Lawry is launching a new steak sauce product nationally with an April 1 start ship and is asking for the Memorial Day ad at Publix, with a two-for-$5 promotional price point. How should A.1. respond to Lawry’s launch? Should A.1. defend itself against the launch and if so, what should A.1. do?
A.1. had little competition, substantial sales, and excellent margins with a long history. A.1. was the leader in the steak sauce category with a dollar share of more than 50 %. Heinz 57 was A.1.’s largest branded competitor but nit directly competing against A.1.
Kraft’s revenue on A.1. Steak Sauce was about $150 million in 2002 and operating profit was approximately $60 million. A.1 had worked to broaden the brand beyond steak sauce. The brand launched a line of marinades in 2001 in order to enter the fast-growing category. At the end of 2002, Kraft’s revenue on the A.1 line was $15 million, and the line had a 10% share of the marinades category. A.1.’s 2003 budget called for......
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