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MARKETING MANAGEMENT
Nehal Sharma SMBA08292Nikhil Bhatt SMBA08293
April 11, 2023
Nestle Refrigerated Foods: CONTADINA Pasta & Pizza
ContentsContents
1
4
2 Overview
Company Profile
Volume Estimate
SWOT Analysis
Overview
Company Profile
Volume Estimate
SWOT Analysis
3
Exhibit Analysis5Recommendation6Annexure7
OVERVIEW & COMPANY PROFILEOVERVIEW & COMPANY PROFILE
BRIEFBRIEF
The case is based upon the various studies and market researches which have
been conducted for the introduction of refrigerated pizza in the U.S. markets by
NRFC(Nestle Refrigerated Food Company in 1990.
The company had already established itself in the refrigerated market by the
introduction of Contadina pasta and sauce in the late 1980s .
Nestle Refrigerated Foods (“NRFC”) must determine whether or not to introduce
a refrigerated “Pizza Kit” product.
Nestle should bring the Pizza Kit concept to market and position it as a high
quality, reasonably priced alternative to both the takeout/delivered and frozen
pizza segments.
COMPANY PROFILECOMPANY PROFILE- Overview
Nestle Nestle USA has diversified into the following:
1. Nestle Beverage Company
2. Nestle Food Company
3. Nestle Frozen Refrigerated & Ice Cream Companies.
4. Nestle Brands Food Service Company.
5. Wine World Estate
Between 1980 and 1984, the company divested a number
of non-strategic or unprofitable businesses. In 1984,
Nestle acquired Carnation the American Food giant. NRFC – Nestle Refrigerated food Company is located in
Glendale California. NRFC became the part of Nestle
Frozen Refrigerated and Ice Cream Company. In 1990 NRFC contemplated the introduction of the
refrigerated Pizza Product to the US market.
- Evolution
1866 • In the 1860s Henri Nestlé, a pharmacist,
developed a food for babies.
• In 1905 Nestle merged with the Anglo Swiss Condensed milk company
1918 • After the war the revenues dried up and the management responded by streamlining operations and reducing debt.
1944 - 1975 • Growth accelerated and companies were acquired. • In 1947 came the merger with Maggi seasonings and
soups. Crosse & Blackwell followed in 1960, as did Findus (1963), Libby's (1971) and Stouffer's (1973). • Diversification came with a shareholding in L'Oreal in
1974.
Today •Nestlé is today the world's leading nutrition, health and wellness company. • Sales for 2008 were CHF 109.9 bn, with a net profit
of CHF 18.0 bn. • Nestle employ around 283 000 people and have
factories or operations in almost every country in the world.
Pizza ConceptPizza Concept
Pizza Kit
1. It consists of Crust, Cheese & Sauce separately.
There are two types of sauces available i.e.
Tomato and Pesto.
2. The pizza kit costs $ 6.4, Additional Toppings of
Pepperoni and Sausage veg and extra cheese is
available for $1.3 each.
3. The Pizza is available in two sizes small ( 8
inches) and large (12 inches).
Pizza Kit
1. It consists of Crust, Cheese & Sauce separately.
There are two types of sauces available i.e.
Tomato and Pesto.
2. The pizza kit costs $ 6.4, Additional Toppings of
Pepperoni and Sausage veg and extra cheese is
available for $1.3 each.
3. The Pizza is available in two sizes small ( 8
inches) and large (12 inches).
Pre Assembled Pizza
1. It is available in varieties like Italian Pepperoni ,
Italian Sausage , Italian Cheese and Italian
mushroom and bell pepper.
2. It is priced at $ 7.60, no additional toppings are
available.
3. The Pizza is available in two sizes small ( 8
inches) and large (12 inches).
Pre Assembled Pizza
1. It is available in varieties like Italian Pepperoni ,
Italian Sausage , Italian Cheese and Italian
mushroom and bell pepper.
2. It is priced at $ 7.60, no additional toppings are
available.
3. The Pizza is available in two sizes small ( 8
inches) and large (12 inches).
Volume Estimates – Pizza Kit & Pizza Only
CONCEPT PURCHASE INTENTPizza Kit Research Results : 17% Definitely will buy59% Probably will buy
CONCEPT PURCHASE INTENTPizza Kit Research Results : 17% Definitely will buy59% Probably will buy
Trial Rate
CONCEPT PURCHASE INTENTPizza Only Research Results : 15% Definitely will buy43% Probably will buy
CONCEPT PURCHASE INTENTPizza Only Research Results : 15% Definitely will buy43% Probably will buy
ADJUSTED TRIALIndustry Rule of Thumb:80% “ Definite” Actually buy30 % of “ Probable's” BuyTherefore, Adjusted Trial:(80%)(17%) + (30%)(59%) = 31.3%
ADJUSTED TRIALIndustry Rule of Thumb:80% “ Definite” Actually buy30 % of “ Probable's” BuyTherefore, Adjusted Trial:(80%)(17%) + (30%)(59%) = 31.3%
ADJUSTED TRIALIndustry Rule of Thumb:80% “ Definite” Actually buy30 % of “ Probable's” BuyTherefore, Adjusted Trial:(80%)(15%) + (30%)(43%) = 24.9%
ADJUSTED TRIALIndustry Rule of Thumb:80% “ Definite” Actually buy30 % of “ Probable's” BuyTherefore, Adjusted Trial:(80%)(15%) + (30%)(43%) = 24.9%
ENVIRONMENT ADJUSTMENT SeasonalityENVIRONMENT ADJUSTMENT Seasonality
ENVIRONMENT ADJUSTMENT SeasonalityENVIRONMENT ADJUSTMENT Seasonality
MARKETING PLAN ADJUSTMENT$ 9MM Advertising = 37 % Awareness
58% ACV(31.3%)(37%)(58%) = 6.72 %
MARKETING PLAN ADJUSTMENT$ 9MM Advertising = 37 % Awareness
58% ACV(31.3%)(37%)(58%) = 6.72 %
MARKETING PLAN ADJUSTMENT$ 9MM Advertising = 37 % Awareness
58% ACV(24.9%)(37%)(58%) = 5.34%
MARKETING PLAN ADJUSTMENT$ 9MM Advertising = 37 % Awareness
58% ACV(24.9%)(37%)(58%) = 5.34%
Target Household
95.5 million
Average Trial Unit Purchased
1.1unit at Trial
Target Household
95.5 million
Average Trial Unit Purchased
1.2unit at Trial
TRIAL VOLUME TRIAL VOLUME
REPEAT VOLUME
Trial householdsPizza Kit(95.5 Million)(6.72%) = 6.42 Million
Pizza Only(95.5 Million)(5.34%) = 5.11 Million
Repeat RatePizza Kit22 %
Pizza Only22%
** **
# Repeat Purchase OccasionPizza Kit2
Pizza Only2
**
Average Repeat Transaction AmountPizza Kit1
Pizza Only1
==
Pizza Kit2.82 Million units
Pizza Only2.25 Million Units
Volume Estimates – Contd.. Volume Estimates – Contd..
SWOT ANALYSISSWOT ANALYSIS
SWOT Analysis of Pasta SWOT Analysis of Pasta
Strengths:
1. First Mover Advantage2. Quick & Convenient to make3. Good Quality4. A formidable market share.5. Efficient Supply Chain Management6. Adopted the Component Marketing
Weakness :
1. Stagnant Sales -The proportion of profit to sales has remained the same.
2. Short Shelf life
Opportunities:
1. Market Leader 2. Established Brand
Threats:
1. Entry of strong competitor in the market2. It’s a Cash cow.
Success of PastaSuccess of Pasta
The success of Pasta can be attributed to the following reasons:
1. First Mover Advantage
2. Strong Research methodology adopted prior to launch
3. Its refrigerated and not frozen
4. Majority of the population was in favour of the concept
5. Large variety
6. Good Quality and Fresh
7. Quick and Convenient to make.
8. Efficient Supply Chain Management
SWOT Analysis of Pizza SWOT Analysis of Pizza
Strengths:
1. Established Brand2. Market of $5.15 billion3. Large variety4. Good Quality and Fresh5. Quick and Convenient to make
Weakness :
1. Established competitors2. The survey classifies only the niche market and
doesn't give a holistic view of the market.
Opportunities:
1. A strong market of 28% to be explored.2. NRFC generating new revenue stream.
Threats:
1. Launching of product by competitors2. Market Reaction
Exhibit Analysis
Exhibit 13,14 & 15…Exhibit 13,14 & 15… From the all the three exhibits we can infer that “ Takeout” pizza is the most popular
pizza.
The Pizza Kit lags behind by a huge margin on the following counts: Taste Crust Special Meal
The Assembled Pizza lags behind by a huge margin on the following counts: Lack of Customization Soggy Crust Taste factor Special meal
Exhibit 15 clearly indicates that if the CONTADINA pizza is introduced in the market the market share of all the other pizzas already available decrease.
Exhibit 19,20 & 21…Exhibit 19,20 & 21… Among the Pizza and toppings & Pizza only, Pizza and Topping are a clear favorite.
The concept interview for the Pizza Only was very brief.
An extensive behavioral study has been conducted on Pizza and topping.
The likeability towards Pizza and toppings was unanimous amongst both users and non
users of Contadina Pasta , the same doesn’t hold true for Pizza only.
In the pre product launch research of Pasta there is a lot of emphasis of the USP of the
product which is not being replicated while launching the pizza.
The point of understanding the market perception with regards to the packing of the
product at hand has not been taken care of in the case of pizza.
Exhibit 23 & 24…….Exhibit 23 & 24…….
The survey sample for the In house testing was in complete agreement with the taste
and convenience of Contadina Pizza.
No improvement is required in the marketed product.
The majority of the sample was in favour of the Pizza.
The mean price of the Contadina Pizza and the delivered take out Pizza is almost
similar which indicates that the product is competitively priced.
Recommendations
RecommendationConcentrate on existing customer
Audit, Accounting &
Regulatory
Launch the Pizza Kit
HR Advisory
Use the existing sales platform to
gauge initial response
Provide the Toppings free of
cost initially
Eliminate “ Test Market” in Product
Development
Recommendations
AnnexureAnnexureNestlé Refrigerated Foods: Contadina Pasta & Pizza (A)
1. Using the BASES model described in Exhibit 9, forecast the estimated demand (trial and repeat) for the two Pizza
options under consideration: Pizza and Topping and Pizza Only. Most of the data needed for the forecasting exercise
is available on pages 15 34 (Exhibit 21).
2. What can one learn from Exhibits 13, 14, and 15?
3. How does the pizza concept test data (Exhibits 19, 20, and 21) compare to the pasta concept test data (Exhibit 6)?
4. What is your reading of Exhibits 23 and 24 (include Exhibit 18 if you wish)?
5. In general, how would you compare the pizza opportunity to the pasta opportunity? What are the similarities?
Differences?
6. Why was the pasta product so successful?
7. How do you like Nestlé’s new product development process? For pasta? For pizza?
8. Would you launch the pizza?
Its all about the taste , honey!Its all about the taste , honey!
Thank You