LeClerc Machines de

Cuisine

GROENDU Marine

HABHOUB Audrey

305

Overview of the case

Leclerc Machines de cuisine –

Paris based food processors manufacturer

Creative Cuisines, Inc. –

Atlanta based U.S Distributor

Reliable Restaurants and Home Kitchen Supplies –

New Jersey based mail order firm

ActorsBill Lewis – President of Creative Cuisine

Jane Watson – Sales Manager of Creative Cuisine

Marie Dominic – Bill Lewis’ attorney

François Jost – Leclerc’s Overseas Sales Manager

Albert Rose – President of Reliable restaurant and Home Kitchen

Supplies

Sandra Jordan – Account Executive at Creative Cuisine’s

advertising agency

The different exhibits

The Dialogue

Synonpsis

• Dialogue between Bill Lewis, President of Creative Cuisine and his attorney, Marie Dominic.

• They are discussing possible legal actions against Reliable Restaurant and Home Kitchen Supplies.

• The attorney explains that it is illegal if :

• Leclerc is violating the exclusive distribution agreement

• The products sold by Reliable Restaurant and Home Kitchen Supplies are counterfeits and not genuine Leclerc products.

• Then the attorney brings up the idea that Reliable might be using Creative Cuisine.

• We also learn that the sales have decrease of about 30%.

• Finally, the attorney suggests an action plan to begin.

Exhibit n°1

Synopsis

• It’s a copy of the letter sent by Leclerc to its

distributors.

• The letter explains the problem faced by Creative

Cuisine and Leclerc : Reliable, an other distributor is

selling LeClerc products in the USA while Leclerc

have an exclusive distribution agreement with

Creative Cuisine.

• Finally, Leclerc warns all its distributors that no

violation of this agreement will be tolarated.

Exhibit n°2

Synopsis

• It’s a copy of the letter sent by Marie Dominic, the

attorney of Creative Cuisine, to Albert Rose, President,

Reliable Restaurant and Home Kitchen Supplies.

• She explains how selling Leclerc products is a violation

of the exclusive distribution agreement between LeClerc

Machines de Cuisine and Creative Cuisines.

• She politely tells Reliable that it has to stop right away if

they don’t want Creative Cuisine to sue them.

Exhibit n°3

Synopsis

• It’s a memo from Jane Watson, sale manager of

Creative Cuisine to Bill Lewis, president of Creative

Cuisine.

• She lets Lewis knows that the products that Reliable

are selling are genuine Leclerc product, be cause she

received that they decided to order.

• She also says that the warranty are identical to the

one issued by LeClerc.

Exhibit n°4

Synopsis

• It’s a memo from Jane Watson, sales manager of

Creative Cuisine to all the sales staff.

• She lets the staff know the marketing decision that

Creative Cuisine has taken in order to compete with

Reliable:

• Lowering the price of 2 products LMC Professional

Food Processor and LMC Standard Food Processor.

• Ads in their magazine will be released to inform their

clients.

Exhibit n°5

Synopsis

• It’s an example of the ads that Creative Cuisine

made in order to compete with Reliable.

• It informs the clients that there is a 30% discount on

two different products.

• This ad was advertised in a lots of Consumer Food

Magazines and Professional Journals in order to

reach a maximum of people.

Exhibit n°6

Synopsis

• It’s a letter from Sandra Jordan, Account Executive at Feingold Advertising, Creative Cuisine's Advertising Agency to Bill Lewis.

• It’s a summary of the conversation they both hadearlier that day, about the new ad and the new placement of this ad.

• This new ad will have to report Reliable « pirate » actions. Also, it must inform customers thatwarranties won’t be honored and that CreativeCuisine is lowering prices.

Strenghts and

weaknesses

Existing situation

Strenghts Weaknesses

• Political Environment: in favor of

Creative Cuisine because of their

exclusive agreement with Leclerc has

been violated.

• Comunication: Good because all of the

actions that the attorney and Bill Lewis

thougth need to be made were made.

• Marketing: the new action plan may

attract new customers.

• Financial: the sales are decreasing of

about 30%.

• Ethics: They are going to make bad

publicity for Reliable in order to get

their market share back.

• Competition: they have to deal with

unexpected competition which is

jeopardizing their market share

Statement of the problem

• By selling Leclerc Product, Reliable Restaurant and

Home Kitchen Supplies is violating Leclerc and

Creative Cuisine exclusive distribution agreement.

• What should Creative do in order to stop Reliable

from selling Leclerc products which is creating

unexpected competition ?

Review of possible

options

#1: Maintain the status quo

Advantages Disadvantages

• New marketing plan may attract new

customers.

• Suing Reliable may allow the company

to receive damages.

• Unxepected competition which forces

Creative Cuisine to lower its prices.

• Sales are decreasing.

• Loosing the monopoly of the

distribution of Leclerc product.

#2 :Creative and Leclerc gather to sue

Reliable and launch common Ad campaign

Advantages Disadvantages

• Stronger position against Reliable and

it’s unknown illegal supplier.

• Stronger position on the market as

Leclerc is promoting it’s distributor

(Bosch example).

• Reliable’s prices still have an advantage

competitionwise.

• The unknown supplier still can sell to

other companies.

• It’s allowing Reliable to break the

exclusive agreement they have with

Leclerc.

#3:Creative Cuisine buys Reliable and

presses charges against ex supplier

Advantages Disadvantages

• Creative overtakes the actions of

Reliable and can finally position itself

back as a leader.

• May receive damages from suing the ex

supplier.

• Financial aspects of pressing charges

which can be costly in addition to buying

Reliable.

• Suing procedure are expensive and quite

long.

#4: Creative stops selling all

identical products with Reliable

Advantages Disadvantages

• Might be time for a repositionning of

the brand and horizontal integration.

• Reliable earns all market shares from

Creative.

• Contract with Leclerc might become

obsolete.

• Loosing a big source of revenue.

Solution chosen

?

#2 :Creative and Leclerc gather to sue

Reliable and launch common Ad campaign

Advantages Disadvantages

• Stronger position against Reliable and

it’s unknown illegal supplier.

• Stronger position on the market as

Leclerc is promoting it’s distributor

(Bosch example).

• Reliable’s prices still have an advantage

competitionwise.

• The unknown supplier still can sell to

other companies.

• It’s allowing Reliable to break the

exclusive agreement they have with

Leclerc.