Batesmanor Furniture Case Study

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Introduction

BatesManor has to decide how their money will be spent on promotional activities. It is possible to spend more promotional money on communicating to retailers or for consumer advertising. Also, another option is to spend all of the money towards one promotional strategy.

Findings:

Industry: How BatesManor is compared to the household furniture industry.

Add Another Sales Rep: An additional sales rep will be needed to service company accounts because 50 new accounts were being added.

Promote New Styles of Furniture: These new items would require consumer advertising in shelter magazines to be launched successfully.

Push/Pull Strategy for Promotions: The cost and benefits of trade and cooperative advertising (push), and the cost and benefits of consumer advertising (pull).

Discussion:
Industry:
The household furniture industry has three general categories: upholstered, wood, and ready-to-assemble and casual. The industries dollar sales grew by 2.5% in 2007, and are forecasted to increase by 4% in 2008. BatesManor year-end net sales in 2007 were $75 million, and research shows that their sales follow industry sales perfectly. The year-end net sales can be forecasted to be $78 million in 2008 because of these findings. The industry’s distribution of independently owned furniture stores have declined while furniture store chains have grown. This is a negative for BatesManor because they sell through independent furniture specialty stores and these stores have declined. However, the decision to only distribute to independently owned furniture stores demonstrates the high quality of their furniture.

Add Another Sales Rep:
BatesManor employs 10 full-time salespeople and two regional sales managers. Their employees are expected to motivate retail salespeople, assist in setting up displays in stores, and give advice on a variety of matters. An additional sales representative is needed because 50 new accounts were being added for...
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