TruEarth’s dilemma to launch a new pizza product
TruEarth, maker of gourmet pastas, sauces and meals, has successfully launched a new product named Cucina Fresco in 2006 and took the first mover advantage in healthy food industry. Although Cucina Fresco led to TruEarth’s great success, it doesn’t promise TruEarth a long-term profit due to intense competition. Truearth has gradually lost its market share to Rifazzi after Rifazzi’s introduction of its whole grain fresh pasta in late 2007. Identifying customers’ needs for healthy food and the market trend based on extensive market research, TruEarth is facing a critical business decision about whether to launch a new product line of whole grain pizza or not while its main competitor Rigazzi also intends to launch a similar product. Launching whole grain pizza might help TruEarth to expand its product diversity and retain its position in whole grain products; however, besides the threat posed by Rigazzi, the presence of existing strong competitors such as Kraft and Nestle and consumers’ perception of healthy value of pizza also put TruEarth at a disadvantage.
Success of Cucina Fresca pasta
TruEarth was the first company that identified the opportunity for healthy gourmet products and developed products that met customers’ needs. As the trend of having a healthier diet grows, Cucina Fresca offers not only fresh pasta and sauce with healthy ingredients as home meal replacements but also a better taste than dry, shelf-stable pasta. Recognizing the fact that households nowadays lack time to prepare food, cook the food and clean up, TruEarth first innovated Cucina Fresca so as to provide consumers a homemade meal experience without complicated cooking process. The concept was very successful since housewives would like to give their family a healthy meal without spending too much time preparing the food. Because there were no strong competitors when TruEarth introduced Cucina Fresca, it favored TruEarth to establish the market share and the brand awareness in the fresh whole grain food industry. Cucina Fresca also provides customers with a wide range of choices of pasta and sauce that allows customers to choose the combination they like and even add other ingredients. Customization serves as another advantage for its success. In terms of food, the taste is important as well. Most fresh pasta were not very tasty when TruEarth introduced Cucina Fresca. Taste makes Cucina Fresca surpassed other similar products. Besides the quality of the product, launching Cucina Fresca was not a reckless decision for TruEarth. The team conducted market studies to analyze the market trend and project sales volume to better ensure their success. All of the factors above led to the success of Cucina Fresca.
Opportunity for TruEarth
Before TruEarth entered the fresh whole grain pasta market, there were no strong competitors, and the concept of tasty and healthy food was still novel. Even though there were other companies had tried to produce fresh whole grain pasta, they could not satisfy consumer’s sense of taste. Therefore, Cucina Fresca had a great opportunity to enter this new market. As to pizza, although there is not a fresh whole grain pizza kit in the market yet, the concept of a healthy pizza is no longer novel. TruEarth’s direct competitor Rigazzi has already tested a fresh whole grain pizza concept and is preparing to launch, and a lot of restaurants also provide their customers with whole grain pizza. Moreover, there are a lot of differences between pizza and pasta. Consumers buying pasta are more health-conscious than consumers choosing a pizza because they just want a quick meal with a good taste. As most people would agree, pizza is definitely not a healthy choice. People who want to enjoy a pizza might not be persuaded to buy a healthier but less tasty one. In Exhibit 6 in the case, takeout pizza scored the highest in terms of taste attributes and usage attributes. In other words, takeout pizza is considered the most convenient and freshest pizza with a variety of choices, and that narrows the opportunity for TruEarth. Another factor that affects the pizza opportunity is market saturation. There is not only takeout pizza but also refrigerated pizza on the market. Competition is more intense in pizza market than pasta market since there’re other strong players in this field like Kraft and Nestle. However, the success of Cucina Fresco gave TruEarth a better chance to expand its product line to the pizza market due to its brand image. Customers who are aware of TruEarth are more likely to try its new products. Although the pizza opportunity is not as optimistic as the pasta opportunity, there’re still chances for TruEarth pizza to succeed since it is still an untapped business. Even though Rigazzi has already tested its fresh whole grain pizza concept, it is still under process and it is uncertain that if they can make a better product than TruEarth. As long as TruEarth enter the market before Rigazzi does, it still has the first mover advantage.