A1 Steak Sauce: Lawry’s Defense
A1 is a premier steak sauce produced by Kraft Foods. On April 1st, Unilever will launch their own steak sauce under their brand name Lawry’s. As marketing tool, Lawry’s has requested for the upcoming Memorial Day Weekend, that Publix Grocery Stores promote their new product. The managers of A1 know that it is common practice for the other grocery chains to price match and begin to set their own competitive prices for Lawry’s Steak Sauce. It is the job of A1’s marketing team to come up with new marketing and advertising strategies in order to counteract the new competor’s product.
The problems before A1 begin ...view middle of the document...
Addressing the new competition will mean taking away from the expertise that is focused on the struggling marinade line. This leaves A1 to weigh their priorities; whether it be more prudent to continue in their current direction with the new marinade line or make their focus be Lawry’s, the new competion.
· Their long term success with their steak sauce since the early 1900’s
· Brand loyalty is very high in the steak sauce market
· There is little competition
· Kraft Foods is the largest food company in the United States
· A1 is largely distributed across the United States
· The stagnant market
· The marinade line is losing money
· The marinade line is taking away from A1’s resources
· The product is known mainly known to be used for steaks
· Expanding steak sauce has not worked in the past
· A chance to grow with new marketing strategies
· The possibility to mix the marinade line with A1
· An unstable market will also affect Unilever’s profits
· The new competitor has forced A1 to spend more money and resources on marketing
· The lack of growth in the steak sauce market
· The competition’s cheaper price difference of $1.00
· The competition’s bottle size
Evaluation of Alternative
The options of A1 are few. They could lower its product’s price. They could spend more money on aggressive marketing. They could also expand the A1 line itself.
The first alternative would be to reduce the price of A1. There are several pros and cons on this scenario with the first pro s that a reduce price could take customers away from the store brands, taking a market share away from those store brands. A second pro is that consumers will see a price cut and no reduction in the size of the container, making two positives in the consumer’s mind. The major con of this alternative is the loss of 10 percent profit growth that is desired for the A1 brand to meet.
The second option is for A1 to be more progressive in its advertising and promotion. A1 could increase the number for free standing inserts in newspapers, instead of just doing those free standing inserts four times a year. Do the free standing inserts every two months, and while doing that increase print and television advertising aggressively. A1 could do a media blitz, sponsor food events or other social gatherings have taste samples done at retail outlets. A1 should have more coupons printed in the Sunday papers. A1 should continue to run promotional programs with retailers as I the past and dominate those promotions. The cons to doing an aggressive advertising and promotional campaign is it will take away from the 10 percent growth wanted in profits. The loss my scare stockholders in less profit being made. But a pro in this con is, in the long term profits could grow as consumers would remember the A1 name better and that would improve sales.
The last alternative is to expand the A1 brand. This...