Rbs - Case Study Example
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.
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It was a very slow moving product, which needed “a lot of push marketing to stimulate trade interest.” (Quelch & Beckham, 2009, p.2). Randall further observed that it was “not a natural traffic builder, it does not have high turnover, and it is boring.”(Quelch & Beckham, 2009, p.2). RBS needed promotional methods which would turn the tide in their favor. According to Exhibit 3, RBS had “low advertising recall.” There was greater need to refocus marketing communication efforts. Another limitation was the continual price increase for baking soda over the last 5 years. The price changes were not good because it had a negative impact on the numbers of cases that were shipped to the stores. This could lead to stores choosing a competitor’s brand or selling more of its private label brand. The final limitation is that RBS being a mature product is sold on the push system. The household sales force is paid based on quarterly sales quotas. This allows the sales staff to wait on trade promotions to sell the product. Therefore, they are not concerned with the day to day sales of RBS.
Section V: Alternative Solutions Reliance Baking Soda must increase profit in its household division by 10% in 2008. In deciding how to do this, Regnante must decide what to