Name Ruxshin Watchmaker

Question 1

Key differences between the market research process followed for Pasta and Pizza are as
follows:

1) Product development process of pasta followed BASES I where in the first step,
general idea and patterns were formulated from the trends prevailing in market
followed by concept screening where evaluations regarding consumer behavior and
willingness to pay were performed.

2) Product development of pizza followed BASES II study, which was more extensive
than BASES I study. It included both in-depth concept survey and an in-home product
usage test.

3) For the pasta range, prototype products were tested amongst focused group in product
development and testing stage followed by eventual study where sale and response
estimations were carried out by market research companies. However, for pizza range,
surveys were conducted in 7 cities, interviewing consumers over 18 years of age, who
were the principal grocery shopper for their households.

4) For Pasta range, the study conducted did not incorporate actual taste testing, so BASES
forecast follow-up sales by gauging consumer reaction to the fresh whole grain pasta
concept and its prior experience with other gourmet and healthy foods. Instead, all
pizza survey respondents who expressed interest in purchasing the product were given
a sample kit for a home test and were even called for feedback after 10 days.

After observing all these differences, we can conclude that the research methodology followed
for launching Pizza range was more robust, as along with concept screening, detailed surveys
were performed on specific target audience.

Question 2

Key difference between Purchase intent of Pasta and Pizza is:

Insights derived from Exhibit 7:

1. Exhibit 7 shows us that a higher percentage of existing TruEarth customers will be
open to try the Whole Grain pizza than non- customers.
2. Exhibit 7 shows that the existing customers of TruEarth liked the idea of fresh pasta
better than the non-customers.
 3. Value wise, exhibit 7 shows us that existing TruEarth customers valued the wholegrain
pizza more than the non-customers.

Comparing Exhibit 7 (total people surveyed) and Exhibit 3:

1. Higher percentage of the total people surveyed would be open to trying the Pasta rather
than the pizza.
2. The people surveyed liked the idea of the fresh pasta better than the idea of the
wholegrain pizza.

The value rating for fresh pasta was higher than the whole grain pizza.

Question 3

Write your answer for Part A here.

The predicted sales revenue for TruEarth’s Whole Grain Pizza would be $9.7M.

Paste the excel for Part A here

Non-
Customers Source
Customers
Definitely would buy 15% 26% Exhibit 7
% of "Definites" who actually buy 80% 80% Exhibit 5
"Definite" Purchases 12% 21%

Probably would buy 39% 53% Exhibit 7

% of "Probables" who actually buy 30% 30% Exhibit 5
"Probable" Purchases 12% 16%

Trial Rate ("Definite" + "Probable") 24% 37%

Target households (MM) 58.8 58.8 Table B

Penetration, % of target households 95% 5% Table B
Awareness of pizza product 12% 50% Table B
ACV distribution 40% 40% Table B

Adjusted Trial Households 0.6 0.2

Total trial households (Non-Customers +
0.9
Customers)

% of households repurchasing 21% Exhibit 5

Repeat purchase occasions Table B
2
 Total purchases (Trial + Repeat)
1.2

Retail selling price $12.38 Table B

Retail sales revenue $15.0M
Retailer gross margin 35% Case text
TruEarth sales revenue $9.7M

Write your answer for Part B here.

The predicted sales revenue of TruEarth’s Whole Grain Pizza in the best case scenario would
be $19.4M.

Paste the excel for Part B here

Non-
Customers Source
Customers
Definitely would buy 15% 26% Exhibit 7
% of "Definites" who actually buy 80% 80% Exhibit 5
"Definite" Purchases 12% 21%

Probably would buy 39% 53% Exhibit 7

% of "Probables" who actually buy 30% 30% Exhibit 5
"Probable" Purchases 12% 16%

Trial Rate ("Definite" + "Probable") 24% 37%

Target households (MM) 58.8 58.8 Table B

Penetration, % of target households 85% 15% Table B
Awareness of pizza product 12% 50% Table B
ACV distribution 40% 40% Table B

Adjusted Trial Households 0.6 0.6

Total trial households (Non-Customers +
1.2
Customers)

% of households repurchasing 49% Exhibit 5

Repeat purchase occasions Table B
2

Total purchases (Trial + Repeat)

2.4
 Retail selling price $12.38 Table B
Retail sales revenue $29.8M
Retailer gross margin 35% Case text
TruEarth sales revenue $19.4M

Question 4

From the point of view of the customer, the top 2 pizza categories that TruEarth Whole Grain

Pizza will compete against would be:

● Low Cost Frozen Pizza by big competitors
● Whole wheat or Multi Grain Crust pizzas for Takeouts

Advantages:
● Guilt Free Gourmet Pizza with whole grain crust as we already made a name in frozen
pasta industry for healthy food
● Use of high quality of ingredients
● Pizza Industry was seeing a decline in its consumers due to health concerns. TruEarth
being a popular brand in healthy food sector, can actually attract more customers
towards itself.

Disadvantages:
● Pizza by most people was viewed as an indulgence - not a meal where they are
working hard to make a healthy choice
● Lack of different options in terms of flavours and crusts

Competition with big competitors like Pizza Hut, Papa Johns, Nestle and Kraft.

Question 5

As per the data in Exhibit 10, it can be assumed that the Whole Grain Pizza is not
appropriately priced for the customers.
● Price of pizza with only 1 topping: $11.50
● Customers favorable towards the Product are willing to pay: $10.75

It is discussed that 1.25 toppings are each pizza, the average retail price for TruEarth Whole
Grain Pizza will be about $12.38.

Hence, I feel if price can be reduced then TruEarth could capture a fair amount of audience in
the Market.
Question 6

Yes, I’m in favor of launching the Whole Grain Pizza because TruEarth pizza is made from
healthy and high-quality ingredients and American population is keenly attracted towards the
use of healthy products and that's the best time to launch whole grain pizza because the whole
grain pizza is categorized as a healthy product. Also, Market for Pizza in America is huge.

● Annual sales estimated at 53 Billion.

● 77% Consumers eat Pizza at least once a month.
● 33% are interested in whole grain crust

Meanwhile, the price is a very much influencing factor for most customers but in this case the
whole grain pizza is a healthy product and health conscious consumers will be more willing to
buy a healthy pizza even at premium prices.

To create a sense of awareness in user’s minds, TruEarth should spend capital on marketing of
its whole grain pizza and the marketing campaign should be focused on creating awareness
about the health component among consumers about the whole grain element of this pizza in
order to further develop the market for whole grain pizza.

Since, competitors such as Rigazzi can also launch its whole grain pizza, TruEarth should
launch its whole grain pizza before its competitor launches it in order to take the benefits of
first mover advantage as it had previously enjoyed in the case of whole grain pasta product.

TruEarth has all the equipment needed for the production of whole grain pizza and hence
investment in the equipment and machinery is not of a concern to TruEarth in order to launch
the whole grain pizza.

Furthermore, TruEarth has its already established channel and network for the distribution and
selling of whole grain pizza and its existing channel would help in delivering the fresh product
to the market shelf. Therefore, TruEarth must launch its whole grain pizza in order take the
benefits of first mover advantage and later on it can keep improving the key elements of whole
grain pizza.