1. Describe consumer behavior in the cookware market. How is cookware bought? How is it sold? What are the implications for Culinarian's marketing strategy?
• Generated $3.36 billion in revenues in 2006
• Could be classified on the basis of: price, quality, material (Aluminum, Stainless Steel, Porcelain, cast iron and copper).
• Copper was the most expensive and most preferred by professional chefs due to superiors heat conductivity
• Manufacturers had to balance the need for performance, time saving features, and aesthetics with price
• Growing trend: Offering colored designer cookware that matched the kitchen decor and Product lines endorsed by and branded with ...view middle of the document...
What are Culinarian's strengths and weaknesses? Why has the company been successful?
• Clear strategic direction from management
• Consistency of marketing image and message
• Strong relationship with sales channels
• Experienced sales managers team
• Marketing implementation is well deliberated
• Superior product quality and performance technology
• Strong dealer support due to high margins
• Advertising and marketing spend focused and lean due to selective marketing channels
• Fewer marketing campaigns than competitors
• Monotonous promotions
• Market share shrinks because of brand image positioning
• Flaw data analysis and conflicting conclusions
• Management is cautious to pursue bolder price cut promotion
• Low penetration in low to middle income customers due to premium image and selective channel distribution
• Owned manufacturing unit; difficult inventory control during promotion
Company success factors:
• Maintaining retail relationships:
• Monthly field visits by the account managers for providing information and consultation
• Retail merchandising incentive programs
• High retail margins
Creating a successful brand and marketing mix
• Premium cookware favored by experts and chefs
• Focus on product quality, performance and durability
• Selective channel distribution and advertising to corroborate premium brand image
Skilled company personnel
• Comprehensive training for retail sales clerks
• Experienced account managers with incentive driven pay
3. Was the 2004 promotion profitable? Calculate the profitability using Brown' logic and then calculate profitability using the consultant's model. How would you calculate profitability?
Net loss due to the promotion as per the consultants: $ 529,282
Profit due to the promotion as per Browns estimates: $ 2,397,994
My calculation considered the normal sales projection for the months of Mar-May 2004 as 64,834, based on the 17% decline in sales of aluminum cookware from 2003
Profits due to promotion estimates $2,172,637
The promotions in 2004, were profitable as they were able to rise the demand for CX1, which otherwise were projected to be less.
4. Should Culinarian run a 2007 price promotion? If so, what...