Manchester Home expanded household furniture division
by adding market leader PLFD
– Addition of 990 million in PLFD revenues
– Addition of established sales force, talented design teams – PLFD’s Signature Style line very popular with consumers
• Ability to combine PL design skills with MH engineering and manufacturing
– Manufacturing expertise and ergonomic designs
• Concerns
– How to tie-in PL’s bold designs with MH’s conservative style – Customer confusion over new brand name
5C’S OF THE ACQUISITION
Company
• Companies’ strengths and weaknesses complement each
other
5C’S OF THE ACQUISITION
Customers
• Target consumers ages 34-55; Income over $50K
– MH consumers are categorized as conservative elegance
– PLFD consumers are more fashion-conscious, trend setters – Will need a way to reach both customer segments
• Results from target consumer surveys
– Low brand loyalty – 60% would change brands
– High information search
– Style, design, quality, comfort most important qualities – all covered by MH/PL
– PL has high brand awareness, almost double that of MH, will help to co-brand them to raise awareness for MH
5C’S OF THE ACQUISITION
Collaborators
• Manchester already has network of office distribution
channels, now they gain access to household distribution
channels through Paul Logan.
The Term Paper on Brand Analysis – Consumer Behavior
The advancement of technology has changed mobile phones to become more interactive and convenient. A new term – “Smart Phone” is used to label the mobile phones of today. A typical smart phone allows the user to customize the functions of the phone to their preferences. Nokia, one of the largest mobile phone companies is now struggling to keep up in this emerging smartphone market. The cause of ...
– PL sales force has strong ties to leading distributions channels – PL strength in upscale furniture stores, specialty stores, department stores
• Strong relationship with buyers
– Concern over brand going away, necessary to create a smooth brand transition so consumers make the switch
• Push strategies important to build strong relationships with distribution network
– 90% of PL shipments include Purchase Allowances
5C’S OF THE ACQUISITION
Competitors
• Paul Logan was market leader
• Household Furniture Industry
$36.64 billion in 2004; positive % growth projections
A mature industry
Large number of corporate consolidations
Low-cost imports from Asia/Mexico moving into higher price levels Domestic companies ready to attack the vulnerability of the new brand and position
• We need strong advertising and marketing mix
• Many competitors have company owned stores
– Crucial to leverage our distribution channels to gain market access
5C’S OF THE ACQUISITION
Context
• Office furniture sales growth tied to employment
growth and new business formation.
– Burst of dot.com bubble and recession have
decreased demand for office furniture
• Rise in ‘teleworking’ could increase demand for
home office
• Demand for home furniture is tied to new home
construction and home sales.
• Innovative and stylish products to bolster
demand
MOVING FORWARD
ANALYSIS OF FUTURE BRANDING: OPTIONS
• Drop the Paul Logan name right away
– Losing their current brand awareness
– Need to educate customers
– Strong distribution channel relationships could be damaged
• Keep using the Paul Logan name for the entire allotted three years – Ad agency advises against this option, as they don’t want to allocate advertising dollars to a brand with a three year shelf life
The Business plan on Marketing and Paul Logan
... Paul Logan brand only for three year, thus company have to determine the marketing expenditure for Paul Logan by finding the right advertising ... expenditure to support the transition of the brand. Paul Logan has strong brand images, which allows Manchester to easily promote ... the acquisition of Paul Logan’s Furniture Davison (PLFD). Also, Paul Logan is a well-known brand for home furniture due to ...
• Transition mid-point
– Leverage the Paul Logan name to build strong brand awareness for Manchester
– Continue to use the PL name in subtext for 1.5 yrs.; conduct consumer research to reevaluate after this time.
– Business recommendation to convert the name 100% to Manchester Home after 1.5 yrs.
ANALYSIS OF FUTURE BRANDING: OPTIONS
• Brand name transition:
– First 6 months: Manchester Home: The New Home for
Paul Logan Furniture
– Following year: Manchester Home: The Home for Paul
Logan Furniture
– After 1.5 yrs.: Conduct consumer research to
reevaluate transition
• Business recommendation is to drop the Paul Logan name
• Want to ensure the Manchester Home brand has achieved a
sufficient awareness before removing PL
OUR FUTURE
ADVERTISING STRATEGIES
•
Strong campaign is critical to the success of the new brand name – $184 million allotted for 2005
– Includes national and cooperative advertising for both PLFD and MH products
•
Push vs. Pull
– MH to allocate more $ towards Push advertising
– Heavy Push & Pull the first 1.5 yrs.
– Marketing & Communications mix to form long-term company image
•
Promotional Programs
– Purchase allowances
– Recommend amending the planned 2005 marketing expenditures to allow for purchase allowances.
•
Currently based on % of sales
– Due to brand transition, allocate a fixed amount to advertising to ensure the levels do not drop
RECOMMENDATIONS
• Continue to use the Paul Logan name to leverage
brand awareness and channel partnerships
• Focus strongly on both Push and Pull strategies
the first 1.5 yrs. to communicate the acquisition
– Amend proposed 2005 advertising plan to incorporate
more Push strategies, specifically Purchase Allowances
that contributed to the success of the PL distribution
network
• After 1.5 yrs., the business goal is to transition
The Essay on Branding and brand management
What is a brand? A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them form those of competitors Essentially a marketer’s promise is to deliver a specific set of features, benefits and services consistently to the buyers Cadbury’s best tasting chocolate ...
brand officially to Manchester Home
QUESTIONS?