Marketing and New Product Line

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1.Executive Summary
This document explains why TruEarth, maker of gourmet pastas, sauces and meals, takes "to launch or not to launch" decision of a new product line of fresh whole grain pizza by using some forecasts and financial analysis. According to the analysis, launching the new product line is a profitable business and it exceeds the minimum business requirements which is $18,5M retail market ($12M wholesale) but according to the market researches, customers think that the product is too expensive and it should be lower. So, after revising its price and sales forecasts, TruEarth should reevaluate the case. 2.Company Description

TruEarth, maker of gourmet pastas, sauces and meals, was started by a young entrepreneur Gareth DeRosa to offer healthier gourmet pastas and sauces made from superior ingredients in 1993. TruEarth was one of the first companies to focus on whole grain products and through several promotion programs, advertisements and demonstrations consumer awareness on this issue was raised and several supermarket chains began to carry its products. In 2006, Cucina Fresca, a new fresh whole grain pasta meal kit, was introduced to market by Isabel Eckstein, brand manager, after a long customer and market analysis with the help of a market research firm. According to the financial results of 2007, it became the most successful product launch in company history. 3.Strategic Focus and Plan

The mission and vision of TruEarth is to produce high-quality and healthy products and become the most successful brand in fresh whole grain products.

For the coming years TruEarth seeks to achieve the following goals: •NonFinancial Goals

To generate the right ideas and offer best taste within a more healthy way. To retain its present position as the most successful brand in fresh whole grain pasta. To add new products in order to attract critical mass of consumers. To increase consumer awareness.

Financial Goals

To increase its wholesale customers and supermarket chains.
To increase, revenues and profit margins.

4.Situation Analysis

Figure-1 shows the internal and external factors affecting the market opportunities for TruEarth Figure-1 SWOT Analysis for TruEarth
Internal FactorsStrengthsWeaknesses
ManagementExperienced and entrepreneurial management Sometimes it can be difficult to persuade. OfferingsUniqueIt can easily be developed by others.
MarketingAwareness about the importance of marketing strategy and market researchUntil now there is no detailed advertisement and promotion strategy for new product PersonnelTalented managersDifficult to find experienced employees FinanceExcellent revenue from the last launchLimited resources may restrict growth opportunities when compared to giant competitors

External FactorsOpportunitiesThreats
Consumer/SocialBroaden its target customers Consumers can value a strong brand name and diversity EconomicWith the right strategy profit and amount of customers can be increasedGiant competitors can finance the loses

TruEarth competed against other gourmet companies but Rigazzi is the only competitor of similar scale and Rigazzi sells all the same products with TruEarth. Rigazzi had also tested a pizza concept and was likely not far from an introduction. Kraft and Nestle are already huge players here with low-cost frozen pizza.

Starting from 1990s, there are three trends in the market. Parallel to the increase in dual-income households "home meal replacement" HMR concept became more popular. Refrigerated fresh pasta was the second trend and consumers perceived fresh pasta to be tastier and more authentic than the dry, shelf-stable pasta. The third trend was a growing awareness of the importance of whole grains in the diet. From the wholesale point of view, many of the customers like supermarket chains prefer to have just one...
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