Marketing and Upper Price Points

Category: Advertising
Last Updated: 11 Feb 2020
Pages: 2 Views: 53

2. What are the benefits and risks associated with the acquisition of PLFD? Risks * Manchester only authorized to use Paul Logan name for three years (p. 1) * PLFD lines characterized by bold styles and fashionable colors, whereas MH favored conservative, functional designs (p. 3) * New products introduced by MH could not use the Paul Logan brand name (p. 3) * Heavy competition from cheaper imports (p. ) made it difficult to maintain mid- to upper price points * National Furniture Company (biggest PLFD competitor) stepping up advertising and initiating price reductions in response to MH/PLFD merger and aggressively pursuing a strategy to exploit the uncertainties associated with the pairing (p. 5) * PLFD core customers more fashion-conscious than MH core customers and considered themselves to be trend setters (p. 5) * A major furniture chain which carries PLFD products has expressed displeasure with the merger and is reevaluating their decision to carry PLFD products (p. ) * The debate associated with the brand-name transition strategy and the huge implications associated with the ultimate decision (p. 6) * Promotional debate, which has huge distribution network implications (p. 7) * PLFD favored “push” programs in the form of volume rebates and purchase allowances * MH favored “pull” programs such as national advertising * Should co-op advertising strategy aim at the trade (push), the end consumer (pull), or some combination of both? Benefits: The merger dramatically expanded MH overnight and provided them with a strong brand and an instant market leader position in the household furniture segment (p. 1) * Over 150 SKUs of high quality furniture with a #1 or #2 position in the categories they competed in (p. 2) * PLFD is an instantly recognized and respected brand in furniture (p. 2) * The acquisition included PLFD sales, management, and design teams, 10 distribution centers, inventory for all 150 products, and the right to use the PL name for three years (p. ) * PLFD had a well established sales force (p. 2) * PLFD had strong ties to leading distribution channels (p. 2) * PLFD had a talented design team (p. 2) * The acquisition is very consistent with MH’s ultimate goal of providing a complete family of household furniture products in mid- to upper price points (p. 3) * Both MH and PLFD produced products in the mid, mid-upper, and upper price points (p. ) * Synergy potential between PLFD’s design skills with respect to colors, shapes, and textures coupled with Manchester’s engineering strength, manufacturing expertise, and ergonomic innovations could be a winning combination (p. 3) * Strong housing market (lots of new construction) and US economy in general in early 2005 * Furniture manufacturers relied on innovative and stylish product innovations to fuel growth once the housing boom of the 2000s cooled (p. ) * MH/PLFD partnership is a good combination of innovation and style * PLFD had strong relationships with buyers from major furniture chains, department stores, and wholesalers that sold to the smaller, independent furniture and specialty stores (p. 4) * 2003 Manchester survey showed that 30% of customers favored upscale department stores, 25% specialty shops, 20% large furniture chains, and 15% small, independent furniture stores (p. 5). * These preferences consistent with where PLFD products are currently sold (45% upscale furniture stores and chains, 30% specialty stores, and 25% department stores (p. 4)

Order custom essay Marketing and Upper Price Points with free plagiarism report

feat icon 450+ experts on 30 subjects feat icon Starting from 3 hours delivery
Get Essay Help

Cite this Page

Marketing and Upper Price Points. (2017, May 03). Retrieved from

Don't let plagiarism ruin your grade

Run a free check or have your essay done for you

plagiarism ruin image

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Save time and let our verified experts help you.

Hire writer