Sales contests/incentives: Aims at including the sales force or dealers to increase their sales results over a stated period, with prizes (money, trips, gifts or points) going to those who succeed
Appropriateness: From the findings of the 2003 survey, 50% would buy new cookware even without price discount or a free gift => retailers who are already carrying all the four lines owing to its greater GM compared to competitors, would be induced to promote the brand by featuring, displays, etc. This stimulates sales clerks to push the products further more improving the brand awareness (15% for under $75000 and 25% for above $75000 much lower than close competitors) as only 15% would consider upgrading to higher end products and improves off-season sales which were very low.
Promotion allowances: volume rebate/ quantity discount
Appropriateness: There is a possibility of forward buying problem, wherein retailers buy a greater quantity during the deal period and the manufacturer will have to bear costs of extra work shifts. Since the manufacturer is giving a 4% points additional benefit on GM to retailers over the competitors, giving a promotion allowance might not yield as many benefits as anticipated. However, an equal amount could be spent on advertising/display allowances as the channels chosen are upscale kitchen specialty chains, department stores and local specialty stores.
Sweepstakes involve marketing promotions targeted toward generating enthusiasm to purchase among customers by enticing consumers to submit free entries into chance draws that are tied to product or service awareness wherein the featured prizes are given away by sponsoring companies.
As there is no assurance of benefit in this case, the scheme may not be very attractive to entice first-time customers. Also the lottery system promotion may not reflect highly on the Premium brand image of Culinarian Cookware. Thus sweepstakes are not a good promotion strategy for Culinarian Cookware
Premiums are promotional items that can be acquired through proof of purchase. Exhibit 3 states that 20 % of the people would be motivated to buy cookware because of a free gift. Also a free gift does not damage the premium image of the cookware brand and is widely used by other players in this segment. Since the premium can be shipped after receiving proof of purchase, it reduces opposition from trade channels who would not have to block shelf space for the premiums unlike in the case of free gifts
Rebate is an amount returned on what already has been paid. Rebates may require paperwork submission and this can put off customers. Culinarian cookware distributes through high-end retail channels and invests in well-trained staff to give the best experience to the customers. However, the rebate mechanism requires effort on the part of the customers and can affect the Culinarian premium brand image.
Cooperative advertising allowance:
Culinarian cookware can give some allowances to retailers who prominently display its products or give it the desire shelf space. Also it can be used to encourage retailers to push Culinarian products to the customers who are unsure about the brand. The lure of getting reimbursement and additional money for doing advertisement for culinarian products on the companys behalf will motivate
In slotting allowance a fee charged to produce companies or manufacturers by supermarket distributors or retailers in order to have their product placed on their shelves. Most of the products sold by Culinarian Cookware is through retail outlets. Also most of the products are in the premium end. So Culinarian Cookware can go for slotting allowance. However it should negotiate with retailers to reduce the margin to industry standard of 48% as against 52% now.
Generally in trade shows people look for discounted products. It would not be good for culinarian cookware to sell the products at a discounted rate in trade shows. Howvere it can take part in trade shows to increase awareness especially of its CX1 brand.
Point of purchase displays (functional discounts)
Culinarian Cookware should not go for functional discounts because they already give retailers higher profit margins of 52% as compared to 48% by its competitors. This is a big enough incentive for the retailers to encourage customers to buy Culinarian Cookware products. Thus, no extra functional discounts are required.
The buying pattern given in Exhibit 2 suggests that there are two peak seasons for the sale of cookware, one during the May- June months and the other during the months of November- December. Thus, seasonal discounts will be very effective in capturing the customers and increase sales because of this buying pattern
If we study Exhibit 4, we can observe that the sale of product lines PROX1 and SX1 is higher in the spring season while that of DX1 is higher in the fall season. This cyclical buying pattern tells us that Culinarian Cookware can go for sales promotion twice in a year wherein it can give sales promotion for different product lines in different seasons of the year.