Case Study Description of Culinarian Cookware: Pondering Price Promotion
When students have the English-language PDF of this Brief Case in a coursepack, they will also have the option to purchase an audio version.In November of 2006, senior executives at Culinarian Cookware were debating the merits of price promotions for the company's premium cookware products. The VP of Marketing, Donald Janus, and Senior Sales Manager, Victoria Brown, had different views. Janus felt price promotions were unnecessary, potentially damaging to the brand image, and possibly encouraged retailer hoarding; Brown believed the promotions strengthened trade support, improved brand awareness, and stimulated sales from both new and existing customers. The issue was complicated by a consultant's study of the firm's 2004 price promotions which concluded that these promotions had a negative impact on profits. Janus trusted the results, but Brown, believing the study assumptions were flawed and required further analysis, suspected the promotions had actually produced positive results. The pressing decision is whether to run a price promotion in 2007 and, if so, to determine what merchandise to promote and on what terms. The broader issue is what strategy Culinarian should pursue to achieve sales growth goals, and what role, if any, price promotion should play. Subjects Covered: Price Promotion, Pricing Policy, Consumer Marketing, Profitability Analysis, Retailing, Sales Promotion, Distribution Policy, Brand Equity, Trade Relations, Cookware
Swot Analysis of "Culinarian Cookware: Pondering Price Promotion" written by John A. Quelch, Heather Beckham includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Promotions Cookware facing as an external strategic factors. Some of the topics covered in Culinarian Cookware: Pondering Price Promotion case study are - Strategic Management Strategies, Customers, Decision making, Financial analysis, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Culinarian Cookware: Pondering Price Promotion casestudy better are - – there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, increasing energy prices, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy,
wage bills are increasing, geopolitical disruptions, etc
Introduction to SWOT Analysis of Culinarian Cookware: Pondering Price Promotion
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Culinarian Cookware: Pondering Price Promotion case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Promotions Cookware, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Promotions Cookware operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Culinarian Cookware: Pondering Price Promotion can be done for the following purposes –
1. Strategic planning using facts provided in Culinarian Cookware: Pondering Price Promotion case study
2. Improving business portfolio management of Promotions Cookware
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Promotions Cookware
Strengths Culinarian Cookware: Pondering Price Promotion | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Promotions Cookware in Culinarian Cookware: Pondering Price Promotion Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Promotions Cookware are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Successful track record of launching new products
– Promotions Cookware has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Promotions Cookware has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Promotions Cookware has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Superior customer experience
– The customer experience strategy of Promotions Cookware in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Promotions Cookware is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by John A. Quelch, Heather Beckham can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Promotions Cookware is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Promotions Cookware is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Culinarian Cookware: Pondering Price Promotion Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Promotions Cookware is one of the most innovative firm in sector. Manager in Culinarian Cookware: Pondering Price Promotion Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Promotions Cookware in the sector have low bargaining power. Culinarian Cookware: Pondering Price Promotion has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Promotions Cookware to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Promotions Cookware has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Promotions Cookware to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Promotions Cookware has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Culinarian Cookware: Pondering Price Promotion HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Promotions Cookware has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Culinarian Cookware: Pondering Price Promotion - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Promotions Cookware has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Culinarian Cookware: Pondering Price Promotion Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Culinarian Cookware: Pondering Price Promotion | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Culinarian Cookware: Pondering Price Promotion are -
Increasing silos among functional specialists
– The organizational structure of Promotions Cookware is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Promotions Cookware needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Promotions Cookware to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Culinarian Cookware: Pondering Price Promotion that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Culinarian Cookware: Pondering Price Promotion can leverage the sales team experience to cultivate customer relationships as Promotions Cookware is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Promotions Cookware has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Promotions Cookware products
– To increase the profitability and margins on the products, Promotions Cookware needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Promotions Cookware supply chain. Even after few cautionary changes mentioned in the HBR case study - Culinarian Cookware: Pondering Price Promotion, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Promotions Cookware vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Promotions Cookware has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Promotions Cookware, firm in the HBR case study Culinarian Cookware: Pondering Price Promotion needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Promotions Cookware has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Culinarian Cookware: Pondering Price Promotion HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Promotions Cookware has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Promotions Cookware is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Culinarian Cookware: Pondering Price Promotion can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Promotions Cookware has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Culinarian Cookware: Pondering Price Promotion should strive to include more intangible value offerings along with its core products and services.
Opportunities Culinarian Cookware: Pondering Price Promotion | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Culinarian Cookware: Pondering Price Promotion are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Promotions Cookware can use these opportunities to build new business models that can help the communities that Promotions Cookware operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Promotions Cookware is facing challenges because of the dominance of functional experts in the organization. Culinarian Cookware: Pondering Price Promotion case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Promotions Cookware can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Buying journey improvements
– Promotions Cookware can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Culinarian Cookware: Pondering Price Promotion suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Promotions Cookware has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Culinarian Cookware: Pondering Price Promotion - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Promotions Cookware to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Promotions Cookware can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Promotions Cookware to increase its market reach. Promotions Cookware will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Promotions Cookware can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Culinarian Cookware: Pondering Price Promotion, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Promotions Cookware has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Promotions Cookware has opened avenues for new revenue streams for the organization in the industry. This can help Promotions Cookware to build a more holistic ecosystem as suggested in the Culinarian Cookware: Pondering Price Promotion case study. Promotions Cookware can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Promotions Cookware to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Promotions Cookware can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Promotions Cookware can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Culinarian Cookware: Pondering Price Promotion External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Culinarian Cookware: Pondering Price Promotion are -
Technology acceleration in Forth Industrial Revolution
– Promotions Cookware has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Promotions Cookware needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Culinarian Cookware: Pondering Price Promotion, Promotions Cookware may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Promotions Cookware.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Promotions Cookware needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Promotions Cookware can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Promotions Cookware needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Promotions Cookware needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Promotions Cookware in the Sales & Marketing sector and impact the bottomline of the organization.
Consumer confidence and its impact on Promotions Cookware demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing wage structure of Promotions Cookware
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Promotions Cookware.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Promotions Cookware can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Culinarian Cookware: Pondering Price Promotion .
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Promotions Cookware can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Culinarian Cookware: Pondering Price Promotion Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Culinarian Cookware: Pondering Price Promotion needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Culinarian Cookware: Pondering Price Promotion is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Culinarian Cookware: Pondering Price Promotion is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Culinarian Cookware: Pondering Price Promotion is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Promotions Cookware needs to make to build a sustainable competitive advantage.