Essay About Furniture Manufacturers And Dr. Thomas Berry

Marketing Analysis
Essay Preview: Marketing Analysis
Report this essay
Late in the evening of January 9, 2008, Charlton Bates, president of BatesManor
Furniture, Inc., called Dr. Thomas Berry, a marketing professor at a private university
in the Northeast and a consultant to the company. The conversation went as
follows:
BATES: Hello, Tom. This is Chuck Bates. Im sorry to call you this late, but I wanted to
get your thoughts on the tentative 2008 advertising program proposed by Mike
Hervey of Hervey and Bernham, our ad agency.
BERRY: No problem, Chuck.What did they propose?
BATES: The crux of their proposal is that we should increase our advertising expenditures
by $225,000. They suggested that we put the entire amount into our
consumer advertising program for ads in several shelter magazines.1 Hervey
noted that the National Home Furnishings Collaborative has recommended
that furniture manufacturers spend 1 percent of their sales exclusively on consumer
advertising.
BERRY: That increase appears to be slightly out of line with your policy of budgeting
5 percent of expected sales for total promotion expenditures, doesnt it?
Hasnt John Bott [vice-president of sales] emphasized the need for more sales
representatives?
BATES: Yes, John has requested additional funds. Youre right about the 5 percent
figure too, and Im not sure if our sales forecast isnt too optimistic. Your
research has shown that our sales historically follow industry sales almost perfectly,
and trade economists are predicting about a 4 percent increase for 2008.
Yet, Im not too sure.
BERRY: Well, Chuck, you cant expect forecasts to be always on the button. The money
is one thing, but what else can you tell me about Herveys rationale for putting
more dollars into consumer advertising?
BATES: He contends that we can increase our exposure and tell our quality and
styling story to the buying public–increase brand awareness, enhance our
image, that sort of thing. He also cited industry