Sharratt Furnitures Ltd

Problem

• What should Phillip Snyder, President of Sharratt Furniture Inc., decide is the best marketing decision to establish and allocate advertising budget?

Market-mix

• Sharratt Furniture Inc is a medium to high priced furniture manufacturer.

• Manufactures wooden bedroom, living room and dining room furniture.

• Net sales in 2001: $75 million; before-tax profit: $3.7 million.

• Increase brand awareness, company image enhancement etc.

o Research showed customer between the age of 40-60 years are becoming more home oriented and they are replacing old cheaper with new expensive furniture.

o Company contribution will fall to 25% because of labor and material costs.

• Design of Website

o The website will be designed to accomplish three objectives:

• Consumer advertising/information by showing the product offering information and products available in their city or town.

• Used by retailers to get detailed product information.

• Get retail orders online.

• Company employees 10 full-time and two regional sales managers.

Costs

• Estimated cost for design of website:

o Consumer site: $25,000.

o Retailer information: $10,000.

o Online ordering: $10,000-$25,000.

o Some money to maintain the web site.

• Total promotional expenditure (Sales and administrative expenditure, Co-operative advertising allowance, trade and consumer advertising) for 2001 was $3,675,000.

• Increase advertising expenditure by $20,000

o Entire amount for consumer advertising program for ads in several magazines.

SWOT Analysis

Strengths

• People are becoming more cautious about the life of the furniture and are replacing cheap old furniture with new and expensive furniture.

• Sells furniture through 1000 high quality department stores and independent furniture speciality store across Canada and several Midwestern states.

• Have their own sales group and they are committed to the company.

• The sales people motivate sales group to sell the company line...