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Our marketing mix depends mainly on the product and product marketing, but we are also leveraging a lot more in our presence in channels than on our direct national branding. The channels are the key to our recent growth and our prospects for additional growth.
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Our product marketing has to emphasize the benefits of our unique combination of technological expertise, ergonomics, and fine furniture craftsmanship. We need to sell pride of ownership and workmanship, and prestige. That has to come out in our packaging, finishing, shipping, and collaterals.
Product marketing's most important challenge is the problem of assembly and packaging. We know we have the best product when we deliver it locally. That isn't necessarily so when we send it in boxes to be assembled. We have to make sure that the assembly is truly easy.
Our promotion strategy is based mainly on making the right information available to the right target customer. We can't afford to sell people on our expensive products, because most don't have the budget. What we really do is make sure that those who have the budget and appreciate the product know that it exists, and know where to find it.
The marketing has to convey the sense of quality in every picture, every promotion, and every publication. We can't afford to appear in second-rate catalogs with poor illustrations that make the product look less than it is. We also need to leverage our presence using high-quality catalogs and specialty distributors.
The service aspect of Willamette's marketing mix is limited in traditional terms. That is, due to our high degree of quality in manufacturing and assembly, our product lines do not require continued maintenance or service. However, we do consider our customer service to be key to the retention of customers.
Willamette manufactures many accessories in addition to our main, executive desk lines. As a result, we offer a fully integrated office environment, including peripherals such as lamps, cabinets, tables, and chairs. Therefore, a Willamette Furniture customer is not considered to be a one time buyer. The establishment of a quality office environment can be an on-going process. Willamette will continue to offer additional pieces to our customers, targeting them based on their previous purchases.
Our strategy focuses first on maintaining the identity with the high-end buyer who appreciates the best available quality, but is also very demanding regarding computer systems and technology. We've been able to find these customers using a combination of direct mail catalogs and direct sales to distributors.
For the next year we continue to focus on growing presence in the high-end direct mail catalog that finds our specialty customer. We will work with Sharper Image and Broadview more than ever, and we expect to gain position in the major airline catalogs as well. Specialty retail is a new channel that could become important for us.
Our work with distributors has been promising. We hope to continue the relationship with distributors selling directly to larger corporations, even though this takes working capital to support receivables.
Our past marketing strategy assumes that we need to go into specialty channels to address our target customer's needs. The tie-in with the high-end quality catalogs like Sharper Image is perfect, because these catalogs cater to our kind of customers. We position our products as the highest quality, highest price offering in any channel mix.
By including our products in these high-end catalogs, we were able to successfully target the specific niche that was our marketing milestone. This has provided the foundation for a move to internal catalog production. With a higher degree of information control internally, these catalogs will target the same audience, but will include more extensive information in terms of quality, examples, testimonials, and information tailored to past sales experiences.
The four main manufacturers are selling direct to the office superstores and buying discount clubs. This accounts for the main volume of distribution. The office furniture customer seems to be growing steadily more comfortable with the retail buy in the chain store.
The major corporate purchases are still made directly with manufacturers. Although this is a major channel for some of the more traditional manufacturers, it is essentially closed to new competition. The direct channel is dominated by two manufacturers and two distributors. The distributors will occasionally take on a new line -- happily, this has helped Willamette -- but the main growth is in retail.
Published research indicates that 51% of the total sales volume in the market goes through the retail channel, most of that major national chains. Another 23% goes through the direct sales channel, although in this case direct sales includes sales by distributors who are buying from multiple manufacturers. Most of the remainder, 18%, is sold directly to buyers by catalogs.
In the mainstream business, channels are critical to volume. The manufacturers with impact in the national sales are going to win display space in the store, and most buyers seem content to pick their product off the store floor. Price is critical, because the channels take significant margins. Buyers are willing to settle for laminated quality and serviceable design.
In direct sales to corporations, price and volume is critical. The corporate buyer wants trouble-free buying in volume, at a great price. Reliable delivery is as important as reliable quality.
In the high-end specialty market, particularly in our niche, features are very important. Our target customer is not making selections based on price. The ergonomics, design, accommodation of the computer features within the high-quality feel of good wood, is much more important than mere price. We are also seeing that assembly is critical to shipping and packing, but our customer doesn't accept any assembly problems. We need to make sure that the piece comes together almost like magic, and as it does, it presents a greater feel of quality than if it hadn't required assembly at all.
Willamette Furniture will begin the year 2000 by continuing to strengthen our alliances with established partners in distribution. We will prepare our catalog placements internally, submitting them by the middle of January 2000. Simultaneously, the internal catalog plan will be polished and submitted by the end of January 2000. This will be possible with the expertise of Rebecca King and James Black, who have brought their industry knowledge to the marketing department of Willamette Furniture.
With the completion of this plan, design stages will occur from February 2000 through to the middle of March 2000. This time frame is accurate because we have experience in the design stage, as we have historically submitted our own designs to outside catalog vendors.
As in past years, Spring and Fall Trade Shows will occur at their normal times. These shows will provide test cases for our internal catalog design. , our last milestone category to be implemented will be the expansion of our product distribution through the addition of three new distributors to our current line-up. These distributors will increase our customer base nationwide.
|Advertising||Start Date||End Date||Budget||Manager||Department|
|First Catalog Placement||1/1/2000||1/11/2000||$50,000||Jack||Ads|
|Total Advertising Budget||$120,000|
|PR||Start Date||End Date||Budget||Manager||Department|
|Spring Trade Show - preparation||1/5/2000||3/5/2000||$5,000||Terry||PR|
|Spring Trade Show||3/10/2000||3/15/2000||$15,000||Terry||PR|
|Fall Trade Show - preparation||7/1/2000||8/30/2000||$5,000||Terry||PR|
|Fall Trade Show||9/1/2000||9/10/2000||$15,000||Terry||PR|
|Total PR Budget||$40,000|
|Direct Marketing||Start Date||End Date||Budget||Manager||Department|
|In-House Catalog Plan||1/5/2000||2/19/2000||$3,000||Cassidy||Sales|
|In-House Catalog Design||2/21/2000||3/22/2000||$0||Bertha||Other|
|In-House Catalog Mailing||3/25/2000||3/30/2000||$2,000||Bertha||Other|
|Total Direct Marketing Budget||$10,000|
|Web Development||Start Date||End Date||Budget||Manager||Department|
|Total Web Development Budget||$20,000|
|Other||Start Date||End Date||Budget||Manager||Department|
|Laptop Product Test||2/1/2000||4/1/2000||$5,000||Terry||Other|
|Laptop Product Release||4/1/2000||4/16/2000||$1,000||Sampson||Other|
|Total Other Budget||$6,000|
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