In 2006, Eckstein who was the brand manager then spearheaded the launch of a new product line Cucina Fresca. Although a break-even sales of only $12 million was a necessity in the first year, the product made a total revenue of $18 million in the first year and $35 million in the second year (Kasturi Rangan & Sunru Yong, 2009).This move was by far one of the most successful launches in the company's history. However, the sales of the company began to drop as competitors such as Nestle, Rigazzi, and Kraft geared up in promoting similar products. However, it remained competitive due to first mover advantage and sizable market share.
The size of American pizza market in 2007 was around $53 billion. Two-thirds of the above came from take-outs, delivery, and restaurants. Only 11% of the above estimate came from store-bought refrigerated pizza. The total rating of this is $4.4 billion in sales which is the segment of interest to TruEarth. The sector has many competitors which include Kraft, Nestle, and Rigazzi. The director of business development at TruEarth, Rosie Carlton suggested that delivering a crust as good as a take-out pizza will determine the success of pizza. The reason for this is the fact that TruEarth's competitors offer low prized pizza making it hard for TruEarth to compete with them (Kasturi Rangan & Sunru Yong, 2009)
Most of the risks faced by TruEarth come from its main competitors. One of the danger is the fact that Nestle and Kraft are offering low-cost frozen pizza. A large number of pizza consumers consider cost when determining where to buy pizza. The company must provide great crust which matches that of take-out in an attempt to counter the above. Another threat is the fact that Rigazzi is planning on launching similar offering as TruEarths very soon. That means that Rigazzi will be providing the consumer what TruEarth is offering them plus what it gives and is not offered by TruEarth. Through this, Rigazzi will be targeting on increasing its consumer population. The other threat is the lack of an in-depth study of the study. Due to this, the company has insufficient knowledge on right market penetration, and reception of the product since most of the studies have been carried out in high potential areas, and hence they are not all-inclusive (Kasturi Rangan & Sunru Yong, 2009)
TruEarths problem is deciding on whether to act fast to gain the first movers advantage over its competitor Riggazi as it had done in the case of Cucina Fresca or launch later and gain an insight while losing the first-mover advantage.
Evaluation of Strategic Alternatives
TruEarth has an excellent opportunity to exploit since people do not want to cut their pizza consumption and want a healthier option. A survey carried out shows that 33% of customers who goes to the restaurants showed a keen interest in sound crusts. The company should also utilize the opportunity for the provision of fresher than frozen pizza, healthier than a takeaway and one that allows the consumer to modify taste suitability to give the unique home-cooked feel.
The primary strength in the fact that the company offers a nutritious and healthy provision. Unlike its competitors, TruEarth aims at providing healthy foods and close to substitutes such as fresh home-cooked meals. The arrangement of various topping flexibility is another strength of the company where the company offers an opportunity to mold the product based on individual taste to the consumer. Another advantage is indicated by the survey that was conducted and reported that 30% of the target population felt that the company's offering design was okay and no improvements were required (Kasturi Rangan & Sunru Yong, 2009)
A survey showed that 29% of the population participating in home trials concluded that the price offered by the company needed to be revised by management with the aim of reducing it. Price is a crucial element to consider in every business. The price should appeal to most of the customers to make more sales and make more profits. TruEarth's pizza could only feed 2-3 people. It I the responsibility of the management to adjust the pizza's size accordingly. The company should also consider the customer's concerns of wanting a less chewy crust. The administration should address the above weakness and make adjustments are bound to bring a positive outcome to the business.
The primary opportunity is the provision of a healthier than take away and fresher than frozen pizza which is pocket-friendly. Since TruEarth aims at providing healthy foods, it is the responsibility of the management to seize the opportunity available. Another chance is the large target market in which TruEarth strives. The company targets 11% of the total $53 billion which is a significant market. Another opportunity is the fact that American population is unwilling to cut on the pizza consumption. However, awareness of the ill effects of the available pizza makes TruEarth the most appealing pizza provider to the consumer. Due to this, there is an increase in the consumer population since the company aims at providing a healthier pizza than its opponents.
Recommendations and Implementation
The problem statement describes the alternative sequence of operations. Launching first gives TruEarth the advantage of penetrating the market adequately and establishing hold before its competitors come into play. Launching after its competitor will enable it to analyze the market demand and modify the product accordingly. I would recommend the first mover's advantage in starting the pizza offering. The company has seen success with this approach and should use it once more. However, it should be ready with necessary capital that will be required to break through in the first year.
More to that, the management of the company should take time to analyze the situation they are currently in, determine the problem faced and considering the available options. After doing the above, they should then come with a particular approach that will be advantageous, and that will yield more profits. TruEarth should consider their customer's feedback and concerns. It is their responsibility to produce products that meet the expectations of the customer. The attitude of the customer towards various products offered by the company should be analyzed as well as the market trend. This analysis can be carried out through conduction of multiple surveys by the group.
Kasturi Rangan V., & Sunru Yong. (2009). TruEarth Healthy Foods: Market Research for a New Product Introduction, 12.
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