RELIANCE BAKING SODA: OPTIMISING PROMOTIONAL SPENDING
Decision to be made
Anna Regnante, has been promoted to Domestic Brand Director’s position for Reliance Baking Soda. Reganante has to develop a 2008 budget P&L that would result in a 105 increase in profit over 2007 estimates. Stewart Corporation
Stewart Corporation had four divisions i.e. Household, Beauty, Foods and International. In 2006 the company generated $150 million in net income and $558 million in profit. Household division was responsible for $400 sales and included baking soda, laundry detergents, window cleaners and disinfectant, wipes.The income statement of RBS clearly shows that a lot of income was spent on promoting the product in2006 as a result of which the product sales did not fall much in the second quarter, as compared to the first one in 2007. Marketing Mix Considerations Distribution
•High distribution penetration
•Maximum distribution by one lb box and varies by channel •150 person sales team to manage retail and wholesale accounts •Sales-force incentivized by a quota system with quarterly volume quotas •Most compensation to salesperson came from bonuses pricing •Selling Prices of RBS increased 3 times in previous 5 years •Price increase on all product sizes in 2006-2007
•Price increases were due to increase in raw material cost by 11 %
•Focused on new...