Rumstad Decorating Centres B

896 Words Apr 3rd, 2012 4 Pages
CASE 3.4
Rumstad Decorating Centers (B)
Rumstad Decorating Centers was an old-line Rockford, Illinois, business. The company was originally founded as a small paint and wallpaper supply store in 1929 by Joseph Rumstad, who managed the store until his retirement in 1970, at which time Jack Rumstad, his son, took over. In
1974, the original downtown store was closed and a new outlet was opened on the city’s rapidly expanding west side. In 1996, a second store was opened on the east side of the city and the name of the business was changed to Rumstad Decorating Centers.
Jack Rumstad’s review of 1997 operations proved disconcerting. Both stores had suffered losses for the rear (see Case 2.1, Rumstad Decorating Centers [A]). The
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Although the company was small, it had an excellent reputation within the business community.

Research Design
Rumstad agreed with Sandra Parrett’s suggestion that the best way to investigate Rumstad’s concerns would be to use a structured, somewhat disguised questionnaire (see Figure 3.4.1). The sponsor of the research was to he hidden from the respondents to prevent them from answering
“correctly” instead of honestly, so questions about two of Rumstad’s main competitors, the Nina
Emerson Decorating Center and the Wallpaper Shop, were introduced. Both of these stores offered products and services similar to those carried by Rumstad, and they were located in the same area as Rumstad’s west-side store. The study was to be confined to the west-side store because of cost; loss of profits for the last several years had severely constrained Rumstad’s ability to engage in research of this sort. However, the west-side stove was so critical to the very survival of Rumstad Decorating Centers that Rumstad was willing to commit funds to this investigation, although he repeatedly stressed to Parrett the need to keep the cost as low as possible. Even though the Emerson Decorating Center and the Wallpaper Shop were similar to

Rumstad, there were differences in their marketing strategies. Both stores seemed to advertise more than Rumstad, for example, although the exact amounts of their advertising

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