Culinarian

One of my many adventures of living in the U.S. was learning how to finally cook and to appreciate good cooking equipment.  Back home i never really had to do any of the cooking but living away from home alone forces you to learn quick.  In any case the Cullinarian case introduces us to pricing strategy in the case of a premium brand.  If the brand is known for being a premium offering, would a price discount help push sales?  The obvious answer would be yes it would as price, even for products in premium categories, is a major determinant in the consumption decision.  But we have to ask ourselves, how else can a price discount affect our brand?

From the case, the VP Janus seems allergic to anything that does with lowering prices as he feels it sort of belittles the brand and tarnishes the "American icon".  He even goes so far as to dislike ".99" pricing which i feel goes a bit too far.  I mean, if its going to cost me 999.99 for a 5-piece set of cookware, i don't care if there's a 99 cents there, thats a lot of money and i wouldn't associate the .99 pricing to being a budget item.

Anyways, on the other side of the spectrum you have the sales team lead in Brown who wants to expand market share and offer 30% discounts.

I'm a discount shopper but im also a branded shopper.  Let me explain this a little bit.  I usually go off and would like to buy the high end stuff, but i always always have to wait for a sale.  It may not have to be a good sale like a clearance type 50% off, but there's something at the back of my mind that screams, just wait until you "save a bit".  If im buying a premium product, i don't think that getting a 20% discount diminishes its prestige.  Or maybe im just happy to get the product for a little less.

As for the case, i think a brand like Cullinarian, that wants to protect an image, a small price discount on group sets would best be in-line with the goals set by Mr. Roux.  A discount of 10-15% on select lines that perhaps need a little push will not damage the reputation of these prestige brands.  I didn't particularly agree that the 2005 price promotion on the popular items was a good move.  I'm guessing the promo did well more so because they focused on the fast moving items.  If they're popular, maybe they need not be afforded a discount.  The group sets, possibly with only one or two of the "essential" items could be sold, which could increase market share, preserve the image and force buyers to want to buy the popular pieces like the 10-in frying pan to complete their set.  If sales are good, this will widen distribution as more trade partners will line up although they will have to fit the current line-up of high end outlets.

Pricing for premium stuff may be tricky, but customers and potential customers always welcome a little savings.