2. Introduction
• Pemberton was the snack food division of Candler Enterprises.
• Had a revenue off 5 billion USD with 7.7% PET(profit after tax).
• Compounded annual growth rate (CAGR)-14% over the past five
years.
• Harnessed its own Direct Store Delivery (DSD) distribution system to
deliver products directly.
• It was a market leader in the US cookie and bakery snacks segment.
5. US Cracker Industry Overview
• Estimated 6.9 billion in 2011
• CAGR of 2.2% from 2008-10
• Increased growth of 6.2% in General(All other) in 2010.
• Annual growth forecasted between 10-14% for crackers with filling.
• Largest Competitors are: Kraft Food Inc, Kellogs Co. and Pepperidge
Farm.
7. Strategic Priorities
Building strong brand values in salty snack
categories.
Applying leading marketing and DSD systems
to increase the revenues and overall profits.
Building a good brand imaging in the market.
10. Marketing
• Emphasized on heavy advertising
• Promotion to the end customer and appealing trade
• Aggressive plan for pull spending and trade promotions
11. Distribution
• Effective DSD distribution system
• Proper management of shelf inventory and in-store merchandising
• Optimizing the system to account for longer shell life of crackers
12. Price
• Sought a premium strategy
• Priced at 155% above the category average cost per ounce
• Same retail price as that of competitors but lesser quantity
18. Market Plan-COLUMBUS
• 5 special “Krispy Force”’ representatives were hired in Columbus
• They worker with Pemberton regional and district sales managers and
focused solely on selling the new Krispy Natural product line
19. Market Plan-SOUTHEAST
• In Southeastern cities, the company was able to test its ability to
reposition the product to a more premium offering
• Here regular Pemberton DSD route delivery representatives worked
with regional and district sales managers, handling sales and service
of the new Krispy Natural Line.
20.
21. Expectation
• Columbus would achieve a
market share of 9%
• Southeast’s market share will
rise from 9% to 15%
• The company hoped for 15%
shelf space in both the markets
Reality
• Columbus doubled the share
target, achieving 18% market
share with 30% category
expansion..
• Southeast had a slight increase
to just 10% with little category
expansion.
22. WHY?
• Columbus was able to achieve an 18% market share by stealing share
from other competitors
• However in Southeast the trade was generally receptive to the new
Krispy Natural Line due to the relatively low introductory trade case
discount of 15%
23. Conclusions
• Grabbed 18% market share in Columbus as a new entrant in salty snacks business.
• Kraft, Kellogg and Pepperidge in total lost 10% of market share, despite higher
demands.
• Possible competitive responses to new brand “Frito lay”
• Launching more new product mix as per customer taste and keeping health as a
priority concern.