Section I: Summary of Background and Facts
Reliance Baking Soda was discovered by James Stewart Augusta in 1915. He called it the “miracle compound.” It was founded to serve as a leavening agent in baked goods to let them rise properly. With the invent of self-rising flour and instant cake mixes, baking soda’s original use importance declined. With this decline, Stewart Corporation started promoting baking soda for a myriad of other uses, which include household cleaner, laundry aid, and deodorizer. Reliance baking soda holds a 70% market share. They produce three box sizes, 8oz, 1lb, and 5lbs. The 1lb box holds almost 50% of the sales volume. Reliance has excellent brand awareness and customer loyalty. Stewart Corporation is comprised of four divisions. Reliance Baking Soda (RBS) is in the household division. Anna Regnante was promoted Domestic Brand Director for RBS. She was placed in charge of increasing Reliance’s profit by 10% in 2008. The Household Division is planning to introduce two new product launches in 2008. According to Chris Dale, Managing Director for Stewart’s Household Products Division, they need the incremental profit increase from RBS to “fund the marketing launch expenses for the new products.” (Quelch & Beckham, 2009, p1) Regnante needs to figure out how she can generate the required profit growth for the old-fashioned, mainstay product of baking soda.
Section II: Statement of the core problems Regnante’s core problem is figuring out what marketing mix to use to increase Reliance Baking Soda’s profit by 10% in 2008. One of the main problems with RBS is the current lack of advertising. Regnante’s predecessor had cut the consumer promotion budget in half. Advertising is a key component in making sure the brand’s product is marketed to its consumers. RBS did not properly advertise the significance for what all baking soda could be used to do, which includes outdoor cleaning, baby
Cited: Shaeffer, Lee. (2009, October 14). Maximize Product Profitability as the Market Matures. Product Management Library of Knowledge. Retrieved October 1, 2010, from http://www.aipmm.com/html/newsletter/archives/000359.php