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Launching Krispy Natural: Cracking the Product Management Code

4 pages
1018 words
Carnegie Mellon University
Type of paper: 
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Question #1: What is the problem in the Case?

The primary issue or problem presented in the case Launching Krispy Natural: Cracking the Product Management Code is the promotional and conditional success of the Krispy Naturals, which is Pemberton Products new snack-cracker. It is done with the aim of increasing more profit and capture considerably large market share. The companys market team would like to emphasise two primary problems in this case. Firstly, for the external problem, Pemberton has conducted a market test on Columbus and the Southern part of the United States, but the marketing results have not been appealing. Notably, the market share of Columbus is twice the projection of the company. Contrary this, the Southern United States offers the presentation of the market share that is below the expected. For the internal problem, the manager is meditating if they can expand the new products to the national level depending on the marketing test, as they had done in both the southern United States and Columbus. In this way, therefore, the manager must interpret the market tests results, consider possible competitive responses to the new brand and consequently present his recommendations concerning the national rollout to the vice president of the sales and marketing.

Question #2: What do you think of the Pemberton strategic priorities? Do Krispy Natural crackers fit with these priorities?

The companys strategic priorities offer a specific wavelength for product development. These include the product objectives, maximisation of the profit and provision of support for the salty snack brand. Pemberton president offered the summery of the key strategic priorities for the company as building a collection of the attractive and durable products which are capable of increasing the Pembertons competitive power, expand and capture more share of the market. The second priority entailed leveraging leading sales and marketing systems to improve revenue and profit. In a balanced view, this would increase the companys reduce the operation costs, increase revenue and ultimately the benefit. Establishment or the acquisition capabilities in salty snack categories required a direct launch of the product into the market, and this was the third priority. It would save the cost of development and the time for the newly launched product. The company can benefit from these preferences. A closer look at the whole companys current status would reveal that it substantially fit in these priorities. Several factors offer the indication of this. First, the Companys Research and Development was focused towards improving the taste and quality of the product. Undeniably, the team viewed that the multiple-serving packages sizes and more flavour alternatives were crucial to increase the companys competitive advantage especially with the existing brands in the market. Secondly, the company focused on an appropriate concentration that enabled it to achieve the market demand. The Exhibit 5 offers the products sales projection that it will increase the float amount by double, mainly from 550 million to 100 million.

Question #3: How do you read the test market data? Are we looking at the right indicators?

As observed, Krispy Product should have a good prosperity in the future if at all the company continues investing in it. The Columbus case is unique because the product rapidly captures the 18 percent market share. Undeniably, this offers an implication that Krispy Natural is dominant and accessible within the region. The competitors, which include the Kellogg and Pepperidge in this case lost about eleven percent of the market share within the Columbus region. In this way, therefore, the competitors must adopt new strategies to counter the dominance and the competitive power of Krispy Natural products.

Contrary to this observation, Krispy does not perform well in the southern U.S market areas. Notably, its market share just increased by one percent and therefore have limited detrimental impacts on the competitors brands. Several factors have contributed to this failure. As a regional brand, the company focused its distribution channels in the South Eastern United States, and therefore it becomes difficult for the consumers of goods to change their preferences and tastes within the limited time available.

Question #4: Should we go national? What share would you project based on the test results? Would you change the plan? (Price? Push/Pull money? Krispy reps?)

The Exhibit 5 offers a descriptive information of the scenario of the Krispy Natural in Columbus. As depicted, the company was able to make a total sale of $1000 million upon its launching. Using the Southern scenario, however, the company could purchase $550 million. It means that the company could contribute nearly $5 bill8ion in sales. A closer look at the whole situation will thus show that the company Krispy Natural could provide at least 10 percent of the revenue in case Pemberton goes natural and thus possibly increase the contribution margin of the company. In this sense, therefore, the product should go natural.

Several factors seem to affect the market share. These include individual factors such as the income levels as well as the reaction of the competitor to the entry of the brand into the market. It, therefore, means that Krispy Natural should not consider changing its original market plan but its representatives based on an efficient reposition of the product. Additionally, any move to change the price strategy will substantially hurt the image brand, thereby causing the consumers do not know the position of the product. The Pull strategy will, therefore, be beneficial especially from the consumers point of view.

Question #5: What is the likely competitive reaction? What would you do then?

The competitive reaction, in this case, may involve the production of new products to compete the Krispy Natural. Other results may also include investing on advertising with the aim of fighting Krispy products, expanding the favours on the newly produced products such as on packaging and increasing the trade spending as well as the consumer promotion techniques. As a response to all these reactions, Pemberton should invest more in advertising as well as in merchandising to inform the consumers about the Krispy Natural products through a significant impression ahead of their competitors. Finally, the company should offer discounts and couponing with the aim of attracting customers to make purchases.


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