Contadina Pasta Case Study Summary

• NRFC is having problems choosing between launching Pizza & Toppings and Pizza only products.

• New product in the form of a brand extension in a segment that has not been touched.

• Positioning of the Pizza kit so that it is able to take .3% of the market share away from takeout/delivery (majority of the market share).

• Major competitor Kraft has already tested and possibly on the verge of capturing the 1st mover advantage.

• Pricing the pizza kit competitively so it is able to appeal to consumers and compete with takeout/delivery pizza.

Pasta

Contadina Pasta and Sauces was able to take advantage of being the first company to make a move in the refrigerated food segment. This is all given credit to the market research team of Nestle, as they were able to do tremendous amount of research to position the product to be a hit in the new segment. Nestle was able to establish great brand recognition with the Contadina brand. Traditional, authentic Italian food, and old fashioned are the terms that came to consumers mind when mentioned the brand of Contadina. Nestle was able to communicate to the customer that Contadina was of superior quality and always fresh. The product was able to be refrigerated instead of frozen adding that much more freshness. Nestle was able to advertise the 1st mover advantage to the primary shoppers of the

household so there is increased awareness. Nestle was able to do great amounts of testing through BASES, while focusing on their way of marketing the product. Manufacturing, distribution, and sales was all done through experienced employees and this is where Nestles greatest advantage came from. Through these previous methods is where Nestle concluded on positioning the Contadina brand as ordinary main meal, a quality product, a light meal/side dish, convenient, and a staple food. All of this research of positioning is what lead Contadina pasta and sauces to be a cash cow.

Similarities of Pasta and Pizza
They are both in the Italian ethnic food industry that is continuously growing, while also aiming at ethnic food consumers and homemakers. There is great branding and support that comes from the umbrella of Nestle. Refrigerated pasta and pizza will be or are established in a new market niche, leading to a 1st move advantage. The great research methods that Nestle is able to provide is a key and will be a key in the positioning, manufacturing, marketing, and distribution of the pizza brand extension. Both pasta and pizza have about the same favorableness and indicate in being leaders of their own segments.
By the Numbers
In the BASES II study it shows that Pizza & Topping is more highly preferred over Pizza only, meaning that most consumers want to be able to get the pizza and then be able to choose the toppings that they wish to apply. The numbers in this concept are very similar to that of the pasta measurements in exhibit 4, which could indicate a great advantage for Nestle if this opportunity is taken. Another indication of this opportunity in the refrigerated pizza segment is that the product uniqueness for pizza and toppings is very similar to that of the pasta. Both pasta and pizza are liked on the concepts of quick and easy to prepare, while also being fresh and have good taste. The only item that the numbers are not able to agree on is the price of the pizza, consumers are not quite sure if they agree with paying the price for the refrigerated pizza when they are able to get takeout/delivery for the same price. It is shown that most consumers favorable or unfavorable did not have much issue with the price of pasta, but both sides of the consumers have problems with the price of the pizza. This could lead to trouble with the launching of the refrigerated pizza.
Estimating Customers
Pizza with Toppings
Definitely would buy = 17% Probably would buy = 59%. So .80*.17 + .59*.30 = .313 or 31.3%.
Out of the top two boxes about 31.3% will actually be customers.
The trial rate for pizza with toppings is 6.72% = .313*.37*.58.
So 95.5 million* .672*1.2 = 7.7 million is the trial volume. 7.7 million* .22*2*1 = 3.338 million units is the repeat volume.
Pizza Only
Definitely would buy = 15% Probably would buy = 43%. So .80*.15 + .43*.30 = .249 or 24.9%.
Out of the top two boxes about 24.9% will actually be customers.
The trial rate for pizza with toppings is 5.34% = .249*.37*.58.
So 95.5 million* .534*1.2 = 5.61 million is the trial volume. 5.61 million* .22*2*1 = 2.47 million units is the repeat volume, as noted this is a lot smaller amount than the repeat volume for pizza with toppings.

Recommendations
• I would increase awareness among Contadina users and nonusers as overall awareness is only 37%. Nestle needs to let everyone know that they are coming with a new product to gain a great amount of market share with their first mover advantage.
• BASES tests need to be done in all markets not just the high potential markets so that clear forecasting and sales analysis can be done.
• Possibly launch in a big city before going national with the product, this can allow for feedback and corrections can be made.
• Focus on key attributes that are noted in Exhibits 19 and 23. Such as fresh taste, pizza comes with different varieties, quick and easy to prepare, and good quality crust.
• Capitalize on the branding that Contadina pasta has already created in the refrigerated pasta segment.
• Research new pricing method as it has been indicated that customers believe the pizza is priced to high.
• The demographics indicate the average household has three people, so I suggest that the pizza is advertised towards families with children, who are in a rush and need to provide a quality but quick meal to their family.

I would launch the Contadina Pizza & toppings product as Nestle has everything in their favor.

Great branding and development support in the refrigerated pasta segment, will allow for tremendous success. The pizza comes with a first mover advantage that gives Nestle a greater lead in this niche market. Most manufacturing, distribution, and marketing employees have experience and knowledge of the refrigerated pasta segment, which helps Nestle with lowering costs. They should launch the pizza and toppings products before Kraft so they can capitalize on the first move advantage and have a repeat of the Contadina pasta and sauce

success.