Case Name :      Culinarian Cookware: Pondering Price Promotion

Authors :           John A. Quelch, Heather Beckham

Source :             HBS Brief Cases

Case ID :            4057

Discipline :        Marketing

Case Length :    10 pages

Solution sample availability : YES

Plagiarism : NO (100% Original work)

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