Reliance Soda

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RELIANCE BAKING SODA

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.

Case Overview
 Lot of income spent on promotion in 2006
 Product sales high for 2006
 Sales went down on 2007

 Price increase in 2006-07

Strengths and Weakness
Strengths:
 Market Leader-70% market share
 Multi utility product
 85% households purchase RBS
 Strong brand recall-95%
Weakness:
 Price sensitive market
 Poor Advertising

Marketing Strategy
 Push strategy involves the grower’s marketing activities

(primarily the sales force and trade promotion) directed at the marketing channel intermediaries, such as brokers, wholesalers, etc.
 Push strategy is especially appropriate where:

 there is low brand loyalty in a category;
 purchase, selection or choice is based upon availability in

the retail outlet;
 the product is an impulse item;
 the product benefits are well understood.

Relative merits of Push strategy…
When successful, push strategies result in
 a wider range of availability,
 fewer stock outs,
 greater merchandising activity, and
 a greater marketing effort than would have been
achieved with little or no push communications.

 Consumer Promotions:
 Advertisements were made in women’s magazine, Sunday newspaper and

company website.
 In April set of coupons for 5 household brands was included in 6 million boxes of Brilliance Laundry detergent.
 In June shrink wrapped twin pack of 1 lb. boxes and a $1 cash refund inside the pack with proof of purchase of 2 1 lb. boxes.

 Trade Promotions:
 Discount on invoices for cases ordered in promotion period.  Free cases with a purchase of a minimum order.
 Performance discount incentives for providing verifiable merchandising and

advertising support.
 Temporary discount used to promote sales, lasted 3 to 6 weeks.  Advertising trade support much lower than that of competitors

Economic Analysis
2007
Manufacturer's Price Per Case
8 oz
1 lb.
5 lb.
Factory Shipments ( in 000's of cases)
8 oz
1 lb.
5 lb.
Variable Manufacturing Cost per Case
8 oz
1 lb.
5 lb.
Gross Sales
Variable Manufacturing Cost
Gross Margin
Advertising
TV
Priint
Internet
Total Advertising
PR/Media Production costs
Consumer Promotion
Trade Promotion
Total Marketing Expenses
Profit Before SG & A, Overhead and taxes

2008

7.2
12.02
54.28

7.2
12.02
54.28

714
1226
648

785
1348
712

3.38
3.38
5.58
5.58
24.8
24.8
55050.76 60502.32
25324.8 27832.74
29725.96 32669.58
3815
4196
694
694
248
300
4757
5190
198
198
551
1000
5505
5000
11011
11388
18714.96 21281.58

Recommendation
 Increase promotions within social media like Facebook
 Use of internet like Youtube for mass promotion
 Revise marketing strategy with reduced trade promotions

and increased consumer promotions
 Pricing should be competitive to tame private players

Thank you

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