RYAN BROWNKETAN DESHPANDEMELIH ECERTASFANGO LIN

April 22nd 2010

Euromarket Design Inc

New YorkChicagoSan FranciscoBerkeleyLos AngelesMiami BeachBoston

SITUATION ANALYSIS

SITUATION ANALYSIS

Strengths• 6 stores across USA• Good Quality product• Affordable prices• Crate & Barrel has strong

brand awareness• CB2 sells RTA (Ready to

Assemble) furniture, which is popular among consumers regardless of their income levels.

Weaknesses• No distinct product

differentiation with respect to West Elm

• CB2’s brand awareness is weak in the Boston Market

Opportunities• 6% annual growth in home

furnishings industry in US• 43% of shoppers of furniture

shop at standalone furniture stores

• Boston Market’s urban setting suits CB2, as it has had success in similar market

• Conversion of existing Crate and Barrel customer base to CB2

Threats

• West Elm is one of the biggest competitors in this segment

• Consumer spending and market growth has been affected by the recession

SITUATION ANALYSIS

Low Brand Awareness

Strong competition and similar concept to West Elm.

Global Economic Recession

MARKETING PROBLEMS

• Examining overall attitudes towards CB2 and purchase intention.

• Assess brand image of CB2.

• Discover Consumer motivations for shopping for home furnishings products as well as shopping priority – Convenience, quality, price, product, variety, design, etc.?

• Develop marketing mix strategies (eg. Price, Place and Promotion).

• Identify the type of consumer who would be interested in purchasing trendy home furnishing products.

• What are the attitudes of people towards trendy home furnishing products in the Boston market?

RESEARCH OBJECTIVES

METHODOLOGY

Participants• 10 Participants (5 males, 5

females)

• Students and Working Professionals

• Single & Married

• Ages 21-44 Years old

FGI Overview

General Shopping Behavior & Preferences

CB2 Concept Presentation

Reaction & Insights

METHODOLOGY : FGI

Data Collection & Sampling Methods

• Convenience Sampling (Emerson College & City of Boston)

• Target: Young Adults (Affluent students and working professionals)

• Sample Topics:– Consumer Behavior– Frequency of action– Preferences– Brand attitude– Purchase Intent

• Measurement Samples:– Frequency– Percentages– Semantic and Likart Scales– Open ended

METHODOLOGY : SURVEY

Data Analysis & Action Standard

• 100 Respondents– 64 Females / 36 Males

• Data Analysis:– Frequency– Percentage,– Cross-tabulation– Independent-sample T-test

METHODOLOGY : SURVEY

HIGH ACTION STANDARD: top 2 box 60% with a mean score of 3.50

HIGH ACTION STANDARD: top 2 box 60% with a mean score of 3.50

RESULTSFGI

• What are they looking for?– Style & Variety– Durability & Price– Brand took a back seat

• Where do they shop?– Target, IKEA, Marshalls etc.

• Biggest Concern– Transportation– Accessibility to the store

• CB2 Concept Evaluation– Modern, unique Style, urban population, creative

• Marketing CB2

RESULTS : FGI

RESULTSATTITUDES & PURCHASE BEHAVIOR

Gender AgeTotal Females Males 18-24 25 & over

(No. of Respondents) (100) (64) (36) (62) (38)[%] [%] [%] [%] [%]

Reasons To Buy New Furniture Replacing an old worn out 26 21 37 29 22 Wanting new style 25 31 15 24 27 For a new home, apartment 38 42 30 35 43 The right sale/deal came along 11 6 18 12 8

Total 100 100 100 100 100

‘Moving to a new home or an apartment’ (38%) was the major reason to buy furniture.

‘Moving to a new home or an apartment’ (42%) and ‘wanting new style’ (31%) were major reasons for our female respondents ‘Replacing an old piece of furniture’ (37%),’For a new home/ apartment’ (30%) and ‘right sale/deal’ (18%) were major reasons for our male respondents

REASONS TO BUY NEW FURNITURE

‘Standalone furniture stores’ (78%) was the most preferred channel to buy home furnishing products from.

‘Standalone furniture stores’ was more popular among females (89%) ‘Garage sales’ was more popular among males (31%)

DISTRIBUTION CHANNEL PREFERENCE

For females ‘price’ (2.39) and ‘style’ (2.42) were the most influential factors. Among the males, ‘quality’ (2.52) and ‘price’ (2.61) were the most influential factors.

‘Price’ (2.46) is the most influential factor. ‘Brand name’ (5.13) seemed the least influential factors in making a purchase decision.

FACTORS INFLUENCINGPURCHASE DECISION

More of the Older respondents aged ‘25 or older’ (32%) tend to spend $500 - $999, annually, than younger respondents aged ‘18-24’ (20%). More of the younger population aged ‘18-24’ (69%) spent ‘less than $500’ annually on home furnishings as compared to those aged ‘25 and over’.

Majority of the respondents (62%) spend less than $500 on home furnishings, annually.

ANNUAL SPENDING

Female respondents preferred ‘family referrals’ (50%), ‘product reviews’ (48%) and ‘magazines’ (41%) compared to males (31% for ‘family referrals’, 33% for ‘product reviews’ and 22% for ‘magazines’)

‘Friends referrals’ (62%), ‘catalog’ (54%) and ‘company website’ (51%) appeared to be the preferred sources of information.

SOURCES OF INFORMATION

RESULTSCONSUMER ACCEPTANCE OF CB2

Action Standard: Top 2 Box of 60% , Mean Score: 3.50Gender Age

Total Females Males 18-24 25 & over(No. of Respondents) (100) (64) (36) (62) (38)

Overall Evaluation Top 2 Box % 69 81 50 60 87Mean 3.89 4.21 3.33 3.69 4.21

Gender Age

The respondents of this study showed a positive overall evaluation towards CB2 product concept with a top 2 box % of 69% and a mean score of 3.89. These findings passed the action standard of the study. Female (top 2 box of 81% and 4.21 mean score) indicated more favorable attitude towards CB2, in comparison with male respondents. Older respondents aged 25 or over (87% top 2 box % and 4.21 mean score) demonstrated more preference for CB2, compared to younger respondents.

OVERALL EVAULATION

The respondents indicated that CB2 is ‘modern’ (4.16), ‘urban’ (4.16), ‘trendy’ (4.11), ‘attractive’ (4.06) and ‘creative’ (3.67)

Compared to males, females show more positive brand perception for all description items, except ‘urban’ For age, older respondents aged 25 or older tend to show more favorable preference for all adjectives when compared to the age group of 18-24.

BRAND IMAGE

Respondents consider CB2 product ‘well-designed’ (3.73), ‘simple design’ (3.69), ‘high quality’ (3.57), ‘durable’ (3.28) and ‘expensive’ (2.85)

Female respondents showed favorable attitudes towards all attributes for the product than male respondents. Older respondents aged 25 or over showcased a favorable attitude towards CB2 product in ‘simple design’ (3.92), ‘durability’ (3.50), ‘design’ (3.87) and ‘affordability’ (3.08)

PRODUCT IMAGE

Action Standard: Top 2 Box of 60% , Mean Score: 3.50Gender Age Income

Total Females Males 18-24 25 & over <$15,000 $15,000<

(No. of Respondents) (100) (64) (36) (62) (38) (66) (34)

Purchase Intention

Top 2 Box % 27% 33% 14% 18% 40% 24% 29%

Mean 2.93 3.13 2.58 2.69 3.32 2.82 3.10

The study indicated the respondents showcased a low level of purchase intention towards CB2 product with a top 2 box of 27% and 2.93 mean score.

Females showcased higher purchase intention towards a CB2 product, compared to males. Older respondents aged 25 or over show a higher degree of purchase intention than their counterparts. Respondents earning more than $15,000 showcased a high purchase intention than those earning less than $15,000, annually.

PURCHASE INTENTION

More females (57%) considered CB2 to be ‘somewhat expensive’ than males (49%). More respondents above the age of 25 (57%) considered CB2’s pricing to be ‘somewhat expensive’ than those belonging to the age group of 18-24 (53%).

54% of the respondents felt that CB2’s pricing was ‘somewhat expensive’. About 22% of respondents felt it was ‘reasonably priced’ followed by ‘expensive’ and ‘somewhat inexpensive’ with a score of 9% each.

CB2 PRICING SUMMARY

Females preferred ‘discount/sales’ (92%), ‘free gift’ (61%), ‘In-store activity’ (30%) and ‘membership incentive’ (25%). On the other hand, men preferred ‘New product introductions’ (33%) and ‘binding with a social cause’ (19%) as incentives to visit a CB2 store

The results clearly indicate that ‘discounts/sales’ (91%) is the most popular promotional tactic that can encourage one to visit a CB2 store. This was followed by ‘free gift’ (56%), ‘In-store activity’ (26%), ‘new product introduction’ (26%), ‘membership incentive’ (23%), ‘binding with a social cause’ (15%).

PREFERRED PROMOTIONS

Survey results indicate that ‘Prudential Center’ (41%) was the most preferred choice as a store location for CB2. It was closely followed by ‘Copley Place’ (39%), ‘Harvard Square’ (36%), ‘Cambridge’ (36%), ‘Back Bay’ (33%), ‘near colleges and universities’ (26%), ‘Downtown Crossing’ (24%), ‘rural locations’ (15%), ‘South End’ (11%), ‘Water Town’ (7%) and ‘Jamaica Plain’ (1%)

More females (44%) preferred ‘Prudential Center’ as a store location as compared to males (36%). Females also preferred ‘South End’ (16%) and ‘rural locations’ (20%) more than males. Those belonging to the age group of 18-24 years preferred ‘Prudential Center’ (44%), ‘Copley place’ (44%) as store locations for CB2. Respondents belonging to the age group of 25 and above preferred ‘Watertown’ (16%) and ‘Cambridge’ (42%).

PREFERRED LOCATION

CONCLUSION

RECOMMENDED TO ENTER BOSTON MARKET

Brand Acceptance: Top 2 box 69% and a mean score of 3.89

Purchase Intent: a top 2 box of 27% and a mean score of 2.93

ACTION STANDARD: top 2 box 60% with a mean score of 3.50

ACTION STANDARD: top 2 box 60% with a mean score of 3.50

RECOMMENDATIONS

Product

• Maintain Customer Product Quality Confidence

• Keep Emphasis On Modern And High End

Price

• Change Target Market To A Higher-income Level And Keep Existing Price

• Keep The Target Market, Cut The Price

• Review The Pricing Policy.

RECOMMENDATIONS

Promotions

• More Emphasis On Creative And Modern Image

• Use Discount And Sales Carefully

• Awareness Campaign (Company Ambassadors)

• Distribution Of Creative Catalogs

• Increase Web Traffic

Place

• Urban Locations• Standalone Furniture Store

LIMITATIONS & FUTURE RESEARCH

Limitations

• Non-representative sample• Global economic recession

Future Research

• True target market representative sample

• Conduct study to account for future in economic growth or recession

RYAN BROWNKETAN DESHPANDEMELIH ECERTASFANGO LIN

Questions?