Nestlé Refrigerated Foods: Contadina Pasta and Pizza (a)

Question #1: Using the BASES model described in Exhibit 9, forecast the estimated demand (trial and repeat) for the two Pizza options under consideration: Pizza and Topping, and Pizza Only.

The summary table for the estimated demand including trial and repeat for the two Pizza options is as displayed below. The details and calculations of these estimates are included in Appendix I attached. As noted in the table below and as an example of understanding the table, the total estimated volume demand in MM units for penetration at 5% is 8.81 for option 1 (pizza & topping) and 6.22 for option 2 (pizza only).

Question #2: What can one learn from Exhibits 13, 14, and 15?

 For Exhibit 13, clearly Takeout Pizza is more favorable than Contadina Kit (2nd) and Frozen Pizza (3rd). In fact, on a scale of 1 to 10 (and 10 is Agree Strongly), the sample of 200 people ranged in response from minimum of 7.2 to maximum of 9.4, and a strong average response of 8.73.

 Regarding Exhibit 14, assembled pizza had an average rating of 8.24 versus Contadina Kit's slightly lower average rating of 8.19 in Exhibit 13. In Exhibit 14, Takeout pizza is 1st, assembled pizza in 2nd, and frozen pizza in 3rd.

 Exhibit 15 shows a strong increase in Contadina pizza as a substitute for another pizza product over the next 10 eating occasions - 28% increase in fact. This 28% is stealing 17% from takeout/delivered pizza, 7% from frozen pizza from supermarket, and 4% from homemade pizza. The Contadina pizza outlook is very good.

UsersNonusersUsersNonusersScenario #1: Penetration at 5%1.127.690.825.40TOTALScenario #2: Penetration at 15%3.366.882.464.83TOTALScenario #3: Penetration at 25%5.606.074.094.26TOTALPizza & ToppingPizza OnlyScenariosEstimated Volume Demand in MM Units8.816.2210.247.2911.678.36

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Question #3: How does the pizza concept test data (Exhibits 19, 20, and 21) compare to the pasta concept test data (Exhibit 6)?

Although both pasta and pizza had same objectives, NRFC had another "screening idea" objective; which was to launch pizza and toppings or pizza only. Both got about 75% favorable responses. As Appendix II shows, uniqueness of new concept pasta was accepted, and pizza was also highly rated in flexibility and toppings. Research objectives of both products were almost achieved; however, there remained a problem due to "price/value rating" of pizza, compared with pasta. Considering low point of "taste as good as take-out or home delivered pizza" in Exhibit 20, refrigerated pizza seemed to be more severely valued than pasta because of substitutes such as home delivery pizza.

Question #4: What is your reading of Exhibits 23 & 24 (include Exhibit 18 if you wish)?

Since Exhibit 23 and 24 were about the data from those respondents who tried the product at home, we can get the findings about repeat purchase and the data based on their real trial.

 Exhibit 23 explains about the features such as product taste, easiness to cook, flavors that encourages or discourages consumers to buy the product. For example, "fresh pizza taste" and "quick/easy to prepare" were highly rated.

 Exhibit 24 explains about price ranges and proportion of consumers in favor of those prices. The retail price of $6.39 was within the mean price that consumers would pay for the pizza, but the price data was widely distributed. It is possible that consumers feel it is a little expensive.

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Question #5: In general, how would you compare the pizza opportunity to the pasta opportunity? What are the similarities? Differences?

Similarities