Name : ABBDULLAH AFZAL

STUDENT ID : 10872
Assignment No.1
Case: Tastykake Sen sables
For generations, Tastykakes have been one of the most popular snack foods in and
around the Philadelphia area. The local Tasty Baking Co., founded about 90 years ago,
turns out about five million snack cakes, pies, cookies, and doughnuts each day. Sales,
however, had been stagnant in recent years. The top sales year was 2001, when Tasty
Baking hit $166 million in sales, netting $6 million profit. About this time, new CEO
Charles Pizzi announced to shareholders that in 2004, an innovative line extension would
be launched. While this would not be the only company action designed to boost
performance, the new line would certainly be an important step.

In the snack business, the previous decade had seen a major trend toward healthier
products. Nabisco SnackWell’s lowfat cakes and cookies were a promi- nent example from
the early 1990s. Even Tastykake had some low-fat products out at this time. By the late
1990s, a newer diet-conscious trend, low-carb prod- ucts, was emerging, due to the
popularity of the low-carbohydrate Atkins Diet. By 2003, dozens of food companies had
launched about 600 low-carb products onto the store shelves, and the healthy, low-carb
product trend showed no signs of abating. It seemed logical to all concerned that Tasty
Baking’s new line would be a low-carb version of Tastykakes. As noted by chief marketing
officer Vince Melchiorre, “It was a wave, and we wanted to ride it.” If successful, the low-
carb Tastykake could be the first of several new lines, targeted at a variety of health
concerns.

Karen Schutz had about 20 years of marketing experience at Campbell Soup be- fore
becoming a marketing manager at Tastykake. In January 2004, she was given the task of
making the low-carb Tastykake a reality. The deadline was short: The product was to be
out by fall. From her Campbell days, Schutz was aware of the challenge. A new consumer
packaged good of this type might require a year to 18 months for product formulation,
assessing shelf life, market testing, and advertis- ing planning. As an added constraint, the
new line would have to be produced using existing equipment and personnel.

By mid-January, John Sawicki, Tasty Baking’s manager of research, obtained the first trial
batches of low-carb cookies and doughnuts from an ingredient supplier and arranged for
a private tasting by Tasty Baking managers, including Schutz, at company headquarters.
Schutz and her colleagues liked the taste (she feared her doughnut would taste like
“hamster food”) and agreed that this supplier’s mixes were a good starting point. At
this time a code name was selected for the still- secret low-carb project: Greta (for
“Greta Carbo”).

Sawicki and his team began development of a low-carb chocolate cookie bar on January 27,
2004. A sugar alcohol called maltitol would be the sugar substitute, and some flour in the
mix would be replaced by modified cornstarch. Meanwhile, Melchiorre asked Schutz if it
would be possible to make Greta sugar-free. He explained, “I needed to address the issue
of people who had grown up on Tastykakes who can’t eat it any more. It was good for
business, and good for them.” Schutz knew this would be difficult, as sugar is in milk,
berries, and other ingredients. She e-mailed Sawicki to see if this were feasible. Sawicki’s
response: “Possibly. It probably depends on the product. Should we be targeting this?”

Things were soon going to get exciting for Schutz and Sawicki. In February, senior
management rescheduled Greta’s launch to late June—three months earlier than expected!
But early research results were promising from a low-carb view- point. Early batches of
low-carb chocolate cookie bars contained only seven net carbs (the statistic used by low-
carb dieters), comparable to Atkins low-carb cook- ies. Sawicki brought these, as well as
chocolate cookies and blueberry muffins, to a taste test attended by Schutz and her co-
workers. They liked the taste, but other details like product shape and toppings still had to
be decided on. Schutz re- minded the team that “people eat with their eyes,” emphasizing
that the products had to look good.

She also noted that the low-carb cookies, muffins, and doughnuts were planned for preview
at the upcoming March 10 board meeting. Considering that the dough- nut mix wasn’t ready,
the blueberries sank in the muffins, and the cookie bars needed icing, this would be
difficult. Somehow, Sawicki pulled it all together for the meeting, even arranging the
snacks on serving trays, and the board thanked Schutz and the Greta team for having
come so far so fast.

Later that day, Schutz was speaking to a supplier, who happened to mention that he could
not eat products with maltitol, because it gave him side effects in the lower intestine. As
it turned out, some people are more sensitive to maltitol. She spoke to Melchiorre the next
morning. He needed no convincing that maltitol levels had to be decreased: He had the
same discomfort. In addition, two days after the board meeting, the FDA announced they
were going to monitor the usage of terms like “carb free” or “reduced carb” on product
labeling; violating companies would face sanctions.

Schutz and Sawicki thought fast to solve these problems. A new cookie with polydextrose
and glycerin (a sugar alcohol with fewer side effects than maltitol) was in preparation.
Portion sizes were also reduced. To avoid the FDA low-carb regulatory web, Schutz decided
to position Greta as a sugar-free product, with low-carb being a secondary attribute. The
product was also about to get a name: “Sensables” evoked diet moderation and could
potentially be reused on other snacks with different health benefits.

By May 12, Sensables were introduced to Tasty Baking’s district sales managers. The team
was unable to work out problems with the blueberry muffins (too much sugar in the
blueberries) and replaced them with orange and chocolate-chip finger cakes. The rest of
the lineup was plain and chocolate doughnuts, and the chocolate and chocolate-chip
cookie bars. Schutz and her team had tried out the re- formulated line, with no intestinal
side effects. In her presentation, Schutz stressed the Sensables message: no sugar, low-carb,
and portion control, and announced that the product would hit the shelves on July 15. At
the end of her presentation, something happened that is rare for a district sales manager
meeting: She received a standing ovation. Jim Roche, a Pennsylvania district sales manager,
said, “This is a winner.”

After Sensables were introduced to the sales force, consumer taste testing was undertaken.
According to Schutz, a few of the products were modestly “tweaked”: the chocolate chip
finger cakes and cookie bars received more chips, and more orange flavor was added to
orange finger cakes. The chocolate doughnut was dropped, as customers didn’t like its
taste or its appearance. The consumer testing delayed the launch by a few weeks. Once
the final adjustments were made to the product line, Sensables were launched in and
around Philadelphia on August 10, 2004. The launch received coverage in Philadelphia area
newspapers and on news radio.

Question:
1. How does the Sensables process compare with the new products process in this Case?
2. Would you question anything Tastykake did?
3. Do you think the Sensables line will succeed? Why or why not?

Answer:

1. New product development is the process of creating, testing, and evaluating

the performance of new products on the market. This process involves a

number of stages from product development to product marketing.

2. The Product S process seems to be similar to the process of new products

described in the chapter. The only difference is that each stage of the

new product process is clear, however, for Product S, the sequence of

processes is unclear. It may be due to the different nature of the composite

assets. Combined assets often fall into the model design phase during the

concept test and not the development phase. This means that the new

product team can anticipate the target market, the placement statement and

the price of the assets included in the concept test phase only, thus

eliminating the role of the marketing team.

3. The stages of the new product process are clearly cut from the strategic statement,

concept production, concept / project evaluation, development, and presentation. In the

case of Product S, the focus of senior management was to get the jobs done. Therefore,

speeding up the process puts a lot of pressure on the development team at risk of

contributing to product quality.