Marketing Management - II

TruEarth Healthy Foods

Case Analysis

Submitted by(Group 8- Section B)

Venkat Vinod Madaka-169278096
A Santosh Kumar 169278108
Chaitanya Kilaparthi 169278092
Priyaranjan Parida- 169278074
Chandan Singh- 169278021

Q1. Why was Cucina Fresca pasta successful? How would you compare the pizza opportunity to
that for pasta? How would you compare the actual product development process for each?
Cucina fresh pasta was successful because of multiple reasons.
1. Healthier food option: During that time people were moving away from highly processed
foods and wanted to have some healthier and tastier food option. At that time pasta segment
was not considered that much healthy option. Cucina pasta was a new entrant in the healthy
pasta segment. Cucinas pasta made the market penetration easily because it was an early
entrant in the market and the product (pasta) was healthy and tasty too.
2. Better quality Product: The pasta product included both fresh and better ingredients. The
sauces were very tasty which was able to attract customers based on taste.
3. Fresh Product: At that time people were interested in food products which they can cook at
home without much effort. TruEarth also added fresh tortellini and ravioli to their product
offering. This increased their market strength.
Comparing Pizza opportunity with Pasta:
The pizza opportunity is more than the previous pasta one. First of all, TruEarth believes that it
can make products tastier than the available ones. It is also focussing on the freshness of the pizza.
Also, the pizza market size is much bigger than the pasta market size. TruEarth can also use its
existing distribution channel to provide healthier and tastier pizza which they can make in their
home.
Product Development Phase of each product:
Earlier TruEarth was a small company. So, the product development phase was very simple. Earlier
they used to think themselves as food artists with a little focus on efficiency and company profit.
Now the organization has grown up. So, a lot of focus is given to market requirement, customer
taste etc. Now the loss of failure is huge because of the size of the organization. A lot of focus is
also needed on the existing players on the market contrary to the case of pasta where TruEarth
was the only player. So a modern product development phase is needed before product launch.

Q.2 Using the forecast model for pasta shown in Exhibit 5, what is your forecast of the demand for
pizza?
The target household for this product is 30% larger than the original target market for the
pasta launch. We will use the same projection model used by TruEarth on the product launch of their
fresh pasta line.
Below is the projection model used to determine demand for the fresh pasta. It has been
modified to adapt to the new pizza product that TruEarth is considering launching. The same
methodology was used for this table as was used in the original table for the pasta.

Fresh Pizza Purchase Volume Estimate

Total Repeat Purchase Inputs
Total Purchase Intent
Definitely would buy
18% Trial Households(MM)
%of "definites" who actually buy
80% Repeat purchase occasions
Definite Purchases
14.4% Repeat Transaction Amounts
Probably would buy
43% Repeat Rate, by product scenario
%of "Probables" who actually buy
30% Mediocre Product
Probable Purchases
12.9% Average Product
Trial rate(Definite+Probable)
27.3% Excellent Product
Marketing Plan Adjustment
Gross Rating Points
800 Repeat Volume, by Product Scenario(MM)
Projected consumer awareness
13% Mediocre Product
All commodity volume distribution(ACV)
40% Average Product
Marketing Adjusted trial rate
1.42% Excellent Product
Target Households(MM)
58.8
Trial Households(MM)
0.83
Q3. What can the TruEarth team learn from the exhibit 6 about how consumers view Pizza?
Based on the results of the survey, it is evident that Consumers prefer to opt for Takeout
Pizza over refrigerated pizza. Be it in terms of convenience, taste and high-quality ingredients,
consumers prefer Takeout Pizza. However, comparing these parameters to TruEarth pizzas,
consumers consider TruEarth pizzas to be more healthier and bit less delicious.
Also, we can learn that major segment of consumers who are willing to shift to TruEarth Pizzas
were either consuming refrigerated pizzas or Frozen pizzas before. So, the introduction of TruEarth
pizzas is going to have less impact on the restaurant pizzas market.
TruEarth should work upon increasing the taste of pizzas as well as should introduce high
varieties of pizzas to attract more customers and to retain them in the long run. However, this should
be done at the cost of not compromising on the health factor as their USP is Delicious as well as
Healthy.

Q.4 How do the pizza concept test results (Exhibits 7 and 8) compare with the findings for pasta
(Exhibits 3 and 4)?
The purchase intent of non-customers is significantly less for the pizza test than the pasta test.
However, if we consider the purchase intent of TruEarth customers, the test results for pizza is
comparable with that of pastas.
The market size of pizza is larger than that of pastas and the fact that the lower percentage
of customers willing to definite or probable purchase shouldnt be frightening. Thus from a
prospective of gross revenue and number of units purchased, we can reasonably assume that even if
a lower percentage would give better results.
If we observe the responses to descriptions of the concept, the response to favourable
concept is significantly higher than the response to unfavourable concept. We can infer that when
people were made aware about the quality, taste and ingredients they responded well.

0.83
2
12.38
21%
37%
49%

4.34
7.65
10.13

We can assume that the test is to be taken a good sign that the majority of individuals will
have a positive reaction to the product concept and the product details.
Q.5 Is there a first-mover advantage in pizza similar to fresh pasta?
Yes, it has a first mover advantage in case of Pizza, but not at the scale that it had in case of Pasta.
There is a huge demand of Pizzas in America and only Refrigerated pizzas had an estimated market of
5.8 Billion$.
Because of the growing awareness of health-conscious diet in the American society, Pizzerias
started to offer Whole Wheat Pizzas and Multigrain Pizzas.
Therefore, there is a very good opportunity for TruEarth to explore the segment. But, at the
same time, there is considerable competition from the rival brands like Rigazzi.
But, TruEarth has an upper hand because of the low investment that it would require to enter
in the Pizza market as compared to, while entering the Pasta market. Also, it has created a very good
brand name for itself in the Frozen Italian Food Market.
Q.6 How do you interpret the findings of Exhibit 9 and 10 to evaluate interest in pizza?
When looking over Exhibit 9 and 10 the general interpretation is that there is a large segment
of the test population that believes the price is too high. When we take a closer look at the number of
people who were favourable vs unfavourable we see that people who favoured the product are
approximately 2 times more the people who had an unfavourable reaction.
There are two major issues that in my opinion would not delay the launch but would be thing
I would work on fixing as soon as possible. First is the price, obviously from this data people think the
price needs to come down. In my opinion it really needs to hit closer to the $9.00 mark to capture
both the unfavourable crowd and the frozen pizza crowd. This price point could possibly be adjusted
up as they gain market share. However, entering such a tough market TruEarth needs to enter with a
splash and convert frozen pizza consumers quickly.
The bottom line with regard to the interest level of the pizza from the data shown in Exhibit 9
and 10 is that there is an overwhelming amount more interest than disinterest but the product should
continue to be refined and improved to meet the demands of more individuals.
Q.7 Would you launch the pizza?
Based on the data in the case study and the mathematical projections, I would launch the
product. I believe that there is a huge scope to capture the market as most of the respondents consider
pizza to be unhealthy and are willing to try our product if healthier. Also, Product has above average
acceptance rates based on the test results. Given the fact that just an average product launch will
more than exceed the revenue numbers needed to meet the companies return requirements the
launch this product is a go.
With an average product launch the company will gross in wholesale sales $2.5M more than
is needed to meet the $12M capital return requirement by the company. This coupled with the fact
that TruEarth is working with some slightly incomplete research data and some assumptions relating
to the interest of consumers. The product should still be successful in its first year and hopefully gain
market share in its second year.