Situation Analysis Customers: Our customers are those who like to cook or grill meat outside. Competitors: Our primary competitor is Heinz 57. They have a market share of 16%. The secondary competitors of our business are private labels. They have a market share of 14%. The rest of the competitors towards our company make up the 16% of the market share. A new rising competitor is Lawry’s with new product, steak sauce. Collaborators: Our collaborators consist of virtually every grocery store, merchandiser, and club store. They all carry our product which is mostly located in the condiment isle. Company: A.1 steak sauce started in England in the 1830s by Henderson William Brand, the chef King George. He was so delighted with the …show more content…
This strategy does not have any impact on locking-in retailers. Also, this could be easily duplicated by another competitor for the second major holiday, which is 4th of July. For example, another competitor would copy the idea of using coupons to sell their product and use it for the upcoming holiday. Contest/ Prize: The second strategy will be to create a contest or prize with our product. The idea of this strategy will be if the customer purchases our A.1 steak sauce; there will be a code under the cap. When they are at their homes, they can go on to our website and type in the promotional code. The prizes would range from winning a free bottle of A.1 steak sauce to winning $100. The positive outcome with this strategy is that it would create excitement with customers to buy our product compared to the competitors. It would create awareness about our product to our customers and possibly new customers. By implementing this strategy, it could strengthen our market share. The negative outcome with this strategy would be that it may not lock-in retailers. More research and negotiation with retailers will be needed. Another negative affect would be that this strategy would be costly. We would have to see if we are financially stable to invest. More shelf and trade promotion: The third strategy would be to spend more money on shelf
Lastly, the company suggest to expand their current inventory through increasing production and capacity. With the increase in production rate the company can gain more consumers as a whole through supply and demand. Doing this would give the company an opportunity for more exposure and perhaps better brand recognition.
* Increase in sales and decrease in promotional costs for the introduction of the new product
A.1. Steak Sauce was founded in England in 1830 by King George's Chef, Henderson William Brand and introduced to North America in the early 1900s. The Sauce became a premier brand of Kraft Foods Inc. who acquired it from Nabisco in 2002. (Kerin & Peterson, 2011, 630). A.1. Steak Sauce had done well in sales, and was able to secure excellent margins for Kraft Foods Inc. with a market share of approximately 50% and a brand awareness that was second to none (Kerin
Executives have noted that beef consumption in the US is declining and this explains why volume sales have remained stagnant over the past few years. On the other hand, consumption of chicken and turkey has doubled since the 1970s (AMI, 2009). Considering this information, one recommendation is to offer a sale “Buy one A.1. Steak Sauce, get one A.1. Marinade free”. This type of sale will appeal to customers who plan on grilling both steak and chicken during Memorial Day weekend. Because of the small amount of steak sauce used at one time some consumers do not find it necessary, nor are they interested, in buying 2 bottles of steak sauce for $5. This promotion would also help increase brand awareness for A.1. marinades without spending a lot of money on outside advertising.
A.1. Steak Sauce is a brand of Kraft Foods with little competition in the steak sauce market. The product currently has the majority dollar and volume market shares in the steak sauce market. However, unit and volume sales have remained flat. In February of 2003, A.1. becomes aware of new competition entering the steak sauce market. Lawry’s, which is owned by Unilever, has announced an April 1 launch of its own steak sauce. Lawry’s has approached Publix and requesting the Memorial Day ad with a two-for-$5 price. Publix is requesting that A.1. match Lawry’s pricing or A.1. will lose its place in the ad.
At this point, new groups of consumers might be targeted. By doing this, the brand value is increased and maximum competitive advantage could be gained.
| Issue Lawry is attempting to release a new steak sauce that should penetrate the market by early April. Obviously a new player in the market is not a major concern to A1/Kraft, having over 50 percent of the market share. The best case scenario for Lawry is that they will only gain ten percent of the market share. The direct threat for A1 lies with Lawry’s marketing tactics. Lawry is attempting to launch a Memorial Day advertisement with Publix, offering a two-for $5 promotion. The issue is that retailers generally support only one brand in a particular category in a given week. In recent years A1 has
A.1. is a household name for steak sauce; nevertheless, if Lawry’s secures the ad at Publix with better promotional rates than Kraft, they could drastically lose a small portion of their customer base if the quality of the sauce is in any way comparable to that of A.1. (Kerin & Peterson, 2010).
However we feel that this strategy also has several weaknesses. Compared to the first option presented by the VP of Advertising, we would still need to advertise that our product is coming down in price. If we don’t advertise, the consumer is still going to be drawn to our competitors because they will remain unaware of the new parity in pricing. Also, if we
Implementing newer strategies could result in possibly more confusion for customers---which could lead to a future decrease in sales; changing the management could affect the company financially as well. I’ve listed the SWOT Analysis of JC Penney below:
Kraft is clearly a strong competitor, as they remain one of the top contenders in each of their industries. They are able to strongly differentiate their products from those of other companies to capture a large share of the markets they participate in. They have a wide array of products that can serve as subsituties for each other to keep consumers within their brands, but give them options on which products to consume.
* More people will be exposed to the product. This will lead to greater sales. This will also improve brand equity. Through this positioning strategy Paramount will have a razor in each segment.
To the old customers, it would increase their confidence toward the company and encourages them to continue to try the product. Lastly, sales would automatically increase and the market would expand due to the high demand of the service.
Low product differentiation and economies of scale: There isn’t much product differentiation at play in the retail industry as there are well known manufacturers whose products are offered for sale, which leaves price to compete on. Current well established retailers with thousands of stores enjoy the economies of scale to control their cost that a new entrant might not be able to replicate after immediately entering the industry.