Haverwood Concise Outline

Haverwood Furniture, Inc. (A)

Summary of Facts

A. Market – Wood Furniture

1. Segments

a. 40-59 year old homeowners

b. Those with annual income over $100,000

2. Industry

a. Total furniture industry sales in 2007 – estimated $ 31 billion at manufacturers prices

b. Wood furniture manufacturers’ dollar sales grew by 2.5% in 2007

c. Dollar sales forecasted to increase by 4% in 2008

3. Economic market

a. Monopolistic Competition

Product

1. Furniture

a. Upholstered (50%)

b. Wood (40%)

c. Other (10%)

2. Benefits

a. Core: Home furnishing

b. Quality furniture

c. Status

d. Aesthetic home appeal

3. PLC

a. Furniture – Maturity

Price

1. Allocated $3,675,000 for total promotional expenditures for 2007

2. Cooperative advertising allowances are matched by funds provided by retailers on a dollar-for-dollar basis

3. 3.5% of annual net sales are spent for advertising

4. Proposed budgeting meeting calls for consumer advertising to be increased by $225,000 in 2008

5. Elasticity

a. Furniture – relatively elastic to relatively inelastic

Promotion

1. Participates in two trade shows a year

2. Featured on shelter magazines

3. Newspaper advertising in given city

4. Point of purchase materials

5. Booklets

6. Trade magazines

7. Expansibility

a. Furniture – expansible

Place

1. High-quality department stores

2. Independent specialty stores

3. Channel: manufacturers (Haverwood) – (agents) – retailers – consumers/users

F. Other

1. Internet

a. Small manufacturers consider up-front cost to build a website coupled with the ongoing cost to maintain a furniture website to be prohibitive

b. Cost of delivering and...