Reference no: EM131313246

CUTCO Corporation, the largest manufacturer and marketer of high-quality kitchen cutlery and accessories in the United States and Canada, celebrated its 60th anniversary in 2009. With the design and manufacture of the highest-quality product as its primary objective, over 100 kitchen cutlery products are sold under the CUTCO name. The company also carries lines of cookware, sporting/pocket knives, and garden tools. The CUTCO corporate family consists of the following:

• CUTCO Corporation-parent company
• CUTCO Cutlery Corporation-manufacturer of CUTCO products since 1949
• Vector Marketing Corporation-exclusive marketer of CUTCO products, which are sold direct to consumers
• CUTCO International, Inc.-marketer of CUTCO products internationally
• KA-BAR Knives, Inc.-maker of quality sporting knives
• Schilling Forge-manufacturer of precision forgings

All businesses within the corporate family, except for Schilling Forge, are located in Olean, New York (U.S.), where the company has over 700 manufacturing and administrative employees. Schilling Forge is located in Syracuse, New York. Only a very small percentage of the company's items are manufactured outside the United States. That happens only when the company cannot find a partner in the United States that meets stringent quality standards while simultaneously meeting the pricing needs of the company and its customers. The quality built into CUTCO products at the point of manufacturing is reinforced by the company's direct-to-consumer channel of distribution, which enables high-quality consumer engagement during the selling process.

CUTCO's commitment to quality and innovation is evident throughout every step of the manufacturing process, from the selection of steel to final inspection. The company stands behind each and every product with a FOREVER satisfaction guarantee. The guarantee has four components:

1. FOREVER Performance Guarantee
2. FOREVER Sharpness Guarantee
3. FOREVER Replace Service Agreement for Misuse or Abuse
4. 15-Day Unconditional Money-Back Guarantee

CUTCO Cutlery's American-made products and the hard-working craftsmen and women dedicated to creating this high-quality kitchen cutlery were featured on the Travel Channel's John Ratzenberger's Made in America program. With its reputation for high quality, accompanied by a FOREVER satisfaction guarantee, CUTCO Cutlery Corporation distributes its products direct to the consumer via its Vector Marketing sales force.

CUTCO Cutlery Corporation has approximately 18 million satisfied consumers in North America. Customer response to CUTCO research directs the development of new products and services. The sharing of personal stories about special times with family and friends serves as an inspiration to everyone in the company. Thousands of customers have written letters telling the company about the role the company has played in their lives. These customer letters tell how CUTCO has helped them slice and dice fruits and vegetables for weeknight dinners, create weekend party fare, and chop and carve food for holidays, birthdays, and anniversaries. People give CUTCO cutlery as gifts to newly married sons and daughters, and they hand CUTCO cutlery down from generation to generation as family heirlooms. The customers praise the quality of CUTCO products and offer thanks for the comfort of the ergonomically designed handles and the CUTCO FOREVER Guarantee.

Unlike many competitive cutlery products, CUTCO cutlery products are not available in mass merchandise or specialty stores. Boasting annual sales of over $200 million, Vector Marketing Corporation is a direct sales firm and the sole distributor of Cutco Cutlery. The independent sales representatives of Vector Marketing Corporation are largely college students from campuses across the nation. According to a company spokesperson, Vector Marketing's sales force is a group of dynamite individuals who represent the company to the consumer in the same high-quality fashion as the CUTCO product. The sales representatives contact potential consumers via referrals, referred to as the "friends of friends" approach. Conversely, consumers can contact the company directly and be connected to a salesperson in the same geographic region.

Source: Instructor Manual, Chapter 14, page 22

1. After reading both the case study and Chapters 13 and 14, respond to the following questions in essay format.
2. Your essay must include an introduction paragraph, a main section consisting of two or more paragraphs, and a conclusion paragraph. You must address all relevant parts of each question. The essay must be at least 200 words in length.

Your essays must include cited materials from the textbook at a minimum. Additional resources may be used. Make sure to cite any references you use. Proper citation format for a reference includes the name of the author(s), the title of the work, the date of the publication, and the page number. Be sure to review the grading matrix before you submit your essay.

Essay Questions

1. Provide a brief summary of the case, including the key facts and business issues faced by CUTCO.
2. Based on the details provided in the case, what type of guarantee does CUTCO offer to its consumers? Is there a relationship between the business philosophy of CUTCO and its product guarantee? Provide details to support your analysis.
3. Based on the details provided in Chapter 14 and the case, discuss the unique set of marketing channels utilized by CUTCO. Is the company limiting its sales by minimizing its marketing channels? Provide details to support your analysis.