Case Study on TruEarth Healthy Foods:

Market Research for a New Product Introduction

By Rishit Ghosh
FPB2123/165

Q1. Explain the research steps / processes used by TruEarth in

this case for both pasta and pizza products .
In the case of Cucina Fresca, the fresh whole grain pasta the company had
used the following research steps or processes:
1. Generation of Idea- The idea generation process became a more
systematic evaluation of consumer trends, with formal management
brainstorming sessions held regularly.

2. Screening of Concepts- Administration of the formal surveys that

includes evaluation of interests, probable purchasing behaviours and also
willingness to pay for the product.

3. Testing and Development of Products- Test kitchen developing

prototype products and testing the same by focus groups for product
refinement.

4. Volume Quantification- Hiring the services of professional market

research firms such as Nielsen BASES to estimate the potential sales.
By using the BASES I tests for consumer awareness and interests and
BASES II tests for taste and line extension study for pre-existing
product lines.

5. Studying the Consumer Trends- By conducting surveys the company

had found three trends among the consumers,
i. The Home Meal Replacement.
ii. Growth of refrigerated fresh pasta.
iii. Growing awareness of whole grain food products in the diet.

6. Estimation of Repeat Purchase- By creating three scenarios without

knowing the actual product quality by surveying for mediocre, average
and excellent product.

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In the case of Whole Grain Pizza, the company had used the following
research steps or processes:
All the research steps involved previously for the Whole Grain Pasta product
was present, apart from that the company had commissioned BASES to
conduct market research as well:
1. BASES II Line Extension- Includes both the in-depth concept survey as
well as the in-home product test. The concept test consisted of
photographs and a description of the quality ingredients. All respondents
who expressed interest in purchasing the product were given a sample kit
for a home test. After a 7- to 10-day period, participants were called to
gather after-use feedback

2. Interviews in seven major cities and malls- Intercept Interviewing the

population demographic of people of the age 18 and above who were
the principal grocery shopper for their households. Interviews are
conducted by asking passers-by to provide feedback on the products.

3. Interviewing the existing customers- Customers of the Cucina Fresca

pasta also interviewed. Assuming the customer base that had already
tried the fresh pasta would have higher awareness of the pizza product.

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Q2. Calculate the number of pizza (new product) by taking into
account the data presented in the case (take the pasta related
calculation as example)

Measures Total Non-Customers Customers (N

(N 300) (N 225) 75)
Definitely would 18% 15% 26%
buy
Probably would 43% 39% 53%
buy
"Top Two" Box 60% 54% 79%
Mean Likeability 3.7 3.5 4.2
Mean Price/Value 3.0 3.0 3.1
rating

Methodology:
Methodology: Trial Rate = “Definite” x 80% + “Probable” x 30%
Marketing-Adjusted Trial Rate = Trial Rate x % Awareness x % ACV
(distribution)
Trial Households = Target Households x Marketing-Adjusted Trial Rate
Repeat Volume = Trial Households x Repeat Purchase Occasions x Repeat
Transaction Amounts x Repeat Rate
Total Volume = Trial Purchases + Repeat Purchases

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Given, Target Households & Awareness
Target Households (30% bigger than pasta) 58.8
Cucina Fresca Pasta Customers 11%
Customer Awareness 50%
Non-Customer Awareness 12%
ACV Distribution 40%
Purchase Assumptions
Units per purchase (pizza kit + 1.25 toppings) 1.25
Average spends per purchase (retail) $12.38
Repeat purchase occasions 2.0 %
Repurchasers (Excellent product) 49%

Calculation with respect to The New Product Pizza

5% Penetration
Non-
Customers
Customers
Trial Purchase Intent
Definitely would buy 15% 26%
% of "Definite" who actually buy 80% 80%
"Definite" Purchases 12.00% 20.80%
Probably would buy 39% 53%
% of "Probable" who actually buy 30% 30%
"Probable" Purchases 11.70% 15.90%

Trial Rate (Definite + Probable) 23.70% 36.70%

Marketing Plan Adjustment

Penetration, % of target households 95% 5%

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Projected Consumer Awareness 12% 50%
All Commodity Volume distribution
40% 40%
(ACV)

Marketing Adjusted Trial Rate 1.08% 0.37%

Trial Rate x Awareness x ACV
Target Households 58.8 58.8
Trail Households 0.64 0.22
Total Trial Households   0.85

Repeat Purchase Inputs

Trial Households 0.85
Repeat Purchase Occasions 2

Repeat Rate, by Product Scenario (Same as Pasta)

Mediocre Product 21%
Average Product 37%
Excellent Product 49%

Repeat Purchase, by Product Scenario

Mediocre Product 0.36
Average Product 0.63
Excellent Product 0.83

Total Purchase, by Product Scenario  

Mediocre Product 1.21
Average Product 1.48
Excellent Product 1.69

Retail selling price $ 12.38

Retail sales volume, by Product Scenario
Mediocre Product $ 14.96
Average Product $ 18.34

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Excellent Product $ 20.87

Retailer gross margin 35%

TruEarth sales volume, by Product Scenario  
Mediocre Product $ 9.73
Average Product $ 11.92
Excellent Product $ 13.56

10% Penetration
Non-
Customers
Customers
Trial Purchase Intent
Definitely would buy 15% 26%
% of "Definite" who actually buy 80% 80%
"Definite" Purchases 12.00% 20.80%
Probably would buy 39% 53%
% of "Probable" who actually buy 30% 30%
"Probable" Purchases 11.70% 15.90%

Trial Rate (Definite + Probable) 23.70% 36.70%

Marketing Plan Adjustment

Penetration, % of target households 90% 10%
Projected Consumer Awareness 12% 50%
All Commodity Volume distribution
40% 40%
(ACV)

Marketing Adjusted Trial Rate 1.02% 0.73%

Trial Rate x Awareness x ACV
Target Households 58.8 58.8
Trail Households 0.60 0.43
Total Trial Households   1.03

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Repeat Purchase Inputs
Total Trial Households 1.03
Repeat Purchase Occasions 2

Repeat Rate, by Product Scenario (Same as Pasta)

Mediocre Product 21%
Average Product 37%
Excellent Product 49%

Repeat Purchase, by Product Scenario

Mediocre Product 0.43
Average Product 0.76
Excellent Product 1.01

Total Purchase, by Product Scenario  

Mediocre Product 1.47
Average Product 1.80
Excellent Product 2.05

Retail selling price $ 12.38

Retail sales volume, by Product Scenario
Mediocre Product $ 18.17
Average Product $ 22.27
Excellent Product $ 25.34

Retailer gross margin 35%

TruEarth sales volume, by Product Scenario  
Mediocre Product $ 11.81
Average Product $ 14.47
Excellent Product $ 16.47

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15% Penetration
Non-
Customers
Customers
Trial Purchase Intent
Definitely would buy 15% 26%
% of "Definite" who actually buy 80% 80%
"Definite" Purchases 12.00% 20.80%
Probably would buy 39% 53%
% of "Probable" who actually buy 30% 30%
"Probable" Purchases 11.70% 15.90%

Trial Rate (Definite + Probable) 23.70% 36.70%

Marketing Plan Adjustment

Penetration, % of target households 85% 15%
Projected Consumer Awareness 12% 50%
All Commodity Volume distribution
40% 40%
(ACV)

Marketing Adjusted Trial Rate 0.97% 1.10%

Trial Rate x Awareness x ACV
Target Households 58.8 58.8
Trail Households 0.57 0.65
Total Trial Households   1.22

Repeat Purchase Inputs

Trial Households 1.22
Repeat Purchase Occasions 2

Repeat Rate, by Product Scenario (Same as Pasta)

Mediocre Product 21%
Average Product 37%
Excellent Product 49%

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Repeat Purchase, by Product Scenario
Mediocre Product 0.51
Average Product 0.90
Excellent Product 1.19

Total Purchase, by Product Scenario  

Mediocre Product 1.73
Average Product 2.12
Excellent Product 2.41

Retail selling price $ 12.38

Retail sales volume, by Product Scenario
Mediocre Product $ 21.38
Average Product $ 26.19
Excellent Product $ 29.81

Retailer gross margin 35%

TruEarth sales volume, by Product Scenario  
Mediocre Product $ 13.89
Average Product $ 17.03
Excellent Product $ 19.37