Manchester Products: A Brand Transition

1.0 BACKGROUND OF CASE STUDY

        Manchester Products Ins. was one of the leading office manufacturers of furniture in the United States. In 2004, the revenue of Manchester were USD2.33 billion. The company have a strong expertise in engineering, ergonomics and durable designs feasible to implement to household furniture products. This is the reason of strategic expansion of household furniture market, in order to use synergies between office furniture and household. In 1999, Manchester entered the market and established Manchester’s Household Furniture Division (MH), and consisted three (3) product lines such as Relaxer Lines – Ergonomic Recliners, Home Office and Media / Entertainment furniture. Manchester’s aims’ to provide a full range of household furniture products in the middle to upper class customers. In 2003 and 2004, the sales for MH rise up to USD200 million and USD260 million respectively. In addition, they expected the sales to grow up 30 percent in 2005. However, substantial holes in the MH’s distribution network hinder their further development in household furniture market.

Paul Logan Inc. was the fashionable consumer goods and considered a true lifestyle brand. In 2004, the revenue of Paul Logan were USD9 billion. The company having four division such as Apparel (40 percent of revenue), Home Decor (26 percent of revenue), Fashion Accessories (23percent of revenue) and the Paul Logan’s Furniture Division, PLFD (11 percent of revenue). PLFD offered high quality furniture and occupied the first in market share position for brand recognition. In addition, behind of division success is strong distribution channels, well established sales force and talented design team. Paul Logan Inc. sale the furniture division (PLFD) to refocus on its competencies in fashion and textile design.

In the beginning of 2005, Manchester Products Inc. (MH) applies an acquisition of Paul Logan’s Furniture Division (PLFD). The acquisition giving the opportunity to MH, to achieve better access in household distribution channels. Furthermore, PLFD’s design skills in term of shapes, textures and colors conjugate with Manchester’s engineering, manufacturing expertise and ergonomic innovations would be a winning combination. Besides that, Paul Logan allow Manchester Product to use their Paul Logan brand name only for three (3) years. Therefore, MH will faced the brand transition challenge in order to achieve their aims or ultimate goal in the household furniture market.

2.0 PROBLEM OF STATEMENT

According to the Manchester’s ultimate goal, the company seeks to provide a complete family of household furniture product in the middle and upper class customer. However, insufficient access to household furniture distribution channels become barriers to MH in order to achieving their objectives. Besides that, the company also did not have a strong brand in household furniture market. Therefore, they need to decide the optimal timing and design a brand transition strategy to transfer Paul Logan’s brand to Manchester Household as well as create the appropriate mix and promotion expenditures to support the brand transition in three years.