Tupperware’s Slow Descent into Oblivion
The Tupperware party may be over.
Tupperware may soon declare bankruptcy. Declining revenue, lower stock prices, and dwindling cash reserves do not bode well for the future of this iconic brand. The article and video describe how the company mostly relied on brand recognition and failed to recognize and adapt to a changing consumer and business environment. The company has now partnered with Amazon and Target to boost sales, but it may be too little, too late.
Video Spotlight: Tupperware May Go Out of Business, Company Warns (April 11, 2023, CBS News)
This post is based on the CNN article, Tupperware Has Been Struggling for Years. Three Charts Show Just How Bad It’s Been, by A. Leeds Matthews, April 23, 2023, and the YouTube video in the Spotlight. Image source: G-gan/Shutterstock.
1. The article mentions that the pandemic affected Tupperware’s sales negatively. The video says the opposite. Can you clarify?
Guidance: The second graph in the article reveals that sales did decline from $1.8B in 2019 to $1.6B in 2020, extending a downward trend. Although at-home parties were no longer possible during that time, Tupperware sellers organized digital parties and capitalized on the higher demand for kitchenware. This trend helped increase sales during the last quarter of 2020 and maintain the revenue level throughout 2021. However, sales fell again in 2022, and the company found itself with excess inventory. Although the temporary increase in sales was not a simple random fluctuation (it did occur for a reason), it was merely a pause in a downward trend.
2. The article mostly refers to Tupperware’s problematic marketing strategy. What are the implications for the operations strategy?
Guidance: Marketing and operations strategies are closely related. The company relied on its past glory and name recognition and failed to scan its environment. It was thus unable to identify changing consumers’ needs and market trends. It also underestimated the strength of its competition. Furthermore, the reliance on the direct sales model known as “Tupperware parties” did not take into account shifts in buying behavior. As a result, Tupperware could not translate the Voice of the Customer into the Voice of the Process (review House of Quality) and formulate a viable operations strategy. Quality, Cost, Delivery, and Flexibility were adversely impacted. Desired product and service quality features were lacking, prices were not competitive, product availability was restricted, and the ability to respond quickly to changes in demand was almost ignored.
3. Where would you place Tupperware products in the Kano model? Explain.
Guidance: Early on, Tupperware offered “excitement quality” with the release of new plastic containers in many different colors at the parties. The products then had high functionality and appeal, boosting satisfaction. Over time, excitement quality became performance quality, and higher functionality and appeal were needed to generate satisfaction. Tupperware did not innovate and therefore failed to do so. Today, its products reflect basic quality, and even an innovation boost may be far too late to bring about meaningful satisfaction.