Allied Old English is faced with the problem of having to pay slotting allowances of approximately $250,000 to obtain supermarket shelf space for Sorrell Ridge in order to expand into the California market. Under this introductory marketing plan, Sorrell Ridge would have to distribute 2 million 50 cents off coupons through inserts in LA newspapers and launch a new product, boysenberry conserve. In return, Bromar would be committed to securing distribution in stores for 90% grocery volume within three months of introduction. Allied desired to be the first to enter the California market with an all-fruit product line ahead of its competitors J.M. Smucker and Polaner.
Alternatives
1. Find another broker.
As the largest broker in Southern California is already representing a competitive brand, the question comes to what other skilled brokers are available in the market. It is vital to employ a broker who has experience and has the ability to secure distribution especially as Sorrell Ridge is looking to beat the best of the best in the market of jams.
2. Propose a less expensive launch program to Bromar and hope they would still agree to represent line.
Attaching itself to Bromar shows promising results as Bromar has experience and the ability to propel Sorrell Ridge in the California market.
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We did not have the resource to make mistakes and did nor have the budget cushion for failure”. In order to accomplish that feat, Allied should negotiate with Bromar. As the second largest broker in Southern California, Bromar is more experienced, can aid Allied in developing a long lasting relationship with customers. As a large distributor, Bromar is capable in managing high volume accounts. Moreover, Bromar will be able to increase sales as well as gain broader distribution on a tight budget. The marketing launch program that features coupons will convince consumers of competitor brands to