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Truearth Healthy Foods: Essay

659 words - 3 pages

TruEarth Healthy Foods:
Market Research for a New Product Introduction
Cucina Fresca is a quick home meal replacement product from TruEarth, an Italian food company which focused on whole grain pasta. Isabel Eckstein, TruEarth brand manager was pondered whether to launch its Pizza kit product as a product line extension of Cucina Fresca and if it worth to launch at what volume would be.
TruEarth Experience with Pasta Product - Before launching its product,TruEarth conducted kitchen test which tested to a focused group, organize survey to evaluate interest, and market research to estimates potential sales by Nielsen BASES®. Cucina Fresca pasta market studyfinding that 76% positive purchase ...view middle of the document...

7% x 16.1% x 40%)
Trial Rate x Awareness x ACV 1.9 %
Target Households (MM) 58.8 MM
Trial Household 1.1 MM
Repeat Purchase Inputs
Trial Households (MM) 1.1 MM
Repeat Purchase Occasions 2.0
Repeat Transaction Amounts 1.25

Repeat Rate, by Product Scenario
Excellent Product 49%

Repeat Volume
Excellent Product 1.3 (= 1.1 x 2.0 x 1.25 x 49%)

Total Forecasted Units of Pizza (MM) -> assuming Excellent Product
Trial Volume: 1.1 MM
Repeat Volume: 1.3 MM
Total Estimated Volume (MM) 2.4 MM

Forecast Purchase Wholesale Revenue of TruEarth Pizza
Total Estimated Volume (MM) 2.4 MM
Average Spend per Purchase (retail) $12.38
Retailer Margin 35%
Wholesale Revenue US 19.3 million (2.4 x $12.38 x 65%)
Company’s return requirements US $12 million
Company’s marketing spending US $10 million

Verdict
According to the calculation, TruEarth’s Pizza product’s estimated wholesale revenue will cover return requirements but not marketing spending.

As such, given that:
1. The total potential for store bought refrigerated pizza is US$...

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