July 24, 2007
A.1. Steak Sauce
What do you think of when you want steak sauce? A.1. Steak Sauce, of course. Is there even any other steak sauce out there? A.1. Steak Sauce was a premier brand in the Kraft Foods portfolio and had little competition, substantial sales and excellent margins. The original steak sauce upon which A.1. was based was created in 1824 by Henderson William Brand, chef to King George IV of the United Kingdom. Kraft acquired the product in 2000 as part of an acquisition with Nabisco.
As mentioned, A.1. Steak Sauce had little competition, so when Chuck Smith, Senior Brand Manager on A.1. Steak Sauce and Marinades, received an email that stated Lawry's was launching a steak sauce, he was quite surprised.
The Lawry's brand started with the opening of Lawry's , The Prime Rib Restaurant. The most popular product was Lawry's Seasoning Salt.
Lawry's had other products such as taco seasonings and marinades. Lawry's brand is part of the Unilever family. Unilever had annual sales of almost $50 billion but financial results at Unilever had been disappointing in the past few years.
Lawry's was to start off with quite an aggressive promotion for its new steak sauce. Lawry's was asking for the Memorial Day ad with a two-for-$5 promotional price point at one of the largest grocery chains in the United States, Publix. Holidays sales, such as those on Memorial Day, are extremely significant sources of revenue for A.1. About 10 percent of the company's full-year volume is sold on Memorial Day weekend.
Smith and his team had to decide what the plan of action was going to be. They had to come up with a recommendation on how A.1 should respond to the launch. Should A.1. defend itself? What...