Group I

Ajinkya Poundrik 2013PGP064

Kamalesh Srinivasan 2013PGP087
Vivek M. Rathi 2013PGP108


A.1. STEAK SAUCE: LAWRYS DEFENSE

Protagonist in the Case:
Chuck Smith, Senior Brand Manager for A.1. Steak Sauce and Marinades at Kraft Foods

Case Situation:
Chuck Smith is having a meeting with his cross-functional business team at his office pondering upon the
defense plan on how to tackle the entry of Lawrys Steak Sauce item.

Case Background:
Kraft Foods was the second largest company in the world and largest food company in the United
States.
A.1. Steak Sauce was one of the premier brands in the portfolio of Kraft Foods with little competition,
substantial sales and excellent margins. A.1. was the clear leader in the steak sauce category with a
dollar share of more than 50% and an extremely high brand awareness. The competition was limited
and Heinz 57 was A.1.s largest branded competitor. The retail price of A.1. was about 4.99$ for a 10
ounce bottle with grocery channel margins of about 30%. The brand ran in-store promotions with
discounted pricing only at key holiday weeks of Memorial Day and the Fourth of July, holidays. Retailers
traditionally supported only one brand in a particular category during the promotional week and so A.1.
was usually successful in locking up the steak sauce category for the key weeks.

Problem:
Owned by Unilever, Lawrys brand was launching a new steak sauce product nationally from April 1 in
order to gain full distribution before the peak summer grilling season. The product was a dark, intense
sauce similar to A.1. in taste and texture with shelf pricing significantly lower than A.1. Steak Sauce.
Lawrys was planning to spend heavily on the advertising of the product with Memorial Day ad at Publix
at a two-for-$5 promotional price point.

Challenges:
Chuck Smith had to put up a strong recommendation plan to respond to the competitive threat of
Lawrys new product launch in the steak sauce category keeping in mind the 2003 profit target. While
doing so, he had to answer the following questions in the final recommendation
Should A.1. defend itself against the new product launch from Lawrys? If so, what should it do?
Should A.1. reduce its price, either through a list price roll-back or aggressive promotions?
Should the brand simply spend more on its existing advertising campaign?