1. HOW WOULD YOU CHARACTERIZE THE HOUSEHOLD FURNITURE INDUSTRY?
In 2004, the Household Furniture Industry’s annual growth was 4%, it was a $36.4 billion industry. There a many competitors within the industry because of low cost imports from Asia and Mexico. The household furniture industry is also closely tied with the economy. After the housing boom in the early 2000’s, companies needed to focus on a more innovate and stylist product to get consumers attentions.
Household furniture products are classified as wood (48%), upholstered (34%), and metal/other (18%). They are then segmented by price and quality. In a survey, Consumers rated that they are more concerned …show more content…
MH has to be very cautious about their competitors because they are ready to capitalize on the acquisition. If they keep the Paul Logan name, customer will still recognize it and purchase it because of the brand equity. This will help MH to secure most of PFLS’s market share and help them to remain competitive.
Another reason why they should keep the Paul Logan name is because of the distributors. PLFD is a traffic builder in stores and distributors are concerned about the acquisition. MH needs to secure these distribution centers in order to close up the holes in their distribution network. Once they do this and start building relationships with the distribution centers then they can consider building their business on the MH name. Jeremy Campbell the VP of Strategic Planning suggested that it does not have to be all or nothing for 3 years. Picking up one or two products at a time that lend themselves to low-risk brand transition and transitioning them to MH name gradually is a good start. MH may also want to develop two different names for their furniture styles. They will have 2 different target markets, conservative and high fashion. MH is associated with more conservative furniture, so it would help if they developed a new trendier name for Paul Logan’s furniture to reach their different target markets.
5.6.Compare the marketing budgets for MH and PLFD. What difference