Rbs Case

1. What are the strengths and weaknesses of the RBS brand?

Strengths:

„h RBS is the market leader in baking soda category (70% share) „h Even if the brand is strongly associated with the category, the high product versatility allows it to compete in multiple categories (bakery, cleaning, disinfection etc¡K)

„h Strong distribution penetration among grocery and mass merchandising (90%), club (85%), and drug (80%)

„h Strong margins that have continued to grow over the last 3 years

„h Strong brand recognition and advertising recall

„h Strong brand awareness/salience in the U.S.:

o Over 85% of U.S. family households of incomes $25+ used the product.

o 95% were able to recall the brand name when asked to name a brand of baking soda.

o The product has not only depth of awareness through recall, but breadth of awareness as well: 50% of baking soda consumers used it for more than one purpose.

„h The product has excellent loyalty and it is a functional brand. „h The product has a better perception among consumers than private label brands: 70% of baking soda consumers purchased RBS. Weaknesses:

„h Seems that consumers have no feeling towards and resonate with the RBS brand this is probably due to the low advertising recall. „h The brand doesn¡¦t really communicate cleaning uses

„h The brand and the product itself is unexcited and boring; the product has not changed for over 100 years

„h Some of the weaknesses come from the category of the product not from the product itself:

o Rise in manufacturer¡¦s selling price due to inflation in raw materials

o Baking soda is not a high traffic driver and has low turnover

2. Analyze the effectiveness of past RBS consumer and trade promotional events. How have the promotions strategies impacted sales volumes? Comment on the return on marketing investment.

Most of the time trade promotions have a positive return for the company but we don¡¦t know on what baseline they become incremental. There were only two occasions when trade promotions resulted in a total net incremental loss (in Jan/Feb 2005 and Oct-Dec 2006). Consumer promotions have also had a history of positive net incremental contributions, although the magnitude is not as large as for trade promotions. Particularly in 2006, RBS increased consumer promotion by 155% and trade by 40% which helped drive a 23% increase in gross sales (even with the price inflation). When cutting these

promotions in half during 2007, sales actually decreased. Both have shown success in