Discussion 2 Week 2
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Feb 20, 2024
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Are the products really differentiated at all in the consumers’ minds?
No, the pen is not a product that the consumer sees to have substantial or
notable differentiation. In the 1950’s, the US pen manufacturers made a major switch to ballpoint pens, but the original design has not seen significant change within market since then. This, and the fact that consumers are not truly loyal to brand and will be happy with another product when what they’re looking for is out of stock, prevents differentiation
within the consumers’ minds (Cespesdes & Kindley, p. 2 & 3). Differentiation,
as defined ‘a marketing strategy that businesses use to distinguish a product
from similar offerings on the market’ (Sachs, 2019) According to Cespedes & Kindley, consumers ‘styling, colors, and fashion’ affected consumer behavior,
but ‘real innovation … was rare’ (pg, 6)
Does the retailer see any difference, except price? How much spending is required to maintain their brand?
As shown by Clique’s consumer research, the retailer purchases and sells pen and writing products based primarily upon the promotions. In fact 55% of the allocated spending of the promotional budget for Clique Pens is geared towards such promotions (Cespesdes & Kindley, p. 4). Conducting a SWOT analysis helps us understand how a product’s value compares to the competition (Keimer, The Value of Planning Pt. 1 & 2). Clique strengths are that they are a recognized brand for consumers and that they can reach the consumer via the retailer, through the promotional marketing. The opportunity that they have to turn their weakness (that the consumer’s buying choices rely on the retailer) is to increase the 55% allocation of promotions by decreasing the consumer promotion budget. Cespedes & Kindley have shown that they will reach the consumer more effectively, seeing as how over 80% of sales were based on such deals (pg. 4)
Discuss a plan to increase Clique Pen’s gross profit that will work with their retailers and motivate their consumers.
Clique pens has potential to increase sales and decrease costs simultaneously, therefore increasing gross profit. I think the point has been proven that Clique pens must maintain, and hopefully increase their efforts to make retailers happy with incentive programs and discounts, in order to keep shelf space, influence the consumers, and increase sales. According to Harris et al., the consumer will make purchases based on a ‘willingness to spend’ because of anticipated satisfaction with a product (pg. 59) Cespedes & Kindley have shown that the average pen consumer knows they are going to buy writing utensils but is not loyal, and bases much of their buying decisions on in-store marketing and special promotions. A marketing plan (‘a
uniform marketing vision’ Harris et al, pg 45) must be agreed upon within Clique pens that includes alternative decreases in spending, possibly from the manufacturing end. According to the article ‘Here’s How to Start a Pen Making Business’, the cost of manufacturing pens is low and should not take as much manpower as other industries (Ed Staff, 2019), therefore simplifying
design and packaging is a good place to start in decreasing origination costs.
References:
1.)Cespedes, Frank V. & Kindley, James (2013).
‘Clique Pens: The Writing Implements Division of U.S. Home’. Harvard Business School
Publishing.
2.) Editorial Staff (2019) ‘Here is How to Start a Pen Making Business- Profitable Business Plan’. Make In Business.com. http://www.makeinbusiness.com/how-to-start-pen-making-business/
3.)
Harris, Warren, Reeve, Duchac, Gwartney, Stroup, Macpherson, Scott, Pride, Ferrell, Mcguigan, & Moyer (2015).
‘Bus 5601: Essentials of Business Development I’.
Boston, MA. Cengage Learning.
4.) Keimer, Bob. ‘The Value of Planning Pt. 1 & 2’. Video Lecture Series
5.) Sach, Dr. Harrison. (2019). ‘The product differentiation marketing strategy defined, the benefits of companies using product differentiation marketing strategy and foreign markets, and Internet marketing tactics that help brands’. Amazon E-Books
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