S
A.1. Steak Sauce
Lawrys Defense
PREPARED FOR: PROF. MADYA DR. FAIZAH ABDUL RAHIM MKT 750_STRATEGIC MARKETING MANAGEMENT
PRESENTER
AMIRAH BINTI HILMI 2011228928
PRESENTATION OUTLINE
INTRODUCTION
SCENARIO
Date
Feb 14, 2003
Day
Friday
Occasion
Chuck Smith, senior brand manager of A.1 Steak Sauce & Marinades received an email from Susan Connor, Krafts sales manager for Publix. She stated that Lawrys is launching a new steak sauce product & asking for the Memorial Day advertisement at Publix. Meeting with the division general manager. Susan Connor meeting with Publix representative. National launching of Lawrys steak sauce. Memorial Day. Independence Day.
Feb 17, 2003 Feb 18, 2003 Apr 1, 2003 May 24, 2003 May 30,2003 July 4, 2003
1.
Objective
To sustain A.1 position as market leader in steak sauce segment To achieve target annual profit
Problem Statement How to sustain A.1 position as market leader in steak sauce segment and achieving target annual profit against Lawrys aggressive promotional pricing strategy in order to become the most preferred brand?
2.
Controllable factors (4Ps): Price: adjust price Promotion: develop strategy Place : strategic alliance
3.
A1 Steak Sauce was a clear leader with a dollar category share of more than 50% peak season for grilling (May, June and July) and holiday week
Heinz 57
Private Label Others
Beef consumption trends in the U.S had stabilize in recent years It was standard practice in the industry that manufacturer covered cost of in store price reduction, retailers kept their margins constant on a percentage basis.
3.
3. + -
EXTERNAL
OPPORTUNITIES
Stable beef consumption trends in US Partnership with beef producers 10% of sales contributed during the Holiday weeks
SWOT
THREATS Lawrys new steak sauce product launched Lawrys sauce similar in taste and texture Lawrys aggressive promotion pricing strategies (2-for-$5) Lower Lawrys retail price per ounce
WEAKNESSES Heavy glass bottle Unsuccessful poultry salt Loss incurred on marinade line
4.
Alternative 1
Defend A.1 position for Memorial Day ad at Publix against Lawrys launched by matching the price that Lawrys offered
Alternative 2
Not to defend the position for Memorial Day ad at Publix but provide other promotional strategies as to respond to the lunched
4.
ADVANTAGES
1. Secure strategic alliance with the Publix stores 2. Secure 10% sales during the holiday weeks 3. Maintain repudiation as no 1 steak house preferred by Publix
DISADVANTAGES
1. Incurred loss during the holiday weeks (approximate $3.3M) 2. Cant achieved target profit of $62M in 2003 3. A.1 image as high quality product affected
4.
Alternative 2 ADVANTAGES 1. Retain target profit in 2003 2. Maintain image and position as high quality product and premier market leader
5.
FREEBIES (GRILL-SEASON
RELATED)
IN-STORE SIGNAGE AT
LIMITED PERIOD: 2 WEEKS PRIOR MEMORIAL DAY HOLIDAY
SHELF LEVEL
5.
Offering high quality ingredients Offering convenience locations Packaging: More environmental friendly than plastics (Lawrys)
5.
STEAK HOUSE
BEEF PRODUCERS MASS MERCHANDISER
CLUB STORES
GROCERY STORES
5.
DEVELOP A PLAN FOR IMPLEMENTING THE CHOSEN ALTERNATIVES Loyalty programs Customer relationship management programs Sponsorship
6.
BUT
Decision made: Not to defend A1 position for Memorial Day ads in Publix come out with strategies to encounter Lawrys aggressive pricing promotion
BY
implementing aggressive promotional strategies differentiation managing strategic alliances strengthen consumer exit barrier
6.
Appropriate OR Not? APPROPRIATE. Matching price with Lawrys WILL: - Pose threat to A.1 Steak Sauce profit - Jeopardize A.1 High Quality, High Brand Awareness image to loyal customers