Reference no: EM132307640
Case:
TruEarth Healthy Foods, the main focus being the market research for the introduction of a new product. The company introduced Cucina Fresca in 2006, and by the end of 2007, the company’s sales had hit 23 million dollars, making the product the most flourishing product launch in the firm’s history. However, in 2008, growth had declined because competitors started offering similar products. Continual innovation was necessary to maintain a competitive edge in the fresh Italian category. Consequently, TruEarth had invested profoundly in its product offering. The company was antagonistic in launching Cucina Fresca. For instance, the company made a noteworthy investment in the distribution infrastructure and manufacturing equipment needed to obtain fresh food to shelves speedily. As TruEarth is a small firm competing against Kraft and Nestle, things were not easy for the firm, but no rush decisions were made. As the company thinks that the same result will be achieved with pizza launch, there is a need for research to be done especially by looking at figures. This can be done by looking at essential things such as the company’s background, product development process, consumer trends, and competitive threat.
The company was established in 1993 in Missouri, St. Louis by a young entrepreneur Gareth DeRosa, who saw a chance to market gourmet sauces and pastas. The demand for such products grew drastically. This led to quality and authenticity in production for the company. TruEarth was among the first firms to focus on whole grain products offering both 100% and 60% whole grain pastas in its line. Their products were made from the highest quality ingredients. This concept was successful, and the firm became a supplier to various gourmet groceries. TruEarth had created a loyal regional following by 1998. Several supermarkets started to carry the company’s products. There were promotional programs carried out by the firm that raised consumer awareness.
The company’s product development was largely driven by intuition and was informal. Experimenting with new products was made without affecting overall production. Often, the firm’s projections varied from the actual market performance. However, as the company expanded and achieved scale, the cost of underestimations increased. This made the company develop a formal procedure for research and development. The process comprised of four steps; idea generation, concept screening, product development and testing, and quantification of volume.
In the early 1990s, there were three developments that restructured how consumers bought groceries. The first of these was the Home Meal Replacement (HRM), which led to enhancement of products’ freshness and offerings of prepared food. As not all consumers required ready to eat food, this led to some of the consumers preferring semi-prepared food. Single-serving meal kits were developed lessening the entire process of food preparation. The second development was Refrigerated Pasta. The third development was an increasing awareness of the significance of whole grains in the diet as people sought to avoid ‘bad carbohydrates’. Demand for the company’s products was due to flavor, nutrition, and texture. This is why Cucina Fresca: Fresh Sauce and Pasta was able to make great sales for the company. The products had a wide range of choices increasing its consumption depending on consumer’s tastes and preferences. This product’s success was, however, threatened by the introduction of whole grain fresh pasta by Rigazzi Brands in the late 2007. TruEarth responded with promotions and benefited from the fact that it was a fast mover.
Pizzas were an essential component of the Italian-American food category. The demand for pizza was exceptionally high. This is because research revealed that 77% of consumers ate pizza at least once in a month. TruEarth began working on a refrigerated pizza kit immediately after it had launched the sauce and pasta lines. The consumption of pizza had health issues, and TruEarth saw this as an opportunity to introduce healthy pizza with high quality and whole wheat crust ingredients. However, not all people in the organization were for the idea of the development of pizza line. The only way to ensure that the product succeeds in the market is to offer high quality and fresher products to compete with Nestle and Kraft. Lack of this will imply that TruEarth will not have a competitive offering in the market. The company should keep in mind that consumers have numerous options the firm needs to compete against in order to be successful in this line. Additionally, the price of the product should be affordable to a majority of consumers as offering the product at significantly higher price than the company’s competitors may affect marketing and sales of the product. The capital expenditure in packaging equipment is large while the incremental investment is lower than that for pasta. The pressure to move quickly in the introduction process is high as Rigazzi had also tested a pizza concept for introduction. This leaves TruEarth with a big decision to make and to ensure that the launch is a success for the company.
Should TruEarth launch the pizza product? Make an evidence-based argument using your analysis of the case study.