TruEarth Healthy Foods: Market Research for a New Product IntroductionTruEarthWhat can be better than healthy as well as tasty food? The answer was Gareth DeRosa’s “TruEarth Healthy Foods” founded in the year 1993. They used whole grain wheat to make pasta and sauces. It was the first company to start healthy gourmet food products which gave them a “First Mover” advantage.
DeRosa believed in sourcing high-quality wheat from North Dakota. The product line featured standard and specialty pastas. They offered two categories of whole grain products, one with 60 % whole grain and the other 100 % whole grain pasta. Apart from this, the tomato-based sauces were made from highest-quality tomatoes. By 1998, the company had established themselves in the market and had loyal regional customer base. TruEarth was largely driven by intuition and informal product development, which either resulted in underestimation or overestimation of the product.
As they penetrated in the market the cost of missteps increased. Hence, they developed a formal market research.Due to change in economic and demographic conditions, there was a rise in disposal income coupled with less availability of time.
Consumers were tired of unhealthy options and were looking for Home Meal Replacement(HMR). Few consumers also preferred semi-prepared options, so that they feel they are still involved in cooking which provides them “home-cooked meal” experience, refrigerated fresh pasta saw a substantial growth. The importance of whole grain diet increased, and consumers wanted avoid “bad carbohydrates”. TruEarth’s whole grain product line was considered the best tasting option in the market. Cucina Fresca In 2006 Cucina Fresca, a fresh whole grain pasta meal was launched, it was the most successful launch. They combined HMR, refrigerated pasta and whole grain food options in Cucina Fresca.
There was no strong competitor in fresh pasta offering. They did a market study to estimate potential sales and were focused on repeat purchase estimates. The product was perceived to be at least of average quality. In 2009 their retail sales were $35 Million. The advantages of Cucina Fresca range are quick and easy to cook.CompetitorsRigazzi was the only competitor to TruEarth who marketed themselves using traditional pasta making techniques and vintage Italian equipment.
Rigazzi targeted high priority cities offering discounts to retailers and coupons to customers. But TruEarth benefited for being the first-mover.Way forwardTruEarth started working on refrigerated pizza kit. TruEarth wanted to leverage their brand and introduce guilt free pizzas to their customers. They conducted in-depth survey and in-home product usage tests which showed people had strong interest to buy pizzas. TruEarth should launch their pizza range since they already have an established customer base, equipment for making pizzas and market opportunity to offer healthier pizza range.
Demographic Environment:The main demographic factors included the size and growth rate of population in cities, regions, and nations based on age distribution, educational and household patterns.The demographic factors affecting the TruEarth are the following:TruEarth was successful throughout mid-western United States which provided them base for customer loyalty.Post 1990s, emergence of dual income households led both the workers to spend less time on household chores. They all wanted fully prepared or “ready to eat” foods.The key demographics for demand of pizza had been hurt by health-conscious people and their cut down on carbohydrates. Hence it opened window of opportunity for whole grain pizza concept.The demand was increasing majorly in Metro-Politian areas and 33% of people showed interest in whole-grain pizza.
Poter Generic TruEarth has an edge over other competitors because TruEarth was the first movers in refrigerated fresh pasta. It was an affordable, easy- to-cook, could be used for several meals. As business concentrated on superior performance in customer perceived benefit of refrigerated “homemade food” category.
Hence strategy falls in differentiation leadership. Marketing ResearchObjective-The marketing research would help TruEarth take a decision on launching their new fresh whole grain pizza, after the most successful product-pasta meal kit, in the company’s history.Developing the research plan-TruEarth worked with Nielsen Bases, a market research firm, in order to estimate their potential sales.Observational ResearchThe concept was first tested by the focus groups. Nielsen BASES conducted BASES I study to access consumer awareness on whole grain pasta and consumers insights on interests in purchasing.
They gathered data from the consumers on the consumers shopping habits, relating to time and work.Survey ResearchTruEarth conducted formal surveys which included evaluation of the likes and dislikes, purchasing behaviours and consumers’ willingness to pay.BASES II Line Extension study, included in-home product usage test and in-depth concept survey.Based on this, they figured -54% of non-customers would definitely/probably buy whole grain pizza.79% of customers would definitely/probably buy whole grain pizza.Social cultural environment Views of ourselvesTrueEarth health foods made a great effort with the help of survey given by Nielsen, they knew what they could deliver and what more and more consumers wanted.Quick and easy/shorter cooking timeGreat amount of sauce and pastaSimple instructionsHealthy whole grain with tasteBy some of these flexibility the people were much more interested to buy the productsView of organisationIn the whole of America, the core component is pizza.
It has an estimated annual sale of $53 Billion in 2007. But 33% of population wanted pizzas with less carbohydrates and healthy pizzas in their diet. TruEarth took a perfect opportunity for their organization, but they were worried that there were many huge players in the pizza market.Psychological factors:TruEarth took advantage of the fact that people wanted to be involved in the dinner cooking process while enjoying the benefits of a ready-to-eat meal. So they came up with single serving meal kits to satisfy this need.The growing awareness of the health benefits of whole grains made it easier for TruEarth to market their products.
Understanding the needs and trends:TruEarth understood that there was little difference between high-end dry and fresh pasta in terms of nutrition.But due to consumer’s perception that fresh pasta has better quality, they started rolling out different types of pasta such as tortellini to satisfy this need.To further their competitive advantage, TruEarth offered all of this with the option of whole grains and made sure it tasted to the likes of the consumer.SWOT Analysis STRENGTH They had the first mover advantage.
They could capitalize on the brand awareness that they created in the minds of the consumers with the introduction of Cucina Fresca.The huge American market which included the Italian-American food category.The help of Nielsen’s Bases 1 and 2 to conduct market research.WEAKNESSES:An already existing competition from Kraft and Nestle who are already huge players in the low cost frozen pizza market. TruEarth’s pizza would cost more than existing competitors.The doubt that their crust wont be as good as freshly made takeout.
They don’t have variety of products to offer to the consumers i.e. they have only pasta and pizza.OPPORTUNITIES:The opportunity that consumers were looking forward to switch to whole grain products was a gold mine to be struck as no one was providing this.TruEarth could also completely substitute the current frozen pizza sold if they could capitalize on making their pizzas more healthy and tasty.THREATS:If TruEarth waits too long to bring their line of pizzas to the market, other competitors like Rigazzi might take over and TruEarth will lose the advantage of being the first movers.Although the BASES test with the help of Nielsen have been proved to be successful with the introduction of Cucina Fresca, it might not have the same effect when it comes to pizza market.