TruEarth SWOT Analysis

Strengths

1. Established brand equity with customer and retail stores

2. Invested in manufacturing facility and implemented supplu chain distribution channel
3. Created systematic process for product development
4. Timing with health food trend
5. Successful launch of Cucina Fresca allowed company to establish market share
and distribution network Strong position within niche market

Weakness

1. Revenue growth decreasing due to new entrants in the market

2. Limited product line (only selling whole grain pasta)
3. Pricier pasta products compared to Rigazzi

Opportunity

1. Gain first mover advantage

2. Increase profitability and overall revenues with the extension of pizza line
3. Expansion of product line

Threats

1. Rival pasta companies (Kraft, Rigazzi)

2. Competition on pizza from Rigazzi and other larger companies
3. Threat of Competitors: HIGH
TruEarth faced a formidable competitor in Rigazzi Brands, which was not only of a similar scale,
but also sold all the same products as TruEarth. It competed with TruEarth for the limited shelf
space & had previously targeted TruEarth’s high priority cities with its own line of whole grain
fresh pasta. It had also offered high trade discounts to retailers and high-value coupons to
consumers in the process. It had also tested its own pizza concept and was likely not far from an
introduction.
4. Threat of New Entrants: HIGH
Like in the case of whole grain pastas (pp 5-6), it would not be long before other companies
figured out how to make whole grain fresh refrigerated pizza that also tasted good, just like
Rigazzi. The entry barrier was low. Therefore, in the whole grain fresh refrigerated pizza market,
TruEarth could face a high level of threat from new potential entrants.
5. Threat of Substitutes: HIGH
Whole grain fresh refrigerated pizza faced a whole array of substitute products. For those
customers who were inclined to consume whole grain pizza out of health concerns, restaurants
such as Papa John’s and Pizza Hut, as well as local pizzerias had offerings.
 In general, pizzas were available as takeout/delivery, restaurant pizzas refrigerated pizzas,
frozen pizzas (from Kraft and Nestle) and homemade pizzas.
6. Threat of Buyers’ Growing Bargaining Power: MODERATE
As more players enter the whole grain fresh pizza market, the bargaining power of the buyers’
would increase. However, TruEarth had the reputation of supplying high quality and tasty
products and hence, the threat would be moderate.

Situational Analysis

1. Increase in the demand for truearth’s whole grain pasta encouraged the company to launch
another healthy product
2. Growing demand for quick homemade replacements, refrigerated pasta, and whole grain food
options
3. Semi prepared options sought by some consumers
4. Increased trend in the annual sales of pizza ($53b in 2007)
5. Truearth has an option to launch a new whole grain pizza and be first to market product or not
launch and wait for a better opportunity

Alternatives

1. Launch – be first to launch and gain first mover advantage or launch after rigazzi to get better
understanding of market trends
2. Don’t laumch – reformulate the crust or perform more market analysis

Breakeven analysis

Breakeven variable Data

Avg retail price $12.38
Required retail margin 35%
Avg wholesale price $ 8.05
Breakeven sales (wholesale) $ 12,000,000
Breakeven unit vol (MM) 1.49

Pizza customer distribution

Customer dist UNITS

Target households (MM) 58.8
CURRENT CUSTOMERS (PASTA) 11%
Total non-customers (MM) 52.3
Total current (MM) 6.5

Launch product and make 2.42 MM units

Pizza purchasing data
DESIGNING MARKET STRATEGYA.CUSTOMER NEEDS ANALYSIS

TruEarth frozen pizza provides a convenient and healthy alternative to traditional

frozen pizza. This product is family friendly; the “pizza kit” style gives the
opportunity for kids to jump in making dinner. It tastes great and most of all
it’s just fun for Julia’s family.

B.PROBLEM RECOGNITION

There isn’t necessarily a problem for Julia just a new choice. We can however
create a desired state for her to reach by differentiatingour product from others.
C.INFORMATION SEARCHOur primary target purchaser is ultimately trying to create
harmony within her household. Who does she consult? Her family. Targeting
her influences presents an interesting promotion challenge, however itis the key to
swaying Julia to put our pizza in the cart.

MARKET SEGMENTATION

This is the overall frozen pizzamarket broken down into six categories:

1.Low-­­Cost seekers

a.Driven by price only

b.Not our target

2.Pizza Lovers

a.Consist of 18% of the market but spend 28% of the dollars

b.Dual-­­income, no kids, willing to experiment

c.High market potential

Family pizza pleasers

a.Consist of 16% of the market but spend 19% of the dollars

b.Similar to Pizza lovers, however they are influenced by kids, spouse, others

c.Will be our primary target market for the TruEarth pizza launch

4.Wholesome nutrition seekers

a.Prefer restaurant or takeout pizza

b.Possible market, however we would need to convince them that frozen pizza is
good

c.Much more promotion and awareness building necessary,not ideal

5.Cooking avoiders

a.Taste is not a primary need

b.Not interested in gourmet flavors, similar to Low-­­Cost

6.Frozen pizza avoider

a.Not at all a fertile market