Janmar
Market Background
Distribution/Sales/Promotion
100,000 specialty furniture and home furnishing stores, department stores, and mass-merchandise stores in the United States
Furniture sales to retail outlets is center on manufacturer’s expositions
Manufacturers spend approximately 3.5% of annual sales for advertising of all types
Cooperative advertising: cost shared by retailers; newspapers, television, radio
Trade advertising: directed toward retailers; brochures, point-of-purchase materials, technical booklets
Consumer advertising: shelter magazines
Wood Furniture Industry – Consumer Behavior
Highly cyclical
Consumer spending linked to:
Incidence of new housing starts
Consumer confidence
Disposable personal income
Consumer wants:
More confidence in purchase decision (help to evaluate construction, quality, and price)
Narrow selection of styles
Fair return policy
Moderate level of interaction with salesperson – helpful and knowledgeable but not pushy
Consumer tendencies:
Associate high price with high quality
Get redecorating ideas or guidance from magazines
Read furniture ads before actually needing furniture
Enjoy buying furniture somewhat or very much
Haverwood Furniture, Inc. Background
Wood furniture manufacturer
Medium- to high-priced items
Bedroom, living room, and dining room furniture
Financial standing
2008 contribution margin will be 20%
Company objective of 5% net profit margin before taxes
Company policy of spending ≤5% of expected sales for total promotion expenditures
Year
Sales
Before Tax Profit
Promotional Expenditures (≤5% of sales)
2007
$75,000,000
$3,700,000
$3,675,000
2008 (projected)
$78,000,000
$3,900,000
$3,900,000
Distribution/Sales
1,000 high-quality department stores and independent furniture specialty stores
10 full-time sales people; 2 regional sales managers
Committed to the company
Motivate retail sales-personnel to sell Haverwood line
Assist in setting up
Distribution/Sales/Promotion
100,000 specialty furniture and home furnishing stores, department stores, and mass-merchandise stores in the United States
Furniture sales to retail outlets is center on manufacturer’s expositions
Manufacturers spend approximately 3.5% of annual sales for advertising of all types
Cooperative advertising: cost shared by retailers; newspapers, television, radio
Trade advertising: directed toward retailers; brochures, point-of-purchase materials, technical booklets
Consumer advertising: shelter magazines
Wood Furniture Industry – Consumer Behavior
Highly cyclical
Consumer spending linked to:
Incidence of new housing starts
Consumer confidence
Disposable personal income
Consumer wants:
More confidence in purchase decision (help to evaluate construction, quality, and price)
Narrow selection of styles
Fair return policy
Moderate level of interaction with salesperson – helpful and knowledgeable but not pushy
Consumer tendencies:
Associate high price with high quality
Get redecorating ideas or guidance from magazines
Read furniture ads before actually needing furniture
Enjoy buying furniture somewhat or very much
Haverwood Furniture, Inc. Background
Wood furniture manufacturer
Medium- to high-priced items
Bedroom, living room, and dining room furniture
Financial standing
2008 contribution margin will be 20%
Company objective of 5% net profit margin before taxes
Company policy of spending ≤5% of expected sales for total promotion expenditures
Year
Sales
Before Tax Profit
Promotional Expenditures (≤5% of sales)
2007
$75,000,000
$3,700,000
$3,675,000
2008 (projected)
$78,000,000
$3,900,000
$3,900,000
Distribution/Sales
1,000 high-quality department stores and independent furniture specialty stores
10 full-time sales people; 2 regional sales managers
Committed to the company
Motivate retail sales-personnel to sell Haverwood line
Assist in setting up