Reliance Baking Soda

1) There are a number of alternatives to reach the objective of a 10% increase in profits for Reliance Baking Soda. a. The first alternative is to increase the price of the product. The suggested retail price for each box of RBS is 10% higher than the actual retail price. I would suggest increasing the price by between 5-10% for the 8 oz. boxes and the 1 lb. boxes, as these are the most successful sizes according to the sales volumes in exhibit 5. Additionally, 80% of consumers in a 2006 survey said that they consider baking soda to be inexpensive. Because our target consumers, female heads of households, are less price sensitive to our product, I think a slight increase in RBS retail price would be acceptable to help us reach our goal of increased profit. b. Another possible alternative would be to repeat previously successful promotions. In 2006 these promotions became an integral part of our marketing strategy, and we can use the results of past campaigns to decide which promotions worked best, and reuse the successful ones.

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I would suggest definitely recycling the 08/02/2006-09/24/2006 promotion of sweepstakes and refund. This promotion resulted in a large contribution margin (exhibit 9) and was especially successful for the 1 lb. box. The promotion from 01/05/2006-02/27/2006 was also extremely successful, in conjunction with a simultaneous list price increase. This promotion consisted of a refund, and it seems that this approach to promotions appeals to the target consumer. c. As an out-of-the-box alternative, I think RBS should consider expanding their product uses and relay these new benefits through point-of-purchase marketing materials and social media campaigns. For example, in the fitness industry it is a well-known ‘secret’ that baking soda is the best way to sanitize and deodorize gym equipment, clothes, and athletic shoes.

RBS has continuously shown alternative uses for their product in the household, and how to substitute baking soda for costly products. One angle they did not pursue previously was using baking soda for personal care and beauty. Some of these uses for baking soda include: oral hygiene (making natural toothpaste, mouth wash), facial scrub and body exfoliate, nontoxic deodorant, hair wash, and more. Teaching their target consumer these fun new uses for RBS through promotional ads (YouTube how-to videos), point-of-purchase demonstrations, and even coupons in women’s magazines with ‘recipes’ for natural personal care. 2) I recommend using a combination of these tactics, with specific attention to using previously successful promotions with promoting new uses for RBS.

A very slight price increase will not deter loyal customers from buying the already ‘inexpensive’ product, and this can serve as a profit buffer. Continuing to advertise refunds through promotion campaigns is suggested, and perhaps combining a ‘buy one, get another Stewart household product half-off’ would be successful. No matter what, RBS should definitely promote RBS as a multipurpose product through its social media outlets, as this is an economical way to enhance brand awareness, feature innovative uses, and connect consumers with the product in an alternative way.

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