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Manufacturer of Furniture
Background
The firm is a manufacturer of institutional and residential bedroom,
dining room, and living room furniture. At certification, the firm had
25 employees and annual sales of approximately $750,000.
Canada's abundance of raw lumber, and Mexico's cheaper labor
costs, have allowed these countries to flood the U.S. market with lower priced
products. Because of the strong presence of foreign competitors, the firm has
experienced limited success expanding into new product lines. Customers were no
longer content with the standard wood products that helped build the firm into a
respectable manufacturer of solid wood bedroom furniture. Rather, customers wanted
stylish, customized products at prices competitive with cheaper imports.
Although the firm is able to produce such products, its customer base is not
proportionate to maintain a consistent flow of orders in the shop. For quite a
few years, the firm had been heavily reliant on state contracts to keep the
steady stream of work flowing through the shop. This was not a good arrangement.
On one hand, it kept production going. On the other hand, no new
customers/products or markets were being actively pursued. Consequently, if the
contract business declined substantially the firm would find itself in a very
difficult situation.
Assistance Provided
The NYS TAAC prepared and assisted with the implementation of a strategic
marketing plan for the firm. At the heart of the plan was a sales revenue
target of $1.5 million, which would represent a 63 percent increase in annual
sales. To achieve this bold result the NYS TAAC would address new and improved
advertising tools, sales force development, new product offerings, and better
distribution efforts. The marketing plan could be developed for $30,000.
The first task in the strategic marketing effort was to help the firm define a
mission statement and to focus on a vision of itself. Once this was completed,
all other tasks could be related back to the mission and vision to ensure the
firm that
all efforts were indeed focused and contributed to its long-range goals.
The NYS TAAC next completed the analysis to show the firm who it was competing
against, what the current environment in retail sales was, and how the firm's
products fit within the marketplace. The firm was also given information on
the most effective distribution channels.
Project Results
The changes that have taken place since completion of the marketing plan has the
firm very excited and hopeful for the first time in many years. Retail
sales, which almost did not exist in the mid-'90s, began to rebound after
project implementation to additional revenue of $380,000 in a very short time,
favorably compared to contract sales of $550,000. The firm added eight new
hires to accommodate the increase in sales. The president of the firm had high
praise for the NYS TAAC project team who caused him to face current market
issues and to develop a focus and strategy to accomplish necessary goals. The
owner has purchased property adjacent to the firm's manufacturing facility in
preparation for expected future growth in response to demands of the marketplace.
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