Tupperware revolution

Tupperware Revolution

Very few companies in the world have had such an impact globally on society and further still too few companies have managed to sustain in doing so. Tupperware happens to be one such rarity, which has contributed a lot towards the liberation of women across the globe. The American company was founded in at the end of World War II, at a time when women who used to work in place of the men in factories were being laid off in droves in order to accommodate the men returning from the war. Here was an organization that not only provided jobs to women setting them free financially but liberated the American society as a whole by changing the existing male domination of society. Here was a perfect example of how a company started to focus on customers and customer relationship as early as in the 1950's.

The 50's was a period when a small time company founded by Mr. Tupper managed to foresee and exploit an opportunity that presented itself out of circumstances that arose around that time. He managed to do this by employing women who were out of work and constrained to their homes. Although the company didn't actually do this initially and it wasn't a part of its business strategy, it was a result of widespread failures across its retail store in peddling his unique plastic product which kept food fresh, this was the insight provided by Mr. Tupper towards storing leftovers. Ultimately it was a customer going by the name of Mrs. Brownie Wise that actually spurred this revolutionary movement called 'Tupperware ' and also became its Vice-president. The company's strength lay in its unique product called Tupperware and the ability to use unemployed women as its staff, its core strength lay on its ability to use direct selling methods to market the product at women's social gatherings and parties. According to the 2008 SEC filing Report prepared by Rick Going, the current chief executive officer of Tupperware, two-thirds of its business came from the Tupperware product while the rest from its personal care market. In fact during the current financial recession the company has made record profits with a net income of nearly one-hundred and sixty million far more than it has ever done in its sixty year existence. (2008, p.47).

Tupperware adopts CRM

The adoption of CRM has been a cause in their growing financial success and it has done this by adopting Talisma CRM software as a strategic CRM tool with the help of an IT Organization namely Symon Dacon (2001). CRM has been defined simply as not just software but a strategy that the organization applies across its various functions and departments in order to bring operational effectiveness and enhance its competitive advantage (Bligh & Turk, 2004). The primary reasons for adoption of CRM can be attributed to 3 important factors chiefly the rising costs of direct sales, increased global competition and the need for information (Goldenberg, 2008). These are the reasons why most businesses like Tupperware choose to use CRM as the strategy emphasises on improving and co-ordinating customer communications. However CRM requires the right mix of technological advances built into processes to support the stakeholders involved in order to become effective.

Ever since Tupperware adopted CRM, their growth has been increasing annually as per the SEC filings reports and CRM studies have clearly proven it do, which gives an uniform flow of communications across the organization helping it find efficiencies in their day to day business dealings, these efficiencies are called as operational efficiencies . But operational efficiencies aren't enough as any competitor can adopt the same CRM and thus end up in the same level as the corporation; it is the competitive advantage that is more vital which is done by further strengthening upon its existing strengths. According to Michael Porter, it simply means the price that consumers are willing to pay for the service or product and he defines the two types of competitive advantage one being the price advantage and the other is differentiation (1998, pp.28-30) . The Tupperware Corporation is using differentiation to sell their products by way of commissions being paid by the corporation to the consumers for every product bought by them. It has also been able to enhance its key strength that is by increasing its sales force team especially taking advantage of the recessionary period when more people have been laid off and are looking for job opportunities.

Tupperware Inner workings

The core product of Tupperware Corporation is its trademarked plastic food storage containers and this core product has been divided into the various segments according to the utility of the container as shown in the table given below. (Tupperware, 2009)

In the above table we see that the Tupperware basic product has been broken up into several brands according to the utilization that ranges from gift sets to microwaveable containers, containers that can be used for refrigeration and containers with cartoon characters printed on it for kids. The identification of various usage purposes for the plastic containers as shown in the table describes how segmentation has been used by the Tupperware Corporation. Tupperware products are not sold in retail stores nor has it been using a dedicated sales force to push their products in the marketplace, most of its products are sold by women interested in making some cash in their spare time. Tupperware uses gender segmentation by producing and marketing products for the female gender, both the Tupperware storage containers and the beauty care products are directed at them with premium pricing (Tupperware Team, 2009). Women join the corporation as consultants and are expected to host parties in which they display the Tupperware products and any sales occurring during those parties are credited to their accounts either in the way of cash or products. The corporation uses a multi level marketing scheme also called as the pyramid scheme to enrol consultants; a new customer must contact an existing Tupperware consultant to join. Thus in this way Tupperware has managed to leverage existing relationships among people to build its 2 million strong sales force upon; this is the basic principle of any multi-level marketing scheme. Thus in this way, usually people who know each other end up working as consultants and a chain of customers linked to each other is built on the basis of relationships that already exists among them.

Tupperware and Direct Marketing

Tupperware had realized mobile marketing for making payments and adopted it by tying up with LINQ Corporation, a South African IT vendor to push their products in countries like South Africa.

Tupperware Value Chain

Conclusion

As per the Swot analysis conducted by Data monitor, a business analytics organization (2004, pp.5-8) on Tupperware and a comparison of product pricing, it's quite noticeable to see that the Tupperware products are premium priced which seems a bit unreasonable as storage containers are a low involvement product. The corporation has tried to offset this weakness of a high priced premium product by passing on its returns to the customer chain through payment of commissions by using a pyramid marketing technique. Although pyramid marketing schemes are known to have a bad reputation but the recession is a period when people are spending less, dining home and storing more food in containers plus they definitely are looking for a second job to make some cash, and it represents an opportunity for Tupperware to exploit for its growth. It's focused only on products targeting women still hanging on to its past success, there seems to be no attempt towards the male gender or families unlike the Amway corporation which gets families involved, this would be a good time for them to venture out a bit further in this area probably by starting a new product segment exclusively for men.

Mobile marketing is catching up a lot and Tupperware been using it for making payments through mobiles but the technology hasn't reached maturity as quite a few problems still persist such as the inability for a marketer to relate a mobile advertisement to a sales conversion. However it also depends on the Geographic location; the Japanese use it almost for everything in their daily lives , so a mobile marketing policy which doesn't just focus on mobile payments but on promotions can help increase the awareness as well as the reach of Tupperware and it products (Tsai, 2009).

Current focus is on emerging markets where the retail infrastructure is underdeveloped which has been a good decision on the part of the management. However since more than three quarters of revenues comes from outside of USA; it being subject to market fluctuations of currencies, a stronger US dollar has affected its financial position by a decrease of nearly one-tenth in its profits (Bird, 2009). This definitely shows us a need for the company to improve on its currency hedging strategies or end up suffering from fluctuations even more especially during this recession.

Bibliography

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