purchase in any respect.
If users do not like the product or are swayed by a lower cost option they are unlikely to
return.
b. Factor 2: Our product fills a unique niche that is currently not duplicated; the challenge is
getting the right user to try the product for the first time.

4. Threat of new entrants
Strength: 2
a. Factor 1: Large capital investment in manufacturing and developing a distribution
network, difficulty accessing distribution channels creates huge barriers for new entrants.

Page 5

b. Factor 2: Ready meals market is mature and organic food is experiencing slower but
steady growth. Sluggish increases in the market cap is unattractive to new entrants.

5. Rivalry among existing competitors
Strength: 4
a. Factor 1: The top three companies control 43.3% of the market, retailers can switch
easily and rivalry is intensified by similarity in products.
b. Factor 2: Large capital investments in manufacturing and automation create higher exit
barriers in this industry, which tend to intensify competition.

CONTEXT
ECONOMIC
The gourmet food market is somewhat economically cyclical. Loyal consumers are
most likely not going to steer away from the product, however a robust economy could
expand market potential among those aiming for a healthier diet. Our target has a
relatively high household income because it is a dual income household.

SOCIO-CULTURAL
Analysts describe a trend in American preference towards fresh and natural foods
vs. processed and prepackaged. For larger companies it is harder to shift their focus from
low cost/mass produced to small supplier, gourmet food. In this respect TruEarth has the
advantage, because they were already positioned based on this consumer preference.
Active fitness and nutrition lifestyles are driving TruEarths success.

NATURAL ENVIRONMENT
Corporate sustainability, green, and organic products are
becoming, more and more, a factor in consumer purchasing
behavior. Among our target, Julias across America are just the
type of market that is concerned with this feature because they are
affluent and environmentally conscious.

Page 6

TARGET CONSUMER

Our target consumer is the 35 year old, busy-working mother, Julia. She is looking
for a quick and easy meal without giving up the benefits of a whole grain, organic choice.
She wants something that is not highly processed because she cares about the health of her
family and what her husband and children are putting
into their bodies.
TruEarth and its healthy pizza kits are targeting
middle age family oriented females. This is TruEarths
primary target market because middle age women who
are busy are usually looking for a quick and nutritious
way to feed their family and TruEarths pizza kits are just
the right way accomplish this feat.
In the Values, attitudes and lifestyles analysis we
feel our typical demographic falls under the Achiever
category. Achievers are people who are motivated by the
desire for achievement and are career oriented and have
a deep commitment to their career and family. We feel
this is an appropriate measure of who TruEarth is
primarily targeting because a woman who is excelling in a
Page 7

career oriented lifestyle and trying to raise a family is undoubtedly busy, and a nutritious
and good tasting pizza that can feed the whole family is a very appropriate meal plan for
the family. The definition of an achiever is with many wants and needs, achievers are
active in the consumer marketplace. Image is important to achievers; they favor
established, prestige products and services that demonstrate success to their peers.
Because of their busy lives, they are often interested in a variety of time-saving
devices. The key for TruEarth in that definition is at the end of that sentence, because of
their busy lives, they are often interested in a variety of time-saving devices. Now fresh
healthy pizza is not quite a device, but it definitely can help save a busy person a lot of time
by being able to throw the pizza in the oven and know their family will have a delicious
meal without sacrificing the healthy meal that a growing family needs.

DESIGNING MARKET STRATEGY

A. CUSTOMER NEEDS ANALYSIS

TruEarth frozen pizza provides a convenient and healthy alternative to traditional

frozen pizza. This product is family friendly; the pizza kit style gives the opportunity for
kids to jump in making dinner. It tastes great and most of all its just fun for Julias family.
B. PROBLEM RECOGNITION

There isnt necessarily a problem for Julia just a new choice. We can however create
a desired state for her to reach by differentiating our product from others.
C. INFORMATION SEARCH

Our primary target purchaser is ultimately trying to create harmony within her
household. Who does she consult? Her family. Targeting her influences presents an
interesting promotion challenge, however it is the key to swaying Julia to put our pizza in
the cart.

MARKET SEGMENTATION
This is the overall frozen pizza market broken down into six categories:

1. Low-Cost seekers
a. Driven by price only
b. Not our target
2. Pizza Lovers
a. Consist of 18% of the market but spend 28% of the dollars
b. Dual-income, no kids, willing to experiment
c. High market potential
Page 8

3. Family pizza pleasers

a. Consist of 16% of the market but spend 19% of the dollars
b. Similar to Pizza lovers, however they are influenced by kids, spouse, others
c. Will be our primary target market for the TruEarth pizza launch

4. Wholesome nutrition seekers

a. Prefer restaurant or takeout pizza
b. Possible market, however we would need to convince them that frozen pizza
is good
c. Much more promotion and awareness building necessary, not ideal
5. Cooking avoiders
a. Taste is not a primary need
b. Not interested in gourmet flavors, similar to Low-Cost
6. Frozen pizza avoiders
a. Not at all a fertile market

PRODUCT USAGE

The chart below shows demographics with a high probability to buy a frozen pizza
in the next 6 months. Highlighted demographics show indexes equal to 120 or more.

Page 9

CUSTOMER POSITIONING STRATEGIES

The left-hand chart shows positioning strategies of popular pizza brands as well as
the targeted position of TruEarths Pizza kit. There is an obvious lineal organization to this
graphic. It helps to visualize our position because we can aim for this spot by shifting
customer perceptions of our brand.
The right-hand chart shows possible family meal choices, they are organized by
convenience and satisfaction for the family. In this graphic we can see that the semi-
made category is attractive because it is both moderately convenient for the busy family
and highly satisfactory.

Page 10

VALUE ASSOCIATION MAP

When creating the value association map for TruEarth we came up with three
determining factors; value, attributes and benefits. We felt that each of these factors have
strong ties between each other and can be closely connected to each other in multiple
ways. TruEarth is producing healthy pizzas, which are targeted towards middle class
families, therefore when choosing items that correlate with each other it is important to
choose items that are family related and can be connected with families.

Page 11

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

The driving force underlying these relationships is that the marketer may enhance
its ability to satisfy customers and cope with a rapidly changing business environment
through collaboration of his suppliers, distributors, and customers.
TruEarth uses focus groups to help evaluate their products from a real customers
point of view. TruEarth could actively engage with customer through social media sites
such as Facebook and twitter. TruEarth could use their package to keep the customer
involved by offering points or rewards for going to the website or liking TruEarth on
Facebook. TruEarth has impeccable timing when answering to customer issues, via phone,
email, and mail.

TRENDSPOTTING
Technology Trends - The major pizza players are offering online ordering and some
are now offering text ordering from mobile phones, PDAs and other web enabled mobile
devices. Major pizza chains are using social networking sites like
Facebook as platforms to build a loyal customer base and to facilitate
ordering directly from the sites. With an increased focus on green
initiatives in the restaurant industry as a whole, pizza operators are
introducing energy efficient equipment such as high-speed ovens.

Healthier Options - There is increasing demand among consumers for healthy meals
and healthy kids meals. Consumers are also more interested in where their food comes
from and how it is produced, with a growing demand for locally produced and organic
ingredients. Pizzeria operators are responding by producing dough with healthier fats,
offering whole wheat pizza crusts, healthier vegetable based toppings and salads.
Value - As consumers increasingly look for value, pizzeria operators are expected to
respond with lower prices and promotions. Falling commodity prices will enable more
aggressive pricing. Consumers have less to spend, but they still want to dine out for
convenience and enjoyment. By responding with value pricing, specials and combo-deals,
pizza franchises will meet this ongoing consumer need.

MARKETING MIX
A.
PRODUCT
Current Situation
TruEarth Frozen Pizza differentiates itself from others with kit style presentation.

Page 12

Proposal A
Go forward with proposed method. In a mall intercept survey consumers rated the
pizza concept 7.7 for easy to prepare. Consumers do not differ in the convenience factor
from TruEarths concept vs. typical frozen pizza.
Proposal B
Package toppings with the pizza crust and allow users to assemble the pizza at
home. With this method consumers still get the experience of make-it-yourself, while the
product does not differ itself so much from other choices that consumers wont switch to it.

B.

DISTRIBUTION

Current Situation
Brand is already established in several mainstream supermarket chains and
gourmet grocers across the Midwest.
Proposal A
The pizza concept will take up more space on the refrigerator shelf because it needs
ingredients placed next to it. This is something that the majority of retailers will not
readily adopt; from their perspective its all about maximizing profit per square foot.
Solution: Implement an all-in-one pizza kit with optional ingredients.
Proposal B
Launch product in more affluent suburban areas to maximize reach to target
consumer. Midwestern states, especially in the Great Lakes region, are a very penetrable
market.

C.

PRICE

Current Situation
Product demands premium price (about $12.38 for pizza kit + 1.25 toppings), which
rivals some delivery brand price points. Consumers rated this price point as unfavorable to
concept.
Proposal A
Introduce as proposed, Pizza kit @ $8 + Individual topping packs @ $3.50/each.
Proposal B
Sell entire pizza starter $10 (crust, sauce, cheese, + one topping) with option to add
more toppings as desired.

D.

PROMOTION

Current Situation
New product has little to no awareness, however target consumers are familiar with
the TruEarth name. Awareness for Pizza product will be much higher for current Cucina

Page 13

Fresca users. The promotional mix calls for $8 million in advertising and an additional $2
million in coupons.
Proposal A
Bundle coupons for pizza with Cucina Fresca pastas. TruEarths target markets for
these products are near identical this is the quickest way to pick out a customer and
influence her to try our new pizza.
Proposal B
Create TV ad campaign targeted towards Dad and kids to influence Moms purchase.
On the MRI+ report for frozen pizza purchased in the last 6 months stations with high
indexes include: Fuel TV, Fox Sports, Spike TV, as well as TeenNick, MTV, and Disney.

OPTION SUMMARY
Our three alternatives include keeping with the status quo, launch the pizza product,
and lastly R&D alternative food product. The lowest cost option would be keeping with the
status quo, it would also be the lowest financial risk and great ease of implementation for
TruEarth. Launching the pizza product would offer moderate risk and greater difficulty of
implementation and a cost much higher than keeping with the status quo. Launching an
alternative food product would be a higher financial risk than that of launching the pizza
product because the pizza market is a thriving industry. It is also the slowest option. The
new product market could be either an over saturated one, or an untouched one.

Page 14

EVALUATION OF CRITERIA
STATUS QUO
Growth/Profit Potential
Ease of implementation
Low Initial Cost
Low Financial Risk
Speed of implementation

SCORE

WEIGHT

WEIGHTED SCORE

30
100
95
85
100

35%
10%
20%
20%
15%
100%

10.5
10
19
17
15
71.5

SCORE

WEIGHT

WEIGHTED SCORE

85
70
70
65
85

35%
10%
20%
20%
15%
100%

29.75
7
14
13
12.75
76.5

SCORE

WEIGHT

WEIGHTED SCORE

80
30
40
55
20

35%
10%
20%
20%
15%
100%

28
3
8
11
3
53

PIZZA KIT LAUNCH

Growth/Profit Potential
Ease of implementation
Low Initial Cost
Low Financial Risk
Speed of implementation

R&D ALTERNATIVE
Growth/Profit Potential
Ease of implementation
Low Initial Cost
Low Financial Risk
Speed of implementation

Page 15

IMPLEMENTATION & CONTROL

The implementation plan for the pizza kit will be to launch in sub-urban, mid-
western towns surrounding Chicago, Milwaukee, and Twin Cities, etc. MRI data showed
that the mid-west census region has a high probability to buy pizza in the next 6 months.
Distribution channels will be the same as the Cucina Fresca pastas.

FEASIBILITY
The ease of implementation for the pizza kit we weighted at 10% and scored at 70.
We weighted it higher because the implementation of the pizza kit would be easier than the
implementation of a different product, but its more difficult to implement than sticking
with the status quo. The speed of implementation for the pizza kit was weighted at 15%,
slightly higher than the ease of implementation because the faster we can implement the
pizza kit the sooner we can start making a profit. We scored it at 85 because launching the
pizza kit will be faster than launching a different product and it will be slower than sticking
with the status quo.

MEASUREMENT
The success of the pizza kit launch will be measured by sales and revenues, with a
goal to sell $600 thousand in the first 6 months of sales. We will then and compare our
sales to that of Rigazzis sales. We will also measure our market share in comparison to
Rigazzi. The goal is to expand from the initial test markets if revenues and market share
exceed expectations.

Page 16

CITATIONS & REFERENCES

Datamonitor, (2010) Porters five forces from US ReadyMeals report


MRI+, (Fall 2010) Frozen Pizza used in the last six months.


Chris, D. (2011, November 19). [Audio Tape Recording]. Ama regional conference speaker. ,
Whitewater, WI.


Nestle- http://www.nestle.com/Brands/Pages/BrandsDetail.aspx?brandguid=A3BE777C-
E1A3-4E99-8FE9-73A42FD7A6AA&BrandName=Buitoni


Kraft Foods- http://www.kraftfoodscompany.com/mediacenter/country-press-
releases/us/2009/us_pr_06252009.aspx


Strategic Business Insights. (n.d.) VALS achievers Retrieved from
http://www.strategicbusinessinsights.com/vals/ustypes/achievers.shtml.


Anzalone, A. (2009, January 08). Kashi introduces crispy thin crust frozen pizzas with
seven whole grains. Retrieved from http://www.kashi.com/media_relations


CRMforecast.com. (n.d.). CRM business strategy. Retrieved from
http://www.crmforecast.com/strategy.htm.


Williamson, M., & (n.d.). Minot milling. Retrieved from
http://www.minotmilling.com/durum/durum.html


Market segmentation - meaning, basis and types of segmentation.. (2008-2012.). Retrieved
from http://www.managementstudyguide.com/market-segmentation.htm.

Page 17