A-1 Case

RECOMMENDATION

Recommendation for the holiday week promotion is to promote Kraft’s A.1. marinade line. By doing so, Kraft will be able to secure Publix the marinade promotions in the holiday weeks. To ensure A.1. Steak Sauce still gets a large portion of the sales during those holiday weeks, an offer of $0.50 off steak sauce when purchasing a marinade. This coupon promotion will be in conjunction with the FSIs.

Success Measurements:

In order to deem this promotion successful, conjunction sales of marinades and A.1. Steak Sauce has to meet 2003 profit goal of $55,000,000. This is the total goal for Kraft.

KEY ISSUES AND CONCLUSIONS

1. Lawry’s is launching a steak sauce

a. Aggressive promotion pricing strategy

b. Threatening Publix Memorial Day advertisement

2. Lawry’s has 50% market share in the marinades category

a. Annual growth of 15%

3. “Unit and volume sales have been flat” over the last couple of years due to people only using small amounts of A.1. per occasion.

These key issues have forced A.1. to think about brand image and position and decide how to combat Lawry’s new launch. The options to combat Lawry’s aggressive pricing strategy and ensure the leader position in steak sauce are as follows:

• Beat Lawry’s two-for-$5 promotion by offering A.1. Steak Sauce at a two-for-$4 promotional price

• Reduce product price

o “List price roll-back”

o “Aggressive promotions”

• Increase advertising budget

• Promote Kraft’s marinade line

Key Findings: A.1. Steak Sauce has the highest brand awareness out of any of the steak sauce line. However, Publix promotional holiday specials yield 20% of A1’s annual revenue. In order to secure the steak sauce promotion, A1 would lose money (see Appendix D).

Lawry’s has developed a line extension from marinades to steak sauce. They do not have brand loyalty in the steak sauce industry. As reported, “Nine out of ten steak houses serve A.1.” This is a huge success for Kraft because word of mouth travels farther than most promotional activity.

A.1. Steak Sauce will need to promote its line in a different fashion than the normal Publix advertisement for steak sauce. Since A.1. Steak Sauce is a mature brand, offering introductory prices would not only hurt the bottom line but it would