Furnishings for You: Analysis - Case Study Example

Furnishings for You: Analysis Table of Contents Task 3 a) 3 b) 4 c) 6 Task 2 7 Task 3 10 Task 4 15 References 19 Task 1 a) Promotion is the most important activity in marketing. It helps in bringing the product or service to the attention of the customers and helps in increasing the demand (Vasudeva, 2009). It helps to attract new customers and retain the existing ones. Furnishings for You is a company having four furniture shops situated in Leeds, which offers fine quality furniture to its customers. It provides a variety of furniture. The quality of products of the company and the services provided to the customers help it to gain and maintain reputation in the market. The recent problems that the business is currently facing are appearance of new competitors and the economic downturn which has forced the customers to reduce their spending. Therefore to deal with these issues, the company should have some strong promotional strategies in order to retain its existing customers. The main promotional or marketing objectives of the company are: It should create an awareness of the company, Furnishings for You in Leeds. The customers must get the information about the company through the promotional activities. It should also involve communicating to the existing customers who have previously purchased from the company and taking a feedback from them that they are satisfied with the products or not and provide special services in the case of any dissatisfaction. It should fulfil the objective of influencing the potential and targeted customers to visit the stores of Furnishings for You. To communicate that, Furnishings for You, is a local family business and customers will not have to travel long distances. Communicating to the customers about the product differentiation can be one of the best promotional activities of the company. It will help the company to differentiate their products from the competitors in the market and will also help it to achieve competitive advantage. Bringing in some new varieties of furniture which are not easily available in other companies can be a solution to the problem. In order to maintain the same cost structure, the company can stop producing the furniture which is outdated. It can communicate with the customers who have already purchased its furniture and make an analysis based on their feedback or provide servicing at a low rate to fix any problem that has occurred. By doing these it can gain customer loyalty. These promotional activities will create awareness among the customers about the company’s unique services, which will bring a satisfaction to the customers. This procedure will also help to bring in new customers. 1 b) The promotional mix tool can work effectively for improving public relations. Public relation: It is the communication in between a company and the public, mainly the customers (Bernays, 2004). The company can conduct several programs to make the customers aware of its reputation and the quality of products and services that it provides. These kinds of different programs can help the company to regain its position back in the market which had been in a risk because of the arrival of some new competitors. Moreover, some of the special services provided to the existing customers like providing servicing at a lower rate than its competitors, can retain the existing customers and also attract new customers to the company. The versatility of the company can be broadened by preparing publicity releases for different newspapers and magazines in Leeds. Sales Promotion: - The Company can also opt for sales promotion. If it creates sales promotions for certain types of products, it will be able to attract customers more easily. For example, offering a particular product with a discount for a particular period of time can be a solution to the existing problem of the company because the customers who are already aware of the quality of the products will be interested in buying the products with discounts available. It can start new distribution channels which will help to increase the sales. Conduction of several trade shows to promote products among the resellers can be advantageous for the company. The trade shows can provide knowledge about different product lines to the retailers which will help in the brand recognition of the company. Advertising: It is the best way to build a strong public image and achieve competitive advantage in the market. One of the main objectives of the company is to maintain the diversified product line. Its objective can be sent as a message to the customers by product advertising. It is very important for the company to have a strong public image in order to come back to its original position and advertisement can help to serve this purpose. In addition, this will cover a huge number of customers getting the exact information about the company and its products. 1 c) Internet as a media can be the best way to deliver the message of the company to its customers. All the necessary information is easily available to a customer if the advertising of the products is done through internet (Baker, 2012). Using internet as a source of marketing makes the results much more effective. A customer can view both qualitative and real data, which will help the customers to take their decisions. Internet advertising would involve strategies like website creation, use of social media etc. Internet as a media is better than the traditional methods. Moreover in the current situation, the company should implement such strategies which are not very expensive. Advertising with the help of internet is inexpensive. This not only deals with the information about the products but also provides the qualities of the company with the customers. Social media being a part of internet advertising, it can be used by the company for spreading its message. Through social media direct communication is available with the potential customers. It helps to build relationship with the customers directly and helps to communicate as well as interact with them in a better way (Tuten, 2008). This will not only give recognition to the brand but also help to spread the message in a very relaxed and detailed manner. The company can also make use of local newspapers or local home magazines, which can attract the customers. Use of local news papers and home magazines can also be done to make the customers aware of the fact that it is better to buy their products from a local place than travel a long distance. It is also known as print advertisement. Availability of the entire information about the company and its products printed on a paper is known as print advertisement. This can be done through news papers, local magazines or using banners. This also gives an effective result. Furnishings for You can provide information about their products also making the use of radios. In today’s world people love to listen to music. So use of local radios can also be a media in which they can spread the message of their products to the customers. The company should make an effort to use all such media which are not used by its competitors. In such case use of local radios can prove to be the best one. Posters in different places and billboards can also bring more customers. If posters of the company are available in the local areas which are travelled by the common public then while they are travelling even a glance to the posters can make an effect. If the advertisement in the poster seems to be attractive then the customers will find interest in the products of the company and will visit the local stores. Task 2 A mix of the company’s different marketing plans is known as marketing mix (Belohlavek, 2008). The promotional objectives of the company Furnishings for You are to retain the existing customers and provide a wide range of product mix available to them. On the basis of the promotional objectives of the company, the new marketing mix that can be chosen is: New Marketing Mix Product The product strategy of the company should be such that the customers get attracted. The product offered by the company should always possess a differential advantage over its competitors in the existing market (Hobbs, 2011). This can be done by branding the products and adding some more features to it. The product quality should be reliable along with all the other elements of the marketing mix. The company can bring in some new varieties of furniture in the market which will attract the customers. Branding of the product should be done in such a way that it conveys a message of the reputation of the company and the quality and reliability of the products to its targeted customers. Price The company can follow penetration pricing strategy here. The arrival of many new competitors in the market is one of the problems being faced by the company. The price penetration strategy can act as a solution to this problem. The company can lower the price of its products in the current situation and after achieving the goal of attracting the customers, it can raise the prices of its products as it has already gained a competitive advantage over its competitors in the existing market. Place The place should be such, so that the product holds its importance. The company must give a special thought to where it can open new stores. It is better to open new stores near the main road which will be easily noticeable by the customers. The business operates mainly in Leeds. It can introduce new distribution channels and expand its area of operation in some other locations in order to increase the number of customers. Promotion The promotional strategy which can be chosen by the company is building public relations. The company can conduct various programs to make the customers aware of the reputation of the company and the quality of products and services it provides. This will help the company to come back to its position as a leader in the market. The versatility of the company can be spread by preparing publicity releases in different newspapers and local magazines in Leeds. This will cover a vast area of customers getting information about the company. Moreover, the company can also use the strategy of internet advertising which can provide all the necessary information of the company and its products to the customers for their knowledge and decision making. People People are the most important factor in a product delivery process, since a product cannot be considered to be separate from the person delivering or providing it (Sahay and Sharma, 2009). In this case, the business is family owned which involves the family members as well as the employees. It can open new distribution channels which will include retailers into the business. This will help in the selling of products. An intermediary in the business can help in increasing the volume of sales. Process The company should try to understand the customers and their needs at first. This will help to decide the product requirement. It should then analyse the market and the competition so that it can plan a strategy to achieve a competitive advantage in the market. The company can introduce new distribution channels in the market. For this it needs to make a research about the best way to deliver products to its customers. It can include retailers as an intermediary in order to increase the sales volume. It should plan for a promotional strategy best suitable in the current position, so that the customers get easily attracted to the products of the company. After getting the order from the customers who are willing to buy the products, the company should efficiently plan out to sell the products. After selling the products to the customers, the employees should follow up the customers and take their feedback which will satisfy the customers and help the company to maintain its reputation in the market. Physical Evidence The shops can be made more attractive and new stores can be opened near the main road. The behaviour with the customers should be friendly and there should be expert staff members with enough knowledge and marketing capabilities to convince the customers for buying the products. The stores can also design waiting areas with tea, coffee or magazines available which will again attract customers. Task 3 The company is unable to find out what is happening around their business. So the external environmental analysis of the country i.e. England to which the business belongs, can be done using PESTLE Analysis. Figure 1 (Source: Learntelehealth, n.d.). Factors ENGLAND Political Factors The politics of England includes the Politics of majority of the United Kingdom. London which is the capital of England is also called the capital of the whole United Kingdom and it is because of this reason that English is the most known language in all the parts of United Kingdom. Since England is politically stable and as a result the furniture business belonging to this country will face no political barrier in its operations. Economic Factors The economy of England is the highest of all the four countries in United Kingdom. GDP per capita of England is 26, 904 (in Euros). England’s capital London is known as the world’s largest financial place and leading financial centres. Leeds is the second largest financial centre in England. There are 30 domestic and international banks. Over 124,000 employees are employed in the banking and financial sectors of Leeds. So Leeds is the best suitable place for carrying out the business on grounds of the economy of the country. Social Factors England provides the highest standard of living. Many migrants move from other parts of the world to the UK in search of a standard of living. There are various social factors which creates demand for the migrant workers in the UK. The businesses originating in the UK can also be beneficial from this point of view as the social factors will support the employees to work in this place. Technological Factors England is one of the leading places of Scientific Revolution held in the 17th century. The UK was leading the Industrial Revolution held in the 18th century and has provide the world with many talented scientists and engineers. Thus, since the past days the country possesses a very strong technological environment. As a result the technological strength of the country supports the business. Legal Factors The UK Government Licensing Framework gives a legal framework of the arrangements for licensing the use of public sector information. It recommends an Open Government License for that. These helps to access to publicly held information providing transparency which will help to gain economically as well as socially. Thus, the legal framework of the country results in economic as well as social development which is beneficial for the business running here. Environmental Factors The Green Planet Project and the WEEE Regulations regulates the environmental factors of England. Thus the business has no threat from the environmental factors of the country. Porter Five Forces Analysis The Porter Five Forces Analysis is a tool used for industry analysis and business development. Here it is being used to analyse the threats that the company ‘Furnishings for You’ might face from the suppliers, customers, new entrants, substitute products and industry competitors. Figure 2 (Source: Larsen, 2009) Rivalry from Existing Firms: The number of furniture companies in the UK is very high. So, rivalry among existing firms is also high. However Funishings for You can be a leader by providing a wide range of furniture with penetration pricing strategy. Threat of New Entrants: The chance of new competitors in the existing market is very low. Moreover, the current market of the UK is full of furniture companies and huge amount of initial investment is required to open a new furniture company operating globally. Therefore, threat of new entrants is very low. Bargaining Power of customers: The bargaining power of customers is high as there is a high competition among the existing furniture companies in the current market and the buyers have many alternative options. So the company should follow penetration pricing strategy in order to achieve competitive advantage. Threat of Substitute Products and Services: The threat of substitute products is low as there are not many products in the market that can substitute furniture. Therefore, the threat from substitute products and services is low. However, the company should maintain quality of the product to retain its position in the market. Bargaining Power of Suppliers: There is large number of supplier in the market with high resource and technological capabilities. So the threat of suppliers is low. The company also follows the strategy of maintaining a long term relationship with its suppliers which further reduces threat. Task 4 Personal selling is an important tool of promotional mix. It is beneficial for the company to apply the strategy of personal selling of products to its customers who have visited the stores previously. Personal selling involves selling products to the customers after having a face to face interaction with them (Anderson and Dubinsky, 2004). The sellers here get an opportunity to promote products through their attitude, quality of interaction and knowledge about the products. Personal selling is advantageous as the seller can promote the products personally to customers, which helps to convince them about the product quality and company reputation. It is always easy to personally influence customers for buying the products. When a seller directly goes to customers, their needs and requirements can be understood in a better way. Customers will also feel comfortable to interact with the seller and inform about their requirements or needs based on which the seller will demonstrate suitable products. Once a customer has already visited one of the furniture stores, the company should keep a note of that. After that, employees with excellent knowledge of products should be sent to these customers for promotional purpose. The customers who had already shown an interest in buying the product while visiting the stores are convinced more easily by personal selling method. Moreover, personal selling involves price negotiation which will always be beneficial as it satisfies the customers and helps in bringing new customers to the company. Price negotiation should be done in such a manner that neither the company incurs loss nor the customers get dissatisfied. A settlement of price should be done between them. This entire process of personal selling involves interaction between the seller and the buyer which helps to build a good customer relationship. This maintains reputation of the company and the customer may also become a permanent. The process of personal selling does not involve promotion of the product to a vast range of customers. It involves promotion of the product to specifically targeted individual customers who are specifically targeted. Sometimes, the company can also send demonstration parties to homes. If the customer gets convinced and buys the product, a follow up procedure can help to maintain the relationship that has been built. The personal selling strategy is advantageous for the company because, if it follows this strategy then the prices of products are not needed to be kept low. It can easily adapt to competitive pricing strategy as the customer’s relationship with the seller will help in retaining the customers irrespective of the change in the pricing technique. Thus, personal selling will play a key role in bringing customer satisfaction which will help in fulfilling the objective of the company to retain existing customers. Instead of hiring new employees and training those for the selling process the company can appoint selling agents who will work for a specific contract period, on a commission basis. Since commission is based on the sales volume, the process of personal selling becomes less expensive. This will also save the time wasted on appointing and training new employees. Moreover, if the agent is an experienced selling agent then he/she can bring in existing customers. Personal selling strategy works even at that point when all other strategies fail. Importance of personal selling as a promotional tool can be shown as: Figure 3 One of the advantages of the personal selling process is that it identifies the decision making unit more than any other strategy. In selling a decision making process involves a decision making unit. Marketers need to have the exact information about who are participating in a decision making process and what is the influence, in order to create promotional activities which will always help in influencing the decision. A decision making unit is a unit comprising buyers, deciders, influencers and users. A buyer is the one is buying the products. Deciders are the agents who participate for the organisation and decide the product which is required. Influencers are those who will influence the deciders while taking the decisions and users are those who actually use the products and are benefitted using it. Personal selling process helps to identify the participants in a decision making process in a better way which would not have been possible by advertising products or any other promotional strategy. References Anderson, R. E., and Dubinsky, A. J., 2004. Personal selling: achieving customer satisfaction and loyalty. Boston: Houghton Mifflin. Baker, M., 2012. The Marketing Book. London: Routledge. Belohlavek, P., 2008. Unicist Marketing Mix. Houston: Blue Eagle Group. Bernays, E. L., 2004. Public Relations. Oklahoma: University of Oklahoma Press. Hobbs, D.P., 2011. Applied Lean Business Transformation: A Complete Project Management Approach. Newcastle: J. Ross Publishing. Larsen, S., 2009. The Five Forces Model. [online] Available at: < http://blog.bootstrapbusiness.org/the-five-forces-model-18-02-2009.html> [Accessed 08 February 2013]. Learntelehealth, n.d. Pestle Diagram. [online] Available at: < http://learntelehealth.org/fb-content/pestle-diagram> [Accessed 08 February 2013]. 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