Culinarian Cookware Case Analysis

Topics: Marketing, Brand, Marketing research Pages: 30 (7667 words) Published: January 1, 2014


Case Analysis for Culinarian Cookware

2006-2010

March 28, 2010
Table of Contents

Executive Summary

Situational Analysis

A. Environment

I. Economic conditions and trends

As evidenced by the case material, the US cookware market experienced growth by generating approximately $3.36 billion in revenues from 2002 to 2006. However, due to economic recession of the recent years (2008-present), cookware market faced new challenges and opportunities.

The following developments appear to create several opportunities for cookware manufacturers. Due to slow economy and unemployment, consumers cut back on dining out and defer back to home meals. According to Cookware Manufacturer’s Association (CMA), consumers have re-discovered their kitchen during 2009. Thus, visits to restaurants, carry-outs and frozen entrees have been replaced by meals prepared in the home kitchen. This trend highlights the possibility of increased demand on cookware products. In the foreseeable future, economists predict growth in private and commercial real-estate markets (by 2013). This potential development could boost demand for cookware when consumers, for example, start to move in to newly bought houses.

However, the demand for cookware products would not move in the same direction for all price ranges. Due to elastic demand for high-end and luxurious products, it is reasonable to expect that consumers will try to either buy less of premium priced items, or try to shift their preferences to less expensive models altogether. This fact could burden some companies in the industry that rely mostly on manufacturing and distribution of premium priced products.

Despite slow economy, current and future economic environment provides potential opportunities for players who could adjust their marketing strategy to meet changing demands of consumers. Culinarian Cookware could serve its target markets by focusing advertising efforts on their less expensive product lines, e.g. DX1 and CX1.

Potential threats to the cookware market include growing unemployment and prospects of higher inflation in the near future. Current unemployment has climbed over 10% in 2009 (see Exhibit 1), which reduced the purchasing power of many US households. According to the U.S. Bureau of Labor Statistics, consumer price index (inflation) has grown pretty steadily in the recent years (see Exhibit 2). Additionally, many economists predict higher inflation in the coming year (primarily due to increase in the monetary base, high deficits, and underfunded liabilities) that will further reduce the purchasing power of consumers if the wages and salaries do not keep up with the pace (Marks, Gene , “Staying Cool If Inflation Heats Up”, Business Week, 06/26/2009, http://www.businessweek.com/smallbiz/content/jun2009/sb20090626_938025.htm, accessed March 13, 2010). These potential threats could signal to Culinarian Cookware that consumers might be more price-conscious in the near future, hence stipulating the company to re-evaluate its marketing mix. Exhibit 1Labor Force Statistics from the Current Population Survey

Series Id:           LNS14000000
Seasonally Adjusted
Series title:        (Seas) Unemployment Rate
Labor force status:  Unemployment rate
Type of data:        Percent or rate
Age:                 16 years and over

Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec

2000
4.0
4.1
4.0
3.8
4.0
4.0
4.0
4.1
3.9
3.9
3.9
3.9
 
2001
4.2
4.2
4.3
4.4
4.3
4.5
4.6
4.9
5.0
5.3
5.5
5.7
 
2002
5.7
5.7
5.7
5.9
5.8
5.8
5.8
5.7
5.7
5.7
5.9
6.0
 
2003
5.8
5.9
5.9
6.0
6.1
6.3
6.2
6.1
6.1
6.0
5.8
5.7
 
2004
5.7
5.6
5.8
5.6
5.6
5.6
5.5
5.4
5.4
5.5
5.4
5.4
 
2005
5.3
5.4
5.2
5.2
5.1
5.0
5.0
4.9
5.0
5.0
5.0
4.9
 
2006
4.7
4.8
4.7
4.7
4.6
4.6
4.7
4.7
4.5
4.4...

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