Nestle Co.'s Refrigerated Foods Division: Market Research

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Nestle Co.'s Refrigerated Foods Division has very successfully launched its Contadina brand pasta and sauces. The new product has achieved nearly $100 million in sales in three years. The division now considers an extension into the pizza line. This case provides a detailed look at the use of simulated test markets to forecast a new product's potential.

Learning Objective:
Intended to provide students with an in-depth understanding of new product forecasting in consumer packaged goods. Also raises the understanding of marketing research in pasta and pizza launch commercials.

Subjects Covered:
Brands, Consumer markets, Market research, New product marketing

Geographic: United States
Industry: Food
Company Revenue: $150 million revenues
Event Year Begin: 1990
Event Year End: 1990

Key discussion question: ? Would you launch the pizza? Analysis questions: Using the BASES model described in Exhibit 9, forecast the estimated demand (trial and repeat) for the two pizza options under consideration: Pizza and Topping and Pizza Only. Most of the data needed for the forecasting exercise is available in Exhibit 21. o Hints: ? In Exhibit 21 there is a big difference between Contadina users and non-users on the top two box scores. This will affect the forecast depending on what proportions are used for Contadina users vs. non-users in the population. ? On p. 14 (2nd to last paragraph), Nestlé’s marketing research department cautions us that parent brand usage could vary from 5% to 25%. It would be worthwhile to judge the sensitivity of the forecast under 5%, 15%, and 25% parent brand penetration scenarios. What do you learn from Exhibits 13, 14, and 15? How does the pizza concept test data (Exhibit 19, 20, and 21) compare to the pasta concept test data (Exhibit 6)? What is your reading of Exhibits 23 and 24? How would you compare the pizza opportunity to the pasta opportunity? What are similarities and differences?
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