TruEarth Healthy Foods, a maker of gourmet pastas, sauces, and meals, wants to build on its successful introduction of fresh whole grain pasta by introducing a similar product concept for pizza. In an increasingly competitive market, TruEarth is focused on beating its competition and wants to act quickly and decisively. The company conducts extensive market research, first using focus groups to test the concept and then following up with take-home trials.
Given the following information,
TruEarth Healthy Foods -- Sales Volume for Pizza Non-Customers Customers Source Definitely would buy (%) 15% 26% Exhibit 7 % of "Definites" who actually buy 80% 80% Exhibit 5 "Definite" Purchases (%) 12% 21% Probably would buy (%) 39% 53% Exhibit 7 % of "Probables" who actually buy 30% 30% Exhibit 5 "Probable" Purchases (%) 12% 16% Trial Rate (%) ("Definite" + "Probable") 24% 37% Target households (MM) 58.8 58.8 Table B Penetration, % of target households 89% 11% Table B Awareness of pizza product (%) 12% 50% Table B ACV distribution (%) 40% 40% Table B Adjusted Trial Households 0.6 0.5 Total trial households (Non-Customers + Customers) 1.1 % of households repurchasing (Excellent) 49% 49% Table B Repeat purchase occasions 2 2 Table B Total purchases (Trial + Repeat) 2.1 Retail selling price $12.38 Table B Retail sales volume $26.2M Retailer gross margin 35% Case text TruEarth sales volume $17.0M
What are the key arguments for and against launching Cucina Fresca pizza? Would you launch the pizza?