Clique Pens: The Writing Implements Division of U.S. Home
Clique Pens: The Writing Implements Division of U.S. Home
Clique pens is a company, which was founded in 1922 originally manufacturing fountain pens. The company later changed to ballpoint pens in 1960. The Clique Pens later diversified to markers, pencils, and other art stationary (Cespedes & Kindley, 2013). Elise Ferguson is the division president of the company. In 2012, the gross margins dropped by over 30% due to some factors which include discounts and allowances. This led to a decrease in the gross profit margins by 6% leading to the president to implement strategies aimed at increasing the gross revenues, which will also increase the profit margins (Cespedes & Kindley, 2013). Ferguson who is the president proposed the Market Development Funds Strategy to address the issue but some of the management team members are against this strategy. The management is undecided on whether to work with retailers or encouraging consumers of their products in order to address the issue of reduced gross profits (Cespedes & Kindley, 2013).
Evaluate The Actions Taken By Ferguson To Date. What Errors Have Been Made and What Factors Should Be Considered
Ferguson had provided discounts, allowances and other off-invoice deals with the aim that the 2013 back to school sales would have a 3% increase on the total profit margins in 2012. However, this strategy led to a decrease in the gross profit margins from a 42% to 36% (Cespedes & Kindley, 2013). This strategy had aimed at increasing the retailer margins, which had a negative outcome. Ferguson focused on the Market Development Funds Strategy, which would allow Clique to have more control in pushing sales of their products as the decrease in profit margins had been attributed to the trade discount offered to retailers (Cespedes & Kindley, 2013). This was aimed to increase the retail space for Clique’s products. Ferguson knew that other companies were also implementing this strategy and it was difficult to draw back the discount as this would affect the retail space for Clique’s products and competitors would take advantage of this decision (Cespedes & Kindley, 2013).
Ferguson has held meetings with Logan Chen who is the division VP of marketing and his product managers. This meeting was intended to get their views on the proposed Market Development Funds Strategy. She had also had another meeting with Ross McMillan who is the division VP sales and his key account managers (Cespedes & Kindley, 2013). Chen was in support of Ferguson’s idea but McMillan had a different idea and believed that Clique would face competition from other companies if Market Development Funds Strategy was implemented (Cespedes ; Kindley, 2013). McMillan was in favor of the idea that reduced customer advisement to retailer oriented MDF would increase Clique’s market share increasing the profit margins. Ferguson also sided with Logan Chen by employing funds that would allow Clique to direct the funds to retail display and positioning and support advertising to customers, which is a more effective strategy in increasing the demands for their products (Cespedes & Kindley, 2013).
If You Were To Recommend a New Promotion Strategy, What Should It Look Like? Be Sure To Include Metrics That Should Be a Part of the Promotion Campaign
A promotion strategy for Clique pens would concentrate more on bringing a balance between the customers and the retailers as they both have a direct impact on profit margins of any organization (Nadda, Dadwal, & Rahimi, 2017). The promotion campaign should focus on persuading customers on the benefits of Clique’s products over other products from competitors. A successful promotion strategy is aimed at improving the relationship between the customers and the company (Nadda, Dadwal, ; Rahimi, 2017). Since the management is torn between investing in retailers or customers, a research should be undertaken to provide information on which aspect will highly impact their sales. Factors to be considered include the cost of the strategy and the target market (Cespedes ; Kindley, 2013).
The promotion strategy should be aimed at increasing the back to school sales for 2014, stop the declining profit margins, and increase the gross profit margins by 4%. Since the product is already known, the promotion strategy should focus on increasing the retail space as well as improving its brand awareness in the minds of their customers (Nadda, Dadwal, ; Rahimi, 2017). Since the most manufacturers cannot be successful without collaborating with the major retailers. There should be a balance between advertising and retail discount. A joint oriented promotion strategy involving the other vendors of stationary supplies will reduce the marketing costs (Cespedes ; Kindley, 2013).
In What Ways Can Clique Differentiate Itself from the Competition, and How Would You Promote That Differentiation
Since there a many products similar to Clique’s, Clique company must implement strategies to differentiate its products from other products in the market (Jones, 2017). One of the strategies that Clique can use to differentiate its products is by increasing the value of its products, which can be achieved by an improved packaging, and branding which should be unique from other brands in the market (Jones, 2017). The advertisement should be focused on the value that customers gain when they acquire one of Clique’s products. Customers are looking for value for their money, which is the main factor customers consider when buying a product. Branding is important in differentiating products from others. Branding is one of the components of a successful marketing mix and is an effective element in differentiating products from competitors (Jones, 2017).
Creative branding will play a major role in giving Clique a competitive advantage over other organizations. Clique can also research on its competitors to provide more understanding on the competitor’s products and any missing elements, which can provide the opportunity to stand out over other companies (Jones, 2017). How Clique Company presents itself to the world is also important in providing a distinction over other companies in the market. Presentation helps in creating a connection with the customers of the products and plays an important role in advertising. Clique should invest in having the right public identity, which can be done offline during the marketing campaigns and online on the media, which will help in promoting the differentiation (Jones, 2017).
What Are The Strengths And Weaknesses Of Your Promotion Messaging Strategy And How Will It Reach Its Intended Market?
Creating a balance between retailers and customers will ensure that the company will benefit from the benefits associated with either strategy (Nadda, Dadwal, & Rahimi, 2017). Since Clique Company is in a very competitive environment from other companies, taking advantage of both of the two promotional strategies will provide a security to the company. If a company concentrates on one strategy, it may fail to achieve the determined goals (Nadda, Dadwal, & Rahimi, 2017). Since investing in advertising is already causing Clique many costs associated with marketing their products, a balance between concentrating on the customer and the retailers will balance the costs in relation to the gross profit margins. This strategy will also enhance the effectiveness of promotion strategy, which is determined by comparing the revenues generated with the cost of marketing (Nadda, Dadwal, & Rahimi, 2017).
This strategy also provides companies with the opportunity to use the available ways that customers use to access their products instead of investing in only one intervention. The weakness of this promotion strategy is that companies have no control over the sales process (Lamb, Hair, & McDaniel, 2014). Collaborating with the retailers to perform sales may mean that the company does not participate in the selling process, which reduces the ability of companies to influence their customers. Since other companies have also adopted this strategy, which focuses on retailers, this will lead to negative outcomes as the retailers must balance the products offered by the different companies equally (Lamb, Hair, & McDaniel, 2014).
The discounts provided to the retailers may also negatively affect the profit margins, as is the case with Clique Company, which had reduced profit margins even after implementing the strategy (Cespedes & Kindley, 2013). The promotion messaging strategy will reach its intended market by communication through advertising, direct marketing, and public relations. The company should research on its market and create the right promotional mix targeted to its customers (Lamb, Hair, & McDaniel, 2014). The company should conduct a research to understand the target market and what best strategies can be used to reach the target market. The available media options should also be analyzed to determine the best and affordable option (Lamb, Hair, & McDaniel, 2014).
Cespedes, F. V., & Kindley, J. (2013). Clique Pens: The Writing Implements Division of U.S. Home. Harvard Business School Brief Case 914-525: Boston, MA: Harvard Business School.
Jones, R. (2017). Branding: A very short introduction. Oxford: Oxford University Press.
Lamb, C. W., Hair, J. F., & McDaniel, C. (2014). MKTG 7: Marketing. Mason, Ohio South-Western; Andover Cengage Learning.
Nadda, V., Dadwal, S., & Rahimi, R. (2017). Promotional strategies and new service opportunities in emerging economies. Hershey PA: IGI Global.