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COOKWARE
Pondering Price
Promotion
By Group 10
D E SC R IB E C O N SU M E R B E H AV IOR
IN T H E C OO KWA R E MA RK ET. H OW
I S C O OKWA RE B OU GH T ? H O W IS
I T SOLD ? W H AT A R E T H E
IMP LI C AT IO N S F OR C U LI N A R IA N S
MA R KE T I N G ST R AT E GY?
Q. 1.
DESCRIBE CONSUMER
BEHAVIOR IN THE
COOKWARE MARKET ?
Consumer purchase either by the piece (open stock) or
in a boxed set (5-14 pieces)
In order of importance - Quality, Features and Price
were the top three criteria while making a purchasing
decision.
Brand Recall was also a major factor while making a
purchase
Sales increased during May-June (Wedding) and NovDec (Christmas) months. This shows a seasonality in
sales.
Cookware was given a high preference as a gift item
Professional chefs prefer copper based cookware due
to superior heat connectivity
A growing trend towards premium cookware, designer
cookware that matched kitchen dcor and endorsed
by celebrity chef
Where would
R
consumers
e
prefer
to
s
shop?
p
o
n
d
t
o
Stores
with
Attractive
Informed
Sales
Staff
T display
Wait
for sale
(20%)
(30%)
(25%)
V
,
r
a
d
i
IMPLICATIONS FOR
CULINARIANS MARKETING
STRATEGY ?
Target Customers -
Q. 2.
STRENGTHS
Strong Brand Equity
Strong brand awareness of providing unparalleled quality with highly advanced performance
technology
Sales force included 8 experienced account managers who visited major accounts once every
month
Incentive-driven pay for account managers and Comprehensive training for retail sales clerks
Advertising and marketing spend focussed and lean due to selective marketing channels
WEAKNESSES
Control over advertising and promotions
Constant pressure of promotions from other manufacturers throughout the year
Retailers demands of price promotions wasnt handled well by the company
Culinarian products and promotions seldom advertised by the trade
Infrequent campaigns and lack of consistent product promotion
Management differences over price promotions
Low brand awareness in lower income households and low advertisement recall
WA S T H E 2 004 P R O MOT I ON
P R OF I TA B LE ? C A LC U LAT E T H E
P R OF I TA B ILI T Y U SI N G B R OW N S
LO GI C A N D T H E N C AL C U LAT E
P R O FI TA B ILI T Y U S IN G T H E
C ON SU LTA N T S M OD E L. H OW
W O U LD YOU C A L C U LAT E
PR OF ITA BI LI TY ?
Q. 3.
CALCULATION OF
PROFITABILITY
Category
Consultants view
Sales Forecast
Variable Cost
Cannibalization Loss
Victoria Browns
view
Forecasted sales for
2004 should have been
24% below the 2003
sales which would have
been 59871
Variable costs must
include only labor and
raw materials which
totaled 38.64
Cannibalization
calculations are
erroneous and so are
unreliable
CALCULATION OF
PROFITABILITY
The Variable cost should include only raw materials and labor.
Advertising cost should be treated as a fixed cost. Hence,
variable cost estimated by Brown (which is $38.64) is correct.
CALCULATION OF
COSTS
Microsoft Excel
Worksheet
Consultant
Victoria Brown
Actual Estimate
No
No
No
20%
20%
20%
Promotio
Promotio
Promotio
Promotion
Promotion
Promotion
n
n
n
Units
119504
184987
59871
184987
119504
184987
Price
72
62.4
72
62.4
72
62.4
11543188.
11543188.
11543188.
Total Revenue 8604288
4310712
8604288
8
8
8
Variable Cost
52.05
52.05
38.64
38.64
38.64
38.64
Total Variable
9628573.3 2313415.4 7147897.6 4617634.5 7147897.6
6220183.2
Costs
5
4
8
6
8
Contribution
1914615.4 1997296.5 4395291.1 3986653.4 4395291.1
2384104.8
Generated
5
6
2
4
2
Profit/Loss
-469489.35
2397994.56
408637.68
S H O U L D C UL I N A R I A N R U N A 2 0 0 7
P R I C E P R O MO T I O N? I F S O, W H AT
S H O U L D B E T HE S P E C I F I C S O F
S UC H A P R O M OT I O N (E . G . ,
P R O D U C T S C O P E , D I S C O U NT R AT E ,
T I MI N G , C O M MU N I C AT I O N )? I F A
P R I C E P R O MO T I O N I S N O T
S UI TA B L E , T H I N K ABO U T AN O T HE R
T Y P E O F S A L E S P R O M OT I O N (E . G . ,
M A N U FA C T U R E R R E BAT E P R OG R A M,
Q. 4.
NO !
Browns analysis may be flawed
Industrial Trends
The competitors do not prefer to give any discounts. Gifts are the
preferred mode of promotion
In May 2005, the plant was not able to handle the surge in demand
when 20% price promotion was given. As a result there was trade
overbuying during promotion, the demand of which could not be
TYPES OF SALES
PROMOTIONS
THANK YOU
Group 10
ShwetabhG012 |TanayG0
Spandana G019|PurvaG02
Harsh G052