TruEarth was founded in 1993 by Gareth DeRosa. Due to the growing demand for healthy gourmet products in 1980's, DeRosa developed a plan and a successful company which offers high quality, healthy pastas and sauces. TruEarth used marketing as its biggest tool to promote its product offering coupons, magazines and in-store activities. Such marketing strategies helped TruEarth to increase consumer awareness and developed a loyal regional following.
With the passage of time TruEarth started facing big competitors in the fresh Italian food industry and due to which it invested heavily to expand its business in the pizza industry. For its expansion, it needs to make a decision regarding the launch of a refrigerated pizza line by analyzing the market research and financial information. Four alternatives were created to ensure the success of TruEarth and they are as follows:
1. Status Quo, business as usual with the existing products
2. Launch whole grain pizza as is before Rigazzi
3. Launch whole grain pizza as is after Rigazzi
4. Launch whole grain pizza before and with improvements
It is recommended that alternative 2, launching the whole grain pizza as is before Rigazzi will be best for TruEarth. TruEarth experienced high success levels with the launch of the refrigerated pasta products obtaining market share largely because TruEarth launched it first. This allowed them to acquire and maintain a large market share. From a financial standpoint this alternative is well above the breakeven point which will allow TruEarth to be profitable based on the low incremental cost of the whole grain pizza and the potential market gain makes this alternative very attractive.
However, alternative 4 can also be selected but it will increase the cost of product, which is one of the major concerns of TruEarth’s customers. Therefore, this alternative is not considered as cost effective. Alternatives 2 & 3 are considered as second...