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Discuss on why TruEarth did not make their frozen pizza product

Discuss on why TruEarth did not make their frozen pizza product successful.  Find out 1-3 business reasons, and discuss it.  Make one to two paragraph analysis

1 Understand the assumption and


techniques for estimating markets and


projecting sales, requiring students to


compare across two different products


Analyze and interpret data to make a


?go/no go? decision


Recognize the importance of perceived


value to prospective consumers of a new


product 2 Why was Cucins Fresca pasta successful? How would


you compare the pizza opportunity to that for pasta?


What can the TruEarch team learn from Exhibit 6 about


how consumers view pizza?


How do the pizza concept test results (Exhibits 7 and


8) compare with the findings for pasta (exhibits 3 and




Is there a first-mover advantage in pizza similar to


fresh pasta?


How do you interpret the findings in Exhibits 9 and 10


to evaluate interest in pizza?


Would you launch the pizza? 3 Purchase Intent Comparison: Exhibit 3 (pasta) v.s.


Exhibit 7 (pizza) Concept Likes/Dislikes Exhibit 4 (pasta) (also see the backup


by exhibit 5) v.s. Exhibit 8/9 (pizza before and after trial) Pizza attributes and substitution: Exhibit 6 (fresh takeout


vs. refrigerated) Price analysis: Exhibit 10 (different price levels survey) Volume Projection & Sensitivity Analysis: Duplicate Exhibits 7


and 5 for Pasta to Pizza case 4 Launch Do not Launch Opportunity is most likely $15 MM Opportunity may easily fall below


to $20 MM


required $12 MM


TruEarth and Cucina Fresca brands Cross-selling opportunities with


have significant equity


Cucina Fresca pasta may be




Demand for healthy, whole grain


pizza will continue to grow Research suggests price/value and


positioning problems There is significant share to


capture from refrigerated and


frozen pizza volume Whole grain pizza substitutes are


increasingly available from local


pizzerias and national chains First-mover advantage will enable Healthy crust may not be a


TruEarth to capture share ahead of deciding factor for consumers of




refrigerated and frozen pizza, and


taking share will be difficulty


Staged rollout may be possible to


manage risk 5 Measure Cucina Fresca


(N=300) Pizza


(N=300) Def would buy 27% 18% Prob would buy 49% 43% Top two box 76% 60% Mean likeability 4.1 3.7 Mean price/ Value


rating 3.2 3.0 (1=least, 5=most) 6 LIKES


Food Quality


Whole grain


Freshly made


Look appetizing


Preparation /Other


Product selection


Easy to prepare


Single Meal portion size


Brand Name


Good price


Family likes it




Limited selection


Too expensive


Limited time to prod exp Pasta


(N=300) Pizza


(N=300) 32%




22% 19%




24% 17%








18% 16%








16% 20%




16% 23%




12% Pizza after Home Trial


(N=105 F, 59 UF) 9% (lower price 35%)


8% 7 % of last








Occasions % of next 10 %change rate Pizza Eating


Occasions Takeout/delivery 47% 43% -4% Restaurant pizza 23% 22% -1% Frig pizza 9% 3% -6% Frozen pizza 19% 14% -5% Homemade pizza 2% 1% -1% Total 100% 100% 0% 8 Refrigerate Frozen Delivered d


Pizza Pizza


Pizza $4-$10 50% 77% 32.3% $10-$14 27% 17% 38.7% $14-$18 or


more 22% 5.2% 29% TruEarth Whole Grain Pizza + 1.25 toppings = average retail


price of $12.38 9 Non-Cust Cust Source Def would buy


% of actually buy


Def purchase


Prob would buy 15%






39% 26%






53% Ex 7


Ex 5 % of actually buy


Prob purchase


Def +Prob 30%




24% 30%




37% Ex 5 Target Households (MM)






ACV distribution


Adjusted Trial Household


Total Trial Household 58.8










1.1 58.8








0.5 Table






Table % of households repurchasing


Repeat purchase occasions


Total purchase (trial 1.1 + repeat 1.07) 49%




2.17 Table B


Table B


Table B (for 49%) Retail selling price


Retail sales volume


Retaier gross cost


TruEarth Sales projection $12.38


$26.86 M




17 M Table B Ex 7 B






B Table B Case text $17 M projection exceeded the required min %12 M.


Repeat = 49% * 1.1 * 2 = 1.07


Retail sales volume= $12.38 * 2.1 7=$26.86 M


Expenses=$26.86 *35% = $9.40 M


Sales Projection:=$26.86- $9.40= $17.46 M 10 Penetratio Mediocre Average Excellent 21% 37% 49% 5% $9.7M $11.9M $13.5M 10% $11.8M $14.5M $16.5M 15% $13.9M $17.0M $19.4M n If it is mediocre product quality with less than 10%


penetration, It will fail below the threashold. 11 In early 1990s, the company chose to launch


refrigerated pizza after the success of


refrigerated pasta, but the anticipated sales


volume did not materialize. The product


development team had not recognized how


difficult gaining share would be when


consumers had accessible and more


affordable substitute options for pizza. 12 Quality! Price! Convenienc


e! 13


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