Case Study - Culinarian Cookware Example | Topics and Well Written Essays - 1250 words

- Culinarian Cookware - Case Study ExampleThe connection has conducted previous expenditure progressions of 20% discount in the socio-economic class 2004 (for CX1 Tyro collection line), in the year 2005 (for CX1, DX1 line) and in the year 2006 (CX1 and DX1 line). Vice President of Marketings View Vice president of commercializeing for the company believes in that respect is no need for adopting toll advance because that can hurt the premium brand image of the company. He took help of research report prepared by consulted to show that price promotion in 2004 force negatively to the profit margin of the company. The company hired external adviser to analyze profitability of 2004 price promotion. The consultant pointed out price promotion has caused of loss of $469, 489 as contribution during 2004 period. Time series synopsis shows that unit sales for DX1 line decreased by 4800 units during price promotion hence external consultant concluded that $99,332 was lost as contribut ion DX1 product line due to brand cannibalization. Taking patronage from above mentioned statistics marketing vice president of the company concluded that price promotion for a whiz product line might increase sales revenue for that particular brand but it would sap the revenue of other brand. Price promotion for a particular product line will march on customers to switch from purchasing other product lines offered by the company in order to purchase discounted products and as a result total revenue earned by Culinarian Cookware would be decreased. Senior gross revenue Managers View Senior sales manager is in support for price promotion and she pointed out that report of external consultant is apocryphal due to following reasons. Sales revenue for beginning quarter of 2004 was 24% low in comparison to sales revenue for the same quarter in 2003 hence due to external reasons. She concluded that company should not blame price promotion all for the low sales volume of second quarte r in 2004 and sales data for the year should be judged by lowering the margin by 24%. Inclusion of elements other than labor and raw secular in variable cost calculation in the report was questioned by her. Cannibalization cost calculation manner was also questioned by her. Industry Trend Research data shows offering gift with purchase is more(prenominal) successful push strategy in comparison to price promotion strategy. Competitors of Culinarian Cookware such as Robusto and Le Gourmand offer gifts with purchase. Multi dimensionality of the condition forced Culinarian Cookware to rethink about implementing price promotion strategy to increase sales revenue. Major marketing challenge for the company is to select a price strategy which can help them achieve sustainable growth in near future. Analysis of the actual Situation Strength Culinarian Cookware sells premium range cookware products and also the market leader with 6.5% market share in the premium product segment. They offe r four product lines complemented with Tyro Collection (CX1), unadulterated Collection (DX1), Advanced Chef collection (SX1) and Professional Grade collection (PROX1). Variety of product line helps the company to cater multidimensionality of customers demand. Sales and distribution channel for the company is