Name Tarun Singh Chauhan

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 +
0.2
Customers)

% of households repurchasing 21% Exhibit 5

Repeat purchase occasions Table B
2

Total purchases (Trial + Repeat)

0.4

Retail selling price $12.38 Table B

Retail sales revenue $4.4M
Retailer gross margin 35% Case text
TruEarth sales revenue $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.
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 15% 15% Table B
Awareness of pizza product 12% 50% Table B
ACV distribution 40% 40% Table B

Adjusted Trial Households 0.1 0.6

Total trial households (Non-Customers +
0.7
Customers)

% of households repurchasing 49% Exhibit 5

Repeat purchase occasions Table B
2

Total purchases (Trial + Repeat)

1.5

Retail selling price $12.38 Table B

Retail sales revenue $18.3M
Retailer gross margin 35% Case text
TruEarth sales revenue $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.
Quantitative Approach:
Criteria Pasta Pizza Remarks
Purchase Intent (Based on Exhibit 3 & 7)
Definitely would buy. 27% 18%
Trial Rate is higher for Pasta than
Probably would buy 49% 43%
pizza
"Top Two" Box 76% 60%
Mean Likeability** 4.1 3.7 Likeability is higher for Pasta.
Price/Value is higher for Pasta
Mean Price/Value rating** 3.2 3
than pizza
Concept Likes
Food Qualities
Whole Grain 32% 19% Concept of whole grain Pasta is
Freshly Made & Dated 38% 31% more liked than whole grain pizza.
Looks Appetizing 22% 24% 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 ease of it,
Easy to prepare 21% 16% pasta is easier to prepare.
Other
Tru earth brand name 33% 24% Customer likes are more for
TruEarth Brand and Price for
Good Price 18% 9%
Pasta.
Dislikes
Limited Selection 20% 23%
More dislikes for Pizza for limited
Too Expensive 8% 27%
selection, expensive and time to
Limited time to product expiration 16% 12% 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.