Nestlé Refrigerated Foods : Contadina Pasta & Pizza (a)

option, while 35 Contadina pasta users participated in the pizza only concept test. Results from

the survey were used in the BASES forecasting methodology. Those respondents likely to purchase

the product after viewing the concept board were given the product to try at home. After a 7-10 day

in-home usage period, participants were called back to get their after-use impressions of the

product, with a little more than half of the starting sample completing this portion of the survey.

As the pizza product was in the same ethnic food category as the pasta and carried the same brand

name, Contadina pizza was treated as a brand extension. The product pricing remained consistent

with the earlier concept test, the Pizza Kit and Toppings option was priced at $6.39 for the kit and

$1.29 for the toppings. The Pizza Only was priced at $6.39. Similar to its Contadina Pasta line,

NRFC expected its factory pricing to be two-thirds of retail prices. The results of the study are seen

in Exhibits 18 to 24.

NRFC marketing staff believed that the Contadina pasta users would represent

approximately 24% of the 95.5 million7 target households. Initial responses from the Northeast

region indicated approximately 25% penetration. Additionally, the BASES random sample

(Tabl C) was consistent with this finding with approximately 21% of the general population

stating that they had used Contadina Pasta within the past year. MRD, however, urged caution in

interpreting this data, because the BASES study had been conducted only in high potential

markets. Based on MRD's experience in other product categories, it felt that the parent brand

penetration could range between 5%-25%, and recommended that volume projections be sensitive to

this range.

With a launch decision imminent, NRFC marketing staff compiled the data in Table D,

drawn from their own estimates as well as those of BASES. NRFC's intention was to support either