This slides are about the Harvard business school case- Launching Krispy Natural: Cracking the Product Management Code.

1. Launching
‘Krispy
Natural’:
Cracking the
Product
Management
Code
Harvard business school case

2. What is Krispy Natural?

3. Candler
Enterprise
Pemberton
products
Softies
cookies
Home style
muffins and
doughnuts
Krispy
Natural
Beverage
division
Quick
service
restaurant
Pet care
division
Krispy Natural is the salty snacks brand

4. About Pemberton
Market leader in US in cookies and bakery products.
Generated $5 billion revenue in 2011.
CAGR (compounded annual growth rate) of 14% for
revenue over past 5 years.
Company owned DSD (direct store delivery) system.
Brandon Fredrick is the Marketing Director of Pemberton.

5. In 2008, Pemberton took first step to
enter the salty snack market by
acquiring Krispy Inc.
WHY?

6. 1. US growing Cracker Industry
Retail Cracker sale - $6.9 billion in 2011.
2.2% increase in CAGR from 2008 to 2010.

7. 2. Research of salty snacks in US.
74% respondents consumed crackers on
daily basis.
Crackers were the top salty snacks
ahead than potato chips.
Desire for healthy products was driving
cracker industry.

8. Who are the Competitors?
Kraft Food Inc.
Kellogg Co.
Pepperidge Farm
This three large brands account for ¾ of the
Cracker category.

9. What Pemberton team expected
from Krispy?
Sales in $millions

10. Unexpectedly
Sales in $millions
The actual sales did not match the projected sales.
WHY?
Limited product line.
Lack of flavour satisfaction.

11. Should Krispy
relaunch again?

12. Pemberton team didn’t
gave up.
Instead they decided to
give Krispy another try.

13. Why another try?
Attractive Cracker market.
Overall segment was large and expected growth of
10-14% per year.
Reducing markets of other competitors.

14. Krispy Relaunch
Rebranding as ‘Krispy Natural’.
R&D engaged in improving taste and
quality.
Multi serving package sizes and more
flavours to gain foothold in super
markets.

15. Official market test in Columbus, Ohio
and Southeast US.
In Columbus Krispy Natural will achieve 9% market share
of Cracker category.
In Southeast Krispy Natural will increase market share from
9% to 15%.

16. This time it’s a Success
Krispy Natural is now a serious competition.

17. How Krispy Natural
managed to steal
market share from
competitors?

19. 1. Product Strategy
Focused on increasing package size to multiple servings,
improving taste and more flavour options.
Use of 100% whole wheat and natural ingredients.
R&D tirelessly reformulate the
Product.

20. 1. Product Strategy
77% - 92% positive purchase intent for new
Krispy Natural flavours.

21. 2. Pricing Strategy
Premium price strategy.
Considering product’s superiority
and on the basis of ‘Visual Price’,
retail price was kept same as
competitors but quantity was less.

22. 3. Market Strategy
Adopted Pull Strategy
Aggressive plans for heavy
advertising and promotions
$ in millions

23. 4. Distribution Strategy
Company owned superior DSD
system.
Hired representatives known as
‘Krispy Force’ for proper
distribution.

24. Sales Objectives
National Distribution of Krispy Natural.
Minimum sales of $500 million
Pre-tax profit contribution of at least 13%
Sales
objectives

25. What were the competitive actions?
Short term:
New product testing in process.
Increase A&M.
Increase trade spending and consumer promotions.
Long term:
Spend heavily to counter national roll-out.
Capitalize on pull.
Product line improvements.
Compete on quality and brand reputation.

26. Conclusion
Strengths:
-Pemberton is already a market leader in US.
-World renowned product development labs.
-2:1 ratio in taste preference.
-18% market share in a market with no previous presence.
Weakness:
-Capacity constrains of DSD for
Krispy Natural products.

27. Conclusion
Opportunities:
-Cracker market fundamentals are attractive.
-Market research shows consumer dissatisfaction
with flavour and taste of current brands.
Threats:
-Fritto Lays entering into Cracker market.
-Modest increase of 1% sale in Southeast.

28. Disclaimer
Prepared by Hinal Shah,
NIRMA University,
Ahmedabad
during marketing internship
by Prof. Sameer Mathur,
IIM Lucknow