Name Rahul Baudh

Question 1

Fresh Pasta and Sauce – Cucina Fresca

 Adopted the Nielsen methodology of Bases I study to understand the

awareness and interest in purchasing.
 It did not cover about the taste of the product since there was no sampling carried
out.
 Without knowing the actual product quality, Bases created three scenarios – one
for mediocre, average and excellent.

Whole Grain Pizza

 Adopted the general feedback from TruEarth team and commissioned Bases II
line extension study which included concept survey and in-home product usage.
 Additional quota of respondents who were customers earlier and bought Fresh Pasta
were also interviewed.
 Carried out sampling with the customers by using sample kit for a home test.

Food is an important category which is determined by taste and quality. I think the
second research process of Nielsen Bases II is more robust since it carried out in-depth
concept survey with sampling kit and a feedback loop gives a proper visibility for product
testing. In the first base study taste & sampling were missing and it just provides the
customer awareness and interest for purchase of the product. The study may be flawed if the
projected volume based on the assumed scenarios changes for the product lines for pasta
Question 2

 As Fresh Pasta was launched in a relatively new market, its purchase intent of the top
two box was only 76% and higher mean likeability of 4.2
 Given brand awareness is created for existing user, TruEarth Pizza has more likeability
of purchase with 79% amongst its own customers.
 However, it is significantly lower for non-customers at 54% which indicates
either creating awareness through marketing campaign.

Question 3

In the case, it is discussed that Eckstein believed that true penetration could actually range
between 5% and 15%. Hence considering this as the basis for the worst-case scenario for the
penetration I have considered 5% as the lowest penetration for non-customers and customers.
Also, the second parameter which is considered for % of households repurchasing in the
mediocre product rate of 21%

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 5% 5% Table B
Awareness of pizza product 12% 50% Table B
ACV distribution 40% 40% Table B
Adjusted Trial Households 0.0 0.2
 Total trial households (Non-Customers + 10.2
Customers)

% of households repurchasing 21% Exhibit 5

Repeat purchase occasions Table B
12

Total purchases (Trial + Repeat)

0.4

Retail selling price $12.38 Table B

Retail sales volume $4.40M
Retailer gross margin 35% Case text
TruEarth sales volume $2.8M

The parameters for the best case scenario is based on the range for true penetration based on
Eckstein discussion in the case by 15%. The parameter for the % of households repurchasing by
the product scenarios of excellent product is 49% which is considered the second parameter

Customers Customers Source

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 15% 15% Table B
Awareness of pizza product 12% 50% Table B
ACV distribution 40% 40% Table B

Adjusted Trial Households 0.1 0.65

Total trial households (Non-Customers + 0.7

Customers)
% of households repurchasing 49% Exhibit 5
Repeat purchase occasions 10 Table B
Total purchases (Trial + Repeat) 1.5
Retail selling price $12.38 Table B
Retail sales Retail sales revenue $18.3M
Retailer gross margin 35% Case text
TruEarth sales volume $11.9M
Question 4

As per Exhibit 6, it can be understood that below are the top two pizza categories which would
compete against TruEarth Whole Grain Pizza:

 Takeout/delivered Pizza since it accounted for 47% of the last 10 pizza consumption
were taken out and account for 43% of the next 10 pizza eating occasion.
 Restaurant Pizza since it accounted for 23% of the last 10 pizza consumption were
taken out and account for 22% of the next 10 pizza eating occasion.
 Advantages over the competitors categories:
 TruEarth pizza is made from healthy and high-quality ingredients.
 The pizza is also easy to prepare and it is considered as a pizza for the whole family.

Disadvantages:

 TruEarth pizza is looking to establish themselves as a Gourmet and hence pricing is a

bit disadvantages since as per Exhibit 10, we understand that consumers who are
willing to buy on average are ready to pay $10.75 and unfavorable one at $8.86,
whereas the price of the pizza with one topping pack would be around $11.50 (as per
Exhibit 10).
 Also, the overall taste also can be improved i.e., the crust (that could be more
chewy) and limited selection.

Question 5

As per the data in Exhibit 10, it can be understood that the Whole Grain Pizza is not
appropriately priced for the customers. It is discussed that 1.25 toppings with each pizza, the
average retail price for TruEarth Whole Grain will be about $12.38. However, after the home
trials, comparing refrigerated over the Other pizza, in considering the favorable to product, we
see price to be set at $10.75 and unfavorable to product price expected at mean of $8.86.

Other Pizza for the frozen one expects mean price of $7.43 and for delivered/take out price the
customer expects the price around $11.72.

Hence price may be a problematic scenario for TruEarth, however if the taste and quality of
the product are good and significant improvement on healthy pizzas will attract customer at
TruEarth.

Question 6

In the qualitative approach, we consider carrying out the SWOT analysis to understand the
business and making a decision. SWOT analysis will focus on internal analysis which would
help the organization to understand strengths and weaknesses.

Strengths: Successful launch of Cucina Fresca allowed company to establish market share and
distribution network, strong position within niche market.

Weakness: Market potential forecasting small relative market share within ready-made meals.

Opportunities: New product offers a different approach to ready-made pizza.

Threats: Big players competition from Nestle and Kraft MI based Riggazi, is equally matched
within niche. Frozen pizza market is saturated and market growth is slow.

CRITERIA PASTA PIZZA REMARKS

Purchase Intent(Based on Exhibit 3 and 7)
Definitely would buy 27% 18% Trial Rate is higher
Probably would buy 49% 43% for pasta than Pizza.
“Top Two” Box 76% 60%
Mean Likeability** 4.1 3.7 Likeability is higher
for pasta
Mean Price/Value 3.2 3.0 Price/Value is higher
rating** for Pasta than Pizza
Concept Likes
Food Qualities
Whole Grain 32% 19% Concept of whole
Freshly made and 38% 31% grain Pasta is more
dated liked than whole
Looks appetizing 22% 24% grain Pizza. It is also
 seen that freshly
made and dated is
more liked than
pizza. However,
Pizza looks more
appetizing
Preparation
Product selection 17% 16% For preparations and
Easy to prepare 21% 16% ease of it, pasta is
easier to prepare.
Other
TruEarth brand 33% 24% Customer likes are
name more for TruEarth
Good price 18% 9% Brand and Price for
Pasta
Dislikes
Limited selection 20% 23% More dislikes for
Too expensive 8% 27% Pizza for limited
Limited time to 16% 12% selection, expensive
product expiration and time to product
expiration.

In my opinion, for the decision which can be made regarding the launch of the product. The
company believes in continual innovation, but it should be backed by sound business strategy.
We see that in last few years Pasta has done well and created a brand image for the company.
The company can leverage its first mover advantage on the new and emerging markets. Pizza
market is a larger market than pasta’s and successful reputation of TruEarth allows it to take
chances for calculated risks and launch in new segment of Whole Grain Pizza. However, there
are certain concerns which the company should also relook to gain the market share in the
competitive market. Quality, taste, and portion of toppings on pizza will help to boost the
reputation in the new segment. The challenge is to balance the price and breakeven for the
company once the full-time operations and distribution commences. The distribution reach is
to be strengthened with facilities of storage and maintenance of the pizza will determine
smooth operations and quality delivery to the customers. Customer involvement in customized
pizza menu will also help to retain the customer interests towards pizza and its various
offerings on the toppings.

In all of this consideration with the launch of the pizza will open new segment and will impact
huge in growing bottom line and top line revenues. I think it will be wiser for TruEarth to
expand their product line and launch the pizza at the earliest in the market.