Dorfman Designs - Waldesq
Emilia BalkeYoav BardovKiran DSouzaHelena LamZahid Sultan
Macro Environments
Competitive Situation
Distribution Situation
SWOT
Critical Success Factors
Introduction Marketing Objectives
Marketing Strategy
Marketing Mix
Schedule & Conclusion
DemographicsBaby Boomers =
Rural Cities Changing furniture needs
EconomicsGlobalization Outsourcing Overseas Manufacturing
TechnologicalInternet = More information, global purchasing/shipping, increased technology transfer
Macro-Environment Situation
Political / LegalIncreased activity with regional craft-industry alliance groups
Social / CulturalDomestic tastes turn international
• Asian & European-influenced styles• Ideal for space-saving furniture designs
Macro-Environment Situation
Market Situation
Wood furniture industry demand growing Increase in remodeling New home construction Rise in space-challenged city dwellers
More sales occur in 2nd half of year 2006 sales have slowed
Competitive Situation – High End
Counselor's desk Drop Lid Desk
Elegant design Foldable topTwo pigeon holesTwo secret pencil drawers
Highly functionalHigh qualityWork surface drop lid
$2,569 $1,499
Competitive Situation – Middle Market
eNook The Mobiletech Mobile Desk
Lyon 2253 - Wall Desk
Elegant designCan hold 45 lbsSpace efficient Highly functional
Can fit in most rooms and offices
MobileScratch & stain
resist
Weighs only 30.5 lbs.Strong Lift top compartment
$400-$450 $169.99 $229
Competitive Situation – Mass Market
Adjustable Folding Table leaning wall shelf with desktop
Height adjustableLightweight Folds flatStain resistant
Mobile – shelf rests and is not attached to wall
no skills requiredAdditional accessories available
$59.99 $36.28
Impact on Dorfman Design & Waldesq
Lack of capital & market share
No existing brand name
Competitors’ products manufactured overseas
Competitors strong position decreases industry attractiveness
First mover advantage
sophisticated mechanism, high quality, and upscale design – hard to copy
No product encompasses all Waldesq attributes
growing demand for space saving furniture
Distribution Situation
Distribution
Channels of Distribution
Furniture Retailers
Buying Groups
Distribution Trends
Chain StoresLocal StoresOutletsDisc. StoresReps
Rooms-to-goEthan Allen Levitz IKEA La-Z-Boy
Furniture First
increasingly fragmented
Internet Sales
SWOT
Stre
ng
ths
Weakn
esses
Op
portu
nitie
s
Th
reats
Unique, differentiated products High Quality, elegant and durable products.Multifunctional usage products, broad appeal to different market segments.Ongoing product improvement
No brand identity Lack of capital Lack of manufacturing
capabilities
First mover advantageExpanding to other target
market segmentsProcess improvements
(technological innovation)
Imitation of Competitors Seasonal Demand Lack of financial backing
Critical Success Factors
Identify correct market niche First mover & what’s next Excellence in quality and function Ease of revision to address changing style
trends Solid and substantial financial backing for
manufacturing
Alternatives Strategies
The Think Tank Strategy The Expert Maker Strategy The Sell Strategy The Total Control Strategy The Inventor Strategy
The Think Tank Strategy Sell entire design to another company
Pros All profit realized at
once
Little follow up required
Less capital needed
Buyer will file for patent
Cons Very little creative
control
Focus on function instead of styling
Will not benefit from units sold
The Expert Maker Strategy Focus on manufacturing. Leave selling to
retailers
Pros Retain all creative control
Profit margin determined in-house
Choice of market segment
Cons Requires a large pool of
capital resources Intricate design is labor
intensive and costly. Challenge to locate
domestic manufacturer No guarantee that
retailers will pick this up
The Sell Strategy Dorfman acts as retailer, leaving the
production to a furniture manufacturer.
Pros Margin is made at retail
level, paying furniture manufacturer a set unit cost
Focus on selling to chosen market segment
Headache of making the item can be avoided
Cons Investment in retail space
At the whim of uncontrollable circumstances
Constant work required
Less input into the end product
The Total Control Strategy
Both making & selling
Pros Total control of end
product function & design Total control of targeting
market segment Vertical chain margins are
increased Channel open for further
product launches
Cons Investment in retail space At the whim of uncontrollable
circumstances Constant work required Labor intensive Has the most capital
requirements out of all alternatives
Recommendation: The Inventor Strategy
License the Waldesq design
Pros Low capital requirements Little follow up while
license is active Several ways to profit:
upfront, guarantees, option agreements, royalties
Able to resell design later
Cons Little creative input outside of
patented details Need to maintain patent to
retail license contract value Additional work after license
expires
Marketing Objectives
PRODUCT Blue prints – June, 2007
Price 1. $450-$550
2. Volume discount and wholesale pricing
Distribution
1. Distribution channels
2. Market coverage – selective
3. Volume – 100 units
Promotion 1. "pull" selling strategy
2. Advertising –furniture magazines, newspapers, internet furniture website
Segments and Targets Analysis Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Geographic Segmentation
Young Digerati Couples or single headed house holds mostly with kids Live in urban areas In mid 20s with Masters Degrees and technically savvy.
Baby Boomers Upper middle class home owners in their forties and fifties
with college education, still raising kids. Live in suburban areas with kid centered life style
College Towns Lives in limited living spaces such as dormitories or shared
accommodations in college towns
Demographic Segmentation Income
Middle and High income groups
Life Stage Newly weds and people deciding to move in to live
together
Social Class Upper middle class and upper class consumers
Psychographic Segmentation Innovators
Often purchase upscale, niche oriented products
Thinkers Favors durability, functionality and value in products
Achievers Goal-oriented people who focus on career and family
Experiencers Young, enthusiastic, impulsive people, who seek variety and
excitement
Recommended Marketing Strategy
Concentrated Marketing Strategy
Firm develops and markets for a very well-defined, specific segment of the consumer population.
Target markets are different from one another
Particularly effective for small companies with limited resources, because no need for mass production , mass distribution and mass advertising.
Positioning Space Saving
Living space is at a premium for most of the target market
Multi-functional and Convenience Serves multiple functions such as : writing table, break fast
nook, TV stand, work station etc
High Quality Waldesq made of real wood, aesthetically pleasing and no
close competitor
Marketing Mix - Product Description:
Unique Sleek Design Functional
Materials and colors: Maple Medium cherry
Product Features: high quality wood durability ease of installation
Branding: Message: “Space-saving high
quality furniture with style.” Brass plate “Waldesq by
Dorfman Designs.”
Marketing Mix - Product Augmented Product:
Enhance product (i.e. technical support, repair services)
Offer product hot line Capture customer data Commit to improving existing
products Provide a web forum Offer mailing list & promotional
offers
Marketing Mix - Price Price:
$450-$550 Upscale stores may
not be interested Launch in medium
range market Preserve position
even if copied
Marketing Mix - Place Pilot launch:
Pilot launch of 100 desks
Production cost - $100 per unit
Give idea of market acceptance
Internet Sale: Reach potential large customer
segment – mail catalogues, internet sales
Maintain price to avoid undermining physical store sales
Caution:Increasing e-commerce sales, may affect
first mover advantage
Marketing Mix - Promotion Capture attention:
“Innovators are venturesome“
Target university students and recent graduates
Message: Deliver creative, functional, stylish,
high quality space-saving product. Be open to its customer’s changing
needs
Focus: Focus on meeting customer needs
Use of media: Airline Journals Home Decoration Magazines Recreational Vehicles
Catalogues Furniture Retailer Catalogue
Personal Selling
DEPARTMENTAGENTTASK(S)OBJECTIVESTIMELINEComments
Product ManagementProduct ManagerAcquire Pending Patents
To protect Waldesq’s unique design from copying
June, 2007
Product ManagementProduct ManagerDevelop Blueprints for Waldesq production
For mass production
June, 2007
Product ManagementProduct ManagerLicensing the Waldesq to other manufacturers
For mass production and distribution
August, 2007Assuming that, it takes 2 months to find a potential licensee.
Operations Management
Production Manager
Manufacturing of Waldesq
For distribution through retail stores
February, 2008Typically, it takes around 6 months to organize manufacturing activities.
Sales ManagementSales ManagerDistribution of Waldesq to retail stores
Sell the product to consumers
April, 2008On an average, it takes around 45 days to ship to the retailers.
Sales ManagementSales ManagerPromotion of Waldesq
Sell the product to consumers
April, 2008
Scheduling