TruEarth is faced with a dilemma on whether or not to launch the new whole grain pizza product. This case has analyzed the marketing survey data and provided full alternative solutions. The calculated projected retail market of $21 to 30 million dollars will meet the business requirements to proceed with this project. The marketing plan is to focus on two key consumer groups: existing TruEarth customers and new health conscious group that may or may not be existing pizza eaters. From this strategy, it is expected to meet on the higher end of the projected retail market. A side benefit is the added penetration of TruEarth brand name to the overall consumer market, which may benefit the whole grain pasta product. Problem Statement
TruEarth is a company that supplies gourmet meal products to grocery stores with strong emphasis in high quality ingredients, freshness, and healthy selections. The core competency of TruEarth is the use of whole grain ingredients to make home meal replacement products. TruEarth main product line composes of fresh pasta and sauce. Since product inception in third quarter of 2006, it has been greatly benefited from the higher than expected retail sales and profit margins. The success of this product was short lived as competitors threatened with similar product type and aggressive marketing strategies. In order for TruEarth to remain in the lead in this market, they have been investigating in a product line extension with whole grain pizza. The product development process is at or near completion; the dilemma for TruEarth is to determine whether to launch the whole grain pizza product to the market. The success of the whole grain pizza will rest on the ability to calculate the risk to the following key points: •Product acceptance
•Market segmentation, positioning, and branding
The overall trend in the consumer food industry in United States has shifted greatly, from frozen meal, to semi prepared single portion meal, to fresh pasta, and to avoidance of bad carbohydrates. Fresh pasta environment is where TruEarth strives and has a strong staple in. The annual sales for this category have grown to $4.1B by 2004. History of fresh pasta and sauce
The whole grain pizza is a line extension of the lead product whole grain pasta and sauce. It is important to understand the reasons behind the success of the pasta and transfer the lessons learned to the pizza product. •The use of the Test Kitchen and the structured product development process gives the company a better estimate on product appeal •The use of Neilson BASES I to assess market reaction. The research findings include the first year trial volume and repeat purchase estimates. •The sensitivity analysis of retail pricing and determination of gross margin •The required capital investment and marketing budget
TruEarth mimic the same product development process and arrived to the following analysis: •Test Kitchen developed a basic pizza crust kit and a line of complimentary topping selections •The use of Neilson BASES II to identify indicators for sales volume forecast and prioritize elements for improvement •The pricing model is very similar to the pasta model ($10.50 for 2-3 person portions) •Reduced incremental investment for pizza compared to pizza Summary of market research on whole grain pizza
The market research performed by the team consists of two components. An initial interview was done to compare the TruEarth concept with takeout and other refrigerated pizzas. When compared with takeout, TruEarth faired better only in the category of healthy ingredients while all other measures were scored negatively. Conversely, when compared with other refrigerated pizza, TruEarth measured better in all categories. From this initial survey, TruEarth concept can be considered as success in taking market share away from the refrigerated pizza market. At the...