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Nestle Contadina Pizza

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    Pasta
    Purchased Lambert’s Pasta & Cheese
    Challenge – Needed to identify a brand name; Found Contadina through focus groups and finalized upon Contadina Fresh Performed BASES I study to assess the current level of awareness and usage of fresh pasta and sauces. NRFC wanted to estimate first year trial volume, simulate total year 1 sales volume and understand likely effects of alternate positioning. BASES study forecasted market data such as trial rate, repeat purchase, transaction size and purchase frequency. Concept studies to determine best positioning

    Completed 300 concept tests in six different cities, wherein the respondents were 18+ females who were the primary grocery shopper. Among Homemade, Pasta Dinner and Superior positioning; Superior emerged as the best alternative Based on market research findings, BASES model was used to predict key forecast data Top-two box score was 75% (exhibit 4) which led to adjusted trial rate of 34.5%

    Promotion strategy
    Spent $13MM in advertising which was estimated to generate 48% awareness Spent $6.2MM in consumer promotion followed by $4.8MM in trade promotion Combined effect of the promotions was anticipated to result in 70% ACV (which represents 70% of sales volume of all food products in that area). Repeat purchase

    As no product existed, BASES used consumer reaction to the concept and its prior experience with dry pasta to forecast repeat purchase Three scenarios of product quality (mediocre, average and excellent) were forecast Due to shorter shelf life, 6-week purchase cycle was assumed. Volume was forecasted as in Table A

    Pasta sauce – Analysis similar to pasta was conducted; market size was two-thirds of that of pasta Positioning BASES used PASS (positioning analysis and segmentation summary) Utilized 27 attribute statements used by consumers to determine criteria influencing
    recognition, preference and fit of brands Manufacturing and Distribution

    Existing manufacturing facilities were inadequate in technology and quality to produce refrigerated foods. Also, the existing distribution channels were not built to handle short shelf-life refrigerated foods. NRFC decided to build a single factory in Danville, Virginia capable of producing 60 million units. Additionally, a simple and highly effective distribution system was designed to deliver the product within 10 days

    PIZZA
    Logical product line extension after the successful rollout of pasta Market
    $18.4 billion market dominated by restaurants (68%) for eat-in dining and take-out Pizza consumption was strongest in northern and eastern parts of US. Nestle’s research estimated that 75% of at-home pizza consumption was delivered/takeout Delivered/Takeout market was dominated by large national franchisors such as Pizza Hut and Dominos Average price of 12” pizza was $8 – $10; Frozen pizza market was fragmented with an average of 6”- 8” pizza selling for $2-3.

    Product concepts
    Pizza kit
    refrigerated and consisted of a crust packaged together with separate packets of cheese and sauce (tomato or pesto) expected 12” pizza kit to sell at approx. $6.40
    Additional toppings were developed to be sold separately for $1.30 per topping Pre-assembled heat and eat pizza
    Refrigerated pizza came in four varieties
    Expected 12” pizza kit to sell at approx. $7.60

    Concept testing
    Unlike BASES study, concept test was not used to project potential product volume but rather to assess market interest in its new offerings and obtain diagnostics for refinement for its concept Conducted 400 mall concept interviews in four cities (NY, Atlanta, Chicago, LA) 200 hundred people were interviewed for each concept (equal males and females) Respondents were
    primary grocery shopper for the household or major input in pizza purchase Pizza kit – Top-two box score was 58% overall (49% – males; 66% – females) Pre-assembled – Top-two box score was 52% overall (50% – males; 54% – females)

    Production feasibility
    Pre-assembled pizza concept was deemed infeasible from production standpoint due to quality issues Pizza kit was feasible from production standpoint (robotics pizza line could be installed to produce uniform and high-volume product). Additionally, national distribution was possible.

    Market Study
    Concept tests of Pizza and Toppings and Pizza only
    Objective was to analyze the pros and cons of the two concepts (esp, the effect of availability of separately sold toppings) BASES II Line extension study involving both a concept and in-home product test Conduct mall concept interviews in seven cities

    Women over age who were principal grocery shopper were interviewed. For pizza kit and toppings, 399 women (incl 81 Contadina pasta users) were interviewed. For pizza kit only concept, 198 women (incl 43 Contadina pasta users) were interviewed. A quota sample of Contadina pasta users participated (100 for pizza kit and toppings and 35 for pizza only concept) Additionally, respondents likely to purchase product were given the product to try at home. After 7-10 day in-home usage period, after-use feedback was requested. Results – Product pricing was determined – Pizza kit and Toppings option – $6.39 for the kit and $1.29 for toppings and Pizza kit only – $6.39 Further study was conducted to determine parent brand penetration Initial results showed 25% penetration

    Based on MRD experience, the penetration was forecasted to range from 5-25% BASES research on Pizza toppings
    50% would buy toppings at every pizza kit purchase
    25% would purchase toppings half the time
    If toppings were purchased, trial unit – 1.5 and repeat unit – 1.0

    Promotion strategy
    Market support of $18MM comprising ($9MM in advertising, $5MM in consumer promotion and $4MM in trade promotion) was estimated to lead to 37% overall awareness (60% for Contadina Pasta users, 30% for Non-users)

    Q3
    Where will the sales come from ?
    For both concepts, based on forecast for volume, Contadina pasta users will account about 3 times as much sales compared to Nonusers. Exhibit 24 for competitive options
    Yes, because of brand penetration of upto 25% will help trigger trial higher sales volume. Revenue =( Trial volume + Repeat volume)*6.39
    Pizza & Topping

    Pizza only

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