Culinarian's Promotion Success

The price promotion had successful and unsuccessful points. As far as successes go, Culinarian energized its trade partners and the customers that actually received discount seemed to respond positively to it. Also, Culinarian learned that it might be able to operate with lower average inventory costs during periods of normal sales. While the company will need to ramp up production previous to future promotions, by reducing inventory to appropriate levels during the down periods, Culinarian might be able to become more financially efficient.

Even though 80% of the customers were already Culinarian customers, the new 20% was exposed to the company which might encourage repeat purchases later. This is a double edged sword because the price discount might have spurred on the new customers and they might be unwilling to purchase at regular Culinarian prices later. They might be difficult customers to convert in the future.

Also, it does seem that the later gift purchase promotion did work for the company and was successful with consumers. This hints at the fact that Culinarian might be able to work on future promotions that don't include a flat discount that might be absorbed by the retailers but rather other bundling promotions. The risk here is alienating the trade partners along the way. There are many stakeholders and goals to consider when developing future promotions. It is important to "put the customer first" but in this case retailer reactions need to be taken into account as well as other channel partners.

As mentioned in my previous post, I don't think the promotion was successful overall because the intended price discount wasn't passed onto all consumers. Also, this promotion established unrealistic expectations among trade partners and consumers. If Culinarian wants to remain positioned as a luxury, premium cookware brand, price promotions might not be well advised. The promotion also lost money and cannibalized from future Culinarian sales. This eats into margins and prevents the company from achieving the 15% revenue growth goal. While the promotion might have energized sales people for a short period of time, it didn't really accomplish the goals set out by the CEO. There are probably other ways to use pull instead of push to generate more sales and enthusiasm.