Reliance Baking Soda
Please provide written answers to the following questions. Limit your answers to a maximum of two pages, plus exhibits.
1. What are the strengths and weaknesses of the RBS brand?
With a 70% share in the baking soda category, RBS is clearly the market leader and due to the relatively high degree of versatility it is also widely recognized in several other categories as a key player in the market. The brand also boasted high levels of brand recognition and also unaided brand awareness. By being in the baking soda category and more or less defining the category as a whole, it has created a reasonable level of acceptance of the multiple uses for ...view middle of the document...
Based on the information provided for the year 2006, we find that the return on investment for the consumer promotions is at 118% and the ROI for trade promotions is at 123% [ROI calculated as “(cost + net incremental contribution) / cost”]. It should also be noted that the efforts made during 2006 would have had a carry-over effect and would have been partially responsible for the expected high performance in 2007.
When analyzing individual types of promotions, it can be seen that the consumer promotions that focused on the three brand strategy and the refund offer were the most effective and have yielded the highest ROI. As for the trade promotions, we can see that the refund type of promotions are the most effective, while cross-ruff coupons and off-invoice promotions yielded very poor results.
3. Compare the relative merits of a push vs. pull strategy for the marketing of a low-involvement (low price) grocery item in a mature market setting.
Considering the fact that the market that RBS is currently operating in is at a very mature stage and that the product itself has not undergone any noteworthy changes over the past century, advertising in short unsustainable bursts through a push strategy will not prove effective. However, in order to highlight the wide variety of uses for the product in other categories, there is definitely merit in considering the option of using a push strategy during the launch of such a campaign.
A more long term strategy should focus on a more pull-oriented approach that involves continual initiatives that are designed to establish a difference between other products that is more sustainable. This strategy would focus on creating a loyal customer base that would not shift their purchasing patterns based on a change in the promotion being offered. In addition to this, it will also guarantee a far more steady demand for the products which could help to simplify supply-chain management as the production increases due to the active entry into other markets.
4. What is your recommendation for how Regnante can achieve her 2008 profit target? What, if any, changes should be made to trade and...