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Culinarian Cookware Pondering Price Promotion Case Solution
Senior executives and the marketing team at culinarian cookware were deciding over whether the brand team should offer price promotions for the premium cookware products offered by the brand, in 2006. Janus, the VP of marketing, and Brown, senior sales manager had a debate owing to different opinions and ideas. Janus sternly believed that the price promotions would dampen the premium brand image of culinarian, and possibly lead to retailer hoarding as well. Brown, in contrast, believed that the price promotions were needed for building brand awareness, improving trade relations, and achieving higher penetration in the market. Janus's assessment of 2004 price promotions offered by the company, and reviewed by an external consultancy concluded that the sale had left a negative impact on the company. Brown, in contrast, believed that the review was faulty, and did not take into consideration the subjectivity of the situation. The case focuses on the need to decide whether the brand should run a price promotion in 2007, and if it decides to do so, on which terms and conditions, and which product lines should the price promotions being offered.
Following questions are answered in this case study solution:
Outline 3 reasons why Culinarian Cookware should run price promotion?
In what ways can Culinarian maximize sales of slow movers and popular items?
What are culinarian’s, strengths and weaknesses? Why has the company been successful?
Describe consumer behavior in the cookware market. How is cookware bought? How is it sold? What are the implications for culinarian’s marketing strategy?
How was consumer behavior in the cookware market? What are its implications to Culinarian's marketing strategy?
Compare and contrast the different assessments of profitability by the consultants and Mr.Brown. After doing this, do you think the 2004 promotion was profitable?
Should Culinarian run the promotion in 2007 or not? If it should run, explain the specific details of such a promotion.
Case Study Questions Answers
1. Outline 3 reasons why Culinarian Cookware should run price promotion?
Culinarian cookware should offer price promotion for the following reasons:
Earn support from trade accounts: trade accounts are key supports for brand in their retail. For Culinarian cookware, a premium brand of cooking ware, the price promotion was needed because of the demand for consistent and meaningful price discounts from the trade accounts. The discount in turn would lead to the trade accounts showing higher support towards the brand, and facilitating its retail outreach towards existing and new customers. The discount would permit the trade accounts to push the brand forward, leading to higher sales, as well as increased brand awareness.
Increase brand awareness: the price promotion will also lead to increased brand awareness. Brand awareness is beneficial because it generates conversations about the brand in the relevant target market – often translating into higher sales performance as well as a positive buzz around the brand. The higher brand awareness will also lead to an increased brand recall, creating positive brand footprints amongst the targeted customer groups. Moreover, the increased brand awareness will also lead to increased brand recall, and top-of-the-mind recall for Culinarian, leading to increased customer loyalties.
Increase penetration: with price promotions, the brand will also be able to increase its market penetration. The brand penetration is desired markets and customer groups will occur through two broad means. The price promotions will appeal to existing customers, and they will purchase the brand and its offerings at more attractive prices. In doing so, the brand will re-establish its ties with existing customers. However, with the price promotion, the brand will also be able to attract and appeal to new customer groups. As a result, the promotion will lead to increased market penetration through not only existing markets but also through tapping into new customer groups and markets.
2. In what ways can Culinarian maximize sales of slow movers and popular items?
For the slow movers, Culinarian should invest in tin price promotion. The price promotion will allow the brand to increase brand awareness, and will appeal to existing and new customer groups who want to upgrade their cooking ware, and who want to experiment with the brand. Moreover, with price promotions, the trade accounts, and retail outlets will be able to push the slow movers forward, and will be able to encourage customers to purchase the product owing to not only its premium characteristics but also because of the value for money that they will receive by optimizing the price promotion offered. The slow movers will benefit from the increased brand awareness of the umbrella brand i.e. Culinarian and the discounted prices at the same time – leading to increased sales and customer purchases. These price promotions should, however, not be offered around the year, or multiple times. Instead, they should be offered for a limited time period only, during fixed times annually. This will help the brand maintain its premium brand image and status quo amongst other competing players in the market.
In contrast, for the more popular items, the company should focus on maximizing sales through focused marketing and advertising tactics aimed at the desired target customer groups. With targeted promotional campaigns, the brand will be should focus on developing not only a functional but also an emotional relationship with the customers through its product offerings. In addition, the popular items can also experience an increase in sales by offering increased loyalty points, as well as avenues for redeeming previous loyalty points around the sale of these products. The promise of free gift items with fast movers and popular items can also help boost sales further. Price promotions are not suggested for the more popular items because they may dilute the premium brand image of culinary, and lead to negative brand perceptions about its elite brand status.
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