Janna_Rowell_TruEarth_Case

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Feb 20, 2024

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Janna Rowell MAR 6839 Dr. Yang Yang Feb. 10, 2024 As TruEarth continues to thrive in innovating food products, the prospect of entering the pizza business presents an exciting opportunity and a strategic challenge. TruEarth, which has been around for a few years, is known for its commitment to quality and sustainability. Now, the company faces a critical decision: should it add refrigerated pizza kits to its product portfolio? With pizza’s vast appeal, the move promises considerable rewards – but also introduces the company to a competitive landscape. With TruEarth’s tremendous success in the Cucina Fresca and whole grain pasta field, the company should launch its refrigerated pizza kit – but – there are several pros and cons to consider. Strengths As a first mover in the whole grain and healthy eating market, the company has a lot of momentum to push forward. TruEarth has already secured brand awareness with its customers in its Cucina Fresca line. TruEarth’s expertise in developing convenient and easy-to-prepare meals positions it well to excel in the pizza kit segment. The kit aligns perfectly with the company’s mission of providing convenient – yet wholesome – options for busy consumers. TruEarth maintains its commitment to providing fresh and natural ingredients, allowing it to cater to a variety of tastes and dietary preferences. Second, the pizza industry represents a lucrative market with growth potential. Pizza is certainly beloved by so many, allowing TruEarth to reach new customers.

TruEarth can leverage its existing brand reputation for quality and sustainability and differentiate its pizza kit in an already crowded market, attracting consumers who prioritize high-quality ingredients and eco-friendly packaging. At the same time, this can be a double-edged sword – I’ll explain later in the challenges section. From a strategic standpoint, entering the pizza kit market enables TruEarth to diversify its product portfolio. In turn, it mitigates risks associated with relying solely on a single product category. By expanding into new segments, TruEarth can broaden its market reach, enhancing its overall competitiveness and long-term sustainability. Challenges The pizza market is highly competitive, with multiple established brands. The case states TruEarth already has competition in the whole grain pizza space – Rigazzi. If Rigazzi beats TruEarth to market, TruEarth might lose potential customers and market share. As mentioned earlier, TruEarth’s brand identity is primarily associated with wholesome, natural ingredients and convenient meal solutions. Venturing into the pizza kit market could dilute the brand image – especially if the pizza kits are perceived to be less healthy. Consumers could be confused, potentially harming TruEarth’s reputation. With data given from the case, I projected TruEarth to have a total sales volume of $17 million for non-consumers. The case states wholesale volumes must exceed $12 million to meet the company’s return requirements. The whole grain crust pizza created by TruEarth would be very successful, based on these numbers. On a personal note, as someone whose favorite cheat meal is pizza, I’d probably buy this product, considering I’d feel like I was eating something healthy.

Non-Customers Customers Source Definitely would buy 15% 26% Exhibit 7 % of "Definites" who actually buy 80% 80% Exhibit 5 "Definite" Purchases 12% 21% Probably would buy 39% 53% Exhibit 7 % of "Probables" who actually buy 30% 30% Exhibit 5 "Probable" Purchases 12% 16% Trial Rate ("Definite" + "Probable") 24% 37% Target households (MM) 58.8 58.8 Table B Penetration, % of target households 89% 11% Table B Awareness of pizza product 12% 50% Table B ACV distribution 40% 40% Table B Adjusted Trial Households 0.6 0.5 Total trial households (Non-Customers + Customers) 1.1 ~ % of households repurchasing (Excellent) 49% ~ Table B Repeat purchase occasions 2 ~ Table B Total purchases (Trial + Repeat) 2.1 ~ Retail selling price $12.38 ~ Table B Retail sales volume $26.2M ~ Retailer gross margin 35% ~ Case text TruEarth sales volume $17.0M ~

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