Clique Pens Case Study Word
These sales were not without a cost, however, as various discounts.
Allowances, and other off-invoice deals had pushed gross profit margin down from 42% in 2010 to just over 36% in 2012. (See Exhibit 1 Another one of Ferguson primary goals for Clique was to stop this decline in gross profit margin percentage and grow its overall gross profit by 4%. She hoped to accomplish this by growing revenues and increasing the gross profit margin. At this point, she felt it was unlikely that the latter would happen this year (2013).
Ferguson wondered, were all these “giveaways” to retailers necessary? If so, couldn’t the monies be shifted to a form referred to generally as Market Development Funds (MAD), which would in theory allow Clique to have more control over their use in driving sales of its products, rather than Just increasing retailer margins? Clique had spent considerable effort on wringing costs out of its supply chain, and Ferguson was fairly certain that the deterioration in margins was being driven solely by these trade discounts.
Ferguson had held several recent meetings with Logan Chin, division UP of marketing, and his product managers, for their views on this Issue.
She had also had minimal meetings with Ross McMillan, division UP of sales, and several of his key account managers. Chin and his staff felt strongly that reducing trade discounts to pay for marketing-controlled, consumer-oriented MAD, coupled with additional consumer-targeted marketing programs, was the best way to ensure that consumers were receiving the full benefit of Clique’s promotional dollars.
He was certain this would result In higher sales and profit for Clique. HOBS Senior Lecturer Frank V. Seeped and Professor James Kindled, College of Charleston, prepared this case solely as a basis for class discussion and tot as an endorsement, a source of primary data, or an illustration of effective or ineffective management.
Although based on real events and despite occasional references to actual companies, this case is fictitious and any resemblance to actual persons or entitles Is coincidental. Copyright C) 2013 President and Fellows of Harvard College.
To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business publishing, Boston, MA 02163, or go to http:// www. Hobs. Harvard.
Du. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only in MANAGING Marketing Management SO, 201 5 by GSM MBA Programs, university of New South Wales from arc 2015 to September 2 DECEMBER 16, 2013 For exclusive use University of New South Wales, 201 5 914-525 | Clique Pens: The Writing Implements Division of U.
S. Home McMillan had a very different point of view.
He and his staff believed Clique would lose considerable shelf space and sales to competitors if trade discounts were reduced in favor of marketing-controlled funds. He also argued that consumer advertising should be reduced to fund retailer-oriented MAD controlled by the sales team, which could then provide “deals” for specific accounts in response to competitive activities.
McMillan was certain that this would increase Clique’s retail shelf space and overall market share, leading to greater sales and more overall profit, albeit at a lower gross profit margin. Ferguson knew that all of Clique’s competitors provided a host of discounts and allowances to the trade in the war for retail space. She also knew that discounts, once given, seemed almost impossible to claw back.
This meant that any new program (MAD) would have to be clearly “equal” or better in the retailers’ eyes to their present Clique program to be adopted.
She also was concerned that implementing any change would require keen cooperation between marketing and sales. Jotting down a few more thoughts, she recognized that she’d need to meet with Chin and McMillan soon, as retailer planning cycles were already underway for the critical back-to-school selling period for 2014. Fountain Pens, Ballpoint Pens, Mechanical Pencils: A Very Brief History The first practical fountain pen was invented by Louis Waterman in 1875. For 70 years the Waterman Pen Company led the world in the manufacture of fountains pens.
But in the late sass, a shift to ballpoint pens swept the United States.
The Waterman Company continued to concentrate on its fountain pen line, its sales deteriorated, and the company was forced to sell to BIG (see below). Ballpoint pens trace their origin to John Loud, in 1888. The invention never really took off until Milton Reynolds managed to market them successfully in the sass. The early pens were plagued by leaking-ink problems that were later solved, in the sass, by Patrick Brawler, who named his ballpoint “Permeate. In 1958 M.
Marcel Bach, a Frenchman well established as the leading European pen maker, bought the Waterman Company, forming Waterman-BIG Pen Company. Bach concentrated the company on ballpoint pens, and with aggressive pricing and promotion, the company became the market leader by the early sass. The Waterman trademark was sold by Bach to a Zurich firm and was subsequently acquired by Newell (now Newell Rubberier). The brand continues to sell today. Mechanical pencils trace their origins back to 1822, in the United Kingdom. In 1860 the A.
W. Faber company refined the design specifically for architects.
The modern mechanical pencil emerged in 191 5 from two inventors simultaneously: Touch Hacksaw, whose “lead-thrusting device” became the first product for what is now the Sharp Electronics Corporation; and Charles Seeker, from Illinois, who created the “ever-sharp” pencil. The present-day versions of these inventions have been improved over the years but still use advancing mechanisms for the lead that are little changed from the originals. Company History U.
S. Home was founded in 1978 by Bob Tuttle, formerly a stock trader for Smith Barney.
