Introduction Truearth was founded by Gareth DeRosa, in St louis in the year 1993.

Was a famous name in whole grain half cooked products. As more and more people were becoming diet conscious, there was an increasing demand for the whole grain products. Initially new product development and innovation was based on regular experiments and intuition which led to stock outs or excess production regularly. To prevent such problems a four step product development process was developed that included idea generation, concept screening, product development and testing and quantification of volume. Major competitors included nestle and kraft foods, truearth had to develop new whole grain innovative products as competition only on the basis of price with such big giants was not possible. In 2006 cucina fresca pasta was launched successfully and was considered as on of the best tasting whole grain pasta. Truearth was one of the first companies to focus on whole grain products. The product line featured standard pastas and specialty pastas made from blended ingredients. However, growth had slowed in 2008 as more competition entered the market and started offering similar products. Now the main concern is of the feasibility of launching a wholegrain pizza kit, other competitors like rigazzi had already conducted market testing of a whole grain pizza, so the decision under consideration was either to launch a whole grain pizza or not. The slowing growth of cucina fresca pasta had posed major threats for truearth, in order to retain the competitive edge and diversify the product line, truearth had invested heavily in the development of a new whole grain pizza. The company had invested heavily in the development of the pizza offering. Now options are to either debut or suspend the product completely. The new product line wholesales volume must exceed the 12 million mark to meet the minimum return requirements. Pizza being a major Italian American food category, the product line extension had been a part of the plan from the inception of cucina fresco, the newly developed demand in the market for whole wheat pizza crust has been addressed by local pizzerias and take-out franchises, but not in the store-bought refrigerated pizza market. The immediate release of the pizza kit would allow truearth to penetrate this market before its competitors and benefit from

first mover advantages. But failure may lead to severe consequences like they might lose share in the pasta market as well due to a deterioration in the image of the company.

Case Facts:

Sales had reached $23 million by the end of 2007.

Sustaining the competitive edge, fresh Italian food category required continual innovation.

Demand for fresh, healthy gourmet products was growing sharply.

One of the first company to launch the offerings that consisted both 60% and 100% whole grain pastas in its line.

The company had built a loyal regional following, several mainstream super mart chains carried truearth products.

Home meal replacements led consumers to demand greater variety and freshness.

There was also a greater awareness regarding the importance of whole grains in diet.

Annual sales for the category had grown to $4.1 billon by 2004.

Many whole grain breads, pastas and snacks were considered less tastier than their counterparts, truearth was widely considered one of the best tasting options.

Cucina fresca sales had jumped to $35 million in 2007.

New market entrants like rigazzi threatened truearths market leadership, targeting truearths high priority cities, offering substantial trade discounts and high value coupons to consumers.

Many companies had not yet figured out how to make a whole grain pasta that still tastes great, but truearth could not be complacent as this would not be the case for indefinite period.

With the large capital expenditure in packaging equipment already made, the incremental investment for pizza was substantially less then for pasta.

The decision making process was time sensitive as rigazzi, a ompetitor had already tested a whole grain pizza concept and was very close to introduction of the whole grain pizza.

Industry rule of thumb is that 80% of them who claim definitely would buy and 30% of those who claim probably would buy would actually complete the purchase.

Strengths
Sourced high quality ingredients for their products. Truearth was considered as one of the best tasting whole grain pasta. Strong regional following had been developed by truearth. Market projections were capitalized in the launch of the cucina pasta. Significant investment in new manufacturing equipment and development of the distribution structure was already done. Success was due to its calculative risk based on significant research. Truearth benefitted also in the pasta market due to the first mover advantages.

Weaknesses.
Pizza was considered an expensive option in comparison to other refrigerated options. There was trepidation of a few within the organization regarding the development of the whole wheat pizza option. Use of the same equipment for the production and packaging of the pizza may constrain production of both the products. Consumers already had the whole wheat pizza option, offered by big giants like nestle and kraft. Cucina fresca pasta line only captured approximately 13% penetration in the priority cities. Customers had to pay extra to buy the toppings separately.

Opportunities
The market for whole wheat products was still growing rapidly. Strong brand credibility of the whole wheat pasta could be transferred to the new offering. Previous relationships can be used in order to procure raw material for the pizza. Major supermarkets already sell truearth products. High quality perception of truearth products.

Threats:
Strong competitor Other dominant competitors like Nestle and Kraft have a very high market share There are many restaurants and obviously a fresh pizza is always better than the one offered by TruEarth People now days have health issue and are more aware and may want to avoid pizza because of the fats. The problem of extra topping leads to higher costs which might discourage customers

Quantitative Analysis
There are 3 scenarios which are penetration by 5%, 10% and 15% in which we have to consider different volumes and see the profitability for different products which are Mediocre, Average and Excellent Products are quantified below:

Marketing Research Purchase Intent Definitely Buy Percentage of customer in each category Percentage who would actually purchase Actual purchase Trial rate 18% 80% 14.4% Probably Buy 43% 30% 12.9 or approx 13% 14.4%+13%= 27.3%

Projected customer awareness ACV Marketing Adjusted trial Rate

11*0.5+89*.12=16.2% 40% 27.3%*16.2%*40%=1.8%

A.) 5 Percent
5 percent( 1 Million) Mediocre
Consumer Awareness Marketing adjusted trial rate Trial Volume Total volume(Trial + Repeat) Profit from each option 5*0.5 + 95*0.12 = 13.9% 27.3*13.9*0.40 = 1.5%

10 Percent(1.7 Million) Average

5*0.5 + 95*0.12 = 13.9% 27.3*13.9*0.40 = 1.5 %

15 percent(2.3 Million) Excellent

5*0.5 + 95*0.12 = 13.9% 27.3*13.9*0.40 = 1.5 %

58.8M*0.015= 0.88M 0.88 + 1=1.88M

58.8M*0.015= 0.88M 0.88+1.7 = 2.58M

58.8M*0.015= 0.88M 0.88+2.3= 3.18M

{1.88*12.38M}12M=11.3M (10M)

{2.58*12.38M}12M=19.9M (10M)

{3.18*12.38M}12M=27.4M (10M)

Less Marketing cost Final Profit

1.3M

9.9M

17.4M

B.) 10 Percent

5 percent( 1 Million) Mediocre

Consumer Awareness Marketing adjusted trial rate Trial Volume Total volume(Trial + Repeat) Profit from each option Less Marketing cost Final Profit

10 Percent(1.7 Million) Average 10*0.5 + 90*0.12= 15.8% 27.3*15.8*0.40= 1.7% 58.8* 1.7%= 1 M 1.0+1.7=2.7M {2.7*12.38}-12=21.4M
(10M)

15 percent(2.3 Million) Excellent 10*0.5 + 90*0.12= 15.8% 27.3*15.8*0.40= 1.7% 58.8* 1.7%= 1 M 1.0+2.3=3.3M {3.3*12.38}-12=28.9M
(10M)

10*0.5 + 90*0.12= 15.8% 27.3*15.8*0.40= 1.7% 58.8* 1.7%= 1 M 1.0M+1.0M=2.0M {2*12.38}-12=12.8M

(10M)

2.8M

11.4M

18.9M

A.) 15 percent

5 percent( 1 Million) Mediocre

Consumer Awareness Marketing adjusted trial rate Trial Volume Total volume(Trial + Repeat) Profit from each option Less Marketing cost Final Profit

10 Percent(1.7 Million) Average 15*0.5 +85*0.12= 17.7% 27.3*17.7*0.40=1.93% 58.8*1.93%=1.13M 1.7+1.13=2.83M {2.83*12.38}-12=23.0M
(10M)

15 percent(2.3 Million) Excellent 15*0.5 +85*0.12= 17.7% 27.3*17.7*0.40=1.93% 58.8*1.93%=1.13M 2.3+1.13=3.43M {3.43*12.38}-12=30.5M
(10M)

15*0.5 +85*0.12= 17.7% 27.3*17.7*0.40=1.93% 58.8*1.93%=1.13M 1.0+1.13=2.13M {2.13*12.38}-12=14.4M

(10M)

4.4M

13M

20.5M

Conclusion:

After calculating the quantitative analysis we can see that our return requirement is 12M however when we calculate our profit in each of the option which are the returns for 5, 10 and 15% we see that for all the mediocre, average and excellent products we earn a profit of reasonable amounts. The lowest possibility is of only getting revenue from 5% of the target and when we consider it for the mediocre product the profit is approximately 11M which is enough for the firm, than we see that the profit from the average product is approximately 20M which is greater than the mediocre product and when we see the profit for excellent product we see that the profit is approximately around 27.4M. So this concludes that obviously if more percentage adopt this product which are 10% and 15% respectively the profit would obviously will be higher. Recommendations: Firstly our company should launch the new whole grain pizza as the profits are beneficial. If we launch the Pizza it would diversify our risk and would increase our profitability and customers. TruEarth could also in the future expand into the store bought refrigerated pizza as there is a potential and can increase market share by introducing new flavors or variants If we launch the pizza it would make us more competitive and might provide an edge to us because of the quality and the product that we would offer. The price is a crucial consideration as our main competitors would also introduce the product soon so initially we could capture the market by offering higher price but in the later stages competitive prices can be offered.