Reliance Baking Soda

Summary of the background and facts
In August 2007, Stewart Corporation was enjoying success with its household division of products that included baking soda, laundry detergents, and other household cleaners. Stewart Corporation had built the company on the trusted brand associated with Reliance Baking Soda (RBS). (Quelch & Beckham, 2009). RBS was the market leader in its category, but the Reliance brand had experienced increased competition in recent years due to private label brands gaining more market share. Stewart promoted Anna Regnante as the Domestic Brand Director for (RBS) on August 8, 2007. Regnante was immediately tasked with the job of developing a budget for the coming year (2008) that would “result in a 10% increase in profit (before SGA, overhead and taxes) over 2007 estimates.” (Quelch & Beckham, 2009).

The Stewart Corporation was founded by James Stewart Augusta in 1915. Augusta had discovered what was called the “miracle compound” (baking soda), which led to the introduction of a product that would be used in many capacities that included cooking, cleaning and deodorizing. Baking soda was initially marketed as a key leavening ingredient that caused baked items to rise in the cooking process. Following the introduction of self-rising flour and instant cake mixes, the product’s importance to bakers declined. (Quelch & Beckham, 2009) Stewart found new life for its product to be used as a cleaning agent due to compound’s gritty texture. In 2006, estimates showed that RBS was used by over 85% of US households who had a household income over $25,000.
While RBS was a market leader and was generally the dominant player, the product did have competition, which was mainly with private labels. Over the past decade, RBS had suffered a blow in the market due to the private label brands, thus losing approximately 5% of