Cutco
Case #4 | CUTCO Corporation | BUAD 6300University of ToledoDr. Michael L. Mallin | Meagan Frances Ayers
Spring 2011 |
Strategic Issue
CUTCO must select a strategic focus for the decade ahead and must also make a decision as to whether to continue the retail sales pilot program, halt it, or expand it.
Analysis and Evaluation
Direct Sales Industry
While direct selling has proven to be quite effective for CUTCO, the industry has positives as well as negatives. Because there are no brick and mortar stores and very little advertising, the industry and subsequently the companies that operate within that industry are not well known at time and can be “invisible.” However, this type of selling does provide a more personal approach for the customer.
Direct sales companies do sometimes offer websites but they are generally limited to providing customer service and contact information versus many other websites that allow customers to shop and purchase products.
CUTCO/Vector Corporation Marketing Strategy
From the first product produced, CUTCO cutlery was designed to be the finest cutlery in the world. Cutco cutlery has always been historically marketed through direct selling primarily via Vector Marketing Corporation. He people actually selling CUTCO cutlery are independent contractors who effectively operate their own business. The sales representatives are paid a commission on the products they sell but do not receive a salary from the company.
These sales are made through in-home presentations in which sales representatives validate and prove the superiority of CUTCO cutlery through demonstrations. A former president of the company stated, “ I firmly believe that people buy from individuals they like, and there is no better way to make a solid first impression than face to face. There is no substitute for the personal touch that comes from sitting across from someone in his or her home and allowing them to actually try your
Spring 2011 |
Strategic Issue
CUTCO must select a strategic focus for the decade ahead and must also make a decision as to whether to continue the retail sales pilot program, halt it, or expand it.
Analysis and Evaluation
Direct Sales Industry
While direct selling has proven to be quite effective for CUTCO, the industry has positives as well as negatives. Because there are no brick and mortar stores and very little advertising, the industry and subsequently the companies that operate within that industry are not well known at time and can be “invisible.” However, this type of selling does provide a more personal approach for the customer.
Direct sales companies do sometimes offer websites but they are generally limited to providing customer service and contact information versus many other websites that allow customers to shop and purchase products.
CUTCO/Vector Corporation Marketing Strategy
From the first product produced, CUTCO cutlery was designed to be the finest cutlery in the world. Cutco cutlery has always been historically marketed through direct selling primarily via Vector Marketing Corporation. He people actually selling CUTCO cutlery are independent contractors who effectively operate their own business. The sales representatives are paid a commission on the products they sell but do not receive a salary from the company.
These sales are made through in-home presentations in which sales representatives validate and prove the superiority of CUTCO cutlery through demonstrations. A former president of the company stated, “ I firmly believe that people buy from individuals they like, and there is no better way to make a solid first impression than face to face. There is no substitute for the personal touch that comes from sitting across from someone in his or her home and allowing them to actually try your