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1) There are a number of alternatives to reach the objective of a 10% boost in profits for Reliance Sodium bicarbonate.
a. The first alternative is to increase the cost of the item. The suggested retail price for each box of RBS is 10% greater than the actual market price. I would recommend increasing the rate by in between 5-10% for the 8 oz. boxes and the 1 pound. boxes, as these are the most effective sizes according to the sales volumes in display 5. Furthermore, 80% of customers in a 2006 study said that they consider baking soda to be affordable.
Due to the fact that our target consumers, female heads of families, are less rate conscious our product, I think a slight increase in RBS market price would be appropriate to assist us reach our objective of increased revenue.
b. Another possible alternative would be to repeat previously successful promotions. In 2006 these promotions ended up being an important part of our marketing strategy, and we can use the outcomes of previous projects to choose which promotions worked best, and recycle the successful ones.
I would suggest certainly recycling the 08/02/2006 -09/ 24/2006 promotion of sweepstakes and refund. This promo led to a big contribution margin (display 9) and was especially successful for the 1 pound. box. The promo from 01/05/2006 -02/ 27/2006 was also very effective, in conjunction with a synchronised sale price increase. This promotion included a refund, and it seems that this method to promotions attract the target consumer.
c. As an out-of-the-box option, I think RBS must think about expanding their item uses and relay these brand-new benefits through point-of-purchase marketing products and social networks campaigns.
For example, in the physical fitness industry it is a well-known ‘secret’ that baking soda is the very best method to sanitize and ventilate fitness center equipment, clothing, 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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