TRUEARTH HEALTHY FOODS: MARKET RESEARCH FOR A NEW PRODUCT

INTRODUCTION

SECTION-A

GROUP - 6

DEEPANSHU AGARWAL

AVIRAL SANKHYADHAR

PUNIT VERMA

NAMAN CHAHAL

ANTONY LAWRENCE PULIKOTTIL

RAGHAW KHETAN
SUMMARY:

TruEarth was founded by Gareth Derosa in 1993 in St. Louis, Missouri. DeRosa saw an
opportunity to provide market with healthier gourmet pasta and sauces made from high
quality ingredients. The main focus of TruEarth is the use of healthier ingredients to make
home meal replacement products and deliver what customers wanted. The main product line
of TruEarth comprises fresh pasta and sauce. The competitors like Rigazzi and others started
entering the market with similar products and to sustain the lead in the market, Truearth has
been researching and investing in a product line of whole grain pizza which is healthier and
tastes the same like normal pizza. The process of the new product line is near completion and
TruEarth has to see whether to launch the newly made whole grain pizza in the market or not.

Q1. Why was Cucina Fresca pasta successful? How would you compare the pizza
opportunity to that for pasta?

A. Cucina fresca success can be attributed to the TruEarth marketing strategy of taking the
first movers advantage (FMA). As the years have passed starting from 1990's U.S have seen
a surge in dual income households which has increased the disposable income but in turn has
bought the phenomenon of " Time poverty" where workers find themselves lacking time to
cook a meal, this has bought relatively a new trend called "home meal replacements ". Here
companies provide the customer with "ready to eat products". As with human nature, it was
found out that some consumers sought semi prepared meals which would give them near to
authentic "home cooked meal "experience. Refrigerated pasta is a part of this semi prepared
food market where consumers feel that fresh pasta is cosiderably tastier and more authentic
than dry shelf stable pasta . But Pasta traditionally has been considered part of the “ bad
carbohydrates” diet due to its ingredients of refined white flour . This trend of early 2000’s
where food are characterized being diet fad or not has seen an increase in awareness of the
importance whole grains in the diet .TruEarth by analyzing that there is a huge customer
potential for multigrained ,weight loss friendly and semi cooked pasta and taking FMA
developed fresh whole grain pasta line dubbed Cucina Fresca whose success Can be
attributed to the fact that it is mix of perfect quality and quantity and gives consumers a taste
of authentic pasta coupled with being diet friendly multigrain . The Italian –American food
category has sizeable annual sales of $53 billion in the U.S .Pasta and pizza both come in this
category. Here the refrigerated version of these products share 11% that is $5.8 billion in total
of refrigerated pizza while refrigerated pasta has a smaller market share of $4.8 billion, While
33% of 77% from Italian-American food category consumers ate pizza have shown strong
interest whole grain crust and the trend where increasing number of pizzerias are offering it
shows that there is a great opportunity for whole grain pizza , It does not mean whole grain
pizza does not have its own shortcoming's many consumers feel it's an indulgence and not
proper healthy meal whereas pasta is considered a proper meal .
Q-2 What can TruEarth learn from exhibit 6 about how consumers view pizza?

Ans - According to exhibit 6, consumers avoided takeout and refrigerated pizza because it
was unhealthy. A respondent would substitute TruEarth Pizza instead of takeout or
refrigerated one.

When it comes to TruEarth pizzas, the results were different as consumer showed interest in
their pizza as compared to takeout or homemade pizza because of the high-quality and
healthy ingredients used in their pizza. In exhibit 6, we can also see that the TruEarth concept
scored higher than refrigerated pizza experience in every measure. Although the takeout
pizza experience was convenient, fresh and came in varieties, the TruEarth pizza concept was
made of healthier ingredients, which was more appealing to the consumers due to rising
health concerns. We can also understand from exhibit 6 about the change in the percentage of
next ten pizza eating occasions if TruEarth pizza would be an option. We can see a decrement
of 4% in the takeout/delivered pizza, it means the consumers would shift towards TruEarth
pizza. A healthy 17% would like to start consuming pizza with the introduction of TruEarth
pizza.

Now, if we analyze it overall, the TruEarth pizza would be favourable and with the help of
the data in exhibit 6 it’s recommended that TruEarth could move forward with its pizza
segment.

Q-3: How would you evaluate the findings in exhibit 9 & 10 to evaluate interest in
pizza?

A. Exhibit 9 represents the data collected of Pizza product likes and dislikes, after home trial.
A total of 168 respondents participated in the in-home test. Of these, 109 were favourable to
purchasing the product and 59 were unfavourable. The likeability of the cheese, sauce,
toppings and fresh ingredients were the key reasons for respondents favourable to the
product. The ease of preparing, the pricing, family liking, and the overall taste, texture and
quality of the product also made some respondents favourable.

The main reason for respondents, who were unfavourable, was the expensive price of the
product that is 45%. The exhibit also shows that the respondents were unfavourable because
the product was more expensive than eating a restaurant or a takeout, that is 23%. Few
respondents were unfavourable because they disliked the crust and overall taste and quality of
the product or their family disliked it, that is 11%.

‘Suggested Improvements' showed as high as 35% of respondents wanting a lower price.

Respondents were also unfavourable because the crust was too chewy, and they didn't like the
overall taste/flavour.
Exhibit 10 shows the typical price consumers would pay for a 12” pizza. Maximum
consumers would pay anywhere between $6.01 to $10.00 and the average retail price
estimated by TruEarth for their product, assuming a customer also buys toppings, was
$12.38. The average price a favourable respondent would pay was $10.75 and $8.86 is what
an unfavourable respondent was willing to shell out.

Although people were receptive of the product as it was healthier, the main area of concern
was that of the price of it. This is clearly what can be said about the interest in pizza by the
consumers.

Q4. Would you launch the pizza?

A. Yes, I think TruEarth should launch the pizza as early as possible as they have benefitted
before from being a successful first mover with their product Cucina Fresca. The success of
Cucina pasta has already built a good reputation for the company and consumer are already
aware of their brand. TruEarth believes that they carry a message of high quality and healthy
ingredients into the pizza market and the product is healthy and convenient. Pizza should be
launched now to stay with an advantage of first mover to avoid falling behind their
competitor Rigazzi. Investment and distribution has been already made when they Cucina
Pasta were being introduced to the market and it is easy to retain existing TruEarth
customers.

From Exhibit 9, the study shows that the market response to the 168 consumers after the
home trail, 65% were in favour of the concept. the market’s size itself which is $53 billion
out of which 11% is the core target market for TruEarth which turns out to be $5.83 billion
which turns out to be higher than refrigerated pasta market. The consumer does not want to
reduce their pizza consumption as almost 33% of the population on a survey desired for a
healthy pizza meal option making the consumer crave for a healthy pizza option. By
providing an option which is healthier than take away and fresh pizza than frozen pizza and
one which is pocket friendly lie an opportunity for TruEarth. Revaluating the pricing of the
product, working out on more varieties and tastier options need to maintain the quality of
pizza to equal forecasted demand as it seems like a negative aspect pointed by the
participating consumers in the studies as seen in Exhibit 9 and 10. Consumers view pizza as
something that is easy and convenient for whole family so Truearth should target the
audience who look for quick, easy and healthy alternatives like housewife, working class and
college students.