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Steak Sauce: Lawrys vbnmqwertyuiopasdfghjklz Defense Prepared by xcvbnmqwertyuiopasdfghj klzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopa sdfghjklzxcvbnmqwertyuio pasdfghjklzxcvbnmqwerty uiopasdfghjklzxcvbnmqwe rtyuiopasdfghjklzxcvbnmq wertyuiopasdfghjklzxcvbn mqwertyuiopasdfghjklzxcv bnmqwertyuiopasdfghjklzx cvbnmqwertyuiopasdfghjkl zxcvbnmqwertyuiopasdfgh jklzxcvbnmqwertyuiopasdf
Group B Amrita Agrawal Anchal Khaneja Animesh Agarwal Ankita Kushwaha Annam Vaibhav (2012PGP007) (2012PGP008) (2012PGP009) (2012PGP011) (2012PGP012)

Case Summary:
The Senior Brand Manager of A. 1. Steak Sauce and Marinades, Mr. Chuck Smith, is under the dilemma about branding of A. 1. Steak Sauce after reply of Lawrys new steak sauce launching. A. 1. has a diversified portfolio which contains Steak Sauce, Marinades etc. and is a product line of Kraft Foods which is the second largest food company in the world and the largest food company in USA and provides 67 major brands among which A. 1. is one. One of the competitor, Lawry is launching a new Steak Sauce in direct competition to A. 1. Steak Sauce in a peak season with an offer of 2 bottles of $5. Lawry has scheduled its products launch in the week which is a holiday week and specifically in which A. 1. generates 10% of its annual revenue. A. 1. steak sauce has a very high brand equity in market and is a market leader with 54% dollar share and 46% volume share as compared to its competitors: Heinz 57s 16% and 13%, Private Labels 14% and 19% and others 16% and 22%, respectively. The issues in front of Mr. Chuck Smith, in the case that need to be dealt with are as follows: Should A. 1. reduce its price to a point lower than that of Lawry, so that is maintains its sale in the Memorial week? If the firm adopts this defense strategy, how much financial sense would the move make? A. 1. need not react to the promotional strategies adopted by Lawry as the brand equity is high and the segment till date showed good brand loyalty? Should the brand spend more on promotion or go for a price roll-back? Should A. 1. work on its line extension to meet the competitive threat?

Recommendations: 1. A. 1. steak sauce has highest market share and followed by Heinz 57 which has very less market share compared to it. Lawrys steak sauce, on the other hand is new product in the market and has very less market share. There are very less chance of posing threat to A. 1. Steak Sauce by Lawrys. Therefore, Mr. Smith should not be worried about the competition with Lawrys. 2. Supermarkets like Publix are giving the Memorial Day key week (week with highest annual sales) promotion to Lawrys Steak Sauce on its twofor-$5. In peak sales time, promotion of good offer might degrade the brand equity of A. 1. Steak Sauce. A. 1. might face decline in annual sales and brand equity which leads to erosion in market share in long terms. To compete with Lawrys offer in peak session, Mr. Smith has an option of putting offer on its Steak Sauce of two-for-$4.

3. A. 1.s management has a target of 10 percent annual profit growth by the end of respective year. Retail shelf price of A. 1.s Steak Sauce is $4.99 of 10 ounce size ($0.50 retail shelf price/ounce) in compare of Lawrys Steak Sauce retail shelf price of $3.99 of 11 ounce pack ($0.36 retail shelf price/ounce). Offer of two-for-$4 gives $0.2 retail shelf price/ounce, hence losing $0.3/ounce; more than what A. 1. is earning. Providing such offers in peak sales season does not promise to achieve the annual target. 4. During peak sales season, it is important to keep hold on the brand equity of product to capture more market share. Offers like cheaper bottles with lucky draws with excited gifts can be provided to attract more customers. It causes less expense with more market share.