A1 Case Study

A1 Case Study

A.1. Case Study

Problem:   Lawry’s is launching a new steak sauce product nationally on April 1st and is asking Publix, one of the nation’s largest grocery store chains if they can have the Memorial Day add with a two-for-$5 promotional price point. This Holiday weekend accounts for 10% of annual sales. Should A1 match this price and ensure that they get the Memorial Day add?
A.1. in recent years has had little competition, with great margins. The product itself has been around for over a 100 years and has developed strong brand awareness. A1 has been the clear leader in the steak sauce category with over 50% of the market share. Loyalty to steak sauce has been high, and competition has been limited. Currently the biggest competitor to A1 is Heinz 57. A1 has tried to branch off and expand its efforts beyond steak, but has experienced little success. A1 is well distributed and can be found in nearly every grocery store as well as mass merchandisers across the country. The current retail price of A1 steak sauce is $4.99 for a 10 ounce bottle.
Strengths
  * Brand Awareness
  * Over 50% Market Share
  * Widespread distribution
  * Brand loyalty
  * Strong association between A.1. and steak
  * Strong financial position of Kraft Food
  * More shelf facings
Weaknesses
  * Difficult brand extension
  * Consumer only uses small amount of A.1. with meal
  * A1 is priced higher than competitor sauces
Opportunities
  * Develop more strategic alliances
  * Expand its current relationships with distributors and suppliers
  * Conduct more research about consumers
  * Provide coupons and price cuts for consumers
  * Expand its current distribution Network
  * Match Lawry’s price and secure the key holiday promotional advertisements

Threats
  * Lawry’s entering the market with a new steak sauce at a lower price
  * Losing a vital partnership with Publix, one of the nation’s largest grocery stores
  * Lawry’s...