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Launching Krispy Natural: Cracking the Product Management Code Case Solution & Answer

Launching Krispy Natural: Cracking the Product Management Code Case Solution

1. Executive Summary

1.1 Introduction

Pamberton Products is a snacks company, which operates in the US. It deals in cookies and different bakery style snacks. Pamberton started dealing in the snacks industry because the US market has a high consumption rate of salty snacks and the marker has 6.9 billion of sales. The industry grew with 2.2% from 2008 to 2010. Candeler Enterprise is multinational manufacturer of beverages and snacks and Pamberton is its food division. However, the company has a good leadership marketing and DSD-Direct tore Distribution-system, which enhances the company’s profit and revenues. It has a good market image and possesses good shares in the snacks’ industry. The US industry has 3 top companies,namely: Kraft Food Inc., Kelloggs Co., and Pepperidge Farm. These are the main competitors of Pamberton Products. The company started single-serve cracker package initially but later the research and development department foretasted the decline sales of the company because of its limited product line. It could not compete in the market and the taste was quite unsatisfactory for thecustomers. The decision was taken to relaunch the products with different sizes of packaging and enhancement in taste. The repositioning of product gave a success to the company and it had significant results in Columbus but in Southeast the results were not as impressive and the increase in market was very insignificant. The company is going to roll up its products nationally but there is a rumor that a rival company is going to introduce its new product, which can downsize Pamberton’s sales. The management is in dilemma of either to roll up its product or to apply strategies to promote the Krispy natural. However, the product has slow growth in the Southeast which is a tough situation for the company.

1.2  Problem

The main issue to the Pamberton Products is whether to rollout the Krispy Natural or not because it is expected to be launched nationally and the results of the product were unsatisfactory in the Southeast. The other proposed risk is that Frito-Lay is going to introduce its producttill the end of the second quarter, which can be high competitor of Krispy Natural. Moreover, if Palmerston launches its new product in the market, then what would be its strategy to roll out the product on the national level and to compete with its rival?The other obstacle in the sales of Krispy Natural is just 1% growth in Southeast, which can turn out to be a massive drawback for the company.

1.3  Recommendations

The recommendations for the roll out of Krispy Natural is that the company must introduce its products through best advertisements and marketing methods. First thing which must be done is the market positioning, indicating that how the company can create its brand positioning among its potential  customers. The company should also be aware of the customer’s choice regarding what do they like or prefer, and hygienic and natural ingredients must be used. The other factor that should be emphasized upon is marketing strategy, the company should adopt the market penetration strategy where the product must be introduced for every class with reasonable prices. The promotional campaigns must be done in the regions where the product is going to be launched. Another problem is low sales in Southeast because of the non-preference of the people regarding the products there. The company should analyze the market and demand of their people that what is the preference of people or do they like snacks or not? These all factors must be considered, after which, promotional campaigns must be started.

2.Problems

2.1 Problem Statement

Pamberton is a division company of Candeler Enterprise, which is a snacks company in the US. The company has good distribution channel with DSD and has a quite significant image in the market. Recently, it has launched its new product, named: Krispy Natural, which was introduced in Colombia and Southeast. The company had good results in Columbia, i.e. about 18% of sales but only 1% in Southeast. The main reason of growth in Colombia is focusing on product and adequate market research, but the Southeast results showed that there was less expansion in the market. (See exhibit 1).

The company is going to roll up the Krispy natural on a national level, but the previous results are quite unimpressive to the marketing department to introduce it nationally. Moreover, the industry has a rumor of Competitor Company, which is also introducing its new product in the market. The market test and analysis are required to be done properly in order tomake the Krispy natural successful in the market.

2.2  Problem 1

The first problem is that the launch of Krispy Natural was done in Colombia and Southeast after the market research in Ohio, Colombia and Southeast. The results were appropriate after the launch, which showed 18% growth in Colombia, which was about double the market share. But, in Southeast, the growth was just 1%, which is not an impressive result. Volume was increased in Colombia by 30% and a little volume expansion was done in Southeast.

The reason of appreciation of product in Colombia was the high preference of Krispy Natural there and its good brand image, and the stores kept the product because of high demands from people. But, there was already low brand image of the product in Southeast due to an ineffective  market image because of 2009’s crises. Moreover, the trade discounts were low in Southeast in comparison to Colombia, which is the also a cause of negative results.

2.3 Problem 2

The other problem is the roll up of Krispy natural to the national level. However, the previous results had contradictory outcomes, like the product was successful in one place but had failed to impress customers at another place, which is the bottom line of the case to roll up in such a way that it could create a significant image in the market and possess higher growth. Furthermore, the rumor is prevailing in the market that Frito-Lay is launching its new product, which can create a tough competition in the snacks’ industry.

The reason of the problem is previous forecasting result, which has created stress for the company because of the company anyhow improves its product image but the competitor’s product catches up with Krispy Natural and both the companies become head to head in market then how would the company be able to grab a good position and have expansion on a national level. The threat for the company is the lowest sales growth and the launch of the new product by its competitor. Furthermore, the company does not have trade discounts and promotions to help the company in grabbing a higher position in the snack’s industry……………………

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