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QUESTION
Read the Case Study “Cutting Edge Quality: Cutco Knives for Life” available in the textbook, Chapter 12 (Ferrell et al., 2020).
Using the DeVry Library and only peer-reviewed publications (e.g., periodicals, journals), prepare an APA Report addressing the following:
A summary of the case.
List a series of positive attributes that both the product and the organization exhibit and that can be marketable.
Choose at least two traditional promotional strategies (exclude direct sales) and explain why these channels are the best options to move the product from a “push” to “pull strategy.”
Choose at least three digital communication channels and explain how a marketing managing strategies to communicate the benefits and positive attributes of both the product and the company.
Discuss at least two legal and social issues in Internet marketing that apply the most to this type of product and organization. Explain the consequences for the organization when these issues emerge.
Close this paper with an analysis in which you apply the discussed concepts to appraise critically the importance of the managerial issues addressed in this paper. Use real-life examples to explain the importance of these concepts.
Include at least three references with your APA report
Note: For this assignment, you would have to access “Chapter 12: Dimensions of Marketing Strategy” introduced during Week 6).
Use the APA Template
Cutting Edge Quality: Cutco “Knives for Life” Case Study
What if you could have a high quality kitchen knife that would last forever? Look no further than Cutco. Cutco began manufacturing knives in Olean, New York in 1949 when Alcoa Corp and Case Cutlery formed a joint venture to begin creating high quality cutlery. Since then, the company has grown to become a nationally recognized brand known for its high quality, American made products. All Cutco knives come with a “Forever Guarantee” that allows customers to have their knives serviced for free, regardless of when the knives were purchased, so the knives can be passed from generation to generation.
Since 1949, Cutco has used a direct sales channel. In 1981, Vector was founded in Philadelphia as the sales division. It has grown to over 250 district sales offices. The Vector page 396 management team at Vector started as sales representatives. Cutco’s direct sales force, largely college students looking to make extra money during the summer, learn how to manage their time, how to interface with others, and how to express unique product attributes which set Cutco apart from the competition. There are two models of direct selling compensation: multilevel and single level marketing. Multilevel compensation means direct sellers earn commission from their own sales as well as commissions from those they have recruited and trained. Cutco uses a single level method of compensation, which means the sales representatives only earn a commission on the sales they make, and they do not recruit other sales representatives.
While the driver of the Cutco distribution model is direct selling, it has begun to experiment with different sales methods. For example, Cutco has opened 16 retail locations since 2005 in order to give existing customers a place to service their knives while allowing potential customers a place to view and handle its products. These stores are focused on giving a “Cutco experience” where customers can try out knives or take classes on cooking, floral arrangements, gardening, and more. The stores also offer more than 100 kinds of kitchen cutlery products in addition to its knives such as utensils, kitchen shears, flatware, cookware, and a full line of sporting knives.
Cutco is proud of its history and heritage as an American knife manufacturer. Quality and fair treatment of employees and the community are first and foremost the priorities for the company. Cutco’s knife blades are made from a high carbon stainless steel, which goes through a 3-stage heat treatment process to ensure that blades can take a sharp edge, maximize their resistance to corrosion, and won’t snap under pressure. All knives have “full-tang construction,” which means that the blade’s metal extends all the way through the handle of the knife to create stability. The handles are made from an acetal copolymer thermo-resin, which gives the handles high strength, toughness, and resistance to abrasion. Rivets that hold the handle together are made of a nickel-silver alloy that doesn’t expand or contract from heat. This process creates a high quality knife that is built to last. However, wear and tear is inevitable, so customers can get their knives serviced at any time.
Cutco, which has manufactured its product in Olean, New York since it was created in 1949, is now one of the few American cutlery companies to keep manufacturing in the U.S. Cutco’s American made commitment has not always been easy to abide by. After the company entered the flatware business, its American supplier went bankrupt and closed down its operation. All other flatware manufacturing was outside of the United States. In an unparalleled commitment to American jobs and American-made knives, Cutco purchased the fabricating equipment for its stainless table knives and insourced the product into its own factory in Olean. The company takes pride in the town of Olean where it has around 650 full-time employees. James Stitt, Executive Chairman, came to Olean in 1975 to work for Cutco. His son, James Stitt, Jr., joined the company in 1997 and is currently the President and CEO. Before letting his son take over the company, Stitt Sr. ensured that his son remained committed to the town which relies heavily on Cutco since it employs many of Olean’s citizens. Corey Wiktor, The Executive Director of the Cattaraugus County Industrial Development Agency, described Cutco as “. . . the lifeblood of Cattaraugus County and the Southern Tier.”
Thanks to Cutco’s high quality products and unique business model, it is a nationally recognized brand for cutlery that is synonymous with quality. Cutco continues to expand its product offerings and has begun complimenting its direct sales distribution with retail and Internet sales. Even with its evolving marketing strategy, the high quality of its knives and its commitment to direct sales has remained constant since Cutco began in 1949.59
Critical Thinking Questions
- How has Cutco used quality to differentiate its products?
- How does Cutco add value to its products through the “Forever Guarantee”?
- Does the direct selling channel help position Cutco’s high quality knives in the marketplace?
ANSWER
Cutting Edge Quality Case Study
Case Summary
Cutco Cutlery Corporation is an organization that produces and sells various lines of kitchen cutlery, sporting knives, and accessories. The products of the company are marketed and distributed by Vector Marketing Corporation. The vision of the company is “To become the largest, most-respected and widely recognized cutlery company in the world”. The company has been performing very well since its incorporation, currently having more than two hundred and fifty offices in the United States and Canada. The main sales method that the corporation uses is direct selling. However, experiments using other methods of selling have been conducted in recent years. For instance, retail locations have been opened to provide customers with places for product servicing while providing potential customers with areas to view and handle the products before purchase.
Positive Attributes
There are various positive attributes of the products of Cutco, and the company itself, that are marketable. The retail shops that the company has opened provide customers with the “Cutco experience” (Sparks, 2019). Customers can try out various knives to decide which ones to buy and they can take cooking, gardening, and floral arrangement classes. The company provides a wide range of cutlery products to its customers, having more than a hundred different types of kitchen cutlery products in addition to the knives. This provides customers with a wide range of products to choose from. The company also benefits from its good reputation in the country and the market. In addition to providing a wide range of products, the company’s knives are made from high carbon stainless steel that has been heat-treated to ensure that the knives acquire a sharp edge, cannot snap due to pressure and that they are corrosive resistant. The knife handles are strong, tough, and abrasion-resistant. The company produces high-quality knives that are durable and heat-resistant. Lastly, the company provides its customers with service for their knives at any time, independent of when they purchased them.
Promotional Strategies
Cutco presently uses direct selling as the main method of product marketing, a push promotional strategy (brings the product to the consumer). In order to move from push promotional strategy to pull strategy (brings the consumer to the product) of marketing, the company should adopt advertising and provision of discounts as product promotion strategies (Liu & Huang, 2015). By advertising products through channels such as social media and print media, the company will ensure that the customers are aware of the existence of the product and that they will look for it in stores to make purchases. Discounts will also attract customers to purchase their products.
Digital Communication Channels
Digital communication channels are highly effective at communicating the benefits and positive attributes of the products of a company to the potential customers (Taiminen & Karjaluoto, 2015). Cutco can achieve better market performance through the use of digital communication channels to promote its products. Affiliate marketing, social media marketing, and pay-per-click advertising are some of the best channels that the company can utilize to achieve better sales.
Legal and Social Issues in Internet Marketing
Even though internet marketing is a great way of advertising the products of a company since it reaches a wide market, there are various legal and social issues that the company may face with the adoption of the strategy. Intellectual property issues, breach of comparative advertising standards, privacy, and data collection issues are some of the issues that may affect the company (Klein & Wueller, 2017). It is, therefore, important that adequate research and preparation be done to ensure compliance with all the online marketing guidelines.
Conclusion
In conclusion, Cutco is a well-performing company in the United States, dealing in the production and sale of kitchen cutlery. In order to achieve even better market performance, the company needs to adopt modern “pull” product promotional strategies to increase awareness of its products and improve its sales. The methods discussed in this paper have the capability of boosting the performance of the company in the market by communicating the benefits and positive attributes of the company’s products to a wider market. Companies such as Apple Inc. and Google Inc. have achieved market leadership through the use of “pull” product promotion strategies.
References
Klein, D., & Wueller, J. (2017). Fake news: A legal perspective. Journal of Internet Law (Apr. 2017). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2958790
Liu, H. W., & Huang, H. C. (2015). Tradeoff between push and pull strategy: The moderating role of brand awareness. In Marketing, Technology and Customer Commitment in the New Economy (pp. 259-264). Springer, Cham. https://link.springer.com/chapter/10.1007/978-3-319-11779-9_98
Sparks, E. (2019). A Fresh Perspective. American Bankers Association. ABA Banking Journal, 111(1), 18. https://bankingjournal.aba.com/
Taiminen, H. M., & Karjaluoto, H. (2015). The usage of digital marketing channels in SMEs. Journal of Small Business and Enterprise Development, 22(4), 633-651. https://www.emerald.com/insight/content/doi/10.1108/JSBED-05-2013-0073/full/html
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