Decision Problem The Nestle Refrigerated Food Company (NRFC) has the opportunity to extend its Contadina brand name into the refrigerated pizza market. NRFC must determine whether adding a pizza, with or without extra toppings, will meet specific financial objectives and increase sales. Possible Decision Alternatives Our analysis shows that NRFC can 1) maintain the status quo, 2) introduce the refrigerated pizza without toppings, or 3) introduce the refrigerated pizza with toppings. Analysis of Industry Pizza is part of the large and rapidly growing Italian ethnic food category. Restaurants like Pizza Hut and Domino’s capture 88% of the $18.4 billion pizza market. Although 75% of the last 10 incidences of pizza consumption were …show more content…
Using the same model as in Exhibit 9, the total projected volume of “Pizza Only” is 7.85MM units (see Appendix 1) and forecasted revenues are $33.5M, which is $11.5M under the minimum baseline (see Appendix 2). Alternative 3: Pizza & Toppings Advantage: According to Exhibit 21, 76% of respondents are favourable to the pizza kit and toppings options. Moreover, 87% of Contadina pasta users, which represent 24% of the 95.5 million targeted households (almost 23 million), are favourable to the concept. Since Contadina has high brand awareness, advertising expenditures could be lessened. Most importantly, this option exceeds the minimum factory sales of $45 million by over $7.5 million. Disadvantages: The pizza kit and toppings option is rated as too expensive/ more than takeout/delivery/restaurant. The mean price that typical consumers would pay for a 12” pizza service two-three people is $6.49; the average retail price for Contadina pizza and toppings is $8.00 (assuming 1.25 toppings per pizza). In addition, although the pizza kit and toppings option has a “homemade” element to it, some people will prefer to order from a restaurant. This may prove to be a major setback, especially in a market where consumers are almost conditioned to order from a restaurant whenever the craving for pizza, or the desire for a quick, easy dining occasion, presents itself.
only supply plain cheese and pepperoni and cheese combo pizzas. We also know that there is a fixed cost of
The NRFC must find a way to position their product so that they can draw in current consumers that are loyal to frozen and take out pizza companies. This could be hard since “pizza kit” that is being presented is new to the market, so the success (or failure) of the concept has not been proven. However, the biggest issue may be the time-sensitivity of the launch. Kraft has already done market research for a similar refrigerated pizza and has plans to launch the product in 6 months. If the NRFC wants to achieve the first mover advantage that helped them be successful in the Contadina Pasta launch, they will have to get the product to the market quickly. Nevertheless, after reviewing the data I believe there is a strong market for a successful launch, but have some recommendations to ensure their
Whether or not Americans ever agree on what variety of pizza crust is best, thick or thin, round or square, hand-thrown or rolled, one thing is sure: America’s long-term love affair with pizza remains as saucy as ever with no breakup in sight. In fact, the National Restaurant Association estimates a whopping 3 billion pizzas are sold in the U.S. each year representing $32+ billion annually in revenue. Now thatsa-lotta-pizza!
One of the main reason’s Papa John’s has had so much success since the time of their inception is the limited menu and freshness of their product. A limited menu could be considered as a disadvantage, but for Papa John’s the limited menu is an advantage as the main focus is their fresh pizza (Parnell, 2014). They have received numerous awards for customer satisfaction, as they only use fresh ingredients and vegetables on their pizza (Parnell, 2014). They also require all of their franchise locations to purchase their ingredients from a list of approved suppliers. More recently, the pizza industry has changed by offering more low cost pizza options from companies like Little Caesar’s and Cici’s (Parnell, 2014). The pizza from these locations
The pizza market can be very lucrative, therefore it is very competitive. There are low barriers to entry for this market because there is
Exhibits 6, 8, 9, and 10 provide a great deal of information to TruEarth Pizza, including several necessary areas of continuing product development. Creating more appealing varieties and finding a way to increase the convenience factor, for example, would be excellent ways to improve customer response to the product. There are other, more distressing problems that suggest the entire model might be flawed and ultimately unprofitable: two of the most substantial dislikes of the
In a growing ethnic food category, NRFC is facing the decision of launching or not Contadina fresh pizza. Study has shown that business viability is closely depending on brand penetration rate which is not accurately measured. Moreover, NRFC try to get the first mover advantage to face the expected concurrence of Kraft. Product is facing positioning problem, and if the launch failed, it may affect brand awareness and be harmful to its pasta line. NRFC should resolve positioning problem by finding the right price that increase sales reduce dependency to brand parent and ensure product
of a crust-free pizza; we saw it as a significant marketing advantage." So a new product
The market studies consisting of the forecast of the estimated demand show that the pizza
of pizza they will serve in the kit both in terms of crust and toppings.
We have seen from the forecast model of the refrigerated pizza kit that the whole-grain refrigerated pizza kit could make a profit, as the $17.07 million exceeds the minimum required wholesale value of 12 million, showing a surplus of $5.05 million. We also have seen that TruEarth has a first mover
Buyers: While the original strategy was to offer only high-quality pizza, customer preferences began to shift gradually which required expanded menu options for items to complement pizza such as desserts and other creative menu items. Declining sales in the quick-service and sit-down restaurant dining increased the propensity for people to cook more meals at home as well.
The presence of giant pizza companies from its origin, Italy, and from its Western counterpart, the US, in almost every corner of the metro is enough to reveal the Filipinos’ love for pizza. Next to fast-food chains selling burgers, the most patronized parlors are those engaged in pizzas and it makes a potential high-income business. Pizza industry in the country is dominated by Pizza Hut, Shakey’s and Greenwich. Having a strong brand equity in the pizza industry allows a company to gain a significant advantage in the market. Customers in the pizza industry place a high value on the product quality and price of a company. Maintaining a good reputation is very important in this industry for companies because customers will build a relationship with the company and will keep on coming back or ordering from that company if they feel like they are getting a good deal.
The California Pizza Kitchen has 88 restaurants in California alone, which makes it vulnerable to negative economic conditions in California. The California Pizza Kitchen needs to satisfy a number of conditions like credit worthiness, if it continues with its current credit facility along with the likelihood of additional financing. The company does not have direct control over its franchising and licensing partners who contribute to the profits and royalties, and therefore, it affects their profits. Existing economic conditions makes it difficult for the company to pursue its growth plans of expansion. (California pizza kitchen 2009 annual report) 2010).
When it comes to pizza, everyone has an opin ion . Some of us think th at our current pizza is just fine the way it is. Others h ave a favorite pizza joint th at makes it like no on e else. And m any pizza lovers in America agreed up until recentl y that Dom ino 's home-delivered pizza was amo ng the worst. The home-delivery market for pizza cha ins in th e United States is approximat ely $15 billion per year. Domino's, which owns th e largest home-delivery market share of any U.s . pizza chain, is find ing ways to innovate by overhauling its in-store transaction processing systems and by providing other us eful services to customers, su ch as its Pizza Tracker. And