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Discuss on why TruEarth did not make their frozen pizza product
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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

 

4)?

 

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

 

overestimated

 

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

 

Rigazzi

 

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

 

DISLIKES

 

Limited selection

 

Too expensive

 

Limited time to prod exp Pasta

 

(N=300) Pizza

 

(N=300) 32%

 

38%

 

22% 19%

 

31%

 

24% 17%

 

21%

 

16%

 

33%

 

18% 16%

 

27%

 

23%

 

18%

 

16% 20%

 

8%

 

16% 23%

 

27%

 

12% Pizza after Home Trial

 

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

 

8% 7 % of last

 

10

 

Pizza

 

Eating

 

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%

 

80%

 

12%

 

39% 26%

 

80%

 

21%

 

53% Ex 7

 

Ex 5 % of actually buy

 

Prob purchase

 

Def +Prob 30%

 

12%

 

24% 30%

 

16%

 

37% Ex 5 Target Households (MM)

 

Penetration

 

Awareness

 

ACV distribution

 

Adjusted Trial Household

 

Total Trial Household 58.8

 

89%

 

12%

 

40%

 

0.6

 

1.1 58.8

 

11%

 

50%

 

40%

 

0.5 Table

 

Table

 

Table

 

Table % of households repurchasing

 

Repeat purchase occasions

 

Total purchase (trial 1.1 + repeat 1.07) 49%

 

2

 

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

 

35%

 

17 M Table B Ex 7 B

 

B

 

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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