Strategic marketing (Merton Industries) - Case Study Example

Strategic Marketing Case Sovling Introduction: In the present days, competitive marketplace a marketing strategy must ensure a consistent approach to offering a product or service in a way that will help to outsell the competition is important. Yet, in concert with defining the marketing strategy one must also have a well defined methodology for the day to day process of implementing it. It is of little value to have a strategy if there is deficiency either in the resources or the expertise to implement it.

This essay will examine the marketing strategy adopted by Merton Industries. 1. The target segment of Merton Industries: Merton Industries is a private company which manufactures a full line of medium- to high-priced carpet which is basically for the residential segment. Even though about 28% of total sales are contract sales to institutions and businesses the company's market is basically segmented towards the residential consumers. 2. Performance of the Company and the Whole industry: The U.S. carpet and rug industry has under gone some vast changes in the past decade.

The number of U.S. carpet and rug manufacturers has dropped greatly due to changes in consumer preference and foreign competition. The type of retailers and the retailer purchasing strategies have changed drastically also. Currently, Merton Industries which is a small carpet and rug manufacturer is also facing the changes in the re-evaluation of their distribution process. The U.S. carpet and rug industry recorded sales of $75 million in fiscal year 2000. The market share for carpets and rugs in the floorcovering industry has been declining over the past five years in favor of hardwood, ceramic and laminate 3.

The company's current marketing strategy: The company presently uses 7 wholesalers to distribute to their 4,000 retailers. But now they have re-evaluated their marketing strategy by deciding to cut down their number of wholesalers. Every wholesaler of the company will now get a cut of around 6% of their sales. The company has plans to set up their own distibution channels, for which they propose to have 5-7 warehouses with sales teams working out of each site. 4. Change to be adopted by the company: The Merton Industries at the present situation prevailing should not go in for cutting short its whole sellers.

Since the company has been relying on its whole sellers to deliver the goods for the past 30 years and so the company will not be able to directly handle its retailers. When the wholesellers are eliminated the company will also face problems in managing its huge resource of retailers. Thus it is in the best interest of the company to continue with the same form of strategy which it has been following since the last 30 years. 5. Recommendation: Strategically at first glance the choice of Merton to distribute its own products seems to be a great idea.

This idea of distributing its own products would give the company more control over its stocks, prices, and communication with retailers and also a higher profit margin on sales by cutting out the middleman wholesalers. But when this strategey is looked at from the context of forming their own distribution network, the cons far outnumber the benefits. Since Merton has little to no experience in handling its retailers directly as it has used some of its current wholesalers for over 30 years the compoany will initially be off balance.

Reference: http://www.peerpapers.com/essays/Merton-Industries/137430.html