Anna Regnante, the new Domestic Brand Director for Reliance Baking Soda must determine the effectiveness of past promotional strategies in order to select a promotional strategy which will contribute towards a 10% increase in profits for 2008 before SGA, overhead, and taxes, specifically through marketing expenditures in advertising, consumer promotion, and trade promotion. Further Regnante must develop a 2008 budget P&L that will show the resulting 10% increase in profits from the marketing expenses.
Increasing raw material cost
Recent price increases
Prior to 2005, consumer promotions were not really a significant part of RBS marketing Technological
Baking soda first produced in 1846 Social/Cultural
Alternative uses for baking soda
Different types of users of baking soda
Staple product in most homes
Female heads of households generally are the purchasers
Reliance has high brand recognition (95% mentioned Reliance when asked for a baking soda brand)
The main competitors for Reliance baking soda are private label brands who compromise 30% of the market and are priced 30% below RBS price. RBS had lost 5% of its market share to private label brands in the past decade. Baking soda does not have any viable substitutes or alternatives as it is a unique product and staple product, but private label brands posing price pressures on Reliance are a big threat.
Stewart Corporation, founded in 1915 is compromised of four divisions: Household, Beauty, Foods, and International. RBS has a high distribution penetration, with 90% of grocery stores and mass merchandisers, 85% of warehouse clubs, and 80% of drug stores stocking at least one size, 8 oz., 1 lb. and 5lb. The household division of Stewart was responsible for $400m of the $1.8b in gross sales in 2006. Also, the household division