Sunday, July 21, 2019
Marketing strategy of a furniture store
Marketing strategy of a furniture store Customers are core for any business. Companies manufacture products to fulfill their needs. Every company would like to increase their market share through sales by beating their competitors. In order to achieve this, one should have efficient and effective marketing plan. The most vital element of a successful marketing plan knows your customers likes, dislikes and expectations. Basing on these factors a marketing strategy could be developed which allows you to fulfill customers needs by understanding your competitors and identify changes in market place. The every purpose of marketing plan is to outline a strategy to attract and keeping customers. This could be done by defining your market, identifying your customers and competitors. The two main marketing principles are: Entire efforts of a company should be directed towards satisfying customers. Sales volume which is profitable is more important than maximum sales volume. Marketing strategy Marketing strategy is identifying customer groups and serves them better than its competitors by offering tailor made products, prices, distribution and promotional methods to that segment. The strategy should address unmet customer needs that earn potential profitability. Target marketing Identifying separate customers who makes up large groups which helps to locate their needs more specifically. This smaller segment of the general market is convenient for market research and information helps to serve this segment better. This segmentation can be done in two ways Geographical segmentation serving customers needs in a particular geographical area. Customer segmentation identifying those people who buy products and services and targeting those groups. Products and service: To satisfy the target markets product is very important. This is how organizations earn revenue. These products may be in the form of goods, services or ideas. Promotional strategy: Promotion is communication process with the customers about the products through advertisements and direct customer interactions. This helps companies to distinguish their product from competitors. Pricing strategy The right price is the crucial for maximizing total revenue. In general higher prices means lower volume and vice versa. Micro Audit Consumers Industry and market related information regarding consumer buying patterns plays very critical in expecting future levels of demand. Having sales volume information of past helps to foresee the market trend and buying pattern. Key information like current market volume, demand, etc helps to identify the profit potential market. This information helps to build relationship with customers by identifying their needs, wants, preferences and buying habits. Key Points: The market for kitchens (includingÃ furniture, worktops, sinks and taps, appliances sold as part of a kitchen and installation) was estimated to be worth Ã £3.25 billion in 2008, but it is estimated that it will decline to Ã £3.12 billion in 2009. Product innovation, fashion in the home and the desire for individuality are all strong drivers to growth in the market. Added to this, the growing emphasis on the kitchen and its central place at the hub of the home is also stimulating interest in the kitchens appearance, functionality and furnishings. Mintel believes the consumer market will return to growth by late 2010 or early 2011, accelerating to 2014. All the previous positive factors remain in place for a recovery. Kitchens UK: August 2009 Mintel Competitors Sustaining competition in market is important for any business success. Identifying the direct competitors and analyzing their market information like where they stand in market, their strengths and weakness, sales performance, pricing strategy, studying their product range and promotional methods helps us to prepare strategies to penetrate into their market for greater market share. Distributors and suppliers Building proper distribution channel to reach target audience is important. Distributors are one of the key elements in supply chain of a company as he helps to move product from hands of the company to the hands of customers. Reaching target market is unlikely without proper distribution channel. A distributor saves both money and time for companies by their expertise in what they do. Macro audit Macro environment considers challenges in the world at large. These elements are politics, Economy, technology, laws and environment which impact the market. Having detailed information about these elements helps an organization to serve market better. Politics Political system like taxation policies, foreign trade policies, how supportive the government is for private sector helps an organization to plan their marketing strategies more efficiently. Economy Information like inflation, disposable income levels decides the income of the market place which is vital for planning pricing strategy. Technology In todays world technology is growing in very fast phase. Technology enables business to communicate more efficiently and saves time which helps to take efficient decisions. Environment Environmental policies have a major role on the manufacturing process. Availability of raw material, energy costs and pollution are the major influencing factors of quality of product. Research Requirements Retailers Opinion: Retailers knows and understands the behavior pattern of customers. They will have the first hand information on market and what exactly customers are looking for in a product they want. Retailers even have key information on taste of customers who belongs to a particular geographical region. Research methodology: one to one interview is the best research method for this objective. One to one interviews help to get most of the information possible from a retailer which may miss through questionnaire or online survey. Through this method we could able to know the retailers personal views on our product as well as his experiences with customers while selling our product. This information regarding our product and service helps us to understand our lagging points and allow us to work on them. As retailers interact with different kinds of customers during their day to day business they know the customers preference and choice better. So, retailers are the best source of information regarding the pattern of customers buying behavior and the factors which influence their buying decision. As retailer being the possible large data base of information regarding customers, one to one interview research method is the best to collect the information in its totality. Fashion and Trend: In the matter of fashion and trend only change is constant. Peoples taste vary from person to person, place to place etc. people always get influenced by latest trend and fashion. Research methodology: conducting surveys through online as well as placing questionnaires at shops to answer are the best methods to collect information. Young working people who are single and newly married couples are best sample for this kind of survey. These sample can be questioned online by preparing questionnaire with pictures of product with different kinds of designs and asking them which kind of furniture they like and why. Through this method coverage will be more as most of the youngsters use net. At shops customers can see, feel and know more about the product. So, getting answers for what they like or dislike in a product example color, comfort, style, and design etc through questionnaires placing at shops helps to analyze the thought process while shopping. Target Customer segment profile: Before venturing into new market it is important to study the characteristics of that target group as customers thoughts and opinions are different depending on factors like place, income etcÃ ¢Ã¢â ¬Ã ¦ Research methodology: Focus group is the best research method which can be adapted here for this research. The targeted group can be working professionals, business men above age 25 who belongs to both mid and high income markets. This information could be gathered at offices, social gathering places like hotels, restaurants, organized events etc. Feedback from a group has more diversified opinions on a product. This provides most invaluable information about brand, quality, pricing, design etc which helps company to provide best possible quality furniture with appealing design at affordable prices (Saunders M. et al., 2006). SW/OT Analysis Stateroom Furnitures Strengths It is very popular brand known for its quality hand crafted furniture which is made of wide variety of wood. Have wide product range of kitchen furniture which covers from high end dining set to china display cabinets. Capital reserves are available for development and even extra funds can be raised in strong business cases. It has a facility with new machinery which could be used to manufacture a variety range of furniture. Stateroom Furnitures Weakness SR furniture could not utilize its potential in market completely. Many people back off from buying the furniture for its price even though they like it. Its market is limited only to certain section because of its old fashioned design. The material used to make furniture is limited to wood which leads to lack of variety in product range. Though the brand is popular its distribution is limited only to up-market stores in cities and counties. Only 55% of the factories capacity is being utilized. Market Opportunities A huge section of market with young audience is open to target the products. Furniture with modern stylish designs and made of different materials are in huge demand. This space in market in not yet ventured by SR There is demand for branded quality furniture around the world not only for domestic purpose but also business purpose. Large section of market with audience who belongs to middle income group is still open. Market Threats Change of peoples perception towards kitchen as cooking, eating and hanging out area is a threat to kitchen furniture sales. Plastic and Self assembly furniture is becoming popular which are cheap and comfortable to use. As young audience dont like old fashioned furniture there is threat of losing this market completely in future. Reduction in room sizes may lead to not using the dining set which will affect SR sales figures because 50% of sales are of dining sets. Resultant Strategies Different strategies can be developed by using TOWS frame work: S-O Strengths : Opportunities Strategies Capital reserves, Product range and brand reputation could be utilized (S1/2) to promote present sales. Utilize brand reputation to export and contract sales (S1) could be increased as there is demand for quality brands all over the world. (O3) Brand reputation and Capital reserves and factory capacity (S1/3/4) could be utilized to manufacture and market modern style furniture for young audience.(O2) W-O Weakness :Opportunities strategies A Product range at reasonable price (W1/4) could be manufactured and marketed through more outlets even in small towns for middle income group which is a large market segment. (O4) Making furniture with different variety of materials (W2/3) like steel, Plastic etc covers more market and could attract young audience. (O1/4) S-T Strength : Threats Strategies Brand image (S1) can be utilized to venture into other furniture segments like office, bedroom, etc. (T4) For the future: Utilize capital reserves (S3) to venture into plastic and self assembly segment (T 2/3/4). Utilize capital reserves (S3) to change perception of people over dining set and other furniture by running campaigns. (T1) W-T Weakness : Threats Strategies Should make furniture with low cost materials like plastic and others (T2) for mass market which can be sold at reasonable prices (W1). Factory capacity could be utilized to manufacture adjustable furniture with innovative designs (W2/5) to answer space problems which can capture the market of young and other segment who dont like traditional furniture (T3/4). Marketing Strategies Unique selling proposition The USP aims at making new range of durable kitchen furniture made with different materials like wood, steel, Plastic etc. and designed appealingly according to the taste of all age groups. Positioning To be successful SR furniture should use its brand reputation to capture market neglected before which became advantage to competitors. Thus it is targeted at both sophisticated clientele and mass market by positioning itself as quality furniture maker for all age groups. The marketing mix should be planned in such a way that the product range has both quality and appealing designs to cover all age groups and mid income market. This can be achieved with two lines of products where one is positioned at mass market with affordable furniture range and the other for sophisticated and higher income group. This product mix could be achieved with both traditional and modern designer furniture range made of different materials like steel, veneer, plastic etc. This is illustrated in brand positioning map below: Price vs. Quality Design Good Quality Appealing Design Affordable Price SR Galiform PLC High Price Kohler Mira Jaccuzi UK Group PLC Bristan Group Poor Quality Design The above illustration shows that the market positioning is to capture both high end and mid market by offering good quality furniture. Competitive Strategy SR Furniture seeking to venture into new market with affordable price range for mid income group rather down market as the product range is mainly concerned about the brand image it carries for its quality and design. With current product range its strategy is to capture both high end and mass market of all age groups. Mid market prices could be achieved as the material usage will vary for different designs without affecting the quality and durability of the product. This mass market is going to sustain as getting good brand like SR Furniture at affordable price is great value for money. Growth Strategy Utilizing the brand reputation to venture into new market with new product range is very good move as it makes market penetration easy. The strategy of making a product range of modern designer furniture for sophisticated market could carve its share easily as there is lot of room in market with young audience and others who dont like traditional designs but still appreciate SR brand for its quality. In long term this strategy gives a great scope to enter into the other furniture segments like bedroom, living room etc. Marketing mix differences Consumer vs. Business Marketing mix differs from business market and consumer market. Product Consumer market: Product range should consist furniture with appealing design to all age groups. Consumer prefers good looking furniture which is comfortably fits in their rooms and easy to mobilize during house shift. Business market: Business market includes buyers like hotels, restaurants etc who dont shift often. They prefer durable furniture which lasts long and design of furniture is very important in setting up a good ambiance and image in market place. Price Pricing strategy varies between consumer and business markets as the buying pattern differs. Business clients place bulk orders and consumers buy individual pieces of furniture. Furniture manufactured for business purpose could be costlier as it is manufactured according to the specifications of business client. Place Furniture is sold through retail stores at different locations for convenience of individual consumers to shop and transport. There would be no specific location to sell furniture for business purpose. Manufactured furniture according to the clients order would be transported directly from factory. Promotion Television advertisements, ads in news papers and magazines, hoardings, exhibitions and other promotional methods are adapted to reach consumer market. Catalogues would be designed with products picture and key information which are distributed to clients personally by marketing team.