Course

Sakhvadze Salome

Msc in Marketing

6.10.2018

TrueEarth Healthy Foods:

Market Research for a New Product Introduction
Company Background & Problem statement
In the 1980s, demand for healthy and gourmet products grew very fast. A young
entrepreneur, Gareth DeRosa saw an opportunity to produce healthier gourmet pasta and
sauces made from superior ingredients and in 1993 founded a healthy food company -
TruEarth, which was one of the first company which focused on whole grain products and
satisfied consumers’ demand. The company gained customers loyalty in some US regions and
also moreover, they raised consumer awareness through different marketing activities.

Cucina Fresca: Fresh Pasta and Sauce

Based on the three important developments which reshaped how consumers purchased
groceries, the company started to think how to take advantage of growing demand for quick
home meal replacements, refrigerated pasta and whole grain food options that did not
sacrifice taste. The TruEarth test kitchen developed a fresh whole grain pasta line dubbed
Cucina Fresca, Italian for a fresh kitchen, with a full range of choices. In 2006, they tested
the concept with focus groups. As a result they received quite positive feedbacks. After they
estimated Fresca’s potential sales volume, first-year trial volume and repeat purchase volume
they got results which indicated a high percentage of positive purchase intent. Accordingly,
the company launched a new product. By the end of 2007, it’s sales had reached $23 million,
making it the most successful product launch in company’s history. The main factors why
Cucina Fresca succeed were:

 The first mover advantage( for this period). When they launched the product on the
market there were no strong competitors there;
 There was an unmet demand;
  The product was healthier and tastier than other competitors’; and
 The product was quick and easy, with simple instructions and exact proportions.

In late 2007, the main competitor Rigazzi brand introduced the similar product (whole grain
fresh pasta). They moved very fast and because of that, the success of Cucina Fresca was
threatened. TueEarth needed new steps. Soon, after TruEarth had launched the pasta and
sauces line, Eckstein’s team (brand manager) has started working on a refrigerated pizza kit.
On pizza’s market situation was different. Based on the extensive data from TruEarth and
Bases studies (research company), Eckstein had to decide whether or not to launch TruEart’s
pizza line. The decision-making process was time-sensitive because one of the TruEarth
competitors, Rigazzi Brand, had already tested a whole grain pizza concept and was not far
from a launch.

Recommendation

My recommendation for the TruEarth company is to launch a new product line immediately.
However, they have to change some details for the product before they launch to meet
consumers’ preferences.

Pizza market is really large and competitive. As it was indicated, takeout/delivered pizza
companies and pizza restaurants are most popular and primary choice of consumers. On the
one hand, both previously mentioned categories (takeout/delivered and restaurants) and
additionally frozen pizzas (Nestle, Kraft) are competitors on this market what constitute a
threat for the company, but on the other hand, there is not a large player at the moment
which produces semi-prepared refrigerated pizzas and has high awareness. And that is an
opportunity for the company. There is definitely a first-mover advantage on the pizza market
similar to fresh pasta.. If the company “does not launch the new product immediately, there
is a threat for the company to lose an opportunity to gain first-mover advantage, because
Ragazzi has already tested the new pizza concept. And if we analyze TruEart’s ongoing
situation on the market, it’s true that they are successful but revenue growth is decreasing
because of new entrants in the market and they have limited product line. Also, the main
competitor is preparing to launch a new product that will automatically have an influence on
TruEarth market share.

The systematic process for product development gave company an opportunity to maximize
the product in accordance with consumers’ needs:

• They know that the one main reason for unfavorable purchase intent is an expensive
price for a customer. They have to revisit the price for pizza kit, they can decrease the
price for each topping (for ex: from $3.50 to $3.0).
 • The major opportunity for TruEarth comes from the fact that people don’t want to cut
out on their pizza consumption and also want a healthier option - The real opportunity
lies in providing an option healthier than take away (or restaurants) and fresher than
frozen pizza, and one which is pocket-friendly too.
• Almost 33% of the population on a survey ‘strongly desired’ a healthy pizza meal
option.

One more strength for the company is that TruEarth brand awareness is high which is
conditioned with the success of Cucina product. In consumers’ minds, the TruEarth product
is perceived as healthy and product with high quality. This perception will affect the new
product launch and a consumer should connect launched product with a high-quality
product, even though pizza product is generally perceived as an indulgence. In simple words,
the popular brand image of Cucina Fresca’s will also help in the introduction of the new
product.

Also, with the large capital expenditure in packaging equipment already made, the
incremental investment for pizza was substantially less than for pasta, which included some
re-tooling costs and the marketing plan. It’s another advantage of a given situation.

In conclusion, before they launch the product it would be good for the company if they
carefully studied and analyzed the BASE research findings in the context of the proposition
made. That would help them to take steps to modify their offers on a basis of consumer
feedbacks expressed in various surveys. In Addition, if they launch the product, they need to
focus on the distribution (of the product) in supermarkets such as fresh market and whole
foods. This will help them to strengthen their brand image as a healthy and high-quality
product. This will also help them to reach the target market more effectively as well.