Culinarian cookware promotion

Culinarian cookware promotion

Name

University

1. Briefly analyze consumer behavior in the cookware market. How is cookware purchased and sold (from both the end consumer and the channel members’ perspective)? What are the implications for Culinarian’s marketing strategy?

The retail distribution outlets for cookware consisted of department stores, grocery stores, specialty chains, direct TV sales, catalogs, local specialty stores, mass merchandisers, and online retailers. Moreover, the sales of cookware were as well seasonally related, particularly in the cases of Christmas gifts and weddings. In terms of consumer behavior in Cookware Market, the Market witnessed attractive growth from 2002 to 2006, whereby it added up to around $3.36 billion in markets. Cookware classified by quality and material manufacturers. Price can be usually be distinguished according to the product portfolio; they offered, which encompassed either low-end or even mid-level products along with Premium pieces of stuff. Aluminum cookware formed a chef chunk of the cookware sales, which included copper, cast iron, and stainless steel.

The buying behavior of the customer in the cookware market tended to be seasonal, whereby the peaks could be witnessed during May- July, which is the wedding. Besides, the purchasing pattern could peak from November to December, which is the holiday season. A massive chunk of cookware which was purchased was gifted. Quality and features tended to rank higher than brand name and price when it came to buying cookware products. Brand awareness could play a dynamic role when customers went to buy cookware.  Above and beyond, the premium cookware consumers moved towards colored designer offerings that matched their kitchen door. A well, the consumer behavior was positively prejudiced by endorsing celebrity chefs. Most of the customers were from families who have an income of more than $75,000. Naturally, women tended to form the biggest purchasers of premium cookware.

The implications for Culinarians Marketing Strategy- Culinarian as a premium performance cookware manufacturer, it is focused on advanced performance technology CEOs Strategic priorities. The strategies include the increment of market share in the premium cookware segment, the continuation of capturing revenue growth of at least 15% while preserving pre-tax earnings margins of 12%. Besides, the strategic priorities on the distribution network to the end consumer and to protect the prestigious image of the Culinarians Marketing Strategy. Given the consumer behavior along with culinarians’ strategic intent tending to be the premium brand, the strategy mostly focus was in the large households with an annual income of $75,000 or even more. The Culinarian market strategy intended to maintain a prestigious image; therefore, its distribution channels required to have some uniqueness to promote marketing. Furthermore, due to the technological advancement used, the sales force was trained enough to put forth the proposition value. For maintainance the brand image, it was supposed to use every kind of media that could reach its TG. That is the cookery shows, magazines together with elite newspapers. Regardless of strategic marketing, the price promotion remained a tricky task given that the premium nature of offers. Nevertheless, a delicate balance was expected to satisfy the likes and needs of either the retailer or the customers.

2. What are Culinarian’s strengths and weaknesses? Why has the company been successful?

Culinarian tends to have a very concentrative and clear objective, which aims at building its position in the world of premium product market. In turn, the Culinarian cookware tends to generate premium performance cookware which is supported by three main components from the enterprise. The performance is enhanced through reputation, performance technology, and goods quality and services. The above three elements are known as the Culinarian core competencies, which make the Culinarian succeed in the world of business. For the Culinarian product, the company could not afford to stop in product developing and capabilities of having a place in the target marketplace. In such a case, it has become a leader in metallurgy technology. Furthermore, the enterprise has a product catalog offering four product lines whereby each inventory operates on its technological advancement or even feature description resulting to goods position.

The Culinarian customers suggest the business name with quality and best technology in the business world. Culinarian has a steady sales force, which creates a stable and steady relationship through its channel of distribution. The company is very selective in choosing retail outlets as co-partners as the retailers tend to gain much higher gross margins with product sales of Culinarian company. In terms of marketing management, the company puts more effort into advertising and consumer researches in comparison with its competitors, for instance, Le Gourmand and Robusto, who areas well operating in the premium market. The works aid Culinarian in understanding concerns of their existing customers fully as well as drawing more attention from potential or new markets. Subsequently, Culinarian occupies around 6.6 percent market, contributing to the highest share among the premium lines. The company tends to set stable financial conditions and rules aiming to protect the business from fierce competition from other companies and also to avoid economic depression. The employees in the Culinarian have the motivation to work hard as a result of promoting the product and the services offered to customers.

On the other hand, Culinarian carries on it some weakness, which might affect the business directly or directly. For instance, the Culinarian being too conservative in maintaining brand position, the strategy as much as it lies on strengths of the company it portrays weakness. The policy has lowered down the customer’s range. Individuals who have a lower budget will never bother to pay attention to purchasing Culinarian’s product. Thus, reducing the market share of the company directly within the whole industry. Another issue is that Culinarian has extremely little of 5 percent orders coming from direct sales through the company website and catalogs sending to their esteem consumers only twice a year.  Therefore, the kind of the deal suggests that the company tends to have a poor direct connection to the consumers. Besides, another Culinarian weakness is that the lost opportunities of online selling. The reason behind it is that the internet in the current generation become the most social media hence forcing many firms to move their sales from traditional retailers to direct online purchases. As a result, online sales contribute to reducing the cost of the middle man to involve in the business transaction.

The last but not least, Culinarian may suggest having outside consultants to reevaluate its co-operation resulted from making faulty analysis, which may lead to wrong marketing decisions. To overcome the weakness, the Culinarian should have the surety of relaxing from pressures to maintain a brand. Thus, it should bring itself mostly into promotion and advertising in the market place. By so doing, I shall grow in attack instead of increasing in defense; as a result finding a place in the competitive business world.

3. Was the 2004 promotion profitable for Culinarian? Calculate the profitability using Brown’s logic and then calculate profitability using the consultant’s model. How would you calculate profitability? Provide your response in a structured way.

In my view, the 2004 Culinarian promotion was profitable. By use of Brown’s logic Actual units = 184987 Variable costs = 38.64 Forecast units = 59871 Incremental contribution impact = (62.4-38.64) *184987-(72-38.64) * 59871 = 2397995. Using consultant’s model Actual units = 129386 Forecast units = 119504 Variable costs = 52.05 Incremental contribution impact = 10.35*129386-19.95*119504-99332+39540 = -1104752. Through my method to calculate the profitability in the culinarian cookware promotion, I conclude that the promotion is profitable. Promotion period which is March to May Variable cost Both overhead cost, and advertising cost should not be included in the variable cost, so my variable vccost should be 38.64-(52.05*7%)= 35 Forecast units I use consultant’s figure by the computer-generated model, which is 119504 Actual units Actual orders from March to May in 2004, which equals 184987 (47191+89423+48373) (62.4-35)*184987-(72-35)*119504=646995

4. Should Culinarian run a price promotion in 2007? If so, what should be the specifics of such a development (e.g., product scope, discount rate, timing, communication)? If a price promotion is not suitable, think about another type of sales promotion (e.g., manufacturer rebate program, gift with purchase, sweepstakes, product placement, etc.) to recommend.

The 2007 promotion limits price promotion to low-end product lines, which include CX1 and DX1, to preserve the premium image of the brand. As well it reduces trade margin from 52 percent to 48 percent only on fast-moving product lines, which are SX1and PROX1, whereby trade become assured of volumes. The volume tends to compensate for their reduced margins and even keeping the promotions in April, May, October, and November just before the peak sales. Communication should target high-income audiences as well as looking at communicating to mid-level income audience for low-end product lines. Another point, since 55 percent of the customers buy or even receive cookware as gift items, increasing the end of sales to gift shops along with online gifting portals it becomes the right criterion for business marketing. Making low-end product lines available in the mass merchandise outlets helps and attracts the customers since 32 percent purchase cookware in such a place. Running volume discounts whereby a customer buying more than five pieces of the product can be offered a discount, hence, ensuring to capture a larger market share. The business should associate with the cooking shows, thus increasing awareness concerning brand as well as influencing the purchasing decision of the consumer and conducting a contest whereby the best recipe is allowed to win — offering rebates on high-end product lines instead of discounts. The business should have attractive in-store promotions and displays for influencing the purchasing group. Lastly and not the least, the management should run a bundled promotional offer hence clubbing together the fast-moving product and slow-moving product lines.

Appendix

The primary finding from the Culinarian cookware:

• The behavior of the customers to purchase Culinarian product result from seasons
• The high peaks whereby most products are sold depend on two seasons; wedding season and holiday season
• The brand name of the Culinarian cookware helps in marketing strategy hence placing the business to offer competition in the market place.

SWOT analysis

References

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