TruEarth Launching the Pizza

TruEarth has a major problem on their hands, should they launch the pizza? There plenty of factors that make launching the pizza very favorable. Additionally, there are some factors that make this decision far from appealing. Ultimately, TruEarth has a very unique opportunity and should move forward with launching the pizza, however, with a few minor exceptions.

Factors Favoring the Launch

With the new trends circulating TruEarth, it would be smart to introduce a new product like pizza. Their pasta was a hit because it satisfied a lot these new trend desires.

It was healthier, stepping away from the basic mass production of food. It was fresh. Most importantly it was quicker to prepare than traditional home-cooked meals for the average American who just didn't have time to cook. Sadly, pasta isn't as favorable a meal option, however, pizza is. A lot of Americans love pizza, but it's very bad for the body with it's carbohydrates and all. What TruEarth is offering targets a lot of different audiences.

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To the small families just starting out, who are still learning the ropes of cooking and juggling work and a family. To the college kids who probably fall most in line with the current health fads. To single working parents and hard workers. They all just simply don't have the time to cook their own quality pizza and weekly takeout just isn't healthy.

TruEarth resolves these issues by offering healthy, semi-prepared meals. It's fun for the family, quick for anyone valuing time, healthier, and fresher too.

TruEarth should launch their product with these new trends in mind and for many more reasons. TruEarth's Cucina Fresca was highly successful and created brand loyalty among their customers. If they were to launch a new product they'd be backed up by consumers who loved their pasta. By launching pizza the market should be easier to penetrate because of their loyal customers. Furthermore, the market for pizza is much bigger than it is for pasta. So, not only will they have loyal customers, but they have the opportunity to expand with the bigger market and gain new customers.

TruEarth doesn't have much to lose. With the decline of love for pasta and the money already poured into the facilities to develop the pasta, they are at the mercy of diversifying their product. They could try to make additions to the pasta, but what's the point. They're practically swimming in reasons to launch it. If they don't they could possibly go out of business because pasta is getting old and just isn't as big a market as pizza. Since they already have the machinery to make the pizza there's no loss in money there. They only stand to gain by targeting a product with a bigger market. This is desirable because it's different while still maintaining the original niche the company created: healthy, fresh, and easy to prepare meals.

Factors Against the Launch

Their competitors, Rigazzi, are currently in the work of launching their own pizza line. This has been TruEarth's biggest and closest competitor for pasta. Their pizza launch won't be any different and will make it harder to profit. They'd be sharing the pizza market with a

competitor who might be able to make their pizza tastier. In response to this, however, if TruEarth launches first they gain a first-mover advantage. They'll be the only company in the market until Rigazzi enters which gives them the opportunity to gain new customers before their competitor joins. They also have the chance to improve their taste before Rigazzi joins and even after. This is a plus, especially if Rigazzi is in the same position as TruEarth when they go to launch (where they just can't nail the taste down). Also, they will be backed with loyal customers. This along with new customers will make market penetration easier.

They also face threats from substitutions. With frozen pizza companies Kraft and Nestle, it's hard to match them because they offer such low prices. Additionally, the concept of TruEarth's product, in general, isn't very favorable. Due to fresh produce, it doesn't have as long an expiration date as frozen pizza especially for its a high price. Lastly, takeout companies already offer that healthier option with their whole-grain pizza. It seems that with the pizza market saturated, TruEarth isn't left with many options to develop a pizza that will make a difference. They have their work cut out for them, but it's possible. To combat Kraft and Nestle they will be offering something different and better. With the new health trends, people are looking for whole-grain pizza and frozen companies just don't offer that.

Sure, TruEarth's products don't last as long, but they don't really need to. People like pizza enough that it isn't something that will sit in their fridge weeks on end. Also, with pizza being in the fridge it probably cooks a little faster than frozen pizza because it's only refrigerated. So, with the whole-grain pizza they get healthier, fresher pizza instantly. Even though it's a little pricier than people would like, it's the better food option in comparison to frozen pizza. To combat takeout, they're definitely the cheaper option. While about 6% (Exhibit 10) more people are willing to pay $12-$18 for takeout it isn't as cost-efficient. The delivery charge makes takeout/delivery less desirable. Lastly, TruEarth is targeting audiences who favor what they have to offer. It has the ability to still feel like a home-cooked meal for the consumers with families, who also are less likely to take their kids out depending on behavioral factors. It's at the consumers hands hot and ready to serve, so they're not waiting an extra 30 minutes for their food to be delivered cold.

The Final Decision

The company should launch the pizza, but here are some possible methods of improvement as they go to launch. They would be wise to lower their price or more specifically offer a price range depending on the topping to pizza ratio. A simple cheese pizza (including sauce) should be offered at a price ranging from $10-$11. This would fall under the mean price consumers would pay for refrigerated pizza for both the total number of participants tested and those tested who were favorable to TruEarth's product. Additionally, the number of people who would pay $10-$18 are 49.1% and 55.6% (Exhibit 10) for total participants and participants favorable to the product respectively. Furthermore, most people stick with a cheese pizza anyway for quite a few reasons: it tends to be the cheaper option across all pizza options (frozen, refrigerated, takeout) and it's the simplest way to please a crowd - most people are ok with cheese (unless they are lactose intolerant or simply don't like cheese) even if they prefer a topping like a pepperoni because pizza is a luxury regardless of toppings. They should work on a better crust because the whole-grain crust is desirable, but currently not the tastiest. They have the resources to continue testing it, and they have the ability based on their previous product.

They already nailed it with the pasta and are more than likely to do the same with the crust. This should improve the overall tastiness of the pizza as a whole and perhaps draw in a lot more customers looking for that middle ground between tasty yet healthy pizza. Additionally, with the new health fad, they have the opportunity to expand their market to schools as well. With obesity being a huge concern in America lately, implementing healthier options in school could call for TruEarth's products. They're fresh and healthy and can be modified to make more accessible for school cafeterias. The opportunity for profit is there, but it needs to be taken quickly so they have that first-mover advantage by providing consumers with a fresher, healthier, and semi-quick meal to prepare before their competitor Rigazzi enters the market.