Case Study- Stratus Pretzel Company
Stratus Pretzel Company specializing in its pretzel product line with a brand name "Twisty
Pretzel" - a salty snack product. The pretzel industry is estimated to be a $1.2 billion dollar
industry. Pretzels are considered the salty snack industry's fastest growing category.
Twisty Pretzel's closest competitor is a Falcon Brand pretzel, which maintains 9% market share.
Twisty Pretzel uses intensive distribution strategy and it reaches customers via 47,000 retail
outlets such as supermarkets, drug stores, and neighborhood grocery stores. Management
team of Twisty Pretzel has decided to introduce a new low-fat pretzel in the United States in
February 2023. Projected sales revenues from this new low-fat pretzel are estimated to be $ 15
million in year 2023.You have been hired as a marketing consultant by Marketing Vice President to help introduce
the new brand "Twisty Pretzel"

Questions
1. To introduce the new brand and to maintain the current brand sales, the firm plans to spend
6% of its projected sales revenues on marketing communications-related activities.

a. What will be the budget in $$. What budgeting method is the management using?
What are the advantages and limitations of using this budgeting method?