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A1 Case

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Submitted By estef1995
Words 2552
Pages 11
MEMORANDUM
TO: Chuck Smith
FROM:
DATE:
SUBJECT: A.1. Steak Sauce: Lawry’s Defense

A. Situational Overview
Kraft foods is one of the largest food companies in the United States with 67 major brands bringing in $100 million in annual sales. A.1. Steak sauce is one of the premier brands for Kraft Foods. It was created in 1830 by Henderson William Brand, who was the chef for England’s King George. When King George tried the sauce he was so happy with it and declared it to be “A1.” It was brought to North America during the early 1900’s, and Kraft Foods later on in the 2000’s acquired Nabisco which also brought along A.1. Steak Sauce. A1 sauce is the leader in the steak sauce category, and it ties into their high awareness with consumers.
Although they are the leader in the category and sales have grown over the last couple of years, their unit and volume sales have become flat. They tried to reestablish the brand by broadening outside of just steak sauce. They had a horizontal extension in their product line by launching a line of marinates in 2002, and acquired 10% of the fast growing marinates market. The launching of the new marinate line for A.1. should create a future edge against the mature and slow growing steak market by becoming more diverse and offering a new product for the needs of other customer segments (Chernev, p. 154). During the infancy stage of the A.1. marinate line, the profitability will be limited because the market is not as aware of the product. Once the product reaches all of the levels in the adoption process, the sales will increase, and the profit will be more relevant. B. Problem to be solved
A.1. is now facing considerable pressure by the industry and its competition. First, the 2003 budget is calling for an increase of 10 percent for profit on the A.1. portfolio. They are also experiencing this pressure due to the fact

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