Discussion 1 Week 1

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Feb 20, 2024

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 Can Clique Pens implement a price increase? If not, can Clique Pens deploy funds that allow us to gain market share by providing discounts directly to the consumer, but still allow the retailer to make acceptable profit? I believe that Clique pens could implement a price increase per product without negatively affecting the consumer or retailers, while still providing discounts to entice the retailers to promote and sell their products. Research showed that the average pen customer did not understand pricing differences between brands unless there was an advertised discount, because the packaging between brands was not consistent and therefore too confusing to compare (Cespesdes & Kindley, p. 6) It is important it is to understand consumer behaviors in terms of how they view the product itself, the competitors, changes in the products pricing and/or value, etc. (Peter et al, Chapter 1) Clique Pens was at an advantage because their general consumer is more attracted to big box brand names, but Cespedes & Kindley found that the problem with marketing directly to the consumer is that the average consumer showed they were not loyal to any certain big brand and that most of the customers’ impulse buys were in the hands of the retailers. (p. 3 & 4) Overall, I think that the most important strategy for Clique pens is to remain in good standing with the big retail chains, as they drive the sales and control the brands which they carry- having the greatest marketing reach to the consumer for their product. There will always be pros and cons to selling in big retail stores, but Clique has to accept and work through the lower profit margins (rather than direct sales) and realize they have less power over how their product is marketed in store. (Ekstrom, 2016)  Does advertising do nothing to help in this war? I think that advertising directly to the consumer proves to have had such little affect on the consumers choose of brands, direct advertising in this case is not a helpful tool The advertising that should be most highly regarded and considered in this case has to do with the retailer relationships and discounts offered for the retailer to promote Clique over other brands. (Cespesdes & Kindley). The in-store advertising acts as a powerful ‘situational influence’ on the consumers’ buying patterns when it comes to pens, ultimately requiring advertising funds to be allocated to keeping retailer happy (Harris et al, Pg. 151)  One could argue that their customers should perceive a higher value benefit from lower price, but will they really?

According to Haris et al., “we view value as a customer’s subjective assessment of benefits relative to costs in determining the worth of a product” (pg. 8, p 3, line 2) while Keimer refers to value as a math problem in his lecture series. Either way value for different products can be greatly affected by the consumers perception and there are many factors which can change one’s perception. According to Cespedes & Kindley, in the case of pens, the consumer was not often swayed by the exact pricing itself of the packages, since most ll of the products from Clique and their competitors were sold in inconsistent size packages and “these packages made it somewhat difficult for consumers to compare prices directly” (Pg. 6, p. 3, line 1) In his lecture series, Keimer mentions an example of novice salespeople being appalled at consumers not buying products even at the lowest prices (Keimer, Analyzing the Function & Process). He later gives an example of a coffee shop owner who had opened hoping to have lower pries than the brand name stores and who had to later raise their prices to make a decent profit margin. Not only was it a successful business move because they increased profit, they ended up receiving great feedback from customers who ended up seeing more value in the lattes. (Keimer, Analyzing the Function & Process)  Can value differences be discerned with the crazy pricing out there—one competitor with a three-pack for $2.56 versus Clique Pen’s two-pack at $1.78? Personally, I have a very analytical way of thinking (and of shopping) and am often the odd customer who would mathematically breakdown the cost per pen- therefore finding and comparing the value of competing pens based solely on pricing. I do also find Cespedes & Kindley’s research on consumer behavior to be only logical, because although pens are often a needed tool for my home and business, they tend to be an impulse buy in my experience. According to Harris et al., knowing what the competition is doing is a vital part of a successful marketing strategy (Ch 3), therefore the pricing comparison of $2.56 vs $1.78 shows that Cliques pricing aligns with the competitors. As long as they maintain the varied packaging and pricing, I do not think that the difference is value would normally be discerned (except for the occasional analyst like myself) References: 1.) Harris, Warren, Reeve, Duchac, Gwartney, Stroup, Macpherson, Scott, Pride, Ferrell, Mcguigan, & Moyer (2015). ‘Bus 5601: Essentials of Business Development I’. Boston, MA. Cengage Learning.

2.)Cespedes, Frank V. & Kindley, James (2013). ‘Clique Pens: The Writing Implements Division of U.S. Home’. Harvard Business School Publishing. 3.) Keimer, Bob. “1.1 Introduction to Marketing”. Video Lecture Series 4.) Peter, Olson, & Grunert . (1999) ‘Consumer Behaviour & Marketing Strategy (5 th ed)’. McGraw-Hill London. 5.)Esktrom, Jess. (2016) ‘5 Steps for Getting Your Product into Stores’. https://www.entrepreneur.com/article/276734

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