About Kraft Foods
--> Second largest food company in the world, and the largest food company in the US
--> 67 major brands, each with more than $100 million in annual sales
--> Products including: coffee, yogurt, lunch meats, frozen pizza, salad dressing, barbecue sauce, cheese, boxed dinners, candy, cookies, crackers, nuts, cereal, mayonnaise, stuffing, and rice
--> Kraft Foods put strong consumer marketing efforts behind A.1.Steak Sauce.
-The brand spent 15% of its operating revenue on advertising
-Consumer promotions were 5% of operating revenue
-In 2004, A.1. planned to drop 4 FSIs (free standing inserts): one in each quarter, cost of $1million each. Each FSI included a $0.50-off coupon which could be used for one A.1. Steak sauce product.
--> In 2002, Kraft's revenue on A.1. Steak Sauce was about $150 million and operating profit was approximately $60 million.
-->Launched a line of marinades in 2001 in order to broaden the brand beyond steak sauce. It failed on that year but was successfully relaunched in 2002.
--> End of 2002, revenue of A.1. was $15 million, and the line had 10% share of the marinades category
--> First developed in about 1830 by Henderson William brand, chef to England's King George
--> Sold in North America in the early 1900s
--> Kraft Foods acquired A.1. in 2000 as part of its acquisition of Nabisco
--> Little competition, substantial sales, and excellent margins (strength)
--> High brand awareness (strength)
--> High Brand Equity
--> "Nine out of ten steak houses serves A.1."
--> Product packaged in heavy glass bottle
Current Promotion Strategy
--> About 10% of A.1's revenue was spent on in-store promotional efforts or trade promotions
--> In-store promotions with discounted pricing only at the key holiday weeks of: Memorial Day and Fourth of July, which were considered as important holidays for the steak sauce category due to the peak...