TruEarth Healthy Foods

Market Research for a New Product Introduction

Presented by Sreeraj KR Vijeth Amburmath Akheel M Baramy Anoop Biswas
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Introduction
• • • • TruEarth was founded in 1993 in St. louis by Gareth DeRosa Maker of gourmet pastas, sauces and meals Small company competing against giants like Nestle and Kraft Introduced Cucina Fresca in 2006 which is a whole grain pasta and became a success in the market ($23 million,2007) • One of the first companies to offer 60% and 100% whole grain pastas

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Product Development Process
• Product development was informal and volume estimates were highly analyzed and intuitive • As the scale of business grew, the difference between actual and projected volume of sales increased • Later introduced Four step process for R&D
– Idea generation – Concept screening – Product development and testing – Quantification of volume
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• In 2004 demand of HMR, refrigerated pasta and whole grain foods increase • Introduced Cucina Fresca, whole grain pasta, as a product line extension to its pasta • Cucina Fresca product line consist of
– Cut pasta, filled pasta, sauce

• After the success of Cucina Fresca, company started working on launching whole grain pizza as a product line extension to its pizza
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BASES
• BASES is a unit of Nielsen Holdings (global information and measurement company , New York)\ • BASES is the world leader in STM used to
-future sales volume of initiative, find the key driver of the volume

• BASES tests not only new products and concepts, but also line extensions and relaunches.
– Pre BASES - For screening concepts/ positionings – BASES I - For estimating market awareness and market potential – BASES II - For concept/product evaluation
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Product Life Cycle

( Source: Marketer’s toolkit, Harvard Business Essentials )

Maturity Phase: Competitors trying to eat into other’s market share

Brand Revitalization seeks to increase the size of the market through incremental
innovations
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A-T-A-R Model

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Advertising
Budget

Gross Rating Points (GRP)
Promotional Budget

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GRP

BASES

Awareness %
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Trial rate and Availability
• During survey they get three responses

• Will definitely buy, probably buy and wont buy
• Trial Rate = Definites’ x 80% + Probables’ x 30%

• Based on the salesforce feedback, All Commodity Volume (ACV) or
Availability % is estimated

• Trial Households= Target Households x Trial Rate x Awareness % x ACV
(Distribution)
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Repeat purchase
• BASES creates three scenarios for each type of product Mediocre Average Excellent • For each of these three, a specific repurchase rate is determined based on past experience with similar goods • Repeat Volumes = Trial Households*Repeat Purchase Occasions*Repeat transaction amounts*Repeat rate • Total Volume = Trial Purchases + Repeat Purchases
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Competitive threat
• • • • • Rigazzi launched fresh whole grain pasta in 2007 Positioned as Traditional/ Vinatge pasta maker The competitor of similar scale and products Substantial discounts and High value coupons Competitive threat as it has capability to launch comparable products.

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Consumer Generated media (Buzz)
• The booming digital media platform • The phenomena of Buzz can be used for forecasting the sales • The Buzz can be termed as the the word of mouth publicity, and buzz can be measured using the “Buzz Index” • Buzz can be predicted by spending on the traditional media • The Buzz also depends on the product’s familiarity, distinction and uniqueness of solution • Buzz when combined with the traditional forecasting approach increases the accuracy
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• The Controlled sale: • Minimarketing Infoscan by IRI Scantrack by ACNielsen • Provides the results under real market and competetive conditions • The Full Sale methods Test marketing: limited geography / channel

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The Whole Grain Pizza
The Market : • Annual sales of $53 billion in US ( 2007 ) • 77 % of consumers ate pizza at least once in a month • Two-thirds of the sales volume - - - delivery, take-out and restaurants • Refrigerated pizza market - - - 11% of sales - - - $5.8 billion (2007 )

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• 33% of restaurant-goers had “ strong interest “ in whole grain pizzas • Demand was there, but branded products in this category was not prominent • By mid-2007, the basic kit was developed - - - crust ( whole grain ) + packets of cheese and sauce • Complementary toppings were also developed ( three extra cheeses, sliced mushrooms & hormone-free chicken sausagecrumbles )
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Pricing • $8 per pizza kit and $3.50 per topping pack Research • 300 mall intercept interviews were conducted • Bases II Line Extension Study --- both in-depth concept survey and product usage test • Conducted survey in 7 cities, among the age group above 18 • Users of “ Cucina Fresca” pasta were also interviewed • A sample kit was provided for test and feedback was taken after 7 to 10 days
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Nestle : Frozen food category
• In 2010, Nestle bought Kraft's frozen pizza business for $3.7 billion • The purchase added the DiGiorno, Tombstone, Jack's and Delissio brands to Nestle's stable of products, as well as the license to sell California Pizza Kitchen frozen pizza. • The company increased its market share to 33% from 17% of North American frozen foods

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