With all the analysis we did in the lecture, we made the recommendation of certainly not doing another promotion. The very first thing I did after class was adjusting each of our model in class from 3 months moving common to a five months shifting average, with data from previous two months, current month, and two months after. With this realignment, the gradual increased just a little, but still, I think it’s not attractive enough when considered other factors, just like cannibalization effects, into consideration.
Also, as Katz pointed out, “the April-May 78 promotion was announced on January 1 (page 14), the family member lower January-February 1978 product sales level ought not to be used to outlook March-May 78 sales without promotions.
Actually I believe it’s the announcement of promotion about January 1st that triggered the low product sales level in January-February 1978. Retailers might order fewer units prior to the promotion but catch up with even more units purchased during promotion period.
This could also be thought to cut the attractiveness promotion.
Besides the data examination we would in class, there are a few more reasons My spouse and i don’t suggest Hartmann to have a price campaign in the pursuing year. 1st, price advertising will harm Hartmann’s manufacturer image. Certainly one of Katz’s principles for Hartmann was to “maintain a prestigious image (page 2). Because the price promo itself has not been very efficient, why should Hartmann risk it is brand graphic to do it? Second, as Katz said, there are all kinds of different ways to increase total sales, and, based on suitcases consumer research, price advertising was not really the best way intended for Hartmann to achieve higher sales.
From Hartmann’s own review, durability and elegance were considered the most important features in picking luggage (page 5). Even though the results itself seems like is a little misleading, seeing that price has not been an option about that questionnaire, it truly should be the true case, and this conclusion could be proved from the industry researching the market in Demonstrate 2 . In this research end result, only “31% of participants cited price as the most important criterion in selecting luggage, while “21% cited that as the least important criterion, and only “26% would ‘wait for sale, then go there to buy’ (page 16).
Also, considered the target market for Hartmann, which are “customers who demanded the highest quality and durability in luggage (page 1), and its industry position because “most expensive in the industry (page 1), the demandof its products was definitely inelastic. With this inelastic require, price promotion would never become the best method of improve revenue, especially to boost profit. So what would be a better way for Hartmann to increase product sales and income? The same as the consultants, I would recommend Hartmann to make more advertisements to develop wider manufacturer awareness among target customers (page 14).
The reason I makes this recommendation are as follows. Based on the industry study report in Exhibit 2 (page 16), “48% of respondents presumed they would favour a brand of luggage they identified or acquired seen advertised.
The percentage intended for Hartmann’s target consumers may be even higher, because they were pursuing “the highest quality and durability in luggage and the likelihood that they could trust a mysterious brand was very low. Nevertheless , according to Hartmann’s cell phone survey (page 5), the overall aided recognition level was pretty low among high income level customers, who had been considered as Hartmann’s target customers, and “only 5% of respondents recalled having seen any kind of Hartmann advertising.
Therefore , building brand recognition among goal consumers by simply increasing promoting should be the easiest way for Hartmann to increase revenue and, crucial, not jeopardize either success or brand image.
Consequently , all causes listed above, and also sales data analysis we did in class, point to one particular identical bottom line that price promotion has not been a good choice intended for Hartmann to obtain sales and earnings goals. Yet, increasing advertising was a harmless plus more effective approach to help Hartmann achieve the objectives.