Marketing and Furniture free essay sample

Haverwood Furniture, Inc. Opportunity- Charlton Bates as president of the Haverwood Furniture, Inc. was introduced to a promotional budget proposal by Mike Hervey and Bernham leaders of their advertising program for 2008. The proposal suggested that the company increase the advertising expenditures by 225,000 and place that entire amount into the consumer advertising program for ads in several shelter magazines. The advertising program believes that due to the baby boomers affect (baby boomers represent 47% of the U.S households) as consumers’ age they will become more home oriented and replace old cheaper furniture with new more expensive furniture. The advertising program believes that more money spent on advertising will positively affect brand image, brand awareness, etc. Besides increasing the advertising budget, John Bott the president of sales believes that adding another sales representative is necessary because the company is expecting 50 new accountants of service, all together adding more money to the promotional budget. We will write a custom essay sample on Marketing and Furniture or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Causes-The household furniture industry estimated 31 billion dollars in manufacturer prices in 2007 and dollar sales are expected to grow by 4% percent in 2008. The estimated price for furniture was accumulated by three different categories of furniture: upholstered, wood, and assembled furniture. According to Kerin and Peterson, each category represented a percentage of the total household sales, upholstered represent 50%, wood 40%, and all other forms 10%; the bedroom and dining room furniture accounted for majority of the sales. The manufacturers for wood in recent years have increased their emphasis on quality and in 2007 the wood industry grew by 2. 5%. Other causes to consider is that 1% of U. S household’s disposable income is spent for household furniture and home furnishings and manufacturers of household furniture spend approximately 3. 5% of annual net sales for advertising of all types. The advertising that is spent for consumers, majority are in shelter magazines. The promotional proposal by the advertising agency at Haverwood Furniture, Inc. wants to increase the budget because of the indicating factors listed above.And as mentioned, Haverwood Furniture, Inc. is a specialty furniture manufacturer that targets upscale shoppers and 58% of the shoppers get their ideas from the gallery store and 45% buy from the gallery store. The gallery concept is dedicating a small part of retail space in a store to Haverwood’s Furniture, Inc. These concepts eliminate competitors and add more focus on product. Recommended Solution- Haverwood Furniture, Inc. marketing leadership team wants to increase the consumer advertising expenditures by 225,000. The company feels by spending more cash on advertising flourishes their brand.In 2007, total industry sales for furniture manufacturers was 31 billion dollars and is expected to increase by 4% in 2008. The increase in advertising will go more to the shelter magazines which issues surveys on different elements of furniture purchases; some surveys evaluate factors when buying furniture, other surveys question what is important in buying furniture. Through research Haverwood Furniture, Inc. understands the importance of age in which consumers in each age group are buying furniture, like 47% of the baby boomers era make up all U. S households. Today the baby boomers would be the 25 and older age group. When examining Exhibit 4 on page 298 of the â€Å"Strategic Marketing† textbook, ages 25-64 are spending $500 plus on furniture. Charlton Bates through research understands by the numbers that galleries and upscale furniture and department stores serve their targeted customer; the 40-59 year old homeowners with an annual income over 100,000 (U. S Department of Labor, U. S. Bureau of Labor Statistics, 2007). Alternative solutions- The alternative solution would be to not use all of the 225,000 for consumer advertising and use 135,000 to hire another sales representative.