Contadina Pasta Recommendations
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Recommendation: NRFC should launch a pizza extension of the Contradina brand consisting of the pizza kit and toppings.
To reach the figure of $45M cited by Stephen Cunliffe as the measure for market success, the factors that contribute to this decision to move forward with the kit and toppings include:
в–Ð A very positive study by BASES (“BASES II study”) that had a “top two boxes” favorability for purchase at 76%, as opposed to 58% for the pizza only option.
в–Ð Cunliffe’s benchmark for market success represents only .3% of market share from a retail market size of $16.2B (retail segment of 88% multiplied by total market size of $18.4B).
в–Ð The NRFC believed that they could reasonable expect a market penetration of 25% of the current Contradina users (24% of the 95.5 M target households). This base of parent brand users represents sales of $36.6M, or 81% of Cunliffe’s figure for market success, and does not include the additional sales of toppings. (Presumes household purchase of 1 kit annually)
в–Ð This high market penetration for parent brand users requires the brand to pick up only $8.4M in sales from non parent brand users, or achieve 1.8% market penetration with that this group.
в–Ð Although there is a pending market introduction from Kraft, the previous introduction of the Kraft brand increased the size of the market instead of taking market share from NRFC.
Although not being compelling enough to elicit a different recommendation, data that makes a stronger case for not introducing this product line includes:
в–Ð The more conservative estimates of parent brand penetration of only 5%, yielding $7.3M and only 16% of Cunliffe’s target figure for market success.
в–Ð This lower market penetration for parent brand