TruEarth Healthy Foods Case study

By Group C1 Aabhaa I P Ankit Thakrar Gourav Singh Gururaj Nayak Prashanthi Priyanka

TruEarth Founded in 1993 by Gareth DeRosa. Offered healthy pasta and sauces. Launched wholegrain pasta, Cucina Fresca, in 2006. Expansion into the refrigerated pizza market. It has facilities and resources that are already in place to support potential intiative. Dilemma Should Truearthgo ahead with the product launch considering the fact that revenues can be earned in view of the competition and the consumer response in the survey? Product mix of Tru-Earth: Pasta Pizza Product line: Cut pasta Filled pasta Sauce Pizza

Fettucine Linguine Angel hair pasta

Four cheese ravioli Spinach cheese ravioli

Marinara sauce Alfredo sauce Pesto with basil

3 extra cheeses Sliced mushrooms Hormone free chicken sausage crumbles

SWOT Listing(Whole Grain Pizza) Strengths Weakness TruEarth is highly selective about the ingredients. Pizza kit feeds only 2-3 people. Customer awareness programs using coupons, magazine Consumers have to buy toppings separately. advertisements, and in-store demonstrations. Expensive ($12.38). Formal 4-step process for research and development. It has successful market experience in launching new products. Easy preparation, but gives customers the chance to be involved in the cooking process. It allows customers to customize. Refrigerated pizza is considered to be tastier than frozen pizza. Surveys showed that 33% of people had strong interest in a whole grain crust. Opportunities Leverage the relationship with North Dakota durum wheat supplier to supply wheat for pizza dough. Contract with local cafes and other gourmet specialty restaurants to offer products in other store formats. Leverage TruEarth brand name to enter the pizza market. TruEarth is considered to be high quality so we can utilize this to demonstrate the benefits/product attributes of the pizza product. Higher customer awareness due to the success of fresh pasta Cucina Fresca Threats Consumers may not purchase additional toppings. Rigazzi has tested a pizza concept and is preparing to introduce it. Competitors may quickly replicate whole-grain pizza kit and price them lower to win larger share of the market. Nestle and Kraft dominates the frozen-pizza market. Other outlets for pizza like restaurants, take out etc. The pizza crust may not be as fresh as the take out crust.

Projections and calculations:

Fresh Pizza Purchase Volume Estimate, Year 1 Trial Purchase Intent Definitely would buy % of "Definites" who actually buy "Definite" Purchase Probably would buy % of "Probables" who actually buy "Probable" Purchase Trial Rate ( Definite + Probable) = Marketing Plan Adjustment Customer Awareness Non- Customer Awareness Projected Consumer Awareness Projected Consumer Awareness (%) All Commodity Volume Distribution (ACV) 27.33%

18% 80% 14.33% 43% 30% 13.00%

3.23 6.28 9.51 16.18 40%

Marketing Adjusted Trial Rate (Trial Rate * Awareness * ACV) Target Household Trial Household (MM) Repeat Purchase Input Trial Household (MM) Repeat Purchase Occasions Repeat Tansaction Amounts Repeat Rate, By Product Scenario Medicore Product Average Product Excellent Product Repeat Volume,by Product Scenario (MM) Medicore Product Average Product Excellent Product

1.77000% 58.8 1.04

1.04 2 1.6

21% 37% 49% Total Volume 1.74 2.27 2.67

0.70 1.23 1.63

Retail Price Wholesale Price

$12.38 $8.05

Medicore Product Average Product Excellent Product

Estimated Revenue (Total Volume * Wholesale Price) As per 5% As per 15% penetration penetration $14.00 M $4.67M $18.28 M $6.10M $21.5 M $7.20M

Analysis On the basis of the above table on Estimated Revenue we can see that we cannot enter the market with the existing proposition. We need minimum revenue of 12 MN, which cannot be guaranteed on the basis of the above table. Factors that could affect Truearths sales: Another competitor can enter and sarurate market (Rigazzi). The estimated value could take a hit if Rigazzi enters and eats into Truearths estimated market share. Losing first mover advantage to Rigazzi.

Recommendation Pasta market is safe but there is a need to enter new categories and expand the product line so as to seek the new customers and increase the brand awareness. Constant innovation is very much required even in the Pasta market. Diversification and augmentation is very important to increase our sales and profits. We can gain a first mover advantage if we introduce the whole grain pizza before our competitors enter the market.