Heinz

Case B
 Laboratory Test
28oz 28 oz 64 oz-$2.81 24 oz glass bottle

$1.49 $1.59 28 oz-$1.59

Cell Cell Cell Cell

1 2 3 4
 Spending Plans
• Cells 1& Cell 2 ( base plan)
 $2.7 Million in Advertising
 $1.5 million in Consumer Promotion
• Cells 1& 2(high spending plan)
 $4.1 Million in Advertising
 $3.3 Million on Consumer Promotion
• All spending and pricing scenarios led to an incremental
sales 5.5% to 11.5% on a National basis
• Both Test Markets Dallas & New York showed same
pattern as national, higher spending resulted in greater
volume
 Contd
• Cell3
 $ 4.8 Million on Advertising
 $3.4 Million on Consumer Promotion
 National incremental sales 8.5% and New York 7
%, Dallas 10%
• The reorder Rates dropped between first and
second opportunities dropped gradually for 28
oz @$1.59
 Marketing Program Development
• Purchase levels were high for 28 oz @$1.49
• Frequency of usage of ketch up was high for
28 oz @ $1.59
• Issues
 To choose between 28 oz and 64 oz
 Reallocation of Advertising & Promotion budgets
 Cannibalization of 24 oz
 Pricing was an issue
 Suggestion
28 oz @ 1.59 28 oz @ 1.49
Capital Investment 3000000 3000000
Promotion budget 4200000 4200000
Revenues 34344000 32184000
Profit 27144000 24984000

The 28 oz @ $ 1.49 had high purchase levels and the frequency of use was 40%
less than 54% of 28 oz @ $1.59 this would provide an incentive for the users to
buy more of the same content at a lower price.