A1-Steak Sauce: Lawry’s Defense

Problem Statement:

A1 Steak Sauce is a brand of Kraft Foods with little competition in the steak sauce market. The product currently has the majority dollar and volume market shares in the steak sauce market. However, unit and volume sales have remained flat. Lawry’s, which is owned by Unilever, has announced an April 1st launch of its own steak sauce. Lawry’s has approached Publix and requesting the Memorial Day ad with a 2-for-$5 price. Now Publix is telling A1 to either match Lawry’s ad or lose its place.

Target markets:

The target market for A1 steak sauce consists of educated adults with in the United States who purchase groceries in mass merchandise stores. Since A1 is a premier steak sauce product and our price is considered inelastic due to its high quality, the average household income consists of households with a median income of $60,000. The target market is those men and woman who not only enjoy beef, but enjoy the process of grilling and cooking while adding condiments to their meal. A1 has established a loyal consumer base that prefers quality, they make more than the average household income and their meat of choice is often steak.

Product strategy:

Branding / product line:

• The current lines of A1 products consist of; Bold & Spicy, Thick & Hearty, Smokey Mesquite and Original.
• The steak sauce industry is stagnant and due to the maturity of this product the steak sauce industry must expanded to a potential new market. ( However A1’s RMS = 3. 75)
• By focusing our attention on market penetration of the steak sauce we can persuade our loyal consumer base that there is more than one benefit of the steak sauce and that it can be utilized with other meat product; thus equating to more purchases.

Product positioning statement:

“A1 Sauce controls 50 percent of the market share for a reason; they provide a high quality flavor to all steak and meat products which cannot be replicated by Heinz, Lawry’s or private labels. ”

Slogan:

“You deserve the best. ”

Promotion Strategy:

Advertising:

• 16 Million Budget: Process of allocating prices to combat competition such as Lawry’s while simultaneously growing the steak sauce market itself.
• Utilizing a Pulsing advertisement plan where advertisements are shown throughout the year but at very low levels, then boasting the majority of the advertising budget during the summer months when grilling is at its peak.
• Lawry’s stating that it is planning to “…spend 20 million on advertising, concentrated in the months of May June and July” (pg. 5) would be completely over shadowed if A1 were to shift to a pulsing marketing strategy rather than a continuous.

Strategy:

Using a humor appeal, and a testimonial appeal from professional grillers that express there’s no comparison when you want to add the best flavor to your meats.

Television:

Advantages:

• It reaches a large target audience, and engages consumers with visual effects.
• Since we are following the pulsing strategy in terms of advertising we want to concentrate most of our television exposure in the summer months, while significantly limiting the television ads throughout the rest of the year. TV provides visuals, and ads should concentrate on barbeque scenic grilling events, full of friends and family. Primarily showed during the summer grilling months.

TV: 12Mil

Magazines:

• Advertisements in Magazines much like television can be catered to a specific audience. Focusing on common magazine such as Sports Illustrated, ESPN, TIME and FORBES to name a few can garner a lot of the grilling demographic who will be interested in purchasing A1 sauce.
• Magazines also provide long-term ad exposure seeing as they can be view periodically throughout the year.

Advertisements: Should focus on family grilling events, A1 predominately on the picnic table surrounded by all different meats; including chicken, steak, beef… to emphasize that A1 is a universal product.

Magazines: 2 Mil

Internet:

• Utilize Search Engine Optimization to increase traffic towards the main A1 website.
• Become more interactive with the consumer on their website; showcase the diverse ways to utilize A1 sauce on different meat products.
• “Lawry’s Live” provides the hottest grilling trends. (pg. 5)
• Internet/Online: 2 Mil

Consumer Promotions: 5. 5 Million

• Sweepstakes: Create a way for consumers to become more interactive with the product by creating a sweepstakes to get an entire meal catered by A1, or free A1 sauce for a portion of time.
• FSI’s (Free Standing Inserts): An FSI is an advertisement within a group of Ad’s within a print publication (Mass merchandiser Coupons) Utilize these during the prime grilling months such as Labor Day and Fourth of July. (2mil) (1mil each)
• Consumer Promotions: 6 Mil Trade Promotion: 23 Million Utilizing Point of sale displays in checkout lines will prompt consumers to purchase steak sauce.
• Acquire higher amount of shelf space to distinguish itself away from the competition, this can be done by utilizing promotional allowances to create discounts.
• Maintain the Publix ad by matching Lawry’s 2 for 5 dollar deal during Memorial Day. Obviously Publix will choose A1’s ad over that of Lawry’s due to their close business relationship.

Trade Promotions: 23 Mil Distribution:

• Continue supply of A1 sauce to all restaurants to carry on the 9 to 10 ratio. Continue utilizing intensive distribution within all mass merchandisers and grocery stores within the US; maintain the ease of purchase by consumers. (They should never feel like they can’t locate the product)
• Pricing: * 4. 99 per 10oz bottle.
• Utilizing a pricing method on what the competition does specifically Lawry’s. * Using this competition oriented pricing strategy to benchmark A1 sauce is no good, maintain price above the competition.
• Lawry’s is set to rival A1 sauce yet it is below market standards in price, this should not play a significant factor in purchaser’s decision due to high brand loyalty of the A1 sauce product.