Clique: Marketing and Shelf Space

1500 Words Apr 5th, 2015 6 Pages
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
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The current model has allowed retailers to be the real winners, with key pieces of empirical evidence that help us understand. The industry norm “giveaways” have included: warehouse allowances, stocking fees, volume allowances, in addition to others. Though these have been viewed as necessary in order for stores to carry products, they undermine profit margins and ultimately create a constant bidding war that does a disservice to the manufacturer.
By focusing the discounts and allowances on the consumer, Clique will be better suited to determine its destiny. I would reduce trade and allowances to 5.15% rather than the previous 10.3% which has been growing annually. With the Marketing and Sales department jointly steering the ship, relationships could focus on businesses who make all of the purchases in bulk. By finding out exactly what they like out of their products and the volume they need, Clique’s marketing and sales forces could craft direct deals and incentives for the business which they also would be able to monitor in order to evaluate effectiveness. With research indicating that the value of pens and pencils amongst recognizable brands to consumers is sometimes indistinguishable, I believe direct contact promoting discounts to the consumer will bring added value. By reducing the advertising budget, there will be more money freed to make such direct
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