A1 Sauce - Case Study

Introduction

A.1. steak sauce is a sauce that is sold in many stores and used in many restaurants. Many people use this sauce to enhance the taste of their steak. This paper will discuss the analysis of the case along with the management and marketing strategy. This paper will also explain the competition of A.1's steak sauce as well as the core competency and the sustainable competitive advantage. The keys to success, critical issues, Swott analysis, and recommendation will also be discussed in this paper.

Analysis of the Case

A.1. steak sauce is an exclusive brand of Kraft foods. Kraft foods are currently ranked as the second largest food company in the world. Since A.1. sauce is a product of Kraft food it has been able to expand pass it competitors. A.1. sauce in recent years has had little competition, with great margins. The product itself has been around for over a 100 years and has developed strong brand awareness. A.1. sauce has been the clear leader in the steak sauce category with over 50% of the market share. Loyalty to steak sauce has been high, and competition has been limited. A.1. sauce is well distributed and can be found in nearly every grocery store as well as mass merchandisers across the country. The current retail price of A.1. sauce steak sauce is $4.99 for a 10 ounce bottle.

Management and Marketing

Examining the Kraft Steak Sauce division the Marketing and Management groups need to focus on a single unified message on how-to properly market their product against Lawry's steak sauce. Instead of focusing on a single marketing blitz such as a short term sale of the product A.1. sauce needs to increase product usage to have long-term gains. A second strategy for their marketing department would be to link up with steak providers creating pre-prepared marinated meats. By doing this A.1. products can be pre-packaged with the steak products eliminating the consumer need to even think about which steak sauce they need to purchase. Additionally for the consumer this reduces complexity of needing to decide what sauces go's best with the type of meat they are purchasing.

Competition

The competitor of concern is Unilever. One of the largest consumer products companies in the world, Unilever had annual sales of almost $50 billion. The company had a vast and diverse collection of businesses. In early 2003, Unilever announced plans to launch a Lawry's steak sauce. The company chose April 1 for the first ship date in order to gain full distribution before the peak summer grilling season. The company planned to drop five FSIs in 2003 and spend $20 million on advertising, concentrated in the months of May, June, and July. The Lawry's steak sauce line included one item: an 11-ounce product packaged in a plastic bottle. Everyday shelf pricing on Lawry's Steak Sauce is significantly lower than A.1Steak Sauce. Core Competency and Sustainable Competitive Advantage

The competitive advantage of the A.1. Steak Sauce is its high brand awareness, availability at virtually every grocery store, mass merchandiser, and club store. In these stores A.1. sauce incorporates product facings in a large part of the Steak Sauce shelf facings. An additional competitive advantage is the fact that nine out of ten steak houses serve A.1. sauce. The core competencies, of A.1. sauce rest in their ability to have a clear and distinctive brand position focusing on the meat-seasoning category. A.1. sauce also experiences strong retailer relations as shown by contact from a major retailer providing A.1. sauce priority in advertising during the release of Lawry's competing Steak Sauce.

Key to Success

* A.1. steak sauce had worked to broaden the brand beyond steak sauce

* A.1. steak sauce has the strongest brand equity in the category

* It is virtually untouchable

Critical Issues

* Figuring out financial complication

* Looking into the best plan and put together the recommendation for A.1. steak sauce

Industry Analysis

A.1. Steak Sauce performs business in a mature industry, dominated by a few large competitors. It is important for this company to avoid complacency, slow response time, and to remain knowledgeable in regard to current competitors and market analyses in a mature industry. The company is accountable for 54 percent of the steak sauce sales in dollars with the largest branded competitor, based upon revenue, being Heinz 57. Heinz 57, however, only generates 16 percent of the steak sauce sales in dollars.

SWOTT Analysis

Strengths

* A.1. sauce is distinguished from competitors through the high quality and brand equity associated with the product that this firm is offering.

* The company holds a first mover advantage as the original steak sauce producer

* Consumers maintain an exceptionally strong association between A.1. steak sauce and beef products.

* "Nine out of ten steak houses serve A.1."

* The company has a large market share.

* A.1. sauce is the brand leader and is in a stable position.

* Due to the fact that the firm utilizes Kraft Foods Incorporation's distribution network, the supply of A.1's sauce is easily widespread.

* Strong financial position