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A.1 Steak Sauce Positioning A.1 Steak Saucei the premier selection for consumers steak grilling needs With rich intense flavor no other sauce can compare the superior quality that A.1 has provided for decades. below map. The brands categorized basedupon price and quality. A.1.is of the highest quality and also priced sthe most expensive steak sauce Lawryi newi emarket customer have nothada chance to fully explorei goodness Lawryis still perceived asbeen of lower quality than A Positioning 60% A.1 50% 40% 30% 20% Private Label . Heinz 57 10% tawry 0% $- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 Price . Qualityperception was determined by customer behavior i.e. which brand is most most market share Marketing Program A.1 product line includes Roasted Smoky Mesquite A.1 Carb Well steak sauce with gramot Product Strategy to A.1.it brand equity it enjoys. A.1 was the first to market and enjoys the advantage the original steak sauce producer. Al has approximately 54% of the market share and perceived sthe what high quality steak sauce should Consumers exceptionally strong association between and beef products, particularly steak "Nine out of tensteak houses serve .1." (Kerin and Patterson 631). Price Strategy A.1. sells for $4.99pe bottle, compared tr $4.7 for Heinz57, $3.99 for Lawry and $3. 49 for labels uses psychological pricing methods quality rather than cost plus orta arget return A.1 enjoys an 83% grossprofit margin on it steak sauce A.1 alsouses seasonal discount by offering coupons during holidays like Memorial day and 4th of July Promotion Strategy: A.1 spent approximately 15% fits revenue on advertising Consumer made 5% of A.1's revenue.A spots with advertising running throughout the year. Also, Free Standing Inserts with 5ücents off were used four times year Astrategic partnership was formed with the beef producers further promote the use of A Alon beef. National network radio advertisi prior to the three major summer holidays Memorial Day, Labor Day. addition print ment runi grilling issues of the popular Sunday newspaper supplements USA Weekend and Parade Distribution Strategy: A.1. primary distribution channel are the grocery stores A.1 retains the largest percentage of shelf withir grocery stores because has direct correlation withthe sales level anitem A.l.is available virtually every grocery store in the United States. Financial Data and Projections Past Sales Data Kraft's brands span five mer sectors: snacks beverages cheese and dairy, grocery convenient meals, The Company has 187 manufacturing and facilities worldwide NorthAmerica it has facilities, and outside North America, ithas 123 facilities located in 44 countries. Ali managedunder the erocery brands Kraft foods A1 makes approximately 3% Kraft Foods Sales and one of its larger brands Below therevenue from A1 brand for the last Revenue 2007 $165 240,000.00 2006 000.000 2005 $164 322,000.0 Five vear projection for Steak Sauce steak sauce part of the $3.2 billionU.S condiment market. Themarket composed eleven segments ledb Mexicar sauces, ketchup, barbecue sauce and mustard. Growth in the market driven by taste trends and regional flavors well fresh formats traditional products. that "Condimen sales will contique their patterno slow growtha varied changing tastes American palates The smaller such the most growth, these products have not reached the state of segment leader Suppliers will haveto encourage sales through outlets conveniences stores forther grow those products Changes tly correspond evolving consumer tastes, marketing and wranding will to new products" (Data retrieved from Barbecue sauce makes up 10% of h market whichis $320millio Below estimated 5 year projection for A1 Steak Sauce including price and cost inflation 15%? $120,000,000 $352000000 $425,920,000 $468,512000 Scenario1 Unisales 33114228 41,295,199 Dolarsales $165,240,000 $208.123.222 $268086954 Operating income $137,148,200 $171,341.048 5214812000 51.64% 5819% Unitsales 48.722.374 51429.172 54.135.971 Dollersales $218271908 $281.107.200 Operating income $137,149.200 $179696.126 $213,903,632 $225,286.945 6208% 61.00% THE SAUCE MARKET Kraft Itheleading food companies, Kraft'smost direct Unilever PepsiCo and Nestle. Unilever, mavonnaise and marinades Unilever the Lawry's steak sauce adirect competitor to The main awry': steak saurs areitslong history and brand 1830, was preferred sauce royalty andi knownas one of the premier Although new Lawry' steak sauce uses similar ingredients and taste A.1. brand awareness will continue toholdits loyal customers close tothe brand. Instructions Lawrysteak sauce recentiv announced it is going run Independence Dav promotion where bottle Lawry steak sauce willbe 2.99. A.1. sell: 99per Ounce bottle Should A1go neck neck with Lawry': steak sauce? Use financi formation from the case to build your argument accept point unless backed with financial (either from the esearch). To get full credit your submission shoule have introduction arguments for against anda conclusion One of your arguments should include the effecto change price on A1's gross margin.

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A.1 is a premium Steak Sauce with an estimated 54% market share. In comparison, Lawry has a market share of around 10% while others such as Heinz and Private Label control the remaining 36% market share. A.1’s longevity in the market has propelled it to a market leadership position and consumers associate the product with quality. As the quality perception survey indicates, customers are willing to pay the price Kraft charges for A.1 and have a strong association with the product. The brand equity that A.1 enjoys allows Kraft to ignore Lawry’s planned Independence Day promotion because its competitive position is not centered on lowering prices....

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