Marketing and Upper Price Points
2. What are the benefits and risks associated with the acquisition of PLFD?
Risks * Manchester only authorized to use Paul Logan name for three years (p.1) * PLFD lines characterized by bold styles and fashionable colors, whereas MH favored conservative, functional designs (p.3) * New products introduced by MH could not use the Paul Logan brand name (p.3) * Heavy competition from cheaper imports (p.4) made it difficult to maintain mid- to upper price points * National Furniture Company (biggest PLFD competitor) stepping up advertising and initiating price reductions in response to MH/PLFD merger and aggressively pursuing a strategy to exploit the uncertainties associated with the pairing (p.5) * PLFD core customers more fashion-conscious than MH core customers and considered themselves to be trend setters (p.5) * A major furniture chain which carries PLFD products has expressed displeasure with the merger and is reevaluating their decision to carry PLFD products (p.4) * The debate associated with the brand-name transition strategy and the huge implications associated with the ultimate decision (p.6) * Promotional debate, which has huge distribution network implications (p.7) * PLFD favored “push” programs in the form of volume rebates and purchase allowances * MH favored “pull” programs such as national advertising * Should co-op advertising strategy aim at the trade (push), the end consumer (pull), or some combination of both?
Benefits: * The merger dramatically expanded MH overnight and provided them with a strong brand and an instant market leader position in the household furniture segment (p.1) * Over 150 SKUs of high quality furniture with a #1 or #2 position in the categories they competed in (p.2) * PLFD is an instantly recognized and respected brand in furniture (p.2) * The acquisition included PLFD sales, management, and design teams, 10 distribution centers, inventory for
Risks * Manchester only authorized to use Paul Logan name for three years (p.1) * PLFD lines characterized by bold styles and fashionable colors, whereas MH favored conservative, functional designs (p.3) * New products introduced by MH could not use the Paul Logan brand name (p.3) * Heavy competition from cheaper imports (p.4) made it difficult to maintain mid- to upper price points * National Furniture Company (biggest PLFD competitor) stepping up advertising and initiating price reductions in response to MH/PLFD merger and aggressively pursuing a strategy to exploit the uncertainties associated with the pairing (p.5) * PLFD core customers more fashion-conscious than MH core customers and considered themselves to be trend setters (p.5) * A major furniture chain which carries PLFD products has expressed displeasure with the merger and is reevaluating their decision to carry PLFD products (p.4) * The debate associated with the brand-name transition strategy and the huge implications associated with the ultimate decision (p.6) * Promotional debate, which has huge distribution network implications (p.7) * PLFD favored “push” programs in the form of volume rebates and purchase allowances * MH favored “pull” programs such as national advertising * Should co-op advertising strategy aim at the trade (push), the end consumer (pull), or some combination of both?
Benefits: * The merger dramatically expanded MH overnight and provided them with a strong brand and an instant market leader position in the household furniture segment (p.1) * Over 150 SKUs of high quality furniture with a #1 or #2 position in the categories they competed in (p.2) * PLFD is an instantly recognized and respected brand in furniture (p.2) * The acquisition included PLFD sales, management, and design teams, 10 distribution centers, inventory for