Case of Cutco

1 January 2017

The ALCAS corporate vision was to become the largest manufacturer of high-quality kitchen cutlery and accessories in the United States. As of 2009 the company employs more than 800 people at its Olean headquarters and has revenues in excess of $200 million. Vector Marketing Corporation is the largest independent distributor which operated in the eastern United States and is a direct sales firm that market Cutco Cutlery. They are an in-house CUTCO marketing capability that gave it complete control over it major market.

Vector is a wholly owned subsidiary of CUTCO Corporation, which has been Manufacturing Cutco Cutlery for 61 years and has offices across the United States and Canada as the sole distributor of CUTCO. Currently Vector has over 200 offices in the U. S. and Canada. Vector also belongs to the Direct Selling Association, whose members are leading companies engaged in direct selling in the United States. They target high school graduates/college students as the sales people for their CUTCO products to part take in direct selling.

Case of Cutco Essay Example

Cutco is steady growing company that reaches a large segment of the world either through websites or television commercials. Vector annual sales are over $209 million dollars. The CUTCO line is predominantly marketed to consumers as set of high quality knives. The core of the product line consists of ten basic knives that can be purchased individually or in various sets ranging from a two-item gift pack to the Homemaker Set Plus Eight. Cutco products are directly marketed to customers through in-home demonstrations by independent sales representatives who are almost exclusively college students.

CUTCO cutlery has always been marketed through direct selling. This is viewed as a distinct advantage because it allows the quality and performance features of the product to be explained and demonstrated directly to potential customers. Additionally, CUTCO cutlery is instantly recognizable because of its exclusive and unique wedge-lock handle and the Double-D knife blade grind and each knife comes with a full lifetime guarantee that includes free factory sharpening. The guarantee is something that will instill trust from the consumers in the product and the company.

Over time, the line has also become an American icon being featured in TV programs such as Saturday Night Live and The Simpsons and showcased in “Made in America” and “Modern Marvels. ” The cutlery has even been used in the Betty Crocker national bake-offs and countless more food-related events. When Alcas was purchased from ALCOA, the company had focused on selected “growth drivers” to move it forward. Initially the CUTCO product, by virtue of its high performance, quality, and demonstrability, constituted the major driver of the business and the years of that drive was termed “phase one. The second phase consisted of consolidating the various independent agencies selling CUTCO products and creating a nationally distributed sales force through Vector Marketing Corporation. This action led to the third phase, the introduction of the Vector College Recruiting program. Because of this new recruiting program, there were a larger number of managerial candidates which in turn, provided the management talent to open a number of new offices. These new offices fueled a high rate of geographic growth.

This recruitment method is still used to this day and most high school graduates are targeted by Vector to join them when as soon as they graduate. Other growth drivers mentioned are acquisitions, recruiting structures/approaches, expansion of brand recognition, international expansion, supplemental sales channels, and entry into retail sales channels. The qualitative factors that go into such growth drivers are numerous. Sustainability is generally accepted as a key success factor for both public and private. Sustainability brand growth strategies: leadership brands and revenues.

Additionally, other factors include the state of the market (present and future), the compatibility of the selling practices implemented, competitive activities within the market, environmental uncertainties, as well as the experiences of Vector and CUTCO. I think of the suggested growth drivers, recruiting approaches and the supplemental sales channels will go best with their direct selling approaches. The recruiting approaches that CUTCO and Vector are currently using have proven to be very successful for them. The additional investment and efforts to improve upon their recruitment tactics would make sense.

Vector is already proactive in internet (and even mail) recruitment at present, so with additional funding and efforts put in to recruitment, it is very possible to vastly increase their growth via recruitment expansion. With their supplemental sales channels, I believe it would be beneficial for them to continue with their use of catalogs and the web to parallel their direct selling efforts. With the fast pace of technology, and the traditional conformability of catalogs, expansion of both branches will help their revenue and sales.

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