A1 Steak Sauce Case

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Problem / Issue

A.1. 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. In February of 2003, A.1. becomes aware of new competition entering the steak sauce market. Lawry’s, which is owned by Unilever, has announced an April 1 launch of its own steak sauce. Lawry’s has approached Publix and requesting the Memorial Day ad with a two-for-$5 price. Publix is requesting that A.1. match Lawry’s pricing or A.1. will lose its place in the ad.

Alternatives and Analysis

A.1.. could mount a frontal attack on Lawry’s. This would require A.1.. to lower its
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o A.1. has never been seriously challenged by another brand. Currently, A.1. has no reason to believe that Lawry’s could become serious competition.

• Disadvantages o A.1. stands to lose part of its current market share due to the extreme price difference between its steak sauce ($0.50 / ounce regularly) and Lawry’s new steak sauce ($0.36 / ounce regularly). o Currently A.1. is guaranteed to receive chief ad placements during the important holiday weekends. If A.1. makes no changes, there is a high probability that A.1. will lose these placements as Publix is already considering Lawry’s for the Memorial Day ad.


I would recommend a combination of two of the alternatives above. First, I would recommend that A.1. strengthen its relationships with its suppliers and distributors. Although A.1. would incur additional expenses in the form of legal fees and sales representative time, the benefits it could gain would be extremely useful in competing against Lawry’s. A.1. would ensure a high quality product, adequate shelf space, and principal display space. These would reinforce A.1. as the preferred steak sauce and provide additional brand awareness. Second, I would recommend that A.1. alter its advertising program for the upcoming year. With Lawry focusing on May, June, and July with its advertising program, A.1. needs to match it to maintain its current brand awareness. A.1. has been the number one brand of steak sauce people

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