CULINARIAN COOKWARE

PONDERING PRICE PROMOTION

GROUP-9
Ananya Jha
(PGP/17/194)

Aparna Johari
(PGP/17/197)
Shakun
(PGP/17/295)

Ritu Kushwaha
(PGP/17/231)
Akanksha Kirti
(PGP/17/304)

WAS 2004 PROMOTION AT CULINARIAN PROFITABLE?

Browns methodology wasnt correct because:

1.

24% drop in Jan-Feb sales of 2004 as compared to

2003 may be because of pre-announcement of
promotions due in march as a result of which
retailers postponed their purchase to avail the
discount

2.

Her sales forecast was only based on sales of

previous year unlike the consultant who used timeseries analysis thus increasing reliability

. Consultants methodology wasnt correct because:

Our assumptions:
1. Decrease in sales of DX1 is because of increase in sales of CX1
because 30% people considered price as the most important
criterion
2. Savings in inventory isnt considered due to lack of data
2004 promotion was profitable

1.

Variable cost shouldnt include advertising and SG&A

Our suggestion:

1.

There was a 2% decrease in US retail sales in

2004. Hence without promotion,
Sales =
119504 X 0.98 = 117113.92

2.

Cannibalization was calculated as (129386134180) X (200 X 0.48-38.64) = -274983.84

2

3.

Variable cost has been taken as per Browns

suggestion

SHOULD CULINARIAN RUN 2007 PRICE PROMOTION?

From the customer responses to questions on warranty cards,
1. 80% were from households who already owned one or more Culinarian product 20%

were new customers who may have switched from competitors

2. 70% felt that price discount was important to very important in their purchase decision

price promotion was an important purchase driver

3. 15% would consider upgrading to the DX1, SX1 or PROX1 lines for their next purchase

Customers liked the brand (increased awareness knowledge liking preference

conviction purchase as per Hierarchy of effects model), there is good scope of not just
repeat purchases but upselling

The aim of sales promotion is to increase commitment and support from trade and will boost
overall brand awareness. It would help get new customers who wouldnt have otherwise
purchased thinking the retail price to be high and encourage current customers to purchase
additional pieces
Hence Culinarian should run 2007 Price Promotions

DESIGNING THE PROMOTION PLAN

Discount rate: 20% (only on slow moving products and free gifts on other products)

1. Based on market research findings, 30% would be motivated to buy new cookware because of

price discount while 20% would be motivated to buy because of free gifts with purchases
2. Retailers would often get confused with free gifts and felt it occupied too much of floor space

. Timing: Peak season

1. Promotion during peak season will help earn more revenue due to increased sales
2. Also competitors provide only gifts with purchases. Our discount may cause them to switch

. Communication:
1. National advertising campaigns through magazines, newspapers aimed at high income households
2. Introduce loyalty programmes to help retain as well as add new customers
3. Get a known chef to endorse Culinarian cookware in its advertising campaigns
4. Product placement in popular television cooking shows as 39% watch these shows and 18%

purchase after having watched one

5. Promote it as something which can be gifted owing to its superior quality status symbol

THANK YOU