Batemanor Furniture Company Analysis

Company Analysis

BatesManor Furniture Inc is a furniture manufacturer that was founded by Charlton Bate’s great grandfather in the early 1900‘s.Charlton Bates took over the presidency of the company after his great grandfather retired from the company. BatesManor specializes in medium to high priced wood living room, dining room, and bedroom furniture. BatesManor offers there furniture in high end department store and independent specialty furniture store throughout the nation. The company is very specific on what type of retailer they want to display there product. They believe the store should convey a high quality environment that is suitable for BatesManor product to be sold. This leads them to avoid low end retailers such as Rooms To Go and discount stores. Unlike most furniture companies, BatesManor employs there own sales force of ten full time sales people and two regional sales managers who received a base salary and work for commission. These sales people help inform and motivate retailers sales representative to sell there product, they help set up in store display, and give advice to these sales people. BatesManor also focuses heavily on promotional efforts in four distinct categories. The first category is sales expense and administration which include salaries for sales personal and sales managers, fringe benefits, clerical and office assistant and selling expenses. The second category is cooperative advertising which focuses on newspaper ads in the specific geographical regions of there retailers. The third category is trade promotion which focuses on catalogs, trade magazine advertisements, booklets, trade shows and displays for stores. The final category is Consumer advertising which is targeted to highlight new furniture designs of the company through shelter magazines.

BatesManor spend 3.7 million dollars for these promotions in 2007. The household furniture industry they are competing in a estimated 31 billion dollars in sales in 2007. This is a profitable industry that is broken up into three distinct categories. The first is household upholstered furnitures which makes up 50 percent of the industry. The second wood furniture that accounts for 40 percent of the industry. The third is the other available types of furniture that makes up the following 10 percent. The wood furniture segment is viewed as better quality furniture which is forcasted to grow four percent in 2008. There are up to 1000 different furniture companies in the US and one third of the industry is ran by ten major companies. The key player in this industry are Ashley Furniture, Klaussner Home furnishing, LA-Z Boy Inc, Furniture International Inc, Ethan Allen Interiors, Sauder-Woodworking Company and Doral Industry. Other manufactures such as Bassett Furniture Industries and Sherills Furniture make up a good percent of the industry as well. The top 25 manufacture account for over 50 percent of the US