problem faced by Nestle Refrigerated Food Company NRFC is a strategic decision on whether or not
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Problem
The problem faced by Nestle Refrigerated Food Company (NRFC) is a strategic decision on whether or not to launch their line of refrigerated pizzas.
Issue Analysis:
Looking at the past success of the Contadina pasta introduction, Nestle is hoping to repeat its success in the refrigerated pizza category. NRFC had used technology to develop a good product at a reasonable price, in a new food category. The highest market share goes to the first entrant in a particular market and so NRFC wants to be the first in the refrigerated pizza market. The refrigerated food market is growing at a rate faster than that of dry and frozen foods. Also, Nestle fears that since Kraft had already test-marketed a refrigerated pizza product and would be launching their product within the next 6 months, they needed to launch their product as soon as they could in order to try and grab the highest market share. Stephen Cunliffe, President of NRFC wants to know the numbers to ensure its business viability, what variants of the pizza product to launch, the size of the market he would find and what market share he would achieve.
76% of the consumers sampled, said that they would be inclined to purchase the Pizza Kit & Toppings. Over 90% of the consumers found the product concepts to be at least somewhat new and different.
Contadina Pizza Strengths
Convenience and Perceived Quality to attract customers
Established distribution system
Contadina brand name that fits traditional values and image
Large target market size
First in Market
Large financial investment possible
Component Packaging
Can be made exactly to consumers taste
Variety of toppings and sauce
Contadina Pizza Weaknesses
More expensive
Pizza toppings variety limited
Initial tests proved that taste wasn't that good
Temperature of products needs to be maintained
Lower shelf life as compared to frozen pizzas
No good nutritional value
Contadina Pizza Opportunities
First in Market
The sale of toppings can also generate profit for Nestle
Contadina Pizza Threats
Takeout/ Delivery Pizza Chains, Frozen & Fresh Pizzas
Competitors already test-marketed similar products
Temperature of products needs to be maintained
Alternatives:
I would recommend that NRFC further re-evaluate the refrigerated pizza concept and do further testing before launching themselves into the market...