-Consumers not swa$ed #$ adertising and that mone$ #e used to ta+emore shelf space from competitors #$ essentiall$ #u$ing it from retailers)-0o one sees much di,erence in the products out there& so retailers are Aust going to go with the deal the$ perceie as giing them the mostprot) -Bse additional MDF to ta+e adantage of opportunities)-Discounts to the consumers dont wor+ for our accounts or us)-?an test at Staples in /44 stores with our popular two-pac+ pen and pencilset in March) 0ormal retail price /):) "e price it at /4% o, – thats/):!) ;he store sold :% more units than compara#le stores at regularprice& #ut this resulted in lower retail sales reenues)-@erall unit sales did not increase at all in the test stores) .e simpl$traded unit sales that would hae gone to one of our competitors at ahigher price for more of our units at a lower price)-Cant ta+e awa$ the warehouse and stoc+ing allowances) 7f had MDF fundsto run price-o, promotions to o,set the loss in prot to the retailer& someretailers might agree to maintain a lower retain price) ;otal cost to cli*uewouldnt #e much di,erent than that of the current olume discount)-;he #u$er at Staples gets a #onus heail$ weighted to his realiEed grossmargin& so discounts o, our wholesale are e=tremel$ important to him) ;he #u$er at wal-mart prett$ much lies with a set margin& around 35%&#ut is rewarded for o#taining things that e,ect cost& li+e warehouseallowances& roll-#ac+ promotions& and center-aisle programs) ;he #u$er atwalgreens has a #onus with a component that rewards dating andpa$ment discounts) ;ailor programs to these di,erent angles of self-interest) 7f 7 went to "al-Mart #u$er with MDF funds& shed Aust laugh andtell me to discount our price more)
Ferguson"e hae to compete for retail space& and the consumers mind& in a wa$ thatena#les us to stop the continuing erosion of our #rands power with our maAoraccounts& and it cant #e drien Aust #$ lowering our prices) "e need toresole this dilemma #etween mar+eting and sales-this #attling #ac+ andforth needs to end) ;o chen/)@ur costumer should perceie a higher alue #enet from lower price& #utwill the$ reall$2)Can alue di,erences #e discerned with the craE$ pricing out there-onecompetitor with a 3-pac+ for 2)5 s 2-pac+ at /):!3)>re there reall$ di,erentiated at all in the consumer minds6)Does the retailer see an$ di,erence& e=cept price 5).ow much spending is re*uired to maintain our #rand ;o Gogan/)Can we implement a price increase as logan has outlined2)Can we deplo$ funds that allow us to gain mar+et share #$ proidingdiscounts directl$ to the consumer& #ut still allow the retailer to ma+eaccepta#le prot
Can Clique Pens implement a price increase? Yes, according to Chen’s data a 6% price increase would produce only a 1% reduction in sales. To decrease the risk of losing market shares Clique Pens could implement a tailored “deals” program to control the amount of discounts given out by the sales department. In McMillan’s eyes this tailored program could increase Clique’s retail shelf space and overall market share, leading to greater sales and more overall profit. Does advertising do nothing to help in this war? In the writing implements war advertising is a must due to the amount of competition from all the companies. According to Chen, once great companies that stop promoting themselves to the consumer quickly shrink and die. In McMillan’s opinion, Clique is already spending 30% more on advertising than necessary. Clique Pens could focus more on the advertising that focused on the ultimate consumer through both effective retail display and co-op advertising.