Culinarian Cookware: Pondering Price Promotion

Group 5: Team Case Number One

Andrei Grechko Shane Johnston Nakia Lape Kyle McDaniel Kevin Niehaus

Organization
Objectives and Constraints II. Financial Condition III. Management Philosophy IV. Organizational Structure V. Organizational Culture VI. Summary of Strengths and Weaknesses VII. Implications for Strategy Development VIII. Target Market Analysis IX. Alterative Selection
I.

Objectives
Four Strategic Priorities in 2006
(1) Widen distribution network (2) Increase market share of the premium cookware segment (3) Preserve prestigious image (4) Continue to capture revenue growth of at least 15%, while maintaining pretax earnings of $12.5 million.

Most Imperative Goals

Determine if a price promotion is necessary. Develop the details of a marketing strategy that is

consistent with the companys overall strategic objectives.

Constraints
(1)The preservation of brand equity (2)Perceived negative impacts from the 2004 price promotion

(3)Highly selective distribution channels

Financial Condition
Total Market Revenue
2006

3.10%

Culinarian Cookware Competition

96.90%

Financial Condition
Annual Revenue Growth 30.00% 25.00% 20.00% 15.00% 10.00% 5.00%
4.59% 18.96% 25.97% 21.04%

0.00% 2003 2004 2005 2006(E)

Management Philosophy
Paternalistic
Positive: Two-way communication, which motivates workers. Negative: Slows down the decision making process.

Organizational Structure
Structured by Function
Positive: Makes efficient use of specialized resources and makes supervision easier. Negative: Difficult to get quick answers, determine accountability, and may be difficult working with other departments in a unified way to achieve the organizations goals.

Organizational Structure
Culinarian Cookware
Organizational Chart

Chief Executive Officer Audrey Roux

Vice President of Marketing Donald Janus

Senior Sales Manager Victoria Brown

Organizational Culture
Pride. Pride in having unparallel product quality,

most advanced performance technology, and strong dealer support.

Built on brand equity. Every decision takes into

account the preservation of Culinarians prestigious name and image.

Culinarians Strengths and Weaknesses

Potential Resource Strengths and Competitive Capabilities

Clear strategic direction. Core competencies in quality and performance

technology. Strong brand name image/company reputation. Stronger dealer relationships than key rivals. Leader in metallurgy technology. Proven product innovation capabilities. Good management philosophy. Employees are motivated. A strong financial condition. A distinct competence in utilizing internal and external consumer research. Business decisions are highly scrutinize before implemented.

Potential Resource Weaknesses and Competitive Deficiencies

Weak advertising and promotion.
Losing market share because of

attachment to brand name image. Flawed data analysis by a third-party consultant. Limited distribution channels. Management is cautious to pursue bolder price promotion.

Implications for Strategy Development

The preservation of brand equity could prevent

Culinarian from considering a price promotion, fearing that it would cheapen the products image. Perceived negative impacts from a price promotion offered in 2004 are heavily influencing the decision; however, in reanalysis it may be found that the promotion was in fact beneficial. The company is very selective in how merchandise is distributed, which limits the market in which the products are sold. Weak advertising and promotion policies.

Target market
Men and woman between ages 30 to 55, With a household income of 75k + The group tends to care more about what the product

can do rather than how it looks. A large likely hood of watching cooking shows and then purchasing cookware with familiar names of cooking celebrities or brands used by those seen on shows. Consumer wants to compare brands and products
Want to have the biggest bang for their dollar.

Brand Extension
Strategic Alternative Selection

Brand Extension
Benefits:
Would be able to offer other premium culinary

products to complement their cookware Use the new support products as gifts during promotional events Increase the prestigious brand image
Costs:
Would need to understand: What materials would be needed How to produce new products outside their expertise How to market the items