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Clique Pens The Writing Implements Division of US Home Case Solution
| Solution Id | Length | Case Author | Case Publisher |
|---|---|---|---|
| 2565 | 1425 Words (6 Pages) | Frank V. Cespedes, James T. Kindley | Harvard Business School : 914525 |
A Word File
The case is concerned about Clique Pens, the writing implements division of US homes. An innovative company offering writing solutions to students, households, and professionals. The dilemma faced by the company is the constant tussle with retailers, and the dropping company profits while constantly increasing retailer margin. It is advised to the company to be focusing on both the needs of consumers and retailers while setting healthy boundaries and looking out for its own profit margins. It has to leverage its Marketing Development Fund to create a strategy that suits its situation. Choosing a customer-centric approach to deploy the fund will create demand from consumers in the market. Increasing the prices will add to the company’s share of profit as well as protect the retailer’s margin. Creating a win-win situation for all the stakeholders. Here marketing and sales departments are advised to work in collaboration to implement the suggested strategy and the company will have to implement effective communications between them to ensure that friction is reduced.
Following questions are answered in this case study solution:
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Should Clique Pens be more concerned with retailer needs (requirements) or consumer needs? What factors drive this decision?
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Should Clique institute MDF as a marketing initiative or another means for sales to compete for retail shelf space? If marketing how will it be funded? If sales how will it be funded?
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If clique were to fully implement MDF oriented to consumers, how should Ferguson go about obtaining retailer support? What kind of competitive response should be expected?
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How should Ferguson manage the pull/push conflict between the marketing department (Chen) and the sales department (McMillan)?
Case Study Questions Answers
1. Should Clique Pens be more concerned with retailer needs (requirements) or consumer needs? What factors drive this decision?
As per the situation, the company cannot show its concern to only consumer needs or retailer needs, Therefore, Clique needs to focus on Market development funds (MDF) resources as it would cater to both the needs; retailer and consumer and this would ultimately benefit Clique in long run.
Consumer needs
The consumer behavior pattern indicates that even brand recognition holds an important position but due to low switching costs, consumers have the advantage to switch to another brand when they feel that the products/services are not desirable. Moreover, the packaging is the most appealing thing for consumers, hence, the designs and color make a huge impact on the purchase behavior. This behavior of consumers shows that they normally address their needs through instant purchasing having the brand in their mind, therefore, it is important for any brand to avoid stockouts. However, this up till now is a difficult task to manage. Also, it is observed that the advertising mainly focuses on price discounts, hence most of the time neglecting the need to promote features and attributes of the products/services which distinguishes them from competitors. It is also seen that only 1.3% of intentions turned into actual purchases. Further, Consumers at times act indifferent due to the complexity in unit prices of products in big retail stores. Therefore, at the point of sale, price discount promotions also make a huge impact on purchasing behavior
Retailer needs
From a retailer’s perspective, it is important to know that they do have multiple options to choose many well-recognized brands and due to vast options, they do have the power to demand pricing concessions from manufacturing companies. This is why it is crucial to satisfy the needs of retailers as well to have a desirable outcome. Another major factor is the shelf space, as the retailers do have a variety of options to make their choice in brands, and specifically talking about pens and pencils which are basic commodities, creates a hyper-competitive situation among mass brands to acquire shelf space.
2. Should Clique institute MDF as a marketing initiative or another means for sales to compete for retail shelf space? If marketing how will it be funded? If sales how will it be funded?
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