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Rbs - Case Study Example

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Case Study Example 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. …show more content…

Also, a problem existed with trade promotion events due to the fact that the company did not negotiate or set a price with the trade on what to sale its products for when they were purchased during a trade promotion. By not having set promotional retail prices, the trade was allowed to stock up on inventory at reduced prices. They did not have to extend the savings to the consumer. This ultimately caused a loss in profit for RBS. To make matters worse, these trade promotions often overlapped with consumer promotions. Therefore, it is hard to tell what the actual real incremental profits for the promotions were. Section IV: Constraints and Limitations Besides the problems listed in the above sections, Reliance Baking Soda is constrained and limited by the fact that baking soda is in the mature part of its life cycle. When a product reaches maturity, there is no room for traditional growth. The product must discover new uses. RBS is not a “wow” product that can be categorized as a necessity; therefore, it must be aggressive in its advertising in order to stimulate further purchase. The product was old-fashioned and needed some ‘refurbishment’ to make it attractive to the target market. The need for RBS nose-dived, following the introduction of self-rising flour and instant cake mixes. Naturally, it would be cheaper for bakeries to move to baking soda and

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