true earth

1)TruEarth Healty Foods Case Write-up: TruEarth Healthy Foods was founded in 1993 to meeting the demand for healthy gourmet products like pastas, sauces, and meals. These products used the concept of fresh whole grain rather than using refined white flour which is considered as “bad carbohydrates” and introduced the fresh prepared/semi prepared home meal replacement products. Company had successful introduction of fresh whole grain pasta and want to introduce the similar product concept for pizza in coming quarters. Company is targeting to retain its position in whole grain products in the competitive environment and acting quickly and decisively to introduce the new product i.e., Fresh Whole Grain Pizza. For this purpose company conducted the market research through Nielsen BASES®, a market research firm. This research included firstly the focus group to test the concept and then followed by take-home trials. Research data shows that purchase intent for the new product is 61%, comprising of those who would “definitely” or “probably” purchase it and industry standard suggests 62% which is very hopeful. Also utilizing the industry standard of 80% of those who would definitely buy and 30% of those who would probably buy resulted in 27.3% trial rate. Having the same marketing plan as of Cucina Fresca, which is $8 million in advertising and $2 million in promotional coupons would result in 800 GRPs, which would consequently generate 62% of awareness among the existing customer and non-customers. Further based on salesforce feedback, ACV distribution has been anticipated 40%. Based on the margin requirements the price of the pizza kit at $8.0 with individual topping packs at $3.5 would result in a total combined retail market of $38 million to $72 million and in wholsesale market $25 million to $47.3 million. These results are encouraging enough to introduce the new product in the market. But the 27% consumer feedback suggests that the new product is unattractive

2) Mr. Eckstein’s question is one wich is very critical for the company’s future. Should TruEarth launch the pizza brand and at what price should they launch it ?

The competitiveness of the market in which TruEarth does busyness adds a lot pressure on Mr.Ecktein’s shoulders. If the company does not launch this product they will loose the “fist mover” advantage, if they launch it and it does not cover the targeted ROI, financial problems could put the company in a very bad situation. In addition to this, the fact that the product they are looking to launch is a new product, there is no factual data available for the maket’s size and opportunies. With this in mind, Mr. Ecktein needs to base his decision on market research which is good but how good is it really ? Mr. Ecktein’s can look back at his past experience to answer this question and to support the decision he will be taking. The Cucina Fresca project prooved very successfull for TruEarth and this success had been evaluated through market research. However, the Pizza project has a few differences: it has a successfull predessesor in the pasta market, it has an extra direct competitor which is commonly present in this market (the delivered pizzas), the product is sold at a higher price, the overall market size is larger for pizzas compared to pasta and the product does not have a very good reputation when healthness is considered. Let’s evaluate the data presented in the case’s exhibit 7 and Table B. Here is a summary of the derived volume of sales: Data Analysis Pizza project Targeted households 58800000 Trial Rate 27% Marketing ajusted trial rate 5% Trial Households 3210480 Repeat Volume 3932838 Sales Total Volume (pizza sales MM) 7.143318 Sales (MM $) 88.43 $ ROI (MM $) 57.48 $ This summary clearly demonstrate that with the available data from the market research, it will be very interesting to launch this product. However, Mr. Ecktein must be very prudent when presenting...

3) TRUEARTH HEALTHY FOODS 1. Executive Summary This document explains why TruEarth, maker of gourmet pastas, sauces and meals, takes "to launch or not to launch" decision of a new product line of fresh whole grain pizza by using some forecasts and financial analysis. According to the analysis, launching the new product line is a profitable business and it exceeds the minimum business requirements which is $18,5M retail market ($12M wholesale) but according to the market researches, customers think that the product is too expensive and it should be lower. So, after revising its price and sales forecasts, TruEarth should reevaluate the case. 2. Company Description TruEarth, maker of gourmet pastas, sauces and meals, was started by a young entrepreneur Gareth DeRosa to offer healthier gourmet pastas and sauces made from superior ingredients in 1993. TruEarth was one of the first companies to focus on whole grain products and through several promotion programs, advertisements and demonstrations consumer awareness on this issue was raised and several supermarket chains began to carry its products. In 2006, Cucina Fresca, a new fresh whole grain pasta meal kit, was introduced to market by Isabel Eckstein, brand manager, after a long customer and market analysis with the help of a market research firm. According to the financial results of 2007, it became the most successful product launch in company history. 3. Strategic Focus and Plan MISSION The mission and vision of TruEarth is to produce high-quality and healthy products and become the most successful brand in fresh whole grain products. GOALS For the coming years TruEarth seeks to achieve the following goals: • NonFinancial Goals To generate the right ideas and offer best taste within a more healthy

way. To retain its present position as the most successful brand in fresh whole grain pasta. To add new products in order to attract critical mass of consumers. To increase consumer

4) Executive Summary

TruEarth is faced with a dilemma on whether or not to launch the new whole grain pizza product. This case has analyzed the marketing survey data and provided full alternative solutions. The calculated projected retail market of $21 to 30 million dollars will meet the business requirements to proceed with this project. The marketing plan is to focus on two key consumer groups: existing TruEarth customers and new health conscious group that may or may not be existing pizza eaters. From this strategy, it is expected to meet on the higher end of the projected retail market. A side benefit is the added penetration of TruEarth brand name to the overall consumer market, which may benefit the whole grain pasta product. Problem Statement TruEarth is a company that supplies gourmet meal products to grocery stores with strong emphasis in high quality ingredients, freshness, and healthy selections. The core competency of TruEarth is the use of whole grain ingredients to make home meal replacement products. TruEarth main product line composes of fresh pasta and sauce. Since product inception in third quarter of 2006, it has been greatly benefited from the higher than expected retail sales and profit margins. The success of this product was short lived as competitors threatened with similar product type and aggressive marketing strategies. In order for TruEarth to remain in the lead in this market, they have been investigating in a product line extension with whole grain pizza. The product development process is

at or near completion; the dilemma for TruEarth is to determine whether to launch the whole grain pizza product to the market. The success of the whole grain pizza will rest on the ability to calculate the risk to the following key points: • Product acceptance • Market segmentation, positioning, and branding • Product volume Situational Analysis The overall trend in the consumer food industry in United States...

In today’s business market, it is imperative for companies to invest in new product development in order to continuously grow. There are various factors, which come into play when it comes time for a company to make such a decision. In the case of TruEarth Healthy Foods, time has dwindled and they must make a decision whether to release their new refrigerated pizza line or not. Unfortunately, according to statistics launching a new product has an 80% fail rate. In addition, it can be a very expensive process needing special attention from management. Overall, TruEarth’s main concern here is whether or not it would be profitable venture to move forward with the launching of the new pizza product. The factors that need to be considered are the competitive market, consumer preferences based on the market research, manufacturing viability, and the financial viability. The Competitive Market The growing demand for wholegrain products, have cause companies to create products of this nature to appeal to a larger array of consumers. TruEarth’s Cucina Fresca fresh pasta product grew rapidly from $18 million in retail sales in 2006 to $35 million in 2007. In order to assess TruEarth’s dilemma with its new fresh pizza product we can compare it to the success of fresh pasta. First, lets take a closer look at the pizza market as a whole. Pizzas were a core component of the ItalianAmerican food category, with annual sales in the United States estimated at $53 billion in 2007. Moreover, surveys suggest that 77% of consumers ate pizza at least once a month. When looking at total sales, 66% came from delivery, take-out, and restaurants while only 11% came from store-bought refrigerated pizza. When we compare the

sales total of $5.8 billion in refrigerated pizza to that of the $4.4 billion in refrigerated pasta, it is clear there is a larger market for pizza than for pasta. Despite this seemingly open opportunity, Rigazzi, one of TruEarth’s main competitors is...