Nestlé Pizza Case Study

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Nestlé Refrigerated Pizza Case

Executive summary:
In 1990 Nestlé Refrigerated Food Company, NRFC, subsidiary of Nestlé S.A, had to decide about the launch of a refrigerated pizza, under the name of Contadina pizza, continuing the build of the refrigerated food category it started few years ago with the launch of the Contadina pasta and sauces, and where the satisfying results exceeded expectations, NRFC would be then the first mover in this new category product, pre empting its serious and major competitor: Kraft general food who was on his way to make a similar launch(their launch is expected within six months). The market studies consisting of the forecast of the estimated demand show that the pizza launch is recommended, and it should better be with the pizza and topping product instead of the pizza only, and that the basic business requirement $45 million(factory dollar sales) could be met with a minimum of 7% of market penetration. The opportunity is great since the Italian ethnic food market is developing very fast, but NRFC should be very careful since bad results could seriously hurt the Contadina brand name built with the success of the pasta and sauces. The price of the offering should be adjusted to lower levels and a heavy advertising support should be carried.

Situation Analysis:
NRFC first entered the refrigerated food market by launching the Contadina pasta and sauces .it was an undeveloped market in 1987 where fresh pasta was considered to be a premium product sold only in specialty stores. At that time refrigerated foods were responsible of 7% of Nestlé global sales with very little contribution from us market. The refrigerated food was perceived as fresh, very convenient and with high quality, but in the us market it raises a serious problem of distribution because of its nature as refrigerated, for what NRFC devised a highly distribution system from the factory in Danville, Virginia, and took the option to...
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