Haverwood Furniture, Inc.
Opportunity- Charlton Bates as president of the Haverwood Furniture, Inc. was introduced to a promotional budget proposal by Mike Hervey and Bernham leaders of their advertising program for 2008. The proposal suggested that the company increase the advertising expenditures by 225,000 and place that entire amount into the consumer advertising program for ads in several shelter magazines. The advertising program believes that due to the baby boomers affect (baby boomers represent 47% of the U.S households) as consumers’ age they will become more home oriented and replace old cheaper furniture with new more expensive furniture. The advertising program believes that more money spent on advertising will positively
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wants to increase the budget because of the indicating factors listed above. And as mentioned, Haverwood Furniture, Inc. is a specialty furniture manufacturer that targets upscale shoppers and 58% of the shoppers get their ideas from the gallery store and 45% buy from the gallery store. The gallery concept is dedicating a small part of retail space in a store to Haverwood’s Furniture, Inc. These concepts eliminate competitors and add more focus on product.
Recommended Solution- Haverwood Furniture, Inc. marketing leadership team wants to increase the consumer advertising expenditures by 225,000. The company feels by spending more cash on advertising flourishes their brand. In 2007, total industry sales for furniture manufacturers was 31 billion dollars and is expected to increase by 4% in 2008. The increase in advertising will go more to the shelter magazines which issues surveys on different elements of furniture purchases; some surveys evaluate factors when buying furniture, other surveys question what is important in buying furniture. Through research Haverwood Furniture, Inc. understands the importance of age in which consumers in each age group are buying furniture, like 47% of the baby boomers era make up all U.S households. Today the baby boomers would be the 25 and older age group. When examining Exhibit 4 on page 298 of the “Strategic Marketing” textbook, ages 25-64 are spending $500 plus on furniture. Charlton Bates through research
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Haverwood Furniture, a medium-to high-priced manufacturer of wood furniture for bedrooms, living, and dining rooms, has just acquired Lea-Meadows, Inc. Lea-Meadows is a manufacturer of upholstered living and family room furniture. A decision now needs to be made concerning the selling approach. Haverwood has 3 options:
The household wood furniture industry is healthy and growing. Total industry sales in 2007 were estimated to be $31 billion at manufactures prices. Three categories of furniture divide the industry. First upholstered furniture which makes up 50% of sales, Secondly wood furniture at 40% of the industry market share which has grown 2.5% in 2007 and is projected another 4% in 2008, this second category includes dining room and bedroom furniture. Third and last is the other category at 10% this includes ready to assemble and casual furniture. Haverwood has established themselves as a medium to high priced furniture company through 1,000 carefully selected high
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