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Nestle Refrigerated Foods Company

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Nestle Refrigerated Foods Company
Case Summary
Nestle Refrigerated Foods in 1990 was planning to introduce a refrigerated pizza product to launch in the U.S market after its successful enter to refrigerated Pasta and Sauces market in 1987. Nestle was accustomed to taking risks. Prior to launch of Contadina pasta and sauces, Nestle did the following:
 acquired a small company at a premium ensuring first-mover status
 invested heavily in distribution to avoid spoilage rates U.S market was undeveloped in 1987
 utilized brokers to sell the products as opposed to conventional salesforce
Prior to the launch of Contadina Pizza, however, a thorough check of business viability was in order.

1. Characters
NRFC: Nestle Refrigerated Food Company, 100% subsidiary of Nestle
Mr. Cunliffe: President of NRFC, hired in 1987
Carnation Co: a food company purchased by Nestle in 1985, put under NRFC
Contadina: Carnation’s existing brand name for an Italian food product line
Lambert’s Pasta & Cheeses: NY based incumbent local fresh pasta company purchased by Nestle in 1987
MRD: market research dept in Nestle helping its subsidiary’s new product development
BASES: A market research company Nestle frequently uses in new product launch
Kraft: Major competitor of Nestle

2. Time Line
1987: Nestle purchased Lambert’s and started survey of refrigerated pasta national market.
1988: Entered refrigerated pasta market using “Contadina” brand name, $75M retail sales.
1989: Refrigerated pasta successfully recorded $ 150M retail sales.
1990: Nestle is contemplating introduction of refrigerated pizza product.

3. Basic Market Research Procedure in Nestle (6 – sometimes 7 – step process)
Nestle’s new product launch generally proceeds with following steps:
1. Idea Generation
2. Concept Screening/ Refine the idea by an initial market survey by MRD
3. Product Development

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