Professional Documents
Culture Documents
Integrated Core Project
Integrated Core Project
Table of Contents
Integrated
Core Project
Adam Broka
Emily Youngblood
Melanie Bauer
Samantha Kautz
Hannah Gorman
Spring
2013
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Executive Summary..6
Situational Analysis..7
Company...7
Background..7
Corporate Goals...8
SWOT Analysis...8
Strengths..9
Weaknesses11
Opportunities..13
Threats14
Organizational Structure16
Capabilities and Processes.17
Industry Environment17
Customers20
Description of Buyers20
Changes in the Customer Base..21
Purchased Products22
Value of Products...23
Order Qualifying and Order Winning Characteristics...24
External Environment..25
Industry..25
Economic...26
Technological 27
Societal..28
Legal..29
Competitors....29
Description of Competitors....29
SWOT AnalysisNewell Rubbermaid, Inc......31
Strengths....32
Weaknesses33
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Opportunities..33
Threats34
SWOT AnalysisAvon, Inc.....35
Strengths35
Weaknesses....36
Opportunities .36
Threats37
SWOT AnalysisLifetime Brands, Inc....37
Strengths38
Weaknesses39
Opportunities..40
Threats40
Competitive Advantages....41
Financial Ratio Analysis43
Liquidity.43
Long-term Solvency...45
Asset Management46
Profitability....48
Market Value.....50
Collaborators..52
Growth Strategy53
Description of Growth Strategy.53
Goals and Objectives.54
Segmentation..55
Variables55
Customer Segments...55
Demographics....55
Age.55
Gender56
Family Life Cycle..56
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Psychographics..56
Motives..56
Lifestyles57
Targeting.57
Positioning..58
Strategy Execution...59
Product.59
Goals..59
Description of Product...60
Plastic Containers..61
Cloth Bag...62
Pamphlet63
Description of Processes Used to Make Product...63
Outsourced Components66
Life Cycle of Product66
Complementary Services and Warranties.68
Place.68
Goals..68
Level of Market Exposure.69
Channels Used...69
Supply Chain System.70
Promotion71
Goals..71
Promotional Blend.72
Personal Selling.72
Sales Promotion 73
Advertising.74
Price..76
Goals..76
Value Proposition and Customer Sensitivity.76
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Pricing Strategy..77
Breakeven Analysis...78
Capital Budgeting Analysis...78
Project Life78
Sales Volume.79
Discount Rate.83
Marginal Tax Rate.84
Change in Working Capital...85
Initial Investment...85
Depreciation...86
Salvage Value 86
Variable Cost.87
Fixed Costs....90
Revenues....91
Cannibalization of Volume, Revenue, and Capacity.92
NPV and IRR Discussion .95
Implementation and Control...96
Timing and Implementation Activities .96
Sales Estimates..97
Scenario Analysis..98
Sensitivity Analysis.101
Comprehensive Financial Analysis .104
Conclusion.106
References..107
Appendices A-V..112
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Executive Summary
Tupperware Brands Corporation is one of the most trusted brands in housewares. The
renowned company continues to manufacture and sell high quality, innovative products to
women all across the globe. In fact, Tupperware Brands has an international sales force of 2.8
million in almost 100 different countries and territories, as well as sales revenues of almost $2.6
billion in 2012 (Tupperware Brands 10-K, 2013). They currently offer eight distinctive product
lines, which include Armand Dupree, Avroy Shlain, BeautiControl, Fuller, Nutrimetics,
NatureCare, Nuvo, and their most apparent brand, Tupperware (Tupperware Brands 10-K, 2013).
After reviewing Tupperware Brands financial statements from recent years, they have
remained consistent with their profitability. Considering todays societal and wellbeing
concerns, our team has constructed a growth strategy to take advantage of these current trends
and help increase the value of Tupperware Brands shareholders wealth. With an integration of
finance, marketing, and supply chain management, our team has fashioned a profoundly detailed
analysis of our growth strategy and how it will be executed.
Throughout the marketing plan, our arrangement to implement a new product line
extension will be introduced in further detail. We plan to create a new product that is appealing
and beneficial for tweens and their mothers across the United States. In the comprehensive
financial analysis, we will discuss why we believe this project is financially feasible for
Tupperware Brands, and why we think they can achieve such parameters of the new project set
by our capital budge. As a result of our financial perception provided in a later report, and
assuming Tupperware Brands management capabilities do not change in the future, our team
believes the project should be accepted.
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Situational Analysis
Company
Background and Competitive Advantages
Tupperware Brands Corporation was originally founded in 1946 by Earl Tupper.
Tupperware was unique because it was the first company to offer products that were lightweight
and less likely to break when compared to the traditional glassware found in kitchens at that time
(Heritage, 2012). Tupperware Brands is known for selling high quality, sustainable, and
innovative products. They currently offer eight unique product lines, which include Avroy
Shlain, Armand Dupree, Fuller, BeautiControl, Nutrimetics, NatureCare, Nuvo, and their most
distinguishable brand, Tupperware (Tupperware Brands 10-K, 2013). Their Tupperware line
features innovative plastic containers that can be used to store, serve, and refrigerate food.
Tupperware Brands uses the product differentiation strategy as their source of
competitive advantage. Tupperware Brands holds a competitive advantage over the other firms
in its industry because they were the first company to manufacture and distribute plastic
containers for food storage; and since then, they have lead the industry with a highly
recognizable brand name. Furthermore, Tupperware Brands pioneered the direct selling strategy,
an unconventional distribution method that has proven to be successful and they continue to
distribute its products in this manner today. The final significant advantage is their superior
research and development capabilities. They have become leaders in their market in innovation,
and their research and development skills reflect this. For these reasons, Tupperware Brands has
differentiated itself from its competitors giving them their unique advantages. Although
Tupperware Brands main business was selling plastic goods at first, they have expanded into
new markets and have acquired seven other product lines which have become a good competitive
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fit in the company. The success of these new product lines can be associated with the trusted
brand name of Tupperware known by customers.
Corporate Goals
Tupperware Brands mission statement states that Tupperware is passionate about
changing lives, especially for women by enlightening, educating, and empowering. We not only
strive to obtain our premium position, but we are passionate about changing lives and inspiring
confidence in every one of our nearly 3 million sales force members (Vision and Strategy,
2012). As for Tupperwares goals for the future, they state it is essential to sustain our
reputation as the premier, global direct seller of quality and innovative products. In addition,
they seek to inspire confidence in our associates, sales force, consumers, and investors. Lastly,
Tupperware Brands would like to continue to literally change lives, especially women's, by
enabling them to reach their full potential (Vision and Strategy, 2012). These goals are
governed by their core values of empowerment, integrity, responsibility, innovation,
collaboration, and celebration. How Tupperware Brands conducts business and formulates
strategies are centered on the goals mentioned above.
SWOT Analysis
STRENGTHS
High brand recognition
Geographically diversified
Independent sales force
Distribution method
WEAKNESSES
High turnover of contractor workers
Limited product diversity
Products unreachable to some consumers
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OPPORTUNITIES
Product design
Sustainability practices
Global market penetration
THREATS
Products easily substitutable
Environmental concerns
Social health concerns
Strengths
High Brand Recognition: Tupperware Brands primary and staple brand, Tupperware, has high
brand equity and many consumers value these products from the brand name alone. Consumers
often attribute generic plastic containers with the Tupperware brand name, and refer to other
competitors plastic product containers as Tupperware. The introduction of Tupperware
products in the kitchen during the 1940s helped launch the plastic revolution of the upcoming
decades (Heritage, 2012). Because Tupperware was the first to introduce plastic containers in the
kitchen, it has since then built and maintained a strong reputation in the plastic containers
industry that many consumers can identify with today.
Geographically Diversified: Tupperware Brands does business in almost 100 countries
worldwide selling its eight distinct brand names (Tupperware Brands 10-K, 2013). Figure 1
shows the scope of Tupperware Brands expansion throughout the world and the illustration
distinguishes between its two broad product groups. They are a multinational company that sells
its products directly to the customer, and their global diversification reduces the chance of
business and operational risk, leading to a greater return on investment. In 2001, the United
States and Canada took up 29 percent of Tupperware Brands sales and Europe, Africa, and
Middle East at 36 percent. More recently, United States and Canada only hold 12 percent, Latin
America and Asia Pacific each at 28 percent, and Europe, Africa, and Middle East in the lead at
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33 percent as of 2011 (Tupperware Brands 10-K, 2013). Tupperware Brands has successfully
penetrated the global markets shown and is continuing to seek more widespread expansion,
deeper penetration in existing markets, and greater penetration in areas that have low penetration.
Figure 1
I ndependent Sales Force: Tupperware Brands sells directly to its customers using individual
consultants. As of 2012, Tupperware Brands had an independent sales force of 2.8 million
employees (Tupperware Brands 10-K, 2013). The majority of this sales force is independent
contractors and not actual employees of Tupperware Brands. Tupperware Brands employs only
approximately 13,000 people; 1,000 of which are in the United States (Tupperware Brands 10-K,
2013). The company seeks to remain competitive by continually training, motivating, and
offering new compensation arrangements for its independent sales forces. Their method of
independent sales force provides a personable customer service and enhances direct relationships
with the consumers. Primarily, Tupperware products did not sell well in retail stores because
World Wide Presence (2012)
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customers needed demonstrations to fully understand how they operated. This led to the first
Tupperware home party which took place in 1948. The purpose of these parties was to introduce
Tupperware products to the consumers in a social setting. Fortunately, the parties were so
successful that it became the focused method of selling (Heritage, 2012).
Distribution Method: Tupperware Brands uses the direct-to-consumer method worldwide as it
continues to be successful for the company. The renowned company sells its products through
the party method of sales, which allows them to bypass retail intermediaries. Tupperware
parties take place in homes, offices, social clubs, and other locations. According to Tupperware
Brands most recent 10-K (2013),
The system facilitates the distribution of products to the consumers in a timely manner,
without needing to work with intermediaries, and establishes routine standards regarding
the use of the firms trademarks and administrative arrangements. This includes order
entry, delivery and payment, as well as with the recruiting and training of dealers.
This method has differentiated Tupperware Brands from its competitors and is a major strength
because it has given them a competitive edge in its industry.
Weaknesses
High Turnover of Contractor Workers: As stated previously, Tupperware Brands uses a direct
sales distribution force of contractors to sell their products. Because many individuals of the
sales force seek to supplement their normal income with Tupperware parties, many of them are
not dedicated to the method entirely and leave the sales force, and some experiment with it only
once or twice. As a result, Tupperware Brands relies strongly on retaining and motivating their
sales force because of this high turnover rate of independent employees (Tupperware Brands 10-
K, 2013). In fact they state that a key element of the Company's strategy is expanding its
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business by increasing the size of its sales force (Tupperware Brands, 10-K). This is evidence
that their growth as a company is reliant on retaining and expanding their sales force, and their
success could be compromised if they do not effectively maintain a large and competent sales
force.
Limited Product Diversity: Tupperware changed their name from Tupperware Corporation to
Tupperware Brands Corporation in 2005 after several acquisitions expanded their brand portfolio
to eight distinct brand names (Tupperware Brands, 2012). Not only are they selling durable
containers now in many different markets, but they also have a wide variety of beauty products.
Although they hold eight distinct brands, the company only has two broad groups of products,
plastics and beauty. Tupperware Brands may still be exposed to more risk than other companies
that hold more product diversification. If a significant drop in business results in one of their two
broad groups of products, Tupperware Brands could be left struggling to preserve long-term
survival and would be exposed to even more risk. Tupperware Brands should consider adding
another broad group of products that fits in their existing strategies.
Products Unreachable to Some Consumers: Direct selling benefits Tupperware Brands because
it can build customer relationships and loyalty, and also specify orders to that particular
customer. However, since Tupperware Brands does not sell through retailers, they lose a large
potential customer base. Instead of consumers directly ordering their products from Tupperware
Brands, it can be sometimes easier for customers to conveniently pick up a competitor's brand
off of the grocery store shelf. Although their method of direct selling is one of their competitive
advantages and has not caused them any significant problems in the past, a shift in consumers
attitudes and buying behaviors in the future could render their method obsolete, and they would
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lag behind getting their products to retail locations because companies such as Clorox (Glad) and
Newell Rubbermaid are already selling their products in retail stores.
Opportunities
Global Expansion: Tupperware is not only a household name in the United States, but also in
almost 100 countries all over the world. Tupperware Brands' products are sold in almost 100
countries around the world under eight brands (Tupperware Brands 10-K, 2013). Tupperware
Brands has discovered that most of their customers and markets are found outside of the United
States. Stated in their most recent 10-K (2013), the Company derived 90 percent of its net sales
from operations outside the United States in 2011. They have been successful in their global
expansion to nearly100 countries so far, and there are more opportunities in the global markets to
be successful in the future. They also have the opportunity to reposition their product in the
United States to build a stronger customer base and increase their sales in the United States as
well as the global nation. There was a sales increase of six percent from 2010 to 2011 already in
the United States and Tupperware Brands can continue to increase that percentage using
different market and repositioning strategies (Tupperware Brands 10-K, 2013).
Product Design: Tupperware Brands innovative company culture allows them to express their
innovative visions in the product development process. They can take advantage of new trends in
societies across the globe and find new solutions in the kitchen and home by designing products
that specifically fit these new needs. Tupperware Brands has continued to innovate, and this is
apparent as their 10-K (2013); it states, Tupperware has evolved towards truly lifestyle-
oriented products and has leveraged its research and development expertise to bring new
concepts to market, such as the Individual Microwave Rice Maker, the Microwave Omelet
Maker, a Universal Knife Sharpener Tupperware Brands can continue to pursue new
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opportunities by designing new and improved products. For example, Tupperware Brands has an
obvious opportunity to design and extend their present eco-friendly line. Tupperware has already
broken into the environmental aspect of the market by creating eco-friendly mugs, water bottles,
and lunch containers, but as more consumers become concerned with environmental issues, the
company can seek to fulfill new environmental needs with innovative and quality products. Also,
because the company has already entered the global market, they have a great opportunity to
extend their innovative lines globally.
Sustainability Practices: Introduced in the preceding section, Tupperware Brands has an
opportunity to begin implementing practices that are environmentally safe and sustainable.
President and Chief Operating Advisor of Tupperware Brands Corporation stated that, We
continue to look for opportunities to improve the environmental performance of our products and
manufacturing processes, without compromising on safety and quality. Tupperware Brands is
focused on eco-friendly product solutions that help reduce energy consumption and eliminate
waste in landfills (Executive Message on Sustainability, 2012).
Now that Going Green is a new trend in the United States and places all over the world, it
presents an opportunity for Tupperware Brands to not only design sustainable products, but also
sustainable operations. By creating products that ensure the preservation and safety of the
environment, they can not only create products that are better for the environment but, as stated
earlier, they will be able to attract new customers.
Threats
Products Easily Substitutable: Although Tupperware Brands is the leading brand of packing and
container products, its products can easily be substituted by others. Several companies have
developed products similar to Tupperware that may possess qualities such as cost differentiation.
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Tupperware Brands offers their plastic products at a premium price to reflect their dedication to
high quality and durability; however this high price can deter some consumers from buying.
With todays depressed economy, buyers are more conscious of spending, and may be persuaded
to buy a product that is less expensive regardless of quality comparison. In addition to the
economic factors, Tupperware Brands has the disadvantage of not forming relationships with
retail buyers. Customers may find it easier to go to a local store to purchase their food containers
rather than making an order to be shipped to them on a later day.
Environmental Concerns: In 2010, the United States generated almost 14 million tons of
plastics as containers and packaging, almost 11 million tons as durable goods, such as
appliances, and almost 7 million tons as nondurable goods, for example plates and cups. Only 8
percent of the total plastic waste generated in 2010 was recovered for recycling (Plastics, 2012).
These statistics highlight an external threat Tupperware Brands may encounter in the future. As
environmental awareness becomes more prevalent across the globe, consumers may begin
avoiding products made entirely of plastic because of the known environmental effects it causes.
Plastic has been known to take a long time to degrade in landfills, and without a strong recycling
program in many countries, Tupperware Brands business could suffer unless they take the
actions to minimize this threat.
Social Health Concerns: Apart from the environmental damage plastic is known to cause, there
has also been concerned in the public about plastics adverse effects on health. It is commonly
known that many individuals are still concerned with certain chemicals in plastic products
leaking into their foods when stored or microwaved in. However, As of March 2010, items sold
by Tupperware US & CA are BPA free (About BPA & Materials, 2012). This means that
Tupperware products are safe to consumers, but it does not necessarily remove the stigma still
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surrounding plastic products. Tupperware Brands is still exposed to the attitudes of society and
this negative attitude surrounding plastic products could affect Tupperware Brands sales if they
fail to remind consumers of their products safety.
Organizational Structure
The Tupperware Brands management team and board of directors are committed to
having appropriate structures and processes in place to insure that our shareholders' best interests
are served and to meet the current requirements of law (Corporate Governance, 2012). Figure 2,
an organization chart of the companys structure best illustrates the chain of command at
Tupperware Brands.
Figure 2
Tupperware Brands Organization Chart (2013)
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Capabilities and Processes
Tupperware Brands offers high quality products at a premium price. The products are
long-lasting, durable, and stand out from other plastic substitutes. The products offered from
Tupperware Brands stand out mainly because they are innovative and decorative. They not only
offer storage containers, but also have product lines consisting of cooking utensils, cooking
spices, and housekeeping items. Tupperware also has a beauty line that offers skin care products,
cosmetics, fragrances, jewelry, and more (Tupperware Brands 10-K, 2013).
One of the most notable capabilities that really set Tupperware Brands apart from its
competitors is its superior research and development (R&D). Tupperware spent $18.9 million in
2012, $19.5 million in 2011, and $17.8 million in 2010 on Research and Development
(Tupperware Brands 10-K, 2013). Tupperware Brands has leverages their superior R&D
capabilities to bring new concepts to markets (Tupperware Brands 10-K, 2013). This has allowed
them to offer the most innovative products through their engineering and manufacturing
processes. Tupperware Brands believes their expertise in engineering and manufacturing brings
customers the next generation of serving, fridge storage, and microwave products (Tupperware
Brands 10-K, 2013).
Industry Environment
Tupperware Brands Corporation operates distinctly in the consumer goods sector, with it
specifically occupying the packaging and containers industry (Industry: Packaging & Containers,
2013). However, Tupperware Brands also competes with companies in the direct selling
industry. Because Tupperware Brands spans these two specific industries, competitors from both
industries will be considered and compared to the company in order to fully understand the
competitive environment. Avon, Inc. offers the closest competition for Tupperware Brands in the
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direct selling industry because they sell similar beauty products that rival Tupperware Brands
beauty line, distribute their products in a direct selling fashion, and also concentrate on the
same target markets. Newell Rubbermaid, Inc. is Tupperware Brands closest competitor in the
packaging and containers industries because they offer similar products that serve as substitutes
to Tupperware Brands popular kitchen food storage solutions. Lastly, Lifetime Brands, Inc.
constitutes as a competitor of Tupperware Brands because they offer household and kitchen
cutlery, cookware, and food storage items; items that are parallel to Tupperware Brands product
lines. The beginning section of this analysis contains a brief description of how each competitor
of Tupperware Brands got started, the products they offer and markets they operate in, and a
description of their competitive environments.
Avon was founded by David H. McConnell in the 19
th
century after he noticed an
opportunity to provide women of the time a chance to become their own business by allowing
them to directly sell products to other consumers. He noticed very little women working outside
the home and his idea gave women a chance to gain financial independence for themselves by
becoming personal representatives for Avon (Avon Founder, 2012). Today, their success has led
them to become the worlds largest direct seller and a leading global beauty company, operating
in over 100 countries, where its 6 million independent representatives sell high quality beauty,
fashion, and home products to women (Avon Markets, 2012). Avon, also known as the
company for women, targets and markets their efforts toward women consumers where they
generate over $11 billion in annual revenue, selling such well-recognized brands as Avon Color,
Anew, Skin-So-Soft, and Avon naturals. (Investor Relations, 2012)
Newell Rubbermaid was founded in 1903 after Edgar A. Newell purchased the company
and renamed it the Newell Manufacturing Company. Throughout the years leading up to an
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acquisition that would eventually change the company name to Newell Rubbermaid, Inc., Newell
Manufacturing Company strategically acquired a variety of firms that introduced them to
diversified markets such as the cookware and office supply market segments. In 1999, the
company finally made its most significant acquisition and acquired Rubbermaid, doubling the
size of the company, and thus adding another high quality product line which included
innovative plastic home solutions, commercial, and infant products (Our History, 2013).
Because of the numerous acquisitions made in Newell Rubbermaids history, the firm is
now involved in many product segments which include tools, commercial products, writing,
baby and parenting, home solutions, and specialty items. The firm experiences solid competition
throughout its numerous segmented markets, and is required to constantly innovate by designing
new products that deliver superior performance (Our Company, 2013). Today, a highly
competitive environment has led Newell Rubbermaid to implement a new Growth Game Plan,
where the company is redesigning their corporate strategy and focusing on global opportunities
for growth in emerging markets, while also maintaining their share of their current markets (Our
Growth Game Plan, 2013).
Lifetime Brands, Inc. was founded under the name Lifetime Cutlery Corporation in 1945,
which it later changed to Lifetime Brands in 2005. Up until its initial public offering (IPO) in
1991, Lifetime Brands acquired a few firms which expanded their existing lines of kitchenware
and cookware. After its IPO, the brand acquired several other companies and secured a
successful KitchenAid license agreement with Whirlpool Corporation to manufacture and market
a high-end line of kitchen utensils. More recently, Lifetime Brands has opened a new west coast
distribution center, and has made several moves into the international markets of Asia and
Central and South America (Company Timeline, 2012). According to the companys 2011
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Annual Report, the markets for kitchenware, tabletop and other products used in the home
including home dcor products are highly competitive and include numerous domestic and
foreign competitors (Annual & Quarterly Reports, 2011). Lifetime Brands remains
competitive by stressing the importance of innovation throughout the firm and designing
products to meet the ever-changing needs of customers (Annual & Quarterly Reports, 2011).
Lifetime Brands popular product lines include kitchenware, cookware, and glassware under the
familiar brand names of KitchenAid, Farberware, and Pfaltzgraff (Brands, 2013).
Avon and Lifetime Brands are close competitors to Tupperware Brands and both offer
unique challenges to its strategic outcomes. However, Newell Rubbermaid offers the closest
comparison to Tupperware Brands because it is the biggest threat to Tupperware Brands most
popular product line; Tupperware food storage solutions. Because Newell Rubbermaid offers the
closest substitute to Tupperware Brands products, an analysis of the two companies will follow
in the financial ratio analysis discussion below in order to gauge the relative financial strength of
Tupperware Brands in relation to its competitor. This will be achieved by using the two firms
most recent financial statements.
Customers
Description of Buyers
Tupperware Brands targets mostly one demographic, which is middle aged women, either
married or married with children. This demographic would typically fall in the Generation X
cohort, with some customers occupying the baby boomer generation. Since Tupperware is sold
by women either through home parties or catalog orders, the main customer is therefore women.
With Tupperware Brands offering an opportunity for women to make a business for themselves,
they target their own friends, family, and other women when selling and marketing their product.
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With Tupperware being sold mostly at home parties, it offers a different buying
environment rather than just in stores. Being surrounded by friends, cocktails, and good
conversations, this leads to less buyers remorse, and the likelihood that more goods will be
purchased. Women who attend Tupperware parties are looking for an entertaining buying
situation that will engage their senses. They seek more involvement in the purchasing decision
and are better informed than if they were to buy from traditional retail locations.
Different lifestyles is the main psychographic that Tupperware Brands targets. The
women they target for both customers and as sales representatives are women that are
independent or women that are homemakers. The sales representatives are women that are
looking to supplement their incomes to help support their family or host parties for their friends
and family to receive party benefits. This unique selling method gives independent women an
opportunity to start their own business with little capital invested on their part.
Changes in the Customer Base
Tupperware Brands Corporation continues to evolve with the adjustments in consumer
wants and needs. The world is changing constantly and Tupperware Brands innovation and
creativity allows its products to adapt with the differences in buyer behavior and attitudes.
Tupperware Brands use[s] a modern approach to form and function to create convenient
solutions to household tasks (Heritage, 2012). In fact, Tupperware Brands currently reaches over
100 markets worldwide and offers products specifically manufactured for different cultures, such
as the Kimchi Keeper, the Kimono Keeper, and the Japanese Bento Box (Heritage, 2012).
Recently, there have been slight changes in society that are persuading buyer behavior.
For instance, the environment has been a major factor in consumer purchases. Products that are
sustainable and eco-friendly have become an essential attribute, and can make or break a buyer
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purchase. Since Tupperware Brands are using plastics in most of their merchandise, they have
created an eco-line to attract consumers that support going green. Another shift in society has
been the trend toward a healthier lifestyle. More than one-third of adults (35.7%) in the United
States are considered obese. Centers for Disease Control and Prevention proclaimed that
medical costs related to obesity were estimated at $147 billion as of 2008 (Overweight and
Obesity). Due to the issue with obesity, people have looked into healthier options dealing with
foods and portion control.
Purchased Products
Tupperware Brands core business is centered around design-centric preparation, storage
and serving solutions for the kitchen and home (Tupperware Brands 10-K, 2013). This core
business is centered on Tupperware Brands most well-known brand, Tupperware. This means
consumers who purchase from Tupperware Brands can expect innovative kitchen and home
solutions that are based on individuals lifestyle needs. Because the products are lifestyle
oriented, they are designed to enhance many of the situations consumers find themselves in
around the home and kitchen. Consumers are buying more than a plastic container when they
purchase from Tupperware, they are buying a product whose physical characteristics and
attributes are suited to fit their unique lifestyle needs.
Tupperware Brands carries a variety of product lines that include the traditional plastic
storage and serving solutions, but also an established line of kitchen cookware, microwavable
products, textiles, and gifts (Tupperware Brands 10-K, 2013). Some of the traditional storage
solutions include popular collections like Modular Mates and FridgeSmart, where the purpose of
the two collections is to provide consumers with simple containers in which they can
proportionally store dry or cold foods. Tupperware Brands also has a Chef Series collection
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where it offers high-end cutlery sets, individual knives, and stainless pots and pans. They also
carry a kitchen complement category where consumers can purchase items to supplement their
experiences in the kitchen. Items in this category include recipe books, microfiber cleaning
cloths, sponges, and a can opener. Tupperware Brands also provides consumers with gift options
such as decorated drink and serving containers, and a boys or girls lunch set. The company is
also meeting peoples need for a cleaner environment, by offering new products such as Square
Eco by Tupperware. Tupperware Brands diversely designed kitchen and home product lines
fulfill consumers different needs around the home and kitchen.
Apart from Tupperware Brands core business of storage and serving solutions around the
kitchen and home, the company also manufactures and distributes skin care products,
cosmetics, bath and body care, toiletries, fragrances, and nutritional products (Tupperware
Brands10-K, 2013). Tupperware Brands markets and distributes these products under the brand
names Armand Dupree, Avroy Shlain, BeautiControl, Fuller Cosmetics, NaturCare, Nutrimetics,
and Nuvo. In each of the brands, consumers find a unique kind of cosmetics, skin care,
fragrances, and bath and body care products. Many of these brands originated in specific
international markets, but are now sold globally by Tupperware Brands after their acquisition of
the brands. Consumers purchase naturally enriched cosmetics from the NaturCase, Nutrimetics,
and Nuvo brands, and find a variety of perfumes and colognes, lip applications, and body washes
throughout most of their beauty line selections (Tupperware Brands 10-K, 2013)
Value of Products
Customers are buying our products mainly because they offer unique storage solutions to
the endless types of situations in the kitchen and home. Our products offer the customers a way
to keep food fresh and ready to consume when they are. Additionally, our products can be taken
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on-the-go to places like school or work and keep food fresh and protected along the way. The
reason customers choose to buy our products over our competitors products is because they
value that we are a sustainable and societal company, not only looking out for the well-being of
our environment, but the health of our customers. Our customers value the durability,
reusability, and the warranties that come along with our product lines. Tupperware products are
made to last and if any product is believed to be defective a free replacement will be issued
(Warranty and Returns, 2012). Customers are always returning to Tupperware Brands because
they value the companys constant efforts to innovate and offer new solutions to old problems. In
fact, Tupperware Brands was named in the Worlds Most Admired Companies in 2013 by
Fortune, and received the top ranking for innovation in its industry (Fortune: Worlds Most
Admired Companies, 2013).
Order Qualifying and Order Winning Characteristics
All companies must create order qualifying products to survive in the market. Their order
winning products, on the other hand, are what sets them apart and pulls them ahead of their
competition. Tupperware clearly has the order qualifying products they need to compete in the
market and they have for many years. The order qualifying attributes include durability,
reliability, range of products, and portability. Included on all their products is also a lifetime
warranty where they will replace the product if anything should happen to it due to normal wear.
Their competitors, such as Newell Rubbermaid, also have this attribute to their products. These
qualities allow Tupperware to be in competition with other close competitors.
However, it is Tupperware Brands order winning attributes to these products that sets
them apart and the reason why customers will choose them over others. Their products are all
designed to fit the needs of their customers. Tupperware Brands offers truly lifestyle-oriented
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products and has leveraged its research and development expertise to bring new concepts to
market (Tupperware Brands 10-K, 2013). Another order winning characteristic is they
distribute their products through direct selling. This enables them to build a strong customer-
business relationship and customer loyalty. This direct selling method offers consumers a
personal and convenient way to purchase products that they may not had access to otherwise
(Direct Selling, 2012). They are also now, like many other companies, pushing to become a more
sustainable manufacturer, which will be a great order winning quality to their products if they are
able to achieve this before their competitors.
External Environment
Industry
Tupperware Brands is listed in Yahoo! Finance in the packing and containers industry
(Industry: Packaging & Containers, 2013). The packaging and containers industry consists of
firms engaged in the manufacturing of containers, as well as companies providing services in
packaging. In addition to the packaging and containers industry, Tupperware Brands other
diverse brands of beauty and cosmetic products also compete with similar companies that sell
these types of products. Tupperware Brands unique distribution method also puts them in
competition with companies such as Avon and Pampered Chef that distribute and sell in this
method. Lastly, because many of Tupperware Brands products are used around the kitchen and
home, companies in the housewares industry also rival Tupperware Brands with the products
they offer. It is clear that Tupperware Brands is affected by several different industries, and each
industry provides different challenges to their business strategy. For a more detailed discussion
on Tupperware Brands industry competitors, see the competitors sections in this report.
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Economic
Tupperware Brands external environment includes economic factors that are out of the
control of the firm but still have an effect on the companys strategy. Several economic factors in
the domestic market, as well as international markets, shape how Tupperware Brands
intelligently plans for the future. A primary economic factor that could negatively affect
Tupperware Brands success in the future is the rising cost of their raw materials; specifically,
the price of oil. Oil is the main raw material used to refine plastic resin pellets, the materials
Tupperware Brands uses in its operations to mold its various plastic containers. As finite global
energy sources deplete and populations of developing countries become more developed and use
more energy, the price of oil will continue to rise. Tupperware Brands most recent 10-K (2013)
states resins are purchased through various arrangements with a number of large chemical
companies located throughout the Company's markets. As a result, the Company has not
experienced difficulties in obtaining adequate supplies and generally has been successful in
obtaining favorable resin prices on a relative basis. Although there has not been a negative
short-term effect on Tupperware Brands, our team suspects without new technologies in the
future, rising energy and raw materials cost will cause major problems for the firms ability to
maintain long-term growth.
Along with other multinational companies, Tupperware Brands is faced with the
economic risk of floating exchange rates in the international economy. Their 10-K (2013) states,
the Company derived 90 percent of its net sales from operations outside the United States in
2012. Because of this, movement in exchange rates may have a significant impact on the
Companys earnings, cash flows and financial position. Exchange rates are uncontrollable by
Tupperware Brands, and although strategies can be taken to diminish the effects, a strengthening
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U.S. dollar will most certainly negatively impact Tupperware Brands as they have more business
outside of the U.S. Their 10-K (2013) highlights this by stating, Although this currency risk is
partially mitigated by the natural hedge arising from the Companys local product sourcing in
many markets, a strengthening U.S. dollar generally has a negative impact on the Company. As
the U.S. economy continues to strengthen, and the U.S dollar becomes more valuable relative to
other currencies, Tupperware Brands will need to consider these risks and plan accordingly.
The last economic factor in the external environment that is affecting Tupperware Brands
strategy is the most recent U.S. and global recession. The U.S. Great Recession of 2007-2009,
and the global recession that ensued, had a major effect on peoples attitudes and buying habits.
As a result, peoples real income and purchasing power dropped, and more and more people
focused on necessity items rather than additional wants. The depressed U.S. and global economy
has showed some progress in recent years, but its scope still has lingering effects on the people.
Although purchasing power has risen slightly, and more people are returning to work, people are
still unsure of the future and are reluctant to spend money. Our team has recognized that our
products, especially the plastic products, could be negatively impacted. Because of the reusable
nature of our products, and our warranty that guarantees replacement from defects caused by
normal use, individuals will be less willing to purchase new specialty plastic items from
Tupperware Brands and be more willing to reuse the items they already own. Tupperware
Brands may need to start offering lower priced options during the recession recovery to entice
more individuals to buy their products.
Technological
Technology is an aspect of business many companies struggle with. There is a constant
change in the types of systems a company uses to run their business. Software updates, faster
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processors, and new programs are all things that a company needs to keep constant watch on
because if their competitors implement a system that is more cost efficient and effective than the
programs Tupperware Brands may be using then that creates a competitive advantage for their
competitors.
Things such as market/product research, new designs, increased production, sales
monitoring, etc., are all things that technology has greatly improved over a short amount of time.
Online surveys have quickly become the most popular and efficient way of conducting market
research and this was because of technology. Getting information about a market is now easier
than ever. As mentioned before, in order to gain a competitive advantage, Tupperware Brands
must keep up with the changes in operational and administrative technologies as it will help their
business remain ahead of the competition. The evolution of the internet will also serve as another
technological factor Tupperware Brands will need to follow with.
Societal
A current societal trend within the United States is childhood obesity. Childhood obesity
has more than doubled in children ages 6-11 from 1980 to 2010, from 7% to 18%, respectively.
Meaning that in 2010, more than one third of children were overweight or obese. Overweight is
commonly defined as having excess body weight, while obesity is defined as having excess body
fat (Childhood Obesity Facts, 2013). Children that are obese are more likely to have high blood
pressure, high cholesterol, and pre-diabetes. In a sample of 5 to 17 year olds, 70% had one of the
risk factors previously named. The long term effects of childhood include most likely being
obese as an adult and increased risk for heart problems, strokes, type 2 diabetes and numerous
types of cancer (Childhood Obesity Facts, 2013). Overweight and obesity within childhood can
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be prevented by eating healthy and physical activity (Childhood Obesity Facts, 2013). As these
trends continue, consumers will be seeking products that will supplement a healthy lifestyle.
Legal
As environmental concern grows, there could be an increasing number of EPA laws
originating in the United StatesTupperware Brands domestic market. Tupperware Brands
primary products, plastic containers, may be subject to these laws as plastic is known to have
adverse effects on the environment and ecosystems of the world. As of present, Tupperware
Brands claims it has no issues with environmental laws. Tupperware Brands states in their 10-K
(2013) Compliance with federal, state, and local environmental protection laws has not had in
the past, and is not expected to have in the future, a material effect upon the Registrants capital
expenditures, liquidity, earnings or competitive position. However, government regulation on
the environmental practices of businesses in the United States could become more prevalent as
time passes, and this legal factor could have an effect on Tupperware Brands operations.
Although they do not foresee this having a negative impact on their operations, it should be
noted that this is a possible, future outcome that should still be monitored by Tupperware
Brands.
Competitors
Description of Competitors
Newell Rubbermaid, Inc.
The renowned company has managed to flourish and remain successful for over 100
years. In 1903, Newell Rubbermaid started operation in Ogdensburg, New York and primarily
produced and sold curtain rods. As years progressed, they have widened their range of products.
Their mix of products now includes pens, cookware, drill bits, strollers, hairbrushes, etc. The
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organization strives on helping people flourish every day, where they live, learn, work, and
play (Our Company, 2013). Similar to Tupperware Brands, Rubbermaid is affiliated with more
than one industry. They are widely known for their home solutions which include home and
food storage solutions, premium cookware, window treatments and hair styling tools. They
focus on the need for women and their families to get their households in order, and make their
lives much easier. Because Newell Rubbermaid targets the same market as Tupperware Brands
with their home solutions, it makes them one of their top competitors.
Avon, Inc.
As the worlds largest direct seller and a leading beauty company, Avon has nearly $11
billion in annual revenue (Avon 10-K, 2013). With their wide range of products targeting
women in all aspects of their life, Avon has dominated the market putting their label not only on
beauty but also home products as well. Avon was founded in 1886 by David H. McConnell, who
himself was a door to door salesman until he recruited women as sales representatives to start
selling his products (Avon Founder, 2012). The business then grew to a global company
empowering women while creating jobs around the world. Just like Tupperware Brands
Corporation, Avon sells not only beauty products but also re-useable containers. They use the
direct selling technique which helps maintain close relationships with customers. Avon is
considered one of Tupperware Brands main competitors because they target women as their
main target market, while selling similar products at reasonable prices.
Lifetime Brands, Inc.
Lifetime Brands, formerly known as Lifetime Cutlery Corporations, is a kitchenware and
tabletop product manufacturer founded in Italy in 1945. The name of the company changed to
Lifetime Brands in 2005 after they began to build a stronger foundation and secure licenses to
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brand names such as Kitchenware, Cuisinart, Farberware and many more. They continued to
increase the number of brand names associated with Lifetime Brands all the way up to their most
recent brand acquired, F&F (About Lifetime Brands, 2013).
Today, Lifetime brands is associated with 31 brands and counting. Consumers can find
Lifetime Brands in stores worldwide. The company sells their products to wholesalers, national
chains, retailers (private and public) and they make many of their products available to
customers online. Lifetime Brands also has a strong belief in increasing the sustainability of the
companys manufacturing facilities and products (About Lifetime Brands, 2013). They are a
company that believes in providing the best and most innovative products for their customers.
Their ultimate goal as a company is to increase their shareholders wealth as stated in their
mission statement on the corporate website, We are committed to deliver five-star experiences
to the earths consumers through innovative products, services & solutions for the home. In
return, they will reward us with increased market share and profitability allowing our associates,
stakeholders and shareholders to prosper (Company Timeline, 2012).
SWOT Analysis
Newell Rubbermaid, Inc.
STRENGTHS
Strong brand equity
Wide range of products
WEAKNESSES
Products sensitive to consumer
demand
Expensive production costs
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OPPORTUNITIES
Global expansion
Providing better online service
THREATS
Products easily substitutable
Raw material costs
Strengths
Strong Brand Equity: Newell Rubbermaid has been in the market for over 100 years, and has
made a difference to families all across the globe. The familiarity of the companys quality and
consumer values put them in a leading position within the market. The brand equity is the value
of a brand to a companythe higher the brand equity, the more successful and recognizable the
brand. In a survey conducted of the financial community (over 1,000 analysts), Newell
Rubbermaid received the highest linked rating compared to seven other major U.S. rubber and
plastic corporations. In fact, the most highly rated benchmark for Newell Rubbermaid was brand
equity (Rubbermaid, 2013).
Wide Range of Products: Newell Rubbermaid produces and distributes a wide range of products
around the world. Newell Rubbermaid categories span from home storage and garage
organization, food containers and laundry supplies, bath and cleaning products, closet
configuration, and refuse removal (CareersRubbermaid). Newell Rubbermaid can offer
almost every household necessity for women and their families. They are not limited to few
products, and diversification of products enhances their chances of maintaining their competitive
advantage.
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Weaknesses
Products Sensitive to Consumer Demand: Newell Rubbermaids offers a range of products
whose sales are sensitive to consumer demand; for example, their line of tools could see a drop
in demand in recessionary times. In recent years, the economy in the United States has suffered
which altered consumers purchasing power, so it is assumable that Newell Rubbermaids vast
array of products was negatively affected.
Expensive Production Costs: Referring to their 10-K statement, Newell Rubbermaid has a cost
of products sold figure of 60 percent of their total revenues (Newell Rubbermaid 10-K, 2013).
This indicates Newell Rubbermaid may have difficulties controlling costs or their diverse
product lines cause them to operate at thinner margins than their industry competitors.
Opportunities
Global Expansion: Newell Rubbermaid has a strong brand that continues to grow in global
markets with insight-driven innovation (Newell Rubbermaid 10-K, 2013). In fact, Newell
Rubbermaids Home & Family segment consists of five global business units. The business
units consist of Rubbermaid Consumer, Baby & Parenting Essentials, Decor, Culinary Lifestyles,
and Beauty & Style. By continuing their global expansion, it could open up opportunities to for
increased sales in new markets.
Providing Better Online Service: Newell Rubbermaid recently paired up with The Clutter Diet
to provide unlimited access to direct, personal help from a team of Certified Professional
Organizers (R) via internet and weekly action plans for members (Clutter Diet, 2011). Shortly
after, White Lion adapted the functionality from the established Clutter Diet membership service
with the Newell Rubbermaid brand to provide assistance directly with Rubbermaids customers.
Overall, the Clutter Diet and online tools are helpful to get rid of clutter and reduce stress. With
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an organized website, customers can find their way through more easily. Providing a better
online service can open more opportunities with increasing profit (Clutter Diet, 2011).
Threats
Products Easily Substitutable: Although Newell Rubbermaid is a leading brand; its products
can be easily substituted. Newell Rubbermaid is in an industry where there are several other
companies, such as Clorox, Inc., are offering similar products. Since most of Newell
Rubbermaids merchandise is sold in retail stores, there are other options that may or may not
look more reasonable to the customer. In todays economy, people are more economical, and
arent will to pay top dollar for household items. Due to cheaper, more generic options being
offered, this will become a threat to Newell Rubbermaid products.
Raw Material Costs: As the cost of oil rises, Newell Rubbermaids production and distribution
are impacted. Rubbermaid uses the resin imported from China for its products. The cost of
transportation has a positive correlation with the cost of oil, therefore, the higher prices of oil
drive up the cost of transporting materials. This defeats the attempt of lowering costs using the
method to outsource manufacturing. Asia provides over 75% of Newell Rubbermaids goods,
but brings in less than 4% of revenue. This situation leaves Newell Rubbermaid no other option
but to transport goods over long distances from manufacturing centers to markets (Newell
Rubbermaid 10-K, 2013).
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SWOT Analysis
Avon, Inc.
STRENGTHS
Target market
Customer relationships
WEAKNESSES
Sensitive to size of workforce
Information technology systems
OPPORTUNITIES
Global selling
Broaden target market
THREATS
Strong competition
Strengths
Target Market: Tupperware Brands considers Avon a close competitor due to their products
they sell. A specific strength of Avon is their specific market they target. Avon is targeted more
towards women, selling beauty, fragrance, and household items. According to Avons 10-K
(2013), Our research and development departments efforts are significant to developing new
products, including formulation effective beauty treatments relevant to womens needs, and
redesigning or reformulating existing products. They focus on the womens needs while still
trying to keep their ideas fresh and ever changing as the market demand changes.
Customer Relationships: Another strength that Avon has is their strong customer relationships.
Just like Tupperware distribution method, their direct selling method supports relationships with
customers and connects with them on a personal level. Their channels that they use are online
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ordering and catalog sales. Therefore, relationships are fostered through Avons personal sales
representatives.
Weaknesses
Sensitive to Size of Workforce: Although their independent sales representatives give Avon a
competitive advantage, their business is sensitive to the size and competency of their workforce
(Avon Products 10-K, 2013). If their independent sales people decide to leave their positions for
our direct selling companies, this could have an adverse effect on Avons ability to distribute and
expose goods to their customers.
I nformation Technology Systems: According to Avons 10-K (2013), they state that their
Information Technology Systems are susceptible to disruptions. Their systems are used to
employ information technology systems to support our business, including systems to support
financial reporting, an enterprise resource planning system which we are implementing on a
worldwide basis, and an internal communication and data transfer network. We also employ
information technology systems to support Representatives in many of our markets, including
electronic order collection and invoicing systems and on-line training (Avon Products 10-K,
2013). This means if their susceptible systems experience a disruption, it would have negative
impact on Avons daily operations. Avon may face problems if methods are not used to improve
the integrity of their information systems infrastructure.
Opportunities
Global Selling: Even though they already sell their products in 64 different countries and
territories (Avon Products 10-K, 2013), they can continue to expand into new regions. To
increase their revenues they can offer their products to growing countries. There is always an
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opportunity for a company to keep growing, and if Avon can modify their products to meet the
needs of different cultures, they can expand in new regions.
Broaden Target Market: Another opportunity for Avon is broadening their target market. Their
main target is currently women, but the company can look to offer a wider variety of products to
attract a male population. This would increase their sales and allow them to leverage their direct
selling strategy to develop relationships with male consumers.
Threats
Strong Competition: Since Avon does sell a wide range of different products, they have intense
competition (Avon Products 10-K, 2013). They are not only competing against beauty
companies who sell their merchandise in retail locations, but they are also competing with other
companies that use the direct selling strategy such as Pampered Chef and Tupperware Brands.
SWOT Analysis
Lifetime Brands, Inc.
STRENGTHS
Innovation
Wholesale and Retail
Wholesaler Collaboration
WEAKNESSES
Materially Adverse
Limited Online Selection
OPPORTUNITIES
Environmentally Friendly
Retail Direct Selling Expansion
THREATS
Intense Competition
E-Commerce
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Strengths
I nnovation: Lifetime Brands is constantly coming up with new and innovative products. They
pride themselves on their innovation. At the heart of the Company is a culture of innovation.
The Company brought over 3,600 new or redesigned products to market in 2012 and expects to
bring to market over 4,000 new or redesigned products in 2013 (Lifetime Brands 10-K, 2013).
Because Lifetime Brands is so innovative, they are able to stay ahead of their competition. They
are also able to break through to new markets and create new consumer needs through their
design team. The Companys in-house design and development teams currently consist of 101
professional designers, artists and engineers. Utilizing the latest available design tools,
technology and materials, these teams create new products, redesign products and create
packaging and merchandising concepts (Lifetime Brands 10-K, 2013).
Wholesale and Retail: Lifetime Brands sells their products in both retail and wholesale settings.
They also are able to sell a limited selection of their products online to customers. This gives
them the advantage of being available to customers on the convenience and specialty shopping
levels. The Company operates in two business segments: the Wholesale segment, which is the
Companys primary business that designs, markets and distributes its products to retailers and
distributors, and the Retail Direct segment in which the Company markets and sells a limited
selection of its products through its Pfaltzgraff
, Mikasa
, Lifetime Sterling
and Housewares
Deals
, Mikasa
, Housewares Deals
, KitchenAid
, Mikasa
, Pfaltzgraff
,
Cuisinart
, Elements
, Melannco
, Fred
and V&A