Group 5: Team Case Number One

Culinarian Cookware:Pondering Price Promotion

Andrei GrechkoShane Johnston

Nakia LapeKyle McDanielKevin Niehaus

Organization

I. Objectives and ConstraintsII. Financial ConditionIII. Management PhilosophyIV. Organizational StructureV. Organizational CultureVI. Summary of Strengths and WeaknessesVII. Implications for Strategy DevelopmentVIII. Target Market AnalysisIX. Alterative Selection

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.

Objectives

Most Imperative Goals

Determine if a price promotion is necessary.

Develop the details of a marketing strategy that is consistent with the company’s

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%

96.90%

CulinarianCookware

Competition

Financial Condition

Annual Revenue Growth

25.97%

18.96%

4.59%

21.04%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

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 organization’s goals.

Organizational Structure

Chief Executive OfficerAudrey Roux

Vice President of MarketingDonald Janus

Senior Sales ManagerVictoria Brown

Culinarian Cookware

Organizational Chart

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 Culinarian’s prestigious name and image.

Culinarian’sStrengths 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 marketMen 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 imageCosts:

Would need to understand: What materials would be neededHow to produce new products outside their

expertiseHow to market the items