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  • Reliance GRP 11

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    tanmaysriv
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    Reliance Baking Soda is analyzing how to optimize promotional spending to increase profits by 10%. They have a 70% market share but saw increased sales due to trade promotions after raising prices 13% last year without changing manufacturing costs. The document recommends reducing advertising by 10% due to high brand awareness, and increasing consumer promotions by 50% and trade promotions by 50% while also further raising prices to boost short-term gains without hurting long-term brand viability.

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    Reliance Grp 11

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    Reliance Baking Soda is analyzing how to optimize promotional spending to increase profits by 10%. They have a 70% market share but saw increased sales due to trade promotions after raising prices 13% last year without changing manufacturing costs. The document recommends reducing advertising by 10% due to high brand awareness, and increasing consumer promotions by 50% and trade promotions by 50% while also further raising prices to boost short-term gains without hurting long-term brand viability.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    336 views8 pages

    Reliance GRP 11

    Uploaded by

    tanmaysriv
    Reliance Baking Soda is analyzing how to optimize promotional spending to increase profits by 10%. They have a 70% market share but saw increased sales due to trade promotions after raising prices 13% last year without changing manufacturing costs. The document recommends reducing advertising by 10% due to high brand awareness, and increasing consumer promotions by 50% and trade promotions by 50% while also further raising prices to boost short-term gains without hurting long-term brand viability.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 8

    Reliance Baking Soda

    Optimizing Promotional Spending

    Agenda

    Key Facts

    Objective
    Problem Statement Action Plan Recommendations

    Key Facts

    RBS Market Share - 70%.

    Price Increase in last 1 year - 13%


    No change in manufacturing cost for 2008. Significant brand awareness - as per 2006 survey. Aggressive consumer promotion since 2005. Increased Sales - due to Trade promotion

    Objective

    Recommendations to increase profit by 10% for RBS

    Problem Statement

    Can price be increased without offsetting current level of sales

    What changes can be effected in advertising, consumer promotion and trade promotion

    Would the future viability of the brand get affected


    by the short term gains

    Action Plan

    Reduce Advertising Cost Increase Promotional Offers Customer Promotion Trade Promotion

    Increase in Price of Product

    Reduce Advertising Cost

    Rationale 70% market share evident from the 2006 survey. Only 20% people could recall RBS advertising

    95% people equate baking soda to Reliance.

    Recommendations

    How much to spend on Consumer promotions?

    Increase by 50%, $ 826.5

    Should we consider more performance based Trade promotions? Yes, Increase by 50%, $ 8257.5

    Should changes be done to current level of

    marketing expenditures?
    Yes, Reduction in Advertising cost by 10%

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