TruEarth-Healthy-foods

StatementTruEarthHealthyFoods,whotookthespecialopportunitytolaunchfreshwholegrainpastaproducts,lostitsdominancein2008ascompetitorsstartedprovidingsimilarproducts.TokeepsustainablegrowthsandacompetitiveedgeinfreshandhealthyItalianfoodindustry,weareconsideringinnovatingfreshwholegrainpizzas.Thepressingissueisthatbasingonthemarketresearchresults,canwedeterminewhethertolaunchthesepizzasintomarketornotandwhatvolumeofpizzaswouldbe.EvidenceofkeymarketingissueStagnantgrowthinCucinaFrescasoastodevelopnewproductAnincreasingawarenessofimportanceofhealthywholegrainsfoodCustomertrendinhomemealreplacement,semi-preparedandrefrigeratedfreshproductsBettertastyfreshwholegrainpastasinTruEarthcomparedtoothercouplesofcompaniesAhugesuccessinintroductionofCucinaFrescaintomarketbyapplyingfour-stepprocessforresearchanddevelopmentThreatenedbyRigazzifreshwholegrainpasta,andConductedindependentsurveystoshowdemandsofwholegrainpizzasDoubtsonthewholegrainpizzasmarketbecauseoflow-costfrozenpizzasofferedbyKraftandNestlePizzaconcepttestedbyRigazziwhichwouldlaunchinthenotdistantfuturePenetrationofCucinaFrescapastaaffectingthepizzavolumesRecommendation:Ifirmlybelievetolaunchwholegrainpizzaintomarketnowbecausewewillmakeprofitsandgaindominanceinwholegrainmarket.FinancialAnalysis:Pastatrialhouseholds=targethouse*trialrate*awareness*ACV=58.8*11%*50*40%=1.3Non-customertrialhouseholds=58.8*12%*40%*(1-11%)=2.5Totalwholetrial=1.3+2.5=3.8Repeatvolume=trialhouseholds*repeatpurchaseoccasion*repeattransactionamounts*repeatrate=1.25*3.8*2.0*49%=4.7Wholevolume=3.8+4.7=8.5MMRetailsalesvolume=8.5MM*12.38=105.23MMGrossrevenue=105.23*(1-35%)=68.4MGrossmargin=Grossrevenue–expenses=68.4M-12M-(2M+8M)=46.4MAsabovedetailedcalculationstoobtainthegrossmarginofwholegrainpizza,weneedtolaunchthiskindofproductassoonaspossible.