This has been created by Krishnendu Saha in a marketing intern under the guidance of Professor Sameer Mathur, IIM Lucknow.

1. Launching Krispy Natural :
Cracking the Product Management
Code

2.  The U.S Cracker industry – in brief.
 How Pemberton launched Krispy Natural?
 Initial failure to launch Krispy Natural under Pemberton.
 Strategies that Pemberton used to relaunch Krispy Natural.
 Future problems that Pemberton would face.

3. Brief Background of Pemberton
Candle Enterprises
Multinational beverage and
snacks goods manufacturer
Pemberton
Snack Food Division

4. Pemberton products
28%
72%
Candle’s 2011
Revenue
Pemberton
Rest of the
Divisions
 Snack food division
 Sold packaged food bars, cookies and other sweet baked goods.
 Market leading brands were : Softies Cookies and Homestyle muffins & doughnuts
 Market leader in US cookie and bakery snacks segment of sweet market.

5. Pemberton’s Points of
Differences
• Products with Superior taste experience.
• Constant improvement of recipes &
flavours.
• Utilization of company owned DSD – Direct
store Distribution.

6. Why Pemberton wanted to enter
the salty crackers segment?

7. Understanding the U.S. Cracker Industry
• Retail cracker sales in the U.S reached
an estimated $6.9 billion in 2011.
• Top US cracker manufacturers : Kraft
food Inc., Kellogg Co. and Pepperidge
Farm.
• These companies accounted for almost
three-fourths of the cracker market in
2010.
Retail cracker Sales in the U.S. market
Salty crackers Crackers with filling Graham Crackers
Bread sticks Matzoh Crackers All others

8. Effect of changing trends in the
U.S. cracker market
• Share decline from leading
manufacturers Kraft and
Kellogg.
• Crackers faced significant
competition from other snack
foods alternatives.

9. Mintel Study
• 74% of respondents consumed
crackers regularly.
• Crackers were the top salty snack,
slightly ahead of potato chips.
• Standalone flavour – main criterion
in cracker purchase decisions.
• Consumers desired healthy
products.

10. LAUNCHING THE KRISPY PRODUCT
LINE
In 2008,Pemberton entered the
salty snack market by acquiring
Krispy Inc.
Single serve cracker packages.
Flagship product : Package
containing six round toasted
cracker sandwiches with cheese
fillings.
Marketed as mobile, “Grab and
Go” snacks.

11. WHY THIS
OFFERING FAILED
IN THE MARKET? The product fell
short of the
management
projections.
Under-performance
was a result of the
limited product line.
Product did not
deliver the flavour
satisfaction as
expected.

13. Relaunching Krispy as
Krispy Naturals

14. Motivations for
the repositioning
• Overall market was large and
segments like crackers-with-filling
were expected to grow by 10-14% per
year.
• Frederick, marketing director of
Pemberton, pointed out that Kraft had
become complacent as they continued
to lose market share to Pepperidge
and other smaller brands.
• Consumer dissatisfaction with flavour
and taste experience of current
cracker brands.

15. KRISPY NATURAL
MARKETING STRATEGY

16. Product Strategy
 Increasing package servings to multiple-servings
 Improving taste
 Krispy Natural would be made of 100% whole wheat other all natural ingredients.
 Cracker with filling would offer many varieties.
 Also, flat cracker flavours would offer many variations.
Result :
1. Latest consumer taste survey showed a 77-82% positive
purchase intent for new Krispy Natural flavours.
2. The survey also revealed four-to-one preference over the
leading competitive cracker for the white cheddar flavour.

17. Marketing
 Emphasized on heavy advertisements and
promotions.
 Aggressive plans for pull marketing and
trade promotions.
 Price discounts to be offered initially.

18. Distribution Strategy
 Management believed effective DSD
would be critical component in the overall
Krispy Natural program strategy.
 The company needed to optimize the
system to account for longer shelf life of
crackers.

19. Pricing Strategy
 Krispy Natural sought a premium pricing
strategy.
 It was priced higher than the category
average per ounce price. However, on a
“visual price” basis, Krispy natural would
be on par with the competition.

20. Brand Projections
($ in
millions)
Year 1 Year 2 Year3
Dollar Sales $500 $580 $700
Growth 16% 21%
Dollar Share 9% 10% 11%

21. Test Market Plan
 Krispy Natural was officially launched in two test market regions : Columbus,
Ohio and a trio of cities in South-eastern U.S.
 The company hoped to secure 15% shelf space in each supermarket’s cracker
section.

22. TEST MARKET RESULTS
Columbus
Initial Expectations: 9% share of
the cracker category after 16
week test period.
Result: Share target got doubled,
achieving an 18% share. Category
volume increased by 30%.
South-east U.S
Initial expectations: Increase in
the market share from the
existing 9% to 15% after 16 week
test period.
Result: Only a mere increase of
1% in the market share, thereby
reaching 10% and little category
expansion.

23. SALES AND CHANNEL
RESPONSE
Positive
Sales managers were pleased
and felt the trade was very
interested in the new offering.
Promotions and advertisements
were well received.
Pull marketing created a buzz.
Negative
However, according to an
industry analyst, the positive test
market results were driven by the
price discounts, couponing and
sampling.
Many felt that the taste and
flavours of Krispy Natural were
no better than current brand
offerings.

24. Ramp-up to National Rollout?
 Quite disappointing results in the Southeast but with lower shelf
space than projected.
 Poor results in the Southeast were understandable.
Few things to consider before national roll-out
 Roll-out strategy against one of the largest salty snack brands:
Frito-Lay.
 Things to improve upon before national roll-out.

25. A Brief Recap
 Pemberton – A snack food division under the Candle Enterprises.
 Pemberton acquires Krispy Inc. to enter the salty snack segment.
 First launching fails to impress and it forces Pemberton to re-brand Krispy into
Krispy Natural.
 Test Market Results – Mixed Response.
 Things to consider before national roll-out.

27. Disclaimer
Created by Krishnendu Saha, IIT Roorkee during a
marketing internship by
Professor Sameer Mathur, IIM Lucknow.