Given that the new product would be manufactured using better, but more expensive technologies that protect the environment, Shaw Industries' target market would have to simultaneously meet the following criteria:
present an increased interest towards preserving the environment possess sufficient financial resources in order to afford the higher prices of the products manufactured using superior technologies.
In this order of ideas, Shaw Industries' target market is formed of both American citizens as well as foreigners, with ages between 25 and 65 and who register above medium incomes. The age limit is imposed by the belief that the population younger than 25 rarely possesses their own houses, shows reduced interest in carpets and does not possess sufficient financial resources to afford the relatively high prices of the new carpets. On the other hand, the retired population generally spends their pension money on medicines or journey around the world and presents reduced interest in redecorating.
Given that aside from residential carpets and floors, Shaw Industries is also focused on manufacturing rugs and floors for commercial institutions, the second target market aimed by Shaw Industries will be formed of companies that are concerned with environmental protection and that possess sufficient financial resources to afford the relatively high prices of the new Shaw carpets. The primary segment is formed of the already existent corporate clients.
C. Points of Difference
The points of difference that make the Shaw carpets better than competitors' products are the results of a combination between particular product features and organizational characteristics. Among these advantages, one could point out the following:
The new carpet is manufactured through the usage of environment-friendly procedures
It produces less waste
It can be easily recycled
Through the reduced usage of chemicals, it pollutes less
The company's international recognition is a promise of high quality.
In order to successfully position the new carpet onto the market, the marketing team at Shaw Industries has to analyze the product features from the customers' view points. Once this is done, the company will create a product image that perfectly fits clients' demands. As such, being familiar with the growing concern for environmental protection customers have forwarded, but also with the late fashion trends in regard to carpets, floors and internal decorations, the manufacturer will emphasise on:
The reduced usage on chemicals in the manufacturing process
The usage of superior technologies that protect the environment and create less waste
The high quality of the carpets
The modern design
The wide array of colours, sizes and shapes.
12. Marketing Program
A. Product Strategy
The new Shaw carpets will be sold under the manufacturer's residential as well as commercial brands. Shaw Industries residential brands include: Philadelphia Carpets, Cabin Crafts Carpets, Queen Carpets, Sutton Carpets, American Home Fashions of California, Shaw Home Foundations Flooring, Couture Elegant Floors by Shaw and Shaw Mark. The commercial brands include: Shaw Contract Group, Patcraft Commercial Carpet, Designweave, Shaw Hospitality and Design Origins by Shaw.
The Shaw carpets are designed with the specified functionality of keeping the floors warm while in the same time serving a decorative purpose
The Shaw carpets are produced using the latest technologies available on the market, and the manufacturing process is less polluting
The carpets present customers with high quality
The Shaw carpets will be available in a wide array of sizes, shapes and colours, as to suit all styling demands
The company considers that during a ten-year period, the carpets should not suffer any major damage due to usage, therefore, their warranty period is of ten years starting from the purchase date and it ensures customers of the high quality of the products while also being the manufacturer's promise of resolving any complaints
B. Product Line
The new Shaw carpets are part of both residential as well as commercial product lines
Due to the increased financial costs and additional efforts required in the production of the new carpets, they will be manufactured as a limited product line, as to test customer's response
If the limited product line is received with success by the market, Shaw Industries will expand it.
C. Unique Product Quality
The unique quality offered by the new Shaw carpets resides in their extended warranty period of ten years and the incorporation of high technologies that protect the environment by reduced consumption of energy and reduced levels of waste. In addition, the manufacturer uses high quality raw materials and skilled and specialized personnel to produce a highly satisfactory final product.
The new carpets produced by Shaw Industries will be covered in transparent plastic bags and then packed in cart boxes. The boxes will be provided by Shaw Industries' purveyors and will have a brown colour. The boxes will be double layered and extremely resistant as to protect the carpet during storage and transportation. The packages will contain the product's name, its features (such as dimensions or colour), its brand, the company's name and contact information, including the manufacturer's location, email address and telephone numbers where customers can call in order to resolve any complaints they might have.
E. Price Strategy
The price of the new Shaw carpets will be superior to the prices of other carpets produced so far. The simple explanation of an increased price is the usage of superior technologies and personnel training that generated additional costs. Further on, the price has to cover the entire production costs, taxes paid by the company to the state budget, personnel wages and also ensure the producer with profits. The prices will vary based on the fibre used in the manufacturing process, the thickness of the rug and its size. Prices could vary from $15 per square meter up to $250 per square meter. Price reductions will be offered on discount sales, to customers that purchase larger quantities of carpets (over 50 square meters) and to loyal commercial clients.
F. Promotion Strategy
The new Shaw carpets will be promoted through all media channels, including internet and television advertisements and radio announcements
The products will also be promoted through street banners
They will be discussed and presented during industry conferences and within specialized magazines and journals
The public relations department at Shaw Industries will contact loyal customers (especially companies) and present them the features and advantages of the new carpets.
G. Place (Distribution) Strategy
The new Shaw carpets will be sold within the company's own stores, which are strategically placed and can easily be found in all American states
Customers will also be able to buy the carpets from Shaw's partners and retail distributors
Also, the products will be available to online purchases.
13. Financial Data and Projections
A. Past Sales Revenues
The sales revenues registered by Shaw Industries are highlighted in the Berkshire Hathaway Annual Report for 2006 and present a continuously ascendant trend:
2004: $5,174 million in revenues
2005: $5,723 million in revenues
2006: $5,834 million in revenues
B. Five-Year Projections
By 2011, the carpet manufacturer has set the financial goal of reaching $9,554 million in revenues, a 63.59% increase as compared to 2006. The projections for the next five years are presented below:
Total Revenues in millions of dollars)
Shaw Industries currently possesses the capability of implementing the product and marketing strategies that support the revenue increase. They possess the necessary technologies, raw materials, financial resources and a skilled and experienced management to supervise the production process, the marketing implementation and the results retrieved. However, in order to insure a successful outcome, they need to increase employees' loyalty to the organization and use superior technologies that protect the environment by consuming less energy and producing less waste.
15. Implementation Plan
As to successfully launch the new Shaw carpets onto the market, increase customer satisfaction and consequently sales and profits, while in the same time maintaining their leading position, the manufacturer has to implement the following procedures, in the given order:
1. Conduct marketing analysis in order to identify what the competition is up to 2. Conduct marketing analysis as to identify the customers' needs and demands
3. Purchase cutting-edge and environment friendly technologies to be used in the manufacturing process
4. Allocate more financial resources to the Research and Development department
5. Train the personnel and teach them how to use the new purchased technologies
6. Place more focus on the Human Resource department; stimulate employees by offering them several incentives (such as increased wages, extensive medical care coverage or paid vacations). This would increase their loyalty to the employer and consequently generate increased productivity
7. Launch production of the new Shaw carpets
8. Develop and implement a promotional campaign focused on the benefits and…