Product_Offering

* Product Offering Kachong Duniya, Sami Berrahou, Saad Benchekroun, Jennifer Watkins MKT571 March 1, 2011 William David Hawkins Product Offering Learning Team B decided to follow an innovative route to produce cookware. The number of cookware brands seems to be increasing every year and the range of pots and pans materials vary from cast iron, copper, stainless steel, and aluminum. Currently, trends in the cookware industry are usually positioned and situated by what consumers are buying. Trends follow the consumer's wants and interests based on demand, supply, and purchasing power of consumers. Recently, there are a few shifts in the consumer market that has pushed cookware to implement better technology and innovation. This paper will elaborate our Team’s proposal towards our new cookware product and its market needs. In the following sections, we will discuss the market growth, provide a SWOT Analysis, and analyze the competition. We will also provide the product offering/product definition, explain the product identification, and finally justify our choice of this specific product. Market Analysis Market Needs The needs of the international market are difficult to analyze. Customer expectations have lived through all kinds of issues dealing with product and service quality. Induction cooking has seen an increase in the past year due to its highly safe and energy efficient nature as well as its’ advanced technology. The burners do not get hot; only the pan is heated which allows for far less energy to be used. Not to mention the increased safety of not having hot burners that can burn both children and adults as well. The induction cook-tops are replacing electric and gas stoves throughout the market and are also gaining popularity as society is becoming more efficient. Every year new materials are being developed and used in cookware design and manufacturing. Even though stainless steel is highly durable, it is also used for its high shine bringing aesthetics into the different cookware products. Therefore, our team is proposing to introduce prestige cookware to satisfy the consumers’ needs. Market Growth The following graph displays the evolution of the cookware industry from 1999 to 2008 presented in millions of dollars (Cookware Manufacturers Association, 2009-2010) According to the graph, we can see that the growth of the cookware industry has reached 960, 986, and 991 million dollars for years 2006, 2007, and 2008 respectively. This means that there was an increase of 26 million dollars in sales from year 2006 and 2007. There was also an increase in sales of about 5 million dollars from 2007 to 2008. Moreover, according to the NPD Group, a leading market research company, the house-ware industry observed a slight rise in 2010 after an 11% decline in 2009 (News for us, n/d). While it was another challenging year for this industry, cookware, bake-ware, and cutlery dollar sales have all grown between four and five percent in 2010 therefore driving the overall industry into positive growth. * * SWOT Analysis Strengths. The company has 25 years experience in high-end nonstick cookware and is well established in the German market. The company only uses high quality aluminum and its products are robust and the nonstick surface is durable. Currently, the company has just developed a line of nonstick cookware surface free of both PTFE and PFOA. Also, European professionals and home cooks both give very good recommendations, speak highly, and give good reviews of the brand. Finally, our Company has an excellent young marketing team. Weaknesses. Our company has high overhead especially compared to the Chinese manufacturers. The company is also unfamiliar with and new to the American market it is penetrating characterized with different consumer behaviors, distribution, and promotion strategies and techniques compared to the European counterpart. Opportunities. Because of growing financial and health concerns, people tend to cook more at home using nonstick cookware that allows them to use less oil and less fat. Also, there expected to be a fast US market penetration because, historically, consumers in different industries have trusted the German brands. Finally, penetration in the US market is taking place during an overall increase in cookware total sales in the US. Threats. There is a threat that the competition might try to make knock-off products using similar technology in China. There is also a threat that the US consumers do not welcome “foreign-made” products in the markets as much as they used to in the past. Competition Analysis Types of Cookware There are two dominant types of cookware available in the market: stainless steel and nonstick cookware. Most cooking experts use stainless steel material because it evenly heats its’ content (Consumer Research, 2011). However, foods tend to stick faster to stainless steel which makes it harder to clean the cookware. Therefore, its’ users have to use more oil/fat and watch cooking temperatures very closely. On the other hand, home-cooks mostly use nonstick cookware (Consumer Research, 2011). This type of material prevents food from sticking to the cookware permitting one to cook with less oil. This cookware is also less durable and is traditionally made with two chemicals, PTCE and PFOA, which have raised health and environmental concerns (Consumer Research, 2011). Competitors The following tables list the competitors for stainless steel and nonstick cookware as well as their price ranges, strengths, and weaknesses. Macy’s (n/d) provided the pricing and reviews. Stainless steel Cookware Brand | Price Range | Strengths | Weaknesses | All Clad stainless | $680 for a 10 piece set | - Professionals claim its cooking performance is unbeatable.- Good design- High ratings from customers at Macy’s.com and amazon.com- Durable-Easy enough to clean | -High price- Heavy weight | Calphalon contemporary stainless | $400 for a 10 piece set | -Good weight: not too heavy not, too light | - Thinner material makes it more difficult to control temperature. -Less durable | Cuisinart Chef’s classic stainless | $115 for a 10 piece set | -Budget-priced brand- favorite with owners posting cookware reviews to Amazon.com, Macys.com and Cooking.com | -Less even heating | Emerilware stainless steel | $200 for a 10 piece set | -budget-priced brand-Good heat distribution | -Food sticks too easily | Rachel Ray Stainless | $140 for a 10 piece set | -budget-priced brand | -Some design flaws-Food sticks too easily | Nonstick Cookware Brand | Price Range | Strengths | Weaknesses | Swiss Diamond | $450 for a 10 piece set | -Made without PFOA- Its nonstick surface incorporates real diamond crystals which makes it more durable.- Distribute heat very well | -Contains PTFE-High price | Anolon Advanced | $300 for a 10 piece set | -Good cooking performance, even heating- Durable - Truly nonstick | - Contains PTFE and PFOA | Rachel-Ray Hard anodized cookware | $170 for a 10 piece set | -Good budget brand- Its non stick coating works well and it heats quickly and evenly | -Durability | Scanpan Classic | $ 500 for an 11 piece set | -Eco-friendly brand -excellent performance- Does not contain PTFE nor PFOA-Made in Denmark | -High price | Product Analysis Product offering/Product Definition As far as cookware is concerned, there has been a shift to a more aesthetically pleasing exterior. Nevertheless, beyond the pleasing looks the cookware must be well-built and should withstand heavy use. Our product has many benefits, and compared to competition, it has many advantages also. For a high-end cookware, it is competitively priced, wrap-resistant, scratch-resistant, and durable. The surface permits no sticking of foods and maintains the shine for the life of the product. The company offers a long lasting cookware that could be used to cook absolutely anything. The cookware is also safe to be used on top of grills and inside ovens without affecting the polish on the surface. Finally, the company also offers glass cookware material that is safe for microwaves as well as ovens. Product Identification The highly designed stainless steel cookware is produced from the best alloy of metals available in the market. Our vendors provide the finest steel, carbon, and chromium which are molded into our premium cookware. Our products also contain a copper core which gives them the ability to conduct heat well. This copper helps adjust the change in temperature which allows users control over cooking and even distribution of heat during use. Justification for Choice of Product We chose the cookware market because it is a wide and varied market. We can distinguish many segments such as high end cookware, low end cookware, traditional cookware, and modern cookware. We are interested in the cookware users because they all have different needs. Some of the consumers are interested in performance, some in the easy-cleaning, some in the price, and others in the design. Hence, it is interesting to deal with products that have such a diverse demand ranging from professional to ordinary users. We also chose to market high-end cookware to avoid competing in the lower low end cookware that generates low margins. Moreover, there is a select type of US consumers who will be targeted by the marketing campaigns of this new advanced cookware and this company is interested in introducing its new cookware to the US market which makes it interesting to research, analyze, and penetrate a very competitive market/industry. Finally, the cookware comes with a limited lifetime warranty since the German technology used to make this material is excellent and considered to be one of the best in the world. Conclusion German technology has well-proven to be very efficient and competitive with the rest of the advanced countries in any given industry. In this project, our team embarked on a marketing campaign for a high-end cookware manufacturer originating from Germany. In the subsequent sections, our team analyzed the market needs, discussed the market growth, and provided a SWOT Analysis. Our team also examined the competition, discussed the product offering/product definition, and explained the product identification. Finally, our team concluded by justifying our choice of this product. References Consumer Search. (2011). Cookware Reviews. Retrieved from http://www.consumersearch.com/cookware/review Cookware Manufacturers Association. (2009-2010). Estimated Wholesale Shipments by Category. Retrieved from http://cookware.org/statistics.php Macy’s. (n/d). Confounded by Cookware. Retrieved from http://www1.macys.com/shop/kitchen/kitchen/cookware'id=7552 News 4 Us. (n/d). Housewares Industry on the Rise in 2010 – New Report by Leading Market Research Company The NPD Group. Retrieved from http://www.news4us.com/housewares-industry-on-the-rise-in-2010-new-report-by-leading-market-research-company-the-npd-group/227090/