Truearth Healthy Foods: Market Research For A New Product Introduction Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

TO: Isabel Eckstein, Brand Manager

FROM: XYZ, Marketing Analyst

DATE: 4-June-2015

SUBJECT MATTER: Whole Grain Pizza Product Introduction in Market

The competitive position that had been created by Cucina Fresca’s sales revenue over the years in the Italian food category was facing problems and the growth of the company’s sales had declined significantly. Therefore, in order to maintain the competitive position of the company and grab away more market share from the competitors to retain the company’s strong hold, the management has planned to launch a new whole grain pizza product and now the management of the company needs to determine whether to launch this product or not. One significant requirement before this product is launched is that its wholesale volume of pizzas must exceed a minimum requirement of around $12 million.

Action Recommendations& Options

The company has two options, which are either to launch the new product or suspend the idea and time is short as one of the competitors of the company, Rigazzi Brands has tested the concept of this new whole grain pizza in the market and is just about to launch it. First of all if we consider the option of launching this trend, then the same trends of the consumers would be targeted and the target market would not change. Consumer trends such as whole grain options, refrigerated replacements for home meal and the growing needs of the customers for such customizable meals. Along with this, within the Italian cuisine context, the demand for pizza is impressive and customers frequently purchase pizza each month. Also the health related concerns of the customers are also resolved through this dish (Refer exhibit 1: SWOT Model).

The company could create higher customer perceived value by first penetrating the market with this product. As a result of penetrating the market with the pizza kit first, the company estimates to meet excess return requirement by around $5.5 million (Refer exhibit 2). The funds that would be received in excess could then be utilized for new product development or extension of product line or could also be invested in the manufacturing facilities of the company. However, once this product is launched, despite the excess return the impact on the current brand image and the value proposition created by the company will also have to be considered by the management of the company (Refer exhibit 1).

It might be also possible that the purchase estimates for the company turn out to be less than assumed; therefore, the quantitative analysis has also been performed on the basis of the assumptions if the product is assumed to be considered as of a mediocre quality (Refer exhibit 3). Looking at these results, the second option for the management of the company is to suspend the launch of this product.

This is also because certain quality related issues and excess competition in the pizza market from players like Nestle and Kraft. Moreover, American customers consider flour as more appetizing than whole grains and changing the preferences and taste of the customer might prove to be costly as well as timely for the company.

Investing all the resources that are available with the company in this single product launch could prove to be excessively risky for the management of the company if in case the product is not well accepted by the Americans. However, suspending the launch of this product means that the company is missing out an opportunity to benefit from one of the profitable market opportunity. The consumers are becoming more health conscious therefore; the company needs to serve these needs of the customers by expanding the product line.

Justification

Currently, the sales growth of the company is deteriorating and the company is losing the competitive position that it has created over the years. Therefore, at this moment the launch of the new whole pizza grain product would benefit the company over the long term. If for example, the company suspends this launch, the funds could be utilized on the marketing efforts on marketing campaigns related to the company’s pasta line, however, if the company wants innovation it will have to diversify at some point. Therefore, this is the most suitable time for extending the current product line so that the company could increase the profits, acquire new customers and enhance the awareness of the brand of the company......................

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