First Time Buyers
Right Sided Inc. Danielledivito amandaEggert kerstinklein rachelansay annasawicki juliavictor Bridgetwirth Kimjarosz
Table of Contents
1 - 2 3 - 5 6 7 8 - 9 10 11 12 13 14 15 16 - 17 18 - 19 20
Executive Summary Target Market Target Profile Budget Competitive Analysis Swot Analysis Objective/Strategy Tactics Tactics - Online Tactics - Television Tactics - Radio Tactics - Promotions Media Plan Work Cited
Execuvtive Summary With their first store opening in 1934, Steinhafels Furniture Superstores has been family owned and operated for three generations. The company, originally named Mueller-Steinhafel Furniture, was a partnership between John E. Steinhafel and Arthur Mueller. When Mueller died in 1944, Steinhafel bought his share and subsequently renamed the company. Over the years, Steinhafels moved and expanded. It now has 12 locations in Southeastern Wisconsin, including mattress stores, clearance centers, and their main corporate headquarters. Today, Steinhafels is known for their superb quality and dedication to customer service. One of the challenges faced by the Steinhafels brand is customer perception. Young customers have a distorted view of Steinhafels. They associated it with older audiences and see it as their “parent’s brand�. Therefore, the purpose of this campaign will be to target first time home buyers to change their perception of Steinhafels, and in doing so increase sales and market share. Through strategic use of television, radio and online advertising, we plan to target first time home buyers when they are relaxed, attentive and open to the Steinhafels message. Promotional efforts will build upon this notion to forge connections with our target and place Steinhafels as top of mind when they are considering new furniture purchases.
1.
Executive Summary
75 Years of Quality Furniture
1934
2.
2009
Target Market Our target market is first time home buyers. This market is largely comprised of newlyweds ages 25 to 34 living in the Madison or Milwaukee area. Earning a household income of $75,000 - $149,000, both partners received some form of higher education and currently work as professionals in a sales or office settings. Our target market includes couples that have either recently purchased a home or are in the midst of searching the market. They are planning on having children in the near future. Their daily routine consists of work from nine to five. After work, they enjoy leisurely activities including watching cable TV. Specifically, our target market enjoys shows such as Entertainment Weekly, the Discovery Channel, and the Weather Channel. They subscribe to the daily newspaper and are heavy Internet users, but enjoy outdoor activities. The attitude of our target market toward the Steinhafels brand is one of affluence: they considered their furniture high-end and out of reach. Still, they consider Steinhafels a leader in the furniture category. Known for their immediate delivery and outstanding customer service, Steinhafels has a positive reputation with the parents of our target audience. However, this causes the target market to stray from Steinhafels, fearing that their style is outdated. In addition, the target audience perceives Steinhafels as providing foundational furniture pieces. While they strive for the trendy looks of high-end retailers like Pottery Barn, they look first to Steinhafels to obtain signature pieces. First time home buyers are motivated to purchase furniture by several factors. Among these includes necessity, pride, personalization, aesthetics and the future. Perhaps the largest motivator to buy furniture is out of necessity. Simply put, it takes a lot more to furnish an entire house than it does an apartment or condominium. Furniture fulfills the basic needs of functionality and comfortability for those in the house as well as any guests they may entertain. Pride and personalization also motivator first time home buyers to purchase furniture. They are excited about homeownership and want to show off their new purchase to family and friends alike. Decorating their space with furniture is a vital part of this. In addition, first time home buyers want to transition out of the apartment look and feel to create something that is their own. A new home becomes a chance to show off their sense of style and reflect personal tastes. Similarly, the motivation to buy new furniture stems from aesthetics—specifically the desire for pieces to match. First time home buyers often enter homes with mis-matched furniture from previous living spaces and/or between husbands and wives. Lastly, first time home buyers are motivated to purchase furniture by the future. They have an eye toward the future with the goal of creating a stable, enduring environment.
3.
Target Market When making purchase decisions, first-time home buyers are influenced by a number of factors including social influences, reputation, pricing and product. When it comes to what and where to buy, our target market seeks reinforcement from social influencers such as peers, family and parents. Specifically, research suggests that “…attitude development concerning products and services is based on the influence of the family”. First-time home buyers simply trust the opinions of their family because of their experience buying furniture. Aside from family, peer groups also affect purchase behavior. The target audience seeks information and feedback from their friends. According to Tammi Feltham, “informal groups have a definite influence on brands preferred by young adults”. This is because peers offer a point of reference. Friends share similar tastes and experiences, and therefore their opinions will resonate with the target audience. The reputation of the company as a whole, and in comparison to competitors, influences the decision-making process of the target audience. Reputation corresponds with advertising efforts. In other words, the degree to which the target audience is aware of and has access to a store affects their purchase decision. Our target audience is highly susceptible to advertisements and gathers information about stores and products through this medium. In fact, research shows that “…thirtysix percent of women who plan to buy furniture claimed they read all the advertising inserts or circulars that pertained to the services they needed”. Prices, promotions and incentives are important to the target in the decision making process. This is because first-time furniture buyers have a limited budget and therefore make decisions based on price and payment options. The product itself is a source of influence for the target audience. First-time furniture buyers have a need for durable items that are worth the financial investment. This group is looking for fundamental pieces that meet their need for style and affordability. Likewise, any furniture must accommodate their evolving needs including the possibility of a family. The consumer worries about adaptability, from marriage to having a family the consumer wants to get multiple uses out of a purchase. They also focus on functionality. Product quality is also a factor because first-time home owners want to get the best product available for their money. According to the Vertis Customer Focus Study, the top three factors that influence furniture purchases are price, quality, and variety. In particular, women aged 18-34 stated “‘lowest’ price was the most important consideration when selecting where to make a furniture purchase”.
4.
First time buyers are generally excited about this time in their lives. Starting a new chapter, they are eager to make their own decisions. They now have the opportunity to design their living space. This can be a daunting task since first time home buyers typically do not have a ton of experience buying furniture. With this in mind they do not want to make impulse decisions. Instead, they do their research and search for classic pieces that aren’t too trendy and will last for decades. While furniture purchases are a joint decision, females drive the decision.
Target Market Consumers in the purchase cycle first identify their need for furniture. Most often this stems from the need to fill their newfound space. There is a certain sense of immediacy for first time home buyers when it comes to purchasing furniture. While it depends on the piece, some purchases can be delayed while others are pressing. For example a kitchen table is a necessity over a loveseat. The target audience gathers information by seeking out the opinions of peers and family. Research is done via internet and then in the actual stores. The target market uses furniture websites to get inspiration, view products within a room’s context, search product availability, and see images such as a three-dimension rotation of images on screen as well as see products in multiple colors. Next they evaluate alternatives by seeking further information through television commercials and newspaper advertisements that offer deals on special items. Once the target market has exhausted their resources, they make their decision and purchase the furniture. Their post-purchase behavior is to show off their purchases to their family and friends. According to a U.S. census conducted in 2000, the population for 25-34 year olds in the Wisconsin area was 784,178. After an eight year decreasing estimate of the population, in 2008 it was estimated the population would be 726,680. From this information, it can be concurred that the future growth rate of this target will continue to decrease in numbers. The potential market of first time buyer’s includes the entire state of Wisconsin; more specifically Milwaukee, Waukesha, and Dane counties where current Steinhafels stores are located. As of January 1, 2009 the Wisconsin Department of Administration estimated the state’s population to be 5,688,040, a 6.0% increase from the 2000 census. Within that estimate, our potential target market, 25-34 year olds’, population was estimated to be 784,178. The 2000 census declared Milwaukee, Dane, and Waukesha counties to be the three largest in population size: Milwaukee -940,164, Dane - 426,526, Waukesha 360,767. Milwaukee County’s population, which declined by 114,000 from 1970 to 2000, is predicted to continue losing population through 2035, reaching 863,000 after losing about 77,000 more people. However, the metropolitan area of Milwaukee consisting of Ozaukee, Washington and Waukesha counties is projected to gain nearly 90,000 people across the 35-year period. The county predicted to gain the largest numeric increase among all counties is Dane with 227,000 by 2035.
5.
Target Profile Meet Jennifer and Garret Stout Married only 5 months ago, they have just purchased their first home in Shorewood, WI after living in an apartment together for a year and a half. Jennifer, 27, was born on April 14, 1982 and Garret, 28, was born July 7, 1981. Jennifer, on the side of tradition, Jennifer took Garret’s last name and the Stouts have been together since they met in college. Garret was attending the University of Wisconsin Milwaukee when he met Jennifer, who was enrolled at Marquette University, through mutual friends. They both grew up in the Milwaukee area, Garret being a graduate of Homestead High School and Jennifer a graduate from DSHA. They were married on July 11, 2009 at Jennifer’s parent’s lake house in Wild Rose, Wisconsin. Since moving into their new home they have been very anxious to furnish every room.
Jennifer, an accountant, had been working for Ernst & Young since her graduation from Marquette. She loves working in the city and her coworkers but has always had a hidden love with home life. Jennifer was brought up to always value tradition. Her older sister Jess (30) and parents Jim (58) and Sue (58) have always had influence on her life. Her parents have great influence on most big decisions including where to shop, where to live and even which brand of laundry detergent is better for getting out stains. She reads one gossip tabloid a week along with her monthly subscription to Cosmopolitan and Garret has a subscription to Men’s Health magazine. They get a daily Milwaukee Journal Sentinel and skim through it during breakfast before work. However, they do get a majority of their headlines from surfing the internet up to 2 hours a day. Their day also consist of time in front of the T.V. including early morning news before work, cable shows and primetime dramas and comedies along with the evening news.
6.
Budget
In removing funds for future creative work, as well as a contingency fund, the budget is $111,600. From here, the budget will be split 70/30 between the Milwaukee and Madison markets. In other words, $78,120 will go toward Milwaukee, and $33,480 will go toward Madison. Milwaukee is receiving a higher budget for several reasons. First and foremost, the majority of Steinhafels locations fall within the Milwaukee DMA. Therefore it makes sense to advertise heavier to people who are closer to a larger number of locations. As a larger DMA, advertising in Milwaukee will be more expensive than Madison. Lastly, the Milwaukee DMA has more room for growth. According to Scarborough, in 2007 only 9.4 percent of furniture sales at Steinhafels located in Milwaukee-Racine were attributed to people age 25-34. This is in contrast to 13.6 percent of sales for 2007 furniture purchases by people age 25-34 at Steinhafels’ Madison locations.
7.
Competitive Analysis
8.
Porters of Racine
Colder’s
Strengths: - Services - interior design consultation, custom furniture creation - A+ rating with the Better Business Bureau - Celebrating its 150th anniversary - Carries exclusive furniture lines - Works with over 200 vendors - “Guild Galleries”- furnished rooms to provide inspiration - “House of Ideas” - store within a store - Company website - e-mail newslet ters, sales promotions, new product arrivals
Strengths: - Less expensive prices - Carries appliances and electronics - Wider range of selection - “Full Back” and “Half Back” pro motions - One year warranty on all merchandise - Company website
Weaknesses: - Location - Racine has a small population - Not in a major market - Seen as high-end in price by target market
Weaknesses: - Lower quality - “Same Day Move” - only to specific counties - Limited Milwaukee locations - Target market views Steinhafels and Pottery Barn as better
Competitve Analysis Ashley Furniture Store
American
Strengths: - No. 1 selling furniture brand in the world - No. 1 retailer of furniture and bedding in the U.S. - Locations throughout U.S. & internationally - Locally owned and operated - Less expensive prices - Continual testing of products - Company website
Strengths: - Carries appliances and electronics - 15 locations in the Midwest - Offers widest selection of Energy Star products - “Coordinated Room Groups” at discounted prices - “Low Price Guaranteed” refund policy - Manufacturer authorized in-store repairs - “Price Checks Systems”- adjust to lowest prices - Next day delivery for specific in- stock items
Weaknesses: - Numerous complaints through the Better Business Bureau - Lower quality - Price variation depending on location - Prices not listed on company website
9.
Weaknesses: - Price variation depending on location - Higher starting price points - Lower quality - Delivery can take over 2 weeks
SWOT Analysis Strengths: - - - - - -
High-end products Lower price points Free next day delivery- no third party Onsite repair Long history in the business 7% response rate on Direct Mail
Weaknesses: - - - - -
Target market views as outdated Target market views has too high-end Only offers furniture Cannot ship long distances Website- cluttered & difficult to navigate
Opportunities: - - -
Online advertising Partnering with realtors Change target market perception
Threats:
10.
- - -
Unstable economy Stores that offer electronics & appliances Reliance on out-sourcing to bring in merchandise
Competitively, Steinhafels and American spent the most on advertising in 2008 in the Milwaukee market. Steinhafels spent a total of $4,403,805.00, with $3,418,864.00 going toward television advertising, $82,955.00 toward radio, and $901,986.00 toward local newspaper. In close second, American spent a total of $4,200,177.00 with $3,798,389.00 going toward television, $29,878.00 going toward radio, $40,355.00 going toward local magazine, and $331,555.00 going toward local newspaper. Colder’s came in third with $3,570.116.00 spent between television, radio and newspaper advertising, and Ashley was next with a cumulative $1,998,458.00 spent between television, radio and newspaper advertising. These four players dwarf the $8,349.00 spent by Porters of Racine on local newspaper and magazine advertising (The Nielsen Company, 2009). In 2008, only Steinhafels, Ashley Furniture and American advertised in the Madison market. Steinhafels spent a total of $1,077,460.00, American spent $1,064,855.00, and Ashley furniture spent $457,345.00 (The Nielsen Company, 2009).
Objectives/Strategy Objectives
In our effort to advertise Steinhafels to first time home owners, our objectives include: • Increase Steinhafels’ market share from their current 35 percent to 37 percent • Increase sales by 3 percent among our target audience of 25-34 year olds • Change brand perception to position Steinhafels as a quality, affordable retailer that is in touch with the modern consumer
Strategy Our campaign will run July 1, 2010 - June 30, 2011. We will adopt a flighting plan. Advertisements will be heaviest during the warmer months and around federal holidays. This is because people are more likely to move during the warmer months out of ease. In addition, spring is culturally associated with renewal. People have cabin fever, want change, and want to get out of their houses, making shopping more attractive. The warmer months were also chosen because this is typically the time of the year when couples get married and move into their new homes. During the warmer months ads will run heavy on Tuesday and Thursday. This is because the average individual begins planning their weekend by midweek. By Thursday couples are more inclined to hear an advertisement and head to the store on the weekend with their spouse. Times of interest include the first two weekends in June, the last two weekends in July since these are relatively static times and will not have to combat clutter, and all four weekends in April since it is tax refund time and couples will have extra funds to spend. In an attempt to target first time buyers, we are saturating midweek so the couples will make plans to come in on the weekends. This also gives them time to research their trips on the Internet, which is a staple habit of our target consumer. Coming into the store is not a quick or on a whim decision. These couples need time to research merchandise before they will consider Steinhafels as their best choice for furniture.
11.
Tactics
Mass media such as television, radio, and Internet paid search will mostly be used to target our audience. These mediums will be used since they have a large reach with our first time buyers. Our target audience responds better to television, radio and Internet in comparison to traditional newspaper and print ads because they are interactive mediums. First time buyers receive most of its news from television and Internet. We chose to advertise to the target audience early in the morning and later at night. These time slots will give us the largest reach for our dollar because the target audience is easily exposed to messages before and after work. Running ads on Tuesdays and Thursdays will hit the target market early in the week and then spark a call to action before the weekend. Television and radio advertisements will run during the warmer months to reach the target audience when they are more likely to buy furniture. Television and radio ads will both run on a biweekly basis on Tuesdays and Thursdays, two weeks per month. They will run on alternating weeks (i.e. television the first and third weeks, radio the second and fourth weeks) so that the audience is being reached continually. This will be offset by promotions during the quieter months so that Steinhafels is still advertising in the market. Online paid search will also run on a continual basis throughout the entire course of the campaign.
12.
Online Paid search through Google will be employed year round. The Internet is heavily used by our target audience of 25-34 year olds to research purchases prior to visiting the store. Therefore, it makes sense to connect with customers where they already are. Steinhafels will purchase a variety of keywords related to product and service lines, as well as certain keywords pertaining to holiday or furniture sales. A budget of $558 will be allocated to paid search per month. This translates to roughly $18 per day. With paid search, the client only pays for clicks on keyword returns up to their daily cap. If no one clicks, the client does not have to pay. This makes paid search an easy and desirable layer to add onto traditional media.
13.
Television During warm months and holidays, ads will promote furniture and services unique to Steinhafels. We will develop new ads that are geared towards our target market: first time homebuyers. We will run television ads on Tuesdays and Thursdays, during the early morning and late evening. They will run two times a week every other week starting July September and then again in March - June. Since Mondays are a hectic time of the week for our target, the ads will begin on Tuesdays when our target is more likely to pay attention to what’s on television. Thursday is a perfect time to run the second set of ads since it is right before the weekend and will drive them into the stores during that coming weekend.
14.
• • • • • • • •
TV has a large reach Run during EM and LN on weekdays - audience are in professional fields and likely to catch the news before/ after work Run the ads on television networks such as CNN, CBS, NBC, ABC, and FOX Milwaukee o Early Morning - $950/mo. = 10 pts. o Late Night - $6,090/mo. = 30 pts. • Total = 40 pts./mo. Madison o Early Morning - $640/mo. = 10 pts. o Late Night - $1840/mo. = 20 pts. • Total = 30 pts./mo. TOTAL per month for Milwaukee AND Madison markets: EM - $1,590 LN - $7,930
Radio We will use quick, 15 - second spots that will resonate with our audience on their way to work in the morning. The radio advertisements will run July - September and again in March - June.
15.
• • •
Target audience has professional jobs and listens to the radio on their way to work. Likely to drive to work with the radio on, or radio on at the office, listening to news. Ads will run during the morning commute from 6am - 10am.
• • •
Milwaukee o AM Drive - $950/mo. = 10 pts o PM Drive - $1980/mo. = 20 pts • Total = 30 pts Madison o AM - $290/mo. = 10 pts o PM - $660/mo. = 20 pts • Total = 30 pts Total cost to run radio 2 days per week every other week o Total cost per month for both markets • AM Drive - monthly cost $1,240 • PM Drive - monthly cost $2,640
Promotions
16.
•
A Twitter account will first be established then used to promote a gift card giveaway. The Twitter account will run year long, but the giveaway will occur during the months of October, December and January. This way, it will run opposite of the heavy television and radio advertising.
o
During ordinary times, the Steinhafels Twitter account will be used to heighten customer service and push out promotions. Specifically, Twitter users will be invited to message Steinhafels their contact information to be entered into a raffle for a gift card to Steinhafels. The October and January giveaway will feature a $188 gift card, while the December giveaway will feature a $388 gift card.
o
A $2,000 budget is allocated for the start up of the Twitter account including design and time building a follower base.
•
“The Husband Lounge” will be a special seating area filled with Steinhafels couches and recliners in a featured mall. This is a place where husbands can sit and watch a sports game on the weekend while their wives shop. While seated, our target male will have an opportunity to enter a drawing for a $200.00 gift card to Steinhafels. This will open the door for our target market to experience our merchandise.
o
•
This will help to build a database of customers.
This event will take place during the months of November and January with a budget of $1,000 each month or $2,000 total.
Promotions
17.
•
In Madison, in the month of October the Promotion of “New Home Buyers at Homecoming” will take place during the University of Wisconsin-Madison Badgers Homecoming football game. At gate 1, where our target audience resides, we will have a sponsored Steinhafels tailgating tent where the target audience can sit on our provided furniture while they cook and grill. The participants will have an opportunity to enter a drawing for a $200.00 gift card to Steinhafels. Since there is a Steinhafels store in Madison, and most alumni are near either the Madison or Milwaukee area, this will raise awareness of Steinhafels.
•
In Milwaukee, during the Marquette University vs. Madison basketball game in December, a “Steinhafels Superior Comfort Zone” will be offered for winners in a draw. With this promotion, University alumni will be able to win a seat in the “Steinhafels Superior Comfort Zone”. These seats will be Steinhafels recliners to help get people to see how comfortable and affordable the seats are. During a time out, the people who will be seated in that section will be pictured on the Bradley Center’s jumbo-tron that will be sponsored by Steinhafels.
o
o
This will be a one-time event with a budget of $3,340.
This will be a one-time event with a budget of $3,000.
Media Plan Steinhafel's Media Plan July 2010 - June 2011 July '10
2010 / 2011 Week begins Monday:
28
5
12
August '10 19
26
2
9
16
September '10 23
30
6
13
20
October '10 27
4
11
18
November '10 25
1
8
15
January '11
December '10 22
29
6
13
20
27
3
10
17
March '11
February '11 24
31
7
14
21
28
7
14
April '11 21
27
4
11
June '11
May '11 18
25
2
9
16
23
30
6
13
TOTALS 20
RADIO 25% AM Drive
$1,240
$1,240
$1,240
$1,240
$1,240
$1,240
$1,240
$8,680
PM Drive
$2,640
$2,640
$2,640
$2,640
$2,640
$2,640
$2,640
$18,480
Early Morning
$1,590
$1,590
$1,590
$1,590
$1,590
$1,590
$1,590
$11,130
Late Night
$7,930
$7,930
$7,930
$7,930
$7,930
$7,930
$7,930
$55,510
$558
$558
$558
$558
$558
$558
$558
$6,696
TELEVISON 58%
ONLINE 6% Google Search Engine Marketing
$558
$558
$558
$558
$558
PROMOTIONS 11% Twitter Giveaways
$2,264
$100
$300 $1,000
The Husband Lounge
$3,340
Bradley Center Seating
18.
$2,000
$3,340
Madison Home Buyers at Homecoming MONTHLY TOTAL
$2,764
$100 $1,000
$3,000
$3,000 $16,222
$13,958
$13,958
$3,998
$1,558
$3,858
$1,558
$658
$13,958
$13,958
$13,958
$13,958
$111,600
Media Plan
19.
Milwaukee
Per Month Total
Radio AM Drive PM Drive Television Early Morning Late Night Promotions Husband Lounge Bradley Center Seating Grand Total July ’10-June ‘11
July-Sept ‘10 / Mar-June ‘11
Madison
Per Month Total
Radio AM Drive PM Drive Television Early Morning Late Night Promotions Madison Home Buyers at Homecoming Grand Total July ’10-June ‘11
July-Sept ‘10 / Mar-June ‘11
$950 $1,980 July-Sept ‘10 / Mar-June ‘11 $950 $6,090 Nov ‘10 / Jan ‘11 $1,000 $3,000 74,790
$290 $660 July-Sept ‘10 / Mar-June ‘11 $640 $1,840 Oct ‘10 $3,340 27,350
Work Cited
“Fall 2008 Product Home: Big Ticket Items – Summary.” Market Research Insight Online. 2008. Web. 9 Oct. 2009. MRI Feltham, Tammi. “Leaving Home: Brand Purchase Influences on Young Adults.” The Journal of Consumer Marketing 15.4 (1998): ProQuest. Web. 11 October 2009. Hajewski, Doris. “Not so cozy.” JSOnline (2007): 1-5. Web. 9 Oct 2009. <http://www.jsonline.com/business/29253889.html>. Kurjata, Karin. “Sources of Knowledge for First-Time Buyers: Part Three of a Three-Part Series.” Dawson Creek Daily News (2009): A.7. ProQuest. Web. 10 October 2009. Lokken, Sheri, Worthy, Julianne Trautmann, Miller, Beth, Hyllegard, Karen, et al. “Online Home Furnishings and Furniture Shopping Practices of Rural Consumers.” Journal of Family and Consumer Sciences 97.4 (2005) : ProQuest. Web. 11 October 2009. Scarborough Research, 2009 Stalman, Dirk. Personal Interview, Steinhafels Superstore Pewaukee. http://www.steinhafels.com U.S. Census Bureau, Estimates of Population. (2000). Annual estimates of the resident population by sex and age for Wisconsin: April 1, 2000 to July 1, 2008 Retrieved from http://www.census.gov/ “Vertis Customer Focus Study Reveals Furniture Purchasing Trends.” Webfiles. Web. 9 October 2009. http://www.ashleyfurniture.com http://www.bradleycenter.com http://www.colders.com
20.
http://www.uwbadgers.com