Question 34

Supreme Kitchens Ltd has been making quality wooden kitchen products for over thirty years. The company was formed in 1968, the founder making some money from a hobby after retiring from the Police force. Over the years, the firm has grown and now employs eighteen staff, including a sales and marketing co-ordinator, a bookkeeper and sixteen crafts people.

The firm specialises in the manufacture of high quality, traditional pieces of furniture for use in kitchens, with the goods being sold through small retail outlets. The crafts people are responsible for designing, carving and making up each piece of furniture by themselves. Although this is time-consuming, the Managing Director, Alan Supreme, believes that this ensures that the final products are not mass-produced and as such, gives them a unique selling point.

However, James Mellencamp, the sales and marketing co-ordinator, feels that this approach is failing to take account of the changing tastes in furniture and is resulting in falling sales. He firmly believes that the majority of consumers no longer want to buy traditional pieces of furniture and favour the flat pack items sold by outlets like IKEA and MFI.

These differing viewpoints have been causing a number of arguments at Supreme Kitchens Ltd. Alan and James are both adamant that their opinion is correct, with neither of them prepared to compromise.

Questions

1. a) State what is meant by the term ‘unique selling point’. (2 marks)

b) Alan believes that the products made by Supreme Kitchens Ltd have a unique selling

proposition. Explain why this is the case. (4 marks)

2. a) Identify the advantages and disadvantages to Supreme Kitchens Ltd of selling products solely through small retail outlets. (5 marks)

b) The firm is considering whether to set up a mail order service. Analyse the possible

consequences of this for Supreme Kitchens Ltd. (6 marks)

3. Discuss whether you think James is right to recommend that Supreme Kitchens Ltd manufacture flat pack furniture. (8 marks)