Clique: Marketing and Shelf Space
Clique Pens: The Writing Implements Division of U.S. Home
Harvard Business School Case
March 31, 2015
Define the Problem:
How can Clique come up with a plan that will grow revenues, increase gross profit margin, determine who controls market development funds (MDF’s) and have both the VP of Sales and the VP of Marketing agree and buy in?
Decision Factors:
1. Follow VP of Marketing
a. Reduce trade discounts and help pay for marketing controlled “consumer oriented” MDF
b. Shift to consumer-oriented MDF would generate an additional increase in retail sales of 5% and an increase in gross profit margin to 38%
c. Additional consumer-targeted marketing programs
d. Direct money towards more effective retail display and positioning and co-op advertising
e. Price increase of 6% which would result in 1% reduction in sales
f. Instant coupons
g. Assumes VP of Sales is wrong in asserting that a reduction in shelf space and increase of sales for competitors will be the result of following this price increase and discount reduction plan.
2. Follow VP of Sales
a. Reduce Consumer advertising and fund “retailer oriented” MDF
b. Reduce advertising spending by 30%
c. Sales team would control MDF –
d. Create custom deals for specific accounts
e. Assumes the result will be increased shelf space and overall market share, leading to greater sales and overall profit though a lower gross profit margin
f.
3. Incorporate recommendations of both the VP of Marketing and the VP of Sales
a. Use MDF funds to take more shelf space from competitors
b. Increase price by 6%
c. Reduce advertising spending by 30%
d. Allow Sales and Marketing joint control over MDF
e. Focus heavy discounting during the back-to-school period
Relevant Information:
Industry Current
20 million pens were sold in 2012 in the United States
$5.5 Billion was spent in manufacturing costs
2% projected growth annually for the industry is tied to expected population growth
Customers
85% of customers knew that they wanted
Harvard Business School Case
March 31, 2015
Define the Problem:
How can Clique come up with a plan that will grow revenues, increase gross profit margin, determine who controls market development funds (MDF’s) and have both the VP of Sales and the VP of Marketing agree and buy in?
Decision Factors:
1. Follow VP of Marketing
a. Reduce trade discounts and help pay for marketing controlled “consumer oriented” MDF
b. Shift to consumer-oriented MDF would generate an additional increase in retail sales of 5% and an increase in gross profit margin to 38%
c. Additional consumer-targeted marketing programs
d. Direct money towards more effective retail display and positioning and co-op advertising
e. Price increase of 6% which would result in 1% reduction in sales
f. Instant coupons
g. Assumes VP of Sales is wrong in asserting that a reduction in shelf space and increase of sales for competitors will be the result of following this price increase and discount reduction plan.
2. Follow VP of Sales
a. Reduce Consumer advertising and fund “retailer oriented” MDF
b. Reduce advertising spending by 30%
c. Sales team would control MDF –
d. Create custom deals for specific accounts
e. Assumes the result will be increased shelf space and overall market share, leading to greater sales and overall profit though a lower gross profit margin
f.
3. Incorporate recommendations of both the VP of Marketing and the VP of Sales
a. Use MDF funds to take more shelf space from competitors
b. Increase price by 6%
c. Reduce advertising spending by 30%
d. Allow Sales and Marketing joint control over MDF
e. Focus heavy discounting during the back-to-school period
Relevant Information:
Industry Current
20 million pens were sold in 2012 in the United States
$5.5 Billion was spent in manufacturing costs
2% projected growth annually for the industry is tied to expected population growth
Customers
85% of customers knew that they wanted