Sorrell Ridge

Topics: Slotting fee Pages: 40 (1414 words) Published: October 12, 2013

 

Contemporary
 Marketing
 Channels
 
Assignment
 3.
 Sorrelle
 Ridge:
 Slotting
 Allowances
 

 

 

 

 

a.

What
 are
 Sorrell
 Ridge's
 sources
 of
 negotiating
 power
 and
 weaknesses?
 
What
 about
 Bromar’s?
 
Sorrell
  Ridge’s
  power:
  Sorrel
  Ridge
  was
  the
  first
  manufacturer
  that
  provides
  all-­‐
fruit
  products
  over
  sugared
  jams,
  giving
  SR
  first-­‐entry
  advantages.
 
  With
  the
 
aggressive
  marketing
  expansion,
  SR
  achieved
  “a
  60%
  market
  share
  in
  health
 
food
  store
  nationwide”
  in
  1984.
 
  SR
  hired
  an
  outstanding
  sales
  talent,
  Carol
 
Pressman,
 to
 launch
 the
 supermarket
 expansion
 in
 the
 New
 York
 metropolitan
 
area
 extremely
 successful.
 
 In
 addition
 to
 its
 previous
 success,
 SR
 has
 a
 potential
 
in
  the
  Southern
  California
  area,
  due
  to
  California
  consumers
  have
  growing
 
health
 consciousness.
 
 
 
Sorrell
 Ridge’s
 weakness:
 
 SR
 has
 limited
 network
 or
 resources
 in
 the
 Southern
 
California,
 making
 it
 dependent
 on
 distributors
 or
 brokers.
 
 On
 the
 other
 hand,
 
the
 Southern
 California
 market
 has
 little
 awareness
 of
 SR’s
 brand,
 and
 majority
 
“jam
  and
  jelly
  consumers
  were
  single
  brand
  users”.
 
  Another
  major
  weakness
 
comes
 from
 competitors.
 
 Polaner
 and
 Smucker
 have
 both
 introduced
 their
 all-­‐
fruits
 products,
 and
 are
 planning
 to
 entre
 the
 Southern
 California
 market.
 
 
Bromar’s
 power:
 Bromar
 is
 the
 second
 largest
 food
 broker
 in
 California,
 which
 
not
 only
 has
 strong
 resources
 and
 relationship
 with
 local
 supermarket,
 but
 also
 
provides
  sophistic
  value-­‐added
  services
  to
  SR.
 
  California’s
  other
  food
  brokers
 
are
  currently
  representing
  SR’s
  competitors’
  products,
  making
  SR
  difficult
  to
 
approach.
 
 
Bromar’s
  weakness:
  Although
  SR
  is
  difficult
  to
  approach
  food
  brokers,
  there
  are
 
six
 distributors
 in
 the
 Southern
 California
 that
 can
 replace
 Bromar
 and
 help
 SR
 

to
  entre
  the
  Southern
  California
  market.
 
  Furthermore,
  the
  100%
  fruit
  concept
 
had
  “mass
  marketability”.
 
  Comparing
  to
  its
  fellow
  brokers,
  Bromar
  does
  not
 
represent
  any
  all-­‐fruit
  manufacturer,
  while
  SR
  is
  one
  of
  the
  leading
 
manufacturers
 there.
 
 

b.

Should Pressman agree to the first year program summarized on page 1 and laid out in Exhibit 10? If not, what should she do? Be prepared to take the roles of both the broker and Carol Pressman in a discussion of the appropriate level for slotting fees and the entire first year marketing program for Sorrell Ridge in LA.

Pressman and Ross should choose none of these three options. The reason is because a powerful food broker is critical for a company trying to gain some market share when entering a new market. Since the largest food broker in southern California already represented Smucker’s. ss the second largest food broker,...
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