Kraft Foods successfully introduced
DiGiorno Pizza into the marketplace in 1996, with first year sales of $120
million, followed by $200 million in sales in 1997. It was neither luck nor
coincidence that DiGiorno Pizza was an instant success. Kraft conducted
extensive research about the product and the marketplace before introducing
this product to the public. Many questions had to be answered before Kraft
began production. For example, why do people eat pizza? When do they eat
pizza? Do consumers believe that
carry-out pizza is always more tasty? SMI-Alcott conducted a research study for
Kraft in whichthey sent out 1,000 surveys to pizza lovers. The results indicated
that people ate pizza during fun social occasions or at home when no one wanted
to cook. People used frozen pizzamostly for convenience but selected carry-out
pizza for a variety of other reasons, including quality and the avoidance of cooking.
The Loran Marketing Group conducted focus groupsfor Kraft with women aged 25 to
54. Their findings showed that consumers used frozen pizza for convenience but
wanted carry-out pizza taste. Kraft researchers realized that if they were to
launch a successful frozen pizza that could compete with carry-out pizza, they
had to develop a frozen pizza that: (a)had restaurant take-out quality, (b)
possessed flavor variety, (c) was fast and easy to prepare, and (d) had the
convenience of freezer storage. To satisfy these seemingly divergent goals, Kraft
developed DiGiorno Pizza, which rises in the oven as it cooks. This impressed
focus group members, and in a series of blind taste tests conducted by Product
Dynamics, DiGiorno Pizza beat out all frozen pizzas and finished second overall behind one carry out
brand.
DiGiorno
Pizza has continued to grow in sales and market share over the years. By 2005,
sales had topped the $600 million mark and DiGiorno Pizza held nearly a quarter
of the market
share of frozen pizza sales. In 2004,
Kraft successfully introduced DiGiorno thin, crispy-crust pizza into the market.
Sale revenues continue to grow for this leading brand of frozen pizza.
Discussion
Think about the market research that was conducted by Kraft and the
fact that they used several companies.
1. What are some of the populations
that Kraft might have been interested in measuring for these studies? Did Kraft
actually attempt to contact entire populations? What samples were taken? In
light of these two questions, how was the inferential process used by Kraft in
their market research?
Can you think of any descriptive
statistics that might havebeen used by Kraft in their decision-making process?
2. In the various market research
efforts made by Kraft for DiGiorno, some of the possible measurements appear inthe
following list. Categorize these by level of data. Think
of some other measurements that Kraft
researchers might have made to help them in this research effort and categorize
them by level of data.
a a.
Number of
pizzas consumed per week per household
b b.
Age of pizza
purchaser
c c. Zip code of the
survey respondent
d d. Dollars spent
per month on pizza per person
e e. Time in between
purchases of pizza
f. Rating of taste
of a given pizza brand on a scale from I to 10, where 1 is very poor tasting
and 10 is excellent taste
g g.
Ranking of the
taste of four pizza brands on a taste test
h h.
Number
representing the geographic location of the survey respondent
i. i. Quality rating
of a pizza brand as excellent, good, average, below average, poor
j. j. Number
representing the pizza brand being evaluated.
ii k.Sex of survey
respondent
Source: Adapted from “Upper Crust,”
American Demographics, March 1999,
p. 58; Marketwatch—News That Matters
Web sites, “What’s in a Name? Brand Extension Potential” and “DiGiorno Rising
Crust Delivers $200 Million,” formerly at
http://www.foodexplorer.com/BUSINESS/Products/MarketAnalysis/PF02896b.htm, last
accessed in 1999. Web site for Kraft’s 2005 Investor Meeting: Changing Consumers, Changing
Kraft, May 25, http://media.corporate-ir.net/media_files/nys/kft/presentations/kfLOSOS
lOc.pdf.
(Banking And Finance)
Uy Sovirak (Facebook)
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