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Manchester Products Essay

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.
– 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

• 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
brand officially to Manchester Home

QUESTIONS?


Essay Topics:


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