Nabisco Snack Well Case
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Nabisco SnackWell’s
C Merle Crawford, 2001
As of 1993 Nabisco put intense emphasis on new products and had 30 percent of sales from them. In the previous five years they had had five $100 million products. They stressed that the following story of SnackWell’s (first year sales of almost $200 million) was typical of their firm, but the process might not be for other firms because all innovators are not alike. Nabisco’s way was the result of an overhaul made when they realised that they were suffering the �silo’ problem and others. People were not talking to each other. In their new process, they sought new segments, not confined to foods, and not confined to traditional food channels.. For example, one new product effort involved selling individual-size packages of snacks in video stores and movie theatres.
Their process had three key requirements: 1) the item had to fill a real gap, 2) the item had to be on a key trend , and 3) the whole project had to be executed flawlessly. Doing only one or two just did not work in the food business. Gaps were discovered in two ways. First was a sophisticated gap analysis method of studying markets, probably built around the methodologies you will study later in the course. Second was a method of attribute analysis that sought ways a cookie could be created especially for a user, for an occasion, or just physically different. For SnackWell’s the gap was a user gap – cookies for adults. Kids had theirs, but adults did not have cookies with the attributes they wanted, namely, �great taste, fat-free, better for you’.
The second requirement, on a key trend was satisfied easily – there was very strong growth in adult population, and adults clearly wanted wellness.
The third key, flawless execution was achieved as follows. Nabisco believed in ideation and creativity. Ideas came from employees generally, from gap analysis (above) and from their special environment in the technical development departments. They encouraged blue sky ideation, they provided a �skunkworks’ environment by allowing time off to further personal concepts, staffers could present their ideas to management at annual May Fairs, and they ran brainstorming sessions where development people were joined by marketing, finance, operations, and R&D.
New product concepts that looked good (as SnackWell’s did) were given a feasibility check (could they retool for it, did it interfere with production, etc.). Then it went into quantitative testing – first screened against the firm’s market research database to see if the numbers generally looked OK (that trend issue), and then into simulated test marketing (STM) with volumetric financial scenarios. The STMs sought consumers’ reactions to the concept and used sales waves of actual product so that they could get consumers’ reactions to the taste-and measure-reuse. At this point, if consumers liked it, they were ready to reconfirm the company’s ability to produce and market such a product.
Next came the marketing phase and technical development phase. Marketing tastes included branding. They wanted a direct, memorable name that communicated something positive about the product. In this case, the apostrophe in SnackWell’s communicated