Launching Krispy Natural: Cracking the Product Management Code

1. Launching krispy natural :
Cracking the product
management code
LAUNCHING KRISPY NATURAL :
CRACKING THE PRODUCT
MANAGEMENT CODE

2. Pemberton Introduction
# Snack food division for Candler Enterprises
# Market leader for cookies and bakery segment in the sweet snack
market
# Company has its own DSD System
# 5 billion USD revenue with 7.7 % profit after tax
# CAGR of 14% for revenue for past 5 years

3. • Pemberton was the snack food division of Candler
Enterprises, a multinational beverage and snack goods
manufacturer.
• Had a revenue of 5 Billion USD with 7.7% Profit After Tax
(PAT)
• Pemberton was a market leader in the U.S. cookie and
bakery snacks segments of the sweet snack market.
• Company harnessed its owned Direct Store Delivery (DSD)
distribution system to deliver products directly from the
distribution centers to the retail stores.
Candler
Enterprises
($ 18
Billion)
Beverage
Division
A Quick
service
restaurant
division
Pet care
division
Pemberton
(snack food
division)
# Pemberton was the snack food division
of Candler Enterprises, a multinational
beverage and snack goods manufacturer.
# Had a revenue of 5 Billion USD with
7.7% Profit After Tax (PAT)
# Pemberton was a market leader in the
U.S. cookie and bakery snacks segments of
the sweet snack market.
# Company harnessed its owned Direct
Store Delivery (DSD) distribution system
to deliver products directly from the
distribution centers to the retail stores.

4. Top Management
# Brandon Fredrick : Marketing director for Pemberton
# Ashley Marne : Exec VP of Sales and marketing at Pemberton
Products
# Burt Spivey : Pemberton Chief Operating Officer
# Patricia Williams : Pemberton’s President

5. Current Situation
Key strategic priorities:
1.Leveraging leading
marketing, sales and DSD
systems to increase revenue
revenue and profits
2.Building a collection of
attractive, durable brands

7. The U.S. Cracker Industry
Retail cracker sales in the United States reached
an estimated $6.9 billion in 2011.
The growth rate for the overall cracker industry
from 2008 to 2010 was approximately 2.2% CAGR

8. “All other ” crackers

9. Crackers with fillings
# Growth rate of 14 % in 2010
# Retail sales of 660 Mil $ in 2011 in US
# Flat sales till 2009 then turned into strongest segment

10. US Cracker industry
75%
9%
9%
6% 1%
Sales
All Others
Saltines
Crackers With Fillings
Graham Crackers
Bread Sticks
US Cracker industry

11. Situation
Launching and sustaining the growth of Krispy Natural
in the Salty snack market
Situation
Questions
Public product purchasing intent ?

12. HypothesisHypothesis

13. MARKETING
STRATEGY
FORMULATED

14. PRODUCT BASIS
1)Improving taste to build the preference of
customers over competitors.
2)Expanding in multiple-serving category.
3)Indulging healthy ingredients to gain the
preference of the major American
population.

15. RESULTS WITH PRODUCT MODIFICATION

16. MARKETING BASIS
1)Chose the pull strategy and trade promotions to make
the brand worthy in the minds of the customers.
2)Keeping a premium price strategy and applying
discounts along with less quantity of crackers in same
package size.
3)Longer shelf life and efficient DSD systems.

17. PROJECTIONS WITH THIS STRATEGY

18. MARKET RESULTS

19. CHALLENGES AHEAD
1)Expanding the brand nationally won’t work on the
pillars of sampling, discounting and couponing.
2)Expecting and getting ready for the potential
competitive responses with the national roll-out.
3)The rise of a new cracker product line by the most
successful brand in the category, Frito-Lay.

20. RESPONSES TO NEW BRAND “FRITTO-LAY”
# Launching more new product mix as per
customer taste and keeping health as a
priority concern.
# Optimization of DSD system for Krispy
natural product for cost reductions.

21. ALTERATION
# To stick to the premium prices, the quality, taste and
flavors must be good enough to break even the costs and
gain customer loyalty.
# They should restart the “Grab and Go” campaign to
have an upper hand over competitors in this generation.
# Develop strong brand equity and hence, loyalty among
various segments before the competitive responses.

22. # A “Brand Mantra” and creative use of resources can
help gain the company competitive advantage.
# Going head on with Frito-Lay must require sharp
focus on producing more line of products with flavors
favoring the target market.
# Some incentives like couponing and “Brand Club”
ideas can help the buyers of the product to get loyal to
the brand.

23. CONCLUSIONS DRAWN
#The success of Krispy Natural in the Columbus city can be one of the
outcomes of the special “Krispy Force” representatives.
# The positive test market results were driven by significant price
discounts, couponing, and sampling.
#Southeast results could also be poorer because of the existing low
priced products of Krispy in the market

24. DISCLAIMER
These slides have been created by Saurabh Singh, DIMAT Raipur during
a marketing internship under Prof. Sameer Mathur, IIM Lucknow.