Assignment 1 Executive Marketing Memo

JWI 518: Marketing in a Global Environment

EXECUTIVE MEMO

DATE: April 17, 2017

TO:Mrs. Belinda Hudmon, Chief Marketing Officer, Pampered Chef

RE:Pampered Chef Marketing Program Analysis

Mrs. Hudmon:

The purpose of this memo is to discuss the analysis I performed on the Pampered Chef marketing program. I will also be discussing my recommendations to improve the program. The purpose of the memo is to discuss two main topics. I would like to discuss the analysis on the marketing goals I conducted, our top competitors and how they could affect our business. We will also review our core competencies and Pampered Chef’s market research efforts. In the second part of the memo I will be making recommendation on how to improve our marketing program to reach a larger market than we currently are now.

Marketing Program Analysis

Current Marketing Goals

In 2016 Pampered Chef was rated 28th out of 137 Multi-Level Marketing (MLM) companies in the industry. As you know, since 1980 Pampered Chef (PC) has been well known for its high quality kitchen products and excellent customer service. The main goal of PC is to recruit distributers, or as PC calls them, Independent Consultants. Once the original Independent Consultants hit the ground running, they then bring in new recruits to sell for their team. The original consultants not only gets a promotion where they will make a higher commission percentage on their sales, but they will also earn a small percentage on the sales the team that is under them sells. The more Independent Consultants that are out selling PC the higher the sales volume will be.

The second major goal for PC is to maximize consultant lifetime value. Ultimately, marketing is the art of attracting and keeping profitable consultants. PC works diligently to keep the consultants they have recruited. PC invests a lot of money in their consultants and insures they have the tools they need to start a successful in-home business. The company does not want to invest the money for the consultants to not generate sales, and discontinue being a consultant.

Pampered Chef’s Top Competitors

In my marketing research that I completed, I did a competitor analysis that identified Pampered Chef’s primary competition in the MLM field. The analysis found that Tupperware Brands Corp. and Tastefully Simple, Inc. were the two closest competitors. Like Pampered Chef, Tupperware Brands Corp. and Tastefully Simple, Inc.’s main source of marketing is the Independent Consultant. These two companies also offer a wide variety of incentives to not only sign on as a team member but to maintain their current team members. Tupperware Brands Corp. offers a large range of kitchen storage ideas and Tastefully Simple, Inc. offers a wide variety of gourmet convenience foods. Though PC offers a few items that compete with the two companies, PC’s main focus is on the high end kitchenware for preparing foods.

Pampered Chef’s Core Competency

One of Pampered Chef’s competitive advantages, or core competencies, is it has applications in a wide variety of markets. Kitchenware sold by Pampered Chef can be used by almost anyone, for anyone. Take for example the manual food processor. You could target the following markets;

The market that wants to save on electricity or wishes to live more “off grid”.

Market it to the moms and moms to be to use it to easily make baby food from left over vegetables from the evening’s dinner.

Target the customers with tiny kitchens that don’t have a lot of space to store a larger electric food processor.

Just with those three ideas alone you have targeted most of the market in general.

One other core competency PC has over the others is it is difficult for competitors to imitate. Because PC has been selling high quality products for 37 years and has established an amazing reputation for their quality, it would be difficult for another company to come in and compete. If you mention PC to anyone they more than likely know of the company, the quality of the product and proceed to tell you about the “bar pan” they have had for the last 10 years and still love it to this day. Jumping in to compete with such a well-known company with such an intense following can be very difficult and possibly detrimental to the company trying to compete.

Marketing Research Efforts

Currently the marketing managers use market surveys emailed to consultants and customers. These emails are sent frequently and allow the recipient to decide whether to participate in the survey or not. Surveys may contain questions pertaining to certain subjects such as;

Consultant commissions and whether the commissions are sufficient enough

What type of rewards would the consultants prefer i.e. cash, trips, bonuses etc.

Specific product questions. For example; PC launched a new slow cooker sleeve for the existing RockCrok pots. How do the consultants like the new addition and how would they improve upon it.

Market managers are also using customer complaints and suggestions from phone calls and emails made to the home office. Often times when a new product is launched or an existing product is modified consultants will call the home office and express their concerns about the product. From all of the information collected the marketing team can then complete the marketing research process to analyze the information, present the findings to PC officers and come to a final decision about the issue at hand.

Current Marketing Metrics

Pampered Chef has a few key marketing metrics in its current plan. Some of the top marketing metrics used to measure success are Revenue Growth, Engagement Rate, and Customer Retention Rates. Some other metrics used as listed in the book “A Framework for Marketing Management” are customer metrics such as customer complaints and new-customer gains. Using all of the metrics has helped marketers quantify, compare, and interpret their performance.

Marketing Program Recommendations

Utilizing my work experience as a Pampered Chef Independent Consultant and the learnings from my current course, JWMI Marketing in the Global Environment, I have made a few recommendations for improving the marketing of Pampered Chef.

Expand Marketing Goals

Though Pampered Chef has made great strides with its current marketing goals, I do feel a few more goals should be put in place to increase the success of the company. More communication tools should be provided to the Independent Consultants. Currently most consultants are relying on their own computer skills, or the skills of others, to create online marketing material and imagery. Many of the consultants neither have the time, the resources or the knowledge to create market imagery for them to advertise products.

Another goal I would suggest is to become more efficient at forecasting and demand measurements. With the launch of new products, lately there has been a lack of inventory for the new demand causing backorders. The company is lacking skills to measure and forecast the size, growth, and profit potential of each new opportunity. This lack of attention is causing many customers to become frustrated as they are not getting the desired products in a timely manner. The PC marketing team should pay attention to the fact that the potential, available and target market are a lot larger than originally thought.

Response to Competition

The marketing team could supply its consultants with information about why one product is better than the competitions. Very little material is available to the consultants about the comparison of Pampered Chef products vs. Tupperware or Tastefully Simple. As a consultant myself, I am often been asked the question “What makes Pampered Chef products so much better than (the competitors) product?” I am also asked “Why should I spend the extra money on the Pampered Chef product when I can get (the competitors) product for less money. These are all great questions for customers to ask, but when selling something online having the tools to help consultants with these questions could ultimately end up in an increase in sales. Below is a comparison tool that I use quite often when asked the above questions about the RockCrok line. This tool was not provided by PC itself, but was provided by a fellow consultant who had created it on their own. More tools like image 1 could really help the consultants better explain why PC products are superior to the competitors’ products.

Image 1

Core Competency

To this day the Independent Consultants for Pampered Chef are the main core competency. They are the source of competitive advantage and make a significant contribution to perceived customer benefits. Because of the wide variety and diversity of people who make up the Independent Consultant group, PC is able to target a large variety of markets as well. The experience the consultants gain over time is difficult to replace, as some have been consultants for over 10 years. Keeping the lines of communication open between seasoned consultants and the new consultants is crucial. Not only can the experienced consultants teach the new comers tricks of the trade, but they can also encourage the new consultants and help them to grow and increase their sales.

Marketing Research Effort

Emailing a marketing survey to the consultants is a great start. The company needs to ensure there is participation in the surveys though. There are six key steps in the marketing research process ;

Define the problem and research objective

Develop the research plan

Collect the information

Analyze the information

Present the findings

Make the decision

Insuring all of the above steps are used will ensure the success of the plan. With the emailed surveys, participation can be low to almost non-existent, so step 4 becomes the issue. There could be so little data that the information cannot be analyzed and the problem could not be solved. One way to increase the participation would be to offer a drawing for a prize. Who doesn’t like to win something?

A second option for ensuring the data that is needed is collected is to conduct a customer advisory panel. The company could invite the company’s largest, most outspoken, most sophisticated, or most representative consultants to provide feedback. Having a group face to face will almost guarantee information will be collected.

Marketing Metrics Recommendations

The current marketing metrics used are great tools for the marketing team. I would like to recommend that Pampered chef expand on the current metrics, with close attention to the consultant retention. PC offers some great incentives for consultants who sell certain dollar values including free catalogs, free products and even paid trips and cruises. These incentives though can be hard to earn. In order to earn a free product you have to sell $750 in a months’ time. That is easy for a consultant in an urban area, but for a consultant in a more rural area that can be difficult resulting in them never earning incentives, eventually causing them to leave their sales team. There should be a little something for the consultants who make sales no matter the value sold. Even if the gift is a small gift card for example, just something to say thank you for your efforts in growing our company and contributing to the sales for the month.

Conclusion

In conclusion, Pampered Chef has a great marketing program that is very well developed. I do feel however that if my recommendations are put into place; the PC marketing plan could be the best in the market. Expanding the marketing goals and providing consultants with a proper response to competition will greatly help our main core competency. Tie all of this in with the ideas for greater participation in market research and focusing more on the consultants could make Pampered Chef more successful than anyone could have ever imagined.

I hope to get the opportunity to speak with you about my analysis and the recommendations I presented. Please feel free to contact me at your convenience.

Sincerely,

Meredith Clark

Pampered Chef Independent Consultant