TruEarth Case Analysis

1 Using the forecast model for pasta shown in Exhibit 5, what is your forecast of the demand for
pizza? 

Penetration Rate 5 10 15
Repeat Rate 21% 37% 49%
Trial Volume 1.1237 1.1237 1.1237
Trail Rate 27.3 27.3 27.3
Repeat Volume 0.5899425 1.0394225 1.3765325
Repeat Purchase
Ocassion 2 2 2
Repeat Transaction
Amount 1.25 1.25 1.25
Total Volume 1.7136425 2.1631225 2.5002325
Unit Price 12.38 12.38 12.38
Total Revenue 21.21489415 26.77945655 30.95287835
Retailer Commision -
35% 7.425212953 9.372809793 10.83350742
Profit 13.7896812 17.40664676 20.11937093

2 What can the TruEarth team learn from Exhibit 6 about how consumers view pizza? 

Based on ratings, customers would prefer takeout pizza as it scores maximum in all category except
in one quality attribute. When it comes to health attribute, TruEarth pizza is preferred as compared
to takeout pizza.
Based on second table of exhibit 6, we know that there is minimum change in choosing homemade
pizza (1%) and restaurant pizza (1%), there is quite high change in choosing refrigerated and frozen
pizza (around 5-6%).
The team concluded that, the people want to associate pizza as healthy food, so TruEarth whole
grain pizza should be advertised as healthy food.

3.  How do the pizza concept test results (Exhibits 7 and 8) compare with the findings for pasta
(Exhibits 3 and 4)? 

From the data analysis of the Exhibit 3 and Exhibit 7, we determined that customer prefer to
purchase Pasta than Pizza in their decision. We determined the difference in total likely to purchase
the product. In the result, considering all the given particulars, pasta is preferred.

Below is the table illustrating the difference in preferences:

 Difference in total
Cucina Industry Non- TruEarth likes and dislike
Fresca Median Total Customers Customers between Pasta and
Particulars/Measure (%) (N=300) a (N=300) (N=225) (N=75) Pizza
Definitely would buy 27 20 18 15 26 9
Probably would buy 49 42 43 39 53 6
Top Two Box 76 62 60 54 79 16
Mean Likeability 4.1 3.6 3.7 3.5 4.2 0.4
Mean Price/Value rating 3.2 3.5 3 3 3.1 0.2

Considering the given Exhibit 4 and Exhibit 8, the data is analyzed and following interpretations and
recommendations are made.

 Pasta is considered to be more freshly made, easy to prepare and has reasonable price, but
pasta is less appetizing
 Under Dislike category too, customers consider Pizza to be more expensive with limited
selection/variety but comparatively expiry duration is better for pizza
 Most of the attributes in likes and dislikes category came in favor of Pasta

Likes and dislikes in percentage (%)

Past Pizz Differenc
Particulars a a e
Likes      
Freshly made and dated 38 31 7
Easy to prepare 21 16 5
TruEarth brand name 33 24 9
Looks appetizing 22 24 -2
Good price 18 9 9
       
Dislikes      
Limited selection 20 23 -3
Too expensive 8 27 -19
Limited time to product
expiration 16 12 4

4. How do you interpret the findings in Exhibits 9 and 10 to evaluate interest in pizza? 

The exhibit 9 shows the details about the likes and dislikes of the customers linked to the pizza. The
data shown is for the customer who had participated in home trail, total of 168 customers
participated in home trial.
The key reason for the favourable purchase are Sauce, Fresh Ingredients, toppings and ease of
preparation. Out of the 109 that favoured the product around 24 considered Sauce as the key
reason, 23 considered Fresh ingredients, 21 considered toppings and 21 considered ease of
preparation as the key reason for the purchase. Also, with the rise of dual income the customer’s
wanted ready to cook food that will take less time to cook at the same time will fulfil the satisfaction
of the customer.

The key reason for unfavourable outcome as can be seen from the exhibit 9 is High Price of the
product. Around 26 out of 59 considered the expensiveness as the key reason for being
unfavourable towards the product. Also 26% from the favourable and 35% from the unfavourable to
the product suggested that the price should be reduced.

From exhibit 10 it is clear that most of the customers are ready pay a price that is less than 12$. The
mean price that all the customers are ready to pay is coming to be around 10$ that is less much less
than the price of TruEarth Pizza 12.38$. So, the company should look into possibility of reducing the
price.

5. Would you launch the pizza? Justify your decision

The company has already gained the brand value in the whole grain food market.
Pizza was a core component of Italian- American food category, with annual sales in US estimated at
$53bn in 2007. According to survey results, 77% of consumers ate pizza at least a month. So, the
market consumption of pizza is very high.
33% people shows ‘strong interest’ in whole grain crust pizza. This shows that demand of pizza is
also very high. 
The prize of pizza is also very reasonable around $8.00 for 2-3 people.
As per Eckstein wholesale value needed to exceed 12 millions, as per our estimates the wholesales in
the three are 13.7, 17.7 and 20.11 million respectively and we suggest that we will extend the line
and launch the pizza.