Cutco Cutlery Corporation: Direct to Consumers for Over 60Years! CUTCO Corporation, the largest manufacturer and marketer ofhigh-quality kitchen cutlery and accessories in the United Statesand Canada, celebrated its 60th anniversary in 2009. With thedesign and manufacture of the highest-quality product as itsprimary objective, over 100 kitchen cutlery products are sold underthe CUTCO name. The company also carries a line of cookware,sporting/pocket knives, and garden tools. The CUTCO corporatefamily consists of several companies. CUTCO Corporation—parentcompany CUTCO Cutlery Corporation—manufacturer of CUTCO productssince 1949 Vector Marketing Corporation—exclusive marketer of CUTCOproducts, which are sold direct to consumers CUTCO International,Inc.—marketer of CUTCO products internationally KA-BAR Knives,Inc.—maker of quality sporting knives Schilling Forge—manufacturerof precision forgings All businesses within the corporate family,except for Schilling Forge, are located in Olean, New York (USA),where the company has over 700 manufacturing and administrativeemployees. Schilling Forge is located in Syracuse, New York. Only avery small percentage of the company’s items are manufacturedoutside the United States and that is only when the company cannotfind a partner in the United States that meets stringent qualitystandards while simultaneously meeting the pricing needs of thecompany and its customers. The quality built into a CUTCO productat the point of manufacturing is reinforced by the company’sdirect-to-consumer channel of distribution, which enableshigh-quality consumer engagement during the selling process. TheProducer CUTCO’s commitment to quality and innovation is evidentthroughout every step of the manufacturing process—from theselection of steel to final inspection. The company stands behindeach and every product with a FOREVER satisfaction guarantee. Theguarantee has four components: FOREVER Performance GuaranteeFOREVER Sharpness Guarantee FOREVER Replace Service Agreement forMisuse or Abuse 15-Day Unconditional Money-Back Guarantee CUTCOCutlery’s American-made products and the hard-working craftsmen andwomen dedicated to creating this high-quality kitchen cutlery werefeatured on the Travel Channel’s John Ratzenberger’s Made inAmerica program. With its reputation for high quality, accompaniedby a FOREVER satisfaction guarantee, CUTCO Cutlery Corporationdistributes its products direct to the consumer via its VectorMarketing sales force. The Consumer CUTCO Cutlery Corporation hasapproximately 18 million satisfied consumers in North America.Customer response to CUTCO research directs the development of newproducts and services and the sharing of personal stories aboutspecial times with family and friends serves as an inspiration toeveryone in the company. Thousands of customers have writtenletters telling the company about the role the company has playedin their lives. These customer letters tell how CUTCO has helpedthem slice and dice fruits and vegetables for weeknight dinners,create weekend party fare, and chop and carve food for holidays,birthdays, and anniversaries. CUTCO cutlery is given as gifts tonewly married sons and daughters and is handed down from generationto generation as a family heirloom. The customers praise thequality of CUTCO and offer thanks for the comfort of theergonomically designed handles and the CUTCO FOREVER Guarantee.Product to Consumer Direct Channel via Vector Marketing CorporationUnlike many competitive cutlery products, CUTCO cutlery productsare not available in mass merchandise or specialty stores. Boastingannual sales of over $200 million, Vector Marketing Corporation isa direct sales firm and the sole distributor of Cutco Cutlery. Theindependent sales representatives of Vector Marketing Corporationare largely college students from campuses across the nation.According to a company spokesperson, Vector Marketing’s sales forceis a group of dynamite individuals who represent the company to theconsumer in the same high-quality fashion as the CUTCO product. Thesales representatives contact potential consumers via referrals,referred to as the “friends of friends” approach. Conversely,consumers can contact the company directly and be connected to asalesperson in the same geographic region. Divided into six regions(northeast, Midwest, eastern, central, southwest, and western),Vector Marketing has over 300 offices across the United States andCanada. Regional headquarters are in Philadelphia, Pennsylvania;Detroit, Michigan; Milwaukee, Wisconsin; Dallas, Texas; Austin,Texas; San Diego, California; and Toronto, Canada. Vector MarketingCorporation belongs to the Direct Selling Association (DSA), whosemembers are leading companies engaged in direct selling in theUnited States. All DSA members adhere to a strict code of ethicsand promote a high standard of integrity in direct selling. Fromproduction through sales, the CUTCO Corporation takes ownership ofits products. Using this direct-to-consumer channel enables thecompany to guarantee quality from production to consumption.Sources: CUTCO website, www.cutco.com (Links to an externalsite.)Links to an external site. (Accessed February 28, 2011);Vector Marketing website, www.vectormarketing.com (Links to anexternal site.)Links to an external site. (Accessed February 28,2011). Case Analysis Questions Why would a company such as CUTCOCutlery opt for the direct channel instead of the retailer channelfor its consumer products? Please be specific. What other companiesare similar to CUTCO Cutlery in its approach to direct retailing?Please be specific.