Swan Final Report 3f4z23

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A Critical Analysis of the Mattress Sector sdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyu

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Swan Mattress A Critical Analysis of the Mattress Sector

PREPARED FOR: Dr. Syed Ferhat Anwar Professor M302: Marketing Management

PREPARED BY: M.M. Shahnewaz Kabir Shawon

(ZR-04)

Alim Md. Noor

(ZR-12)

Saif Ahmed

(ZR-21)

Damil Alam Prakash

(ZR-34)

Khandaker Ahad Ahmed

(ZR-48)

BBA – 15th Batch (A)

INSTITUTE OF BUSINESS ISTRATION UNIVERSITY OF DHAKA

June 02, 2008

June 02, 2008

Dr. Syed Ferhat Anwar Professor Institute of Business istration (IBA) University of Dhaka.

Dear Sir: We would like to submit this report titled “Swan Mattresses: A Critical Analysis of the Mattress Sector” prepared as a part of the requirement for the course of Marketing Management. In the process of preparing this report we had the opportunity to practically implement our knowledge of marketing as well as to gain insight into the mattress sector of our country. We tried our best to follow your guidelines in every step of preparing this report. The whole project has been a huge learning experience for us. We hope you will find this report objective, precise and reliable. Thank you for this assignment.

Sincerely,

___________________ Damil Alam Prakash (On behalf of the group)

CONTENTS Executive Summary........................................................................................................................ vii 1. Introduction ................................................................................................................................ 1 1.1 Origin of the report ............................................................................................................... 1 1.2 Objectives.............................................................................................................................. 1 1.3 Scope ..................................................................................................................................... 2 1.4 Methodology ......................................................................................................................... 2 1.5 Limitations............................................................................................................................. 3 2. Swan Group Overview ................................................................................................................ 4 2.1 History ................................................................................................................................... 4 2.2 Swan Group Overview .......................................................................................................... 5 2.3 Organization Structure .......................................................................................................... 8 2.4 Management Team ............................................................................................................... 9 3. Market Analysis ......................................................................................................................... 11 3.1 Market Shares ..................................................................................................................... 11 3.2 Competitive Forces ............................................................................................................. 11 3.3 Mattress Market Type ........................................................................................................ 13 3.4 Current trends ..................................................................................................................... 13 4. Competitor Analysis .................................................................................................................. 14

4.1 Coirex Company Profile ...................................................................................................... 14 4.2 Karmo Company Profile ...................................................................................................... 16 4.3 Other Competitors .............................................................................................................. 18 5. Swan Mattress Model Analysis ................................................................................................. 19 5.1 SWOT Analysis..................................................................................................................... 19 5.2 Strengths and Weakness Analysis....................................................................................... 20 5.3 Opportunity and Threat Analysis ........................................................................................ 23 5.4 Swan Marketing Mix ........................................................................................................... 25 5.5 GE Model Analysis............................................................................................................... 27 5.6 Extended BCG Matrix .......................................................................................................... 31 5.7 Porter’s Five Forces Analysis for Swan Mattress ................................................................ 33 5.8 Cont Matrix ................................................................................................................... 35 6. Strategies .................................................................................................................................. 36 6.1 Goal Setting ......................................................................................................................... 36 6.2 Demand forecasting ............................................................................................................ 40 6.3 Memory foam ..................................................................................................................... 41 6.4 Customer awareness........................................................................................................... 45 6.5 Customer retention............................................................................................................. 46

7. Conclusion ................................................................................................................................. 50 Appendix A – References .............................................................................................................. 51 Appendix B– Sample Questionnaire ............................................................................................. 52 Appendix C – Sample Swan Print Ads ........................................................................................... 63 Appendix D – Sales Data Analysis ................................................................................................. 66

List of Illustrations Figure 1. Swan Group ...................................................................................................................... 5 Figure 2. Corporate structure of Swan Industries .......................................................................... 9 Figure 3. Mattress industry market shares ................................................................................... 11 Figure 4. Strength & Weakness Analysis....................................................................................... 24 Figure 5. Opportunity & Threat Analysis ...................................................................................... 24 Figure 6. The BCG Matrix .............................................................................................................. 31

List of Tables

Table 1. SWOT analyis of Swan mattresses .................................................................................. 19 Table 2. Strength & Weakness Analysis ........................................................................................ 20 Table 3. GE Model Business Strength Rating ................................................................................ 28 Table 4. GE Market Attractiveness Rating .................................................................................... 29 Table 5. Yearly Forecasted Sales ................................................................................................... 37 Table 6. Periodic Forecasted Sales ................................................................................................ 37 Table 7. Rebonded Mattress Sales Analysis.................................................................................. 39 Table 8. Chi-Square Analysis ......................................................................................................... 39 Table 9. WACC Calculation ............................................................................................................ 42 Table 10. ROI Calculation .............................................................................................................. 44 Table 11. ROI Calculation .............................................................................................................. 48 Table 12. Projected sales figures .................................................................................................. 50

Executive Summary Swan Industries have been operating in Bangladesh for a long time. Although they are the clear market leader, Swan is currently facing decreasing profits. This report attempts to identify those problems and propose strategies to resolve those. The report is limited to Dhaka city only. Data was collected through repeated interviews with manufacturing company executives and surveys of both consumers and retailers. The mattress industry of Dhaka city is oligopolistic in nature. Swan is the market leader (32%) and the main competitors include Karmo (15%) and Coirex (5%). Swan Industries currently offer five kinds of mattresses: foam, coir, spring, PE (tight and light) and re-bonded mattresses. Swan Industries have a few considerable strengths which include: largest portfolio of products, international certification, corporate structure and continuous R&D. The weaknesses include: lowest retailer commission, higher costs and lack of information systems. Some of the biggest threats are the headhunting of employees, powerful new entrants like Otobi, Akhter Furnishers, etc. and specialization of niche marketing companies. According to the GE model, Swan lies on the bottom-left grid of the GE matrix. So, the strategy of Swan should be to ‘protect and refocus’. Also, BCG matrix analysis reveals that Swan mattress division as a whole is a cash cow. To resolve the problems of Swan Industries, the following strategies have been proposed: (I) goal setting, (II) demand forecasting, (III) memory foam PR strategy, (IV) print ad modification and (V) customer retention strategy. If Swan Industries invest in the right areas and implement effective strategies, then they should be able to maintain their position and market share in the long term.

Executive Summary

vii

Swan Mattress A Critical Analysis of the Mattress Sector

1. Introduction Swan Industries have been operating in Bangladesh for a long time. Now, they are a powerhouse in the Bangladesh foam and mattress sectors. Despite having the biggest portfolio of products and the widest distribution channel, Swan is currently facing declining sales and diminishing profits. This report attempts to identify those problems and propose strategies to counter those.

1.1 Origin of the report This report has been prepared to fulfill the partial course requirement of Marketing Management (M302), for Dr. Syed Ferhat Anwar, Professor, Institute of Business istration.

1.2 Objectives The objectives of the report are:  Identify problems of Swan Industries – to find out which issues are pressing and which components of the business need to be focused on.  Identify the trends of the mattress industry – to recognize the patterns of the mattress sales in this industry. 1. Introduction

1

 Develop strategies for Swan Industries – after identification of the companies problems, formulate strategies that will resolve the problems for Swan.

1.3 Scope The information of the report is based on the data collected from retailers and the producers in Dhaka city only. This report includes basic and relevant information that are needed to have an overall idea of sales of mattresses and their preferences. To fulfill our objective we have gathered information from retailers. The products offered by Swan Industries can be broadly classified as into foams, mattresses and hometex (comforters, pillows, etc.). We have narrowed down our study only to the mattress division. Though the mattress companies have distribution and retail outlets in major cities like Dhaka, Chittagong, Khulna, only demand in Dhaka city has been discussed here.

1.4 Methodology  Collection of data To learn about the sales of mattresses, we have gathered information from various sources. They are as follows: I.

Surveys – two types of surveys were conducted. a. Consumer survey - a top-of-the-mind survey directed towards consumers to find out their awareness level about the mattress industry. b. Retailer survey – retailers were surveyed to find out more about the value delivery network and consumer preferences. Surveys were conducted in the three main mattress markets in Dhaka city (Elephant Road, Gulshan and Mirpur) and over a total of 22 retailers . 1. Introduction

2

II.

Interviews – management personnel from the mattress companies were interviewed to compare between the manufacturing and delivery processes of competitors.

 Analysis of data The data gathered from the surveys have been arranged according to their categories and analyzed to fulfill our objectives. For better understanding, we have also included graphical representation. Quantitative techniques like Chi-square analysis and financial measures like Return on Investment (ROI) have been used to analyze sales trends and forecast sales.

1.5 Limitations During the preparation of the report, various limitations were encountered. They are:  Since none of the retailers or manufacturers maintain any consumer database, too many consumers could not ed for an extensive survey.  Mattress is a durable product. So, one consumer use the same mattress for around 10 years, and thus might have no idea about existing products.  The scope of the report has been limited to Dhaka city only due to time and resource constraints.

1. Introduction

3

2. Swan Group Overview 2.1 History The journey of Swan Group started when Mr. Khabeer Uddin Khan started Khan Trading Company. He used to buy foams and mattresses from foreign countries like China and sell them in Bangladesh. After some years Mr. Khan recognized the potential of this sector and started his own foam production business called Swan Foam (industrial name poly-urethane foam) in 1988. Swan Foam was a great success and eventually Khan Trading Company was absorbed. Slowly, Swan Foam started to grow and within a few years achieved complete backward linkage for foam products. The foam was mainly sold for sitting purposes (sofa-sets, cushions, etc.) but also, there was a growing demand for foam mattresses. The market for mattresses was increasing steadily. In the meantime, Swan was already diversifying its operations. A chemical called synthetic rubber adhesive was required for the production of foam. Sensing a demand for this product, Swan started manufacturing it commercially. In 1994, a separate division named Swan Chemicals was launched. By this time, the mattress industry had grown in size. There were importers who brought different types of mattresses like spring, felt, etc. to the country. Finding that a sizeable demand existed, Swan group started making spring mattresses in 2001-02. Thus, Swan Mattresses was born. Its first product was Spring Mattress which was a huge success. Building on the success of the mattress division, Swan went for complementary products and created Swan Hometex. As a result Swan’s costs came down for mattress production and profit went up. These surviving industries now create the modern Swan Group.

2. Swan Group Overview

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The latest addition to the Swan Group is the introduction of a real estate business named Swan Properties. It is a completely separate entity and has a different managerial staff for the running of the business.

2.2 Swan Group Overview Swan Group is divided into three main divisions. The divisions are largely independent of each other, though at times the same resources are used by multiple departments. For example, the research and development facilities of both the Swan Chemicals division and the Swan Industries are overlapping.

SWAN Group

SWAN Industries

SWAN Chemicals

SWAN Foam

LA

SWAN Mattress

UPR

SWAN Hometex

SR

SWAN Properties

PU

Figure 1. Swan Group

Swan Industries Swan industries is comprised of three strategic business units (SBUs). They are:


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Swan Foam Swan Mattress Swan Hometex Though the management shows these three as being separate operations, the boundaries of the departments are blurred. One operation might use assets from another when the need arises. For example, the same people who package the foam also package the mattresses. Even though management recognized three SBUs, actually the foam and the mattress operations are very much related. For example, to manufacture a foam mattress, the same machinery and the human resources are used who produce foam cushions and other foam products.

Swan Foam Swan Foam mainly produces foams of four grades. The three main grades in of quality are Swan (Regular Quality), Comfort (Better Quality) and Super (Best Quality). There is also another thin type of foam called YS grade. Currently Swan Supplies to both consumers and business buyers. Business buyers use various types of foam as Raw Materials for their products. Some business buyers sectors where Swan delivers are Furniture, Transportation, Footwear, Toy Sector, Luggage etc.

Swan Mattress Swan is the pioneer mattress manufacturing company in Bangladesh. Their initial product was the Spring Mattress. Now, they create five types of Mattresses. These are: 2. Swan Group Overview

6

 Foam Mattress  Coir Mattress  Spring Mattress  PE Mattress (tight and light)  Re-bonded Mattress They are the current market leaders and they try to keep their leadership through superior product quality and service.

Swan Hometex Swan Hometex division makes a variety of products which includes comforter, pillow, oven mitts, etc. Swan Industries Ltd. has produced quality product for its customer for the last 21 years. It currently has 12 showrooms and almost 700 retail outlets.

Swan Chemicals The initial product of Swan Chemicals was Synthetic Rubber Adhesive (SRA), more commonly known in the market as “Solution”. Currently, they create four types of Adhesives. They are  Lamination Adhesive (LA)  Unsaturated Polyester Regine (UPR)  Synthetic Rubber Adhesive (SRA)  Poly Urethane Adhesive(PUA)


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They are the market leaders in SR adhesive but they are still developing their UPR, PUA and LA. Bu they still cannot achieve the target sales. The manufacturing plant of Swan Chemicals is located in Gazipur.

Swan Properties Recently, Swan Industries Limited Started this developers business. For that purpose they have taken a director who has 12 years of professional experience in this field. Swan Properties office is situated in Prime View, Gulshan Avenue.

2.3 Organization Structure The organizational Hierarchy is blurred in SWAN Group. But broadly Its head is the owners which is the Mr. Khabeer Uddin Khan’s family. Under them there is the General Manager (Corporate). This post is equivalent of CEO. Then there are several posts. They are 

General Manager (Marketing)



Head of s



Head of Commercial



Head of VAT



General Manager Production


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Owner

GMC

GMM

Head of Commercial

Head of VAT

GM Production

Head of s

Figure 2. Corporate structure of Swan Industries

(Marketing) All these post report to both the head of s and the General Manager (Corporate). Under each of the divisions, they have Assistant General Managers and under them there are Deputy General Managers. The Dhaka Corporate Office is in 23-24, Tejgaon Industrial Area, Dhaka.

2.4 Management Team Mr. Khabeer Uddin Khan - MD and CEO Mr. Khabeer Uddin Khan has ed his Honors and Masters from the ing Department of Dhaka University. After graduation he did not attempt to go into a job. He began Khan Trading Company which eventually gave birth to Swan group of Industries Ltd.


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Mr. Zinnat A. Montu - General Manager (Corporate) Mr. Montu has been with Swan Group of Industries for the last 30 years. He is an expert in all the sectors that swan operate in e.g. Servicing, Customs, Income Tax, Financial Institutions etc. He is ing other executives to perform their activities smoothly. Mr. Mozibur Rahman - General Manager (Production) Mr. Mozibur has been with Swan for more than 20 years. He ensures timely production and supply of Swan Products. He also ensures quality of the products produced. He is also an expert in related sectors like local procurement of Raw Materials, transportation of Raw Material and transporting finished goods to valued customers. He also ensures proper storage of Raw Materials and finished goods. Mr. Ali Ahmed - General Manager (Marketing) Mr. Ali has completed his Honors and Masters from the Marketing Department of Dhaka University. He started his career with Singer Company. Mr. Zinder Ali - Assistant General Manager (Marketing) Mr. Zinder has worked with Swan for more than 16 years. He has personally sat with many customers and his liaison skills are irreplaceable.


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3. Market Analysis 3.1 Market Shares

Unfortunately, no statistical information about the market shares could be found from any sources. According Swan Industries, the market shares are something like this:

Mattress Industry Market Shares

21% 32% 7% 10% 15% 5%

5% 5%

Swan Karmo Coirex Tiger Eagle Bengal Imported Others

Figure 3. Mattress industry market shares

3.2 Competitive Forces Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market, the threats from the five forces of industry competitors, potential competitors, buyers and suppliers are the following: 1. Threat of Segment Rivalry: Currently the Mattress market contains numerous competitors. There are many small players in the market both local and foreign. The market currently is undergoing fierce competition, Big

3. Market Analysis

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players like Swan and Karmo has lost significant market shares to many small local and foreign brands. 2. Threat of new entrants Some mattress products like Foam and spring mattress requires expensive equipments and technological expertise. It is also difficult for new entrant to establish a functional network system of dealership and retails to reach customer all over Bangladesh. Only Swan and Karmo have managed to develop an extensive network all over the country Because of heavy investment required in equipment and production expertise the industry has high entry and exit barriers. 3. Threat of Substitute Products In Bangladesh local made Quilt mattress (Zajim) is the most popular. Quilt mattress are more widely available than branded factory produced ones. Quilt mattresses are 3 times cheaper than most Foam and Coir mattresses. 4. Threat of buyers’ growing bargaining power

Buyers don’t have lot of bargaining power in the mattress market. Prices are fixed by retailers and the companies have not focused on any other channels. Through our surveys of retail markets we have seen that retailers charge varying prices in different retail locations, and customers are not sensitive to such price variance. 5. Threat of suppliers’ growing power Swan has most extensive backward linkages of all companies. Swan itself procures most of its raw materials required for Mattress production; therefore only international price changes on 3. Market Analysis

12

raw materials can affect its profitability. However other companies don’t have a strong backward linkage and has to depend on Swan for many raw material imports.

3.3 Mattress Market Type A small number of large firms control more than half of the market share this includes Swan, Karmo and Bengal. All the companies find it hard to charge significantly higher as their products in each category are homogenous. The competitors match on prices and services the only way to gain competitive advantage is by lowering costs. So, the market type can be assumed to be an oligopoly.

3.4 Current trends Sufficient data could not found on the mattress industry. This was mainly because of two factors; firstly, none of the statistics bureaus consist of data focused fully on the mattress industry, and secondly, none of the companies have any customer database which could be used for survey purposes. Based on interviews of retailers and executives, they itted the following trends: 

Foam mattress sales are extremely low in summer, but very high in winter.



General decline in coir mattress sales.



Growing demand of rebonded mattresses.



Specialized firms making more profits.

3. Market Analysis

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4. Competitor Analysis 4.1 Coirex Company Profile Established: 2002

Managing Director: Mr. Mahbubul Alam

Ownership: Partnership

Head Office: Elephant Road, Dhaka

Products: Coir Mattresses

Coirex Mattress Company focuses on a single product category only. The company produces and markets its sole product, Coir Mattress. The company was established by a group of 4 business partners in 2002, the founders were all previously involved in mattress retailing in Elephant Road Market, Dhaka. Currently the managing director of Coirex is Mr. Mahbubul Alam. Coirex only produces coir mattresses. The coir is procured through suppliers who import it from different countries like Malaysia. Coir has a factory where mattresses are stitched. Quality control is very high the owners themselves are responsible for quality checks as inspection. Due to its superior quality and niche marketing, Coirex has become very reputed brand among customers in Dhaka Metro region. Coirex has very well after sales services; it has prompt response time to customer complaints. Coirex has very high variable costs compared to competitors like Swan and Karmo, therefore Coirex has lower profit margins that its competitors. Due to high variable costs and low profit margins Coirex can only give its retailers a commission of 10%-15%, the lowest among its competitors.

4. Competitor Analysis

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Coirex is facing many problems in the market, its competitors are moving very fast in the Coirex mattress category, making Coirex lose its niche in the market. 7 P Analysis of Coirex

 Product Coirex from its inception has produced and market only one category of mattress, which the Coir Mattress. Coirex focus on a single product category has enabled it to specialize in producing the highest quality coir mattress in the company.

 Price Prices the customer pay for mattresses is not fixed and depends upon the retailers. The price of Coirex in any retail location should vary little when compared with another brand. Coirex pays a commission of 10-15% to the retailers; they pay the lowest in the market because they have the higher production cost compared to their competitors Swan and Karmo 

Place

Coirex does not distribute outside Dhaka Metro. Its retail is limited to only Dhaka City. Coirex has a small production capacity. Coirex entered the mattress market in 2002 therefore it has not built a distribution network outside Dhaka City.

 Promotion Coirex till now has not undertaken any promotional activities. The reasons are high variable cost per unit in the production process, Coirex rivals due their bigger size have scale of economy which brings their per unit variable costs down


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Coirex Strategies 

Coirex focused on single product category, Coir Mattress, because it easy to setup up production plants and completion was very little in coir mattress category.



Focusing on single product category enables Coirex to produce higher quality products than rivals Swan and Karmo. Quality control checks and supervision is done by the Coirex owners themselves.



Single product focus has helped Coirex to stay closer to retailers and customers than rivals Swan and Karmo. Coirex has maintained good relations with retailers all over Dhaka City, who despite Coirex’s least commission percentage are more than willing to sell Coirex Mattress.



Coirex has better after sales service than its rivals Swan and Karmo. It promptly responds to any customer complaints.

4.2 Karmo Company Profile Established: 1965

Managing Director: Md. Hafizur Rahman

Ownership: BTL group

Head Office: Elephant Road, Dhaka

Products: Spring, Foam, Coir, and Rebonded Mattresses

Karmo was established in 1965 at a time when Bangladesh was part of Pakistan. The company has been pioneer in Foam market; Karmo was the first company to manufacture foams for furniture. Karmo later lost its market leader position to Swan, but still it holds a competitive position in the market as of fiscal year 2008 Karmo had 15% share in the mattress market.


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The company maintains good relations with dealers and retailers by giving the highest commission in the market commission of 15-20%(exact amount with held). The company’s main strength in the market is its brand reputation, claimed by the company officials because they being the oldest in the mattress market. Karmo is also has another division, Karmo Chemicals which mostly produced adhesives, because the raw material for Foam petro chemicals is complementary for adhesive making. 7 P Analysis of Karmo 

Product

Karmo foam produces three different types of mattresses currently. Those are foam, coir, and spring mattress. They have done quite good but are not market leader in any of the categories. Recently Karmo is trying to start producing rebounded mattress.

 Price Prices the customer pay for mattresses is not fixed and depends upon the retailers. The price of Karmo in any retail location should vary little when compared with another brand. Karmo pays the maximum amount of commission to the retailers in the market. They have very good retailer relationship and satisfaction. 

Place

Karmo has a very good distribution channel throughout the country. They have sufficient number of retail outlets. These outlets are located in convenient locations in both Dhaka city and other areas. And they are very fast at delivering on time.


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 Promotion Karmo stresses on ment for promotional activities. They run TV commercials on a seasonal basis. They have billboards on different spots of Dhaka city and highways. Karmo also gives ment in print media. They do not apply other promotional tools like sales promotion, PR etc.

Karmo Strategies 

Karmo is the oldest in the market and has sufficient brand reputation.



Karmo because the oldest in the market, they have developed an extensive dealer and retailer network throughout Bangladesh.



Karmo has good relationship with channel . They rely on high commission to win retailers who influence customers to buy their products.

4.3 Other Competitors Among the other competitors, currently the most prominent is Eurasia. They only produce felt mattresses which has an increasing demand right now. However, they have been in business for a very short time and so data is insufficient to determine whether felt mattress is riding on a fad or a trend.


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5. Swan Mattress Model Analysis 5.1 SWOT Analysis The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing Swan Mattresses.

Strength      

Maximum type of Products Strong Brand Image Better certification Organizational Structure R&D Technology

Opportunities   

Customer Retention Strategy Memory Foam Mattress Quality Awareness Program

Weakness      

Falling Coir Quality Lowest retailer commission Distribution lag time Higher Costs Limited production capacity Absence of proper information management systems

Threat      

New heavyweight Entrants (Bengal, Akhter Furniture, OTOBI, Kurl-on) Specialization (Coirex in Coir Mattress) Head-hunting of employees Market Cannibalism of Re-bonded Mattress Excess Durability of Re-bonded Mattress New technology such as Natural Latex mattress, Air Mattress, etc.

Table 1. SWOT analyis of Swan mattresses

5. Swan Mattress Model Analysis

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5.2 Strengths and Weakness Analysis Criterion

Swan Mattress

Karmo Mattress

Coirex

Product Quality

?

?

5

Type of Product

4

3

1

Commission

3

4

2

Reach

5

5

1

Distribution

3

4

2

Awareness

5

3

2

TV ment

5

4

0

Print ment

?

?

0

Other ment

?

?

0

Certification

5

4

0

Organization Structure

4

2

4

Capital

?

?

2

R&D

4

3

3

Cost

3

4

2

Technology

5

3

4

Table 2. Strength & Weakness Analysis



Product Quality: Quality of different mattresses? o Swan claims they have the best quality but market survey shows that their Coire mattresses have complaint. Different sources had similar complains that the coire mattresses get puddles in them after 1-1.5 years of use. Also foreign brands had higher rating in spring mattresses. Coirex has higher ratings in Coire Mattress. 5. Swan Mattress Model Analysis

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Most s are indifferent about the foam Mattresses quality. Swan is the only producer of Re-bonded mattress, so it is difficult to evaluate. 

Type of Product: How many types of mattresses? o Swan has the largest range of product. The Mattress types are Foam, spring, Coire, Re-bonded, PE (Tight and Light). The market also has Felt Mattresses by Eurasia but no single brand hold 5 types of products. It also has three different types of Foam Mattresses.



Commission: How much sales commission do the retailers get? o Swan gives a commission of 15% as claimed by Swan, one retailer backed this claim. Swan has distributor between them and the retailers. Because of this distributors commission, the profit margin of the retailers is the least of all brands. o There is a bidding culture about commission in the market. Companies try to outbid their competitors. Swan always keeps their commission fixed. (Information from the Swan.)



Reach: Where can we find it? o Almost all independent retailers sell both Swan and Karmo. o Karmo dealers sell Swan Mattresses but Swan dealers only sell Swan Mattress.



Distribution: Do we find it on time? o Some retailers claimed that Swan foam does not deliver on time.



Awareness: Are people aware of it in different places? o From limited surveys, we have found that almost everyone knows about Swan because it has given TV ment consistently for long period of time. We have not conducted the customer survey to confirm.


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

TV ment o Swan focuses their promotion in TV ments. They claim that they hold the maximum airtime. Now, Karmo also gives TV ments in BTV. We also heard that some other company started giving TV ment. We still do not know its name.



Print ment o Almost all mattresses give ments in different Magazines. Also Karmo gives print ments in famous Bangla Dailies. Swan claimed that they also gives print ments in dailies but we got no proof.



Other ment o All companies use wall writings. Also they use stickers and Karmo has given billboard ments.



Certification o Swan and Karmo have ISO 9001. Only Swan has HAC.

Organization Structure 

Swan is the only company with organization structure. We went to Karmo and it had very blurred organizational structure. Its positions were not defined and the roles were not assigned.

R&D 

Among the existing companies, Swan claims to be the pioneers of R&D. They said that they were the first to produce spring and re-bonded mattresses. Retailers confirmed that they are the only producer of re-bonded Mattresses.


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Cost 

Swan claimed that they have higher costs because they maintain organizational structure and they do R&D.

Technology 

Swan claims to be the most technologically advanced. Other companies come to Swan for stitching because of their better equipment.

5.3 Opportunity and Threat Analysis Opportunities  

Retention Strategies: Swan has a lot of but no retention strategy. If they give some incentives for re-buying then their sales may go up. They can produce memory foam. They have all the necessary technology. It can be a great opportunity since it has a huge market abroad.

Threats      

New Entrants: There are a 3 new local competitors (OTOBI, Akhter Furniture, Bengal Group) and 1 foreign competitor (Kurl-on). Specialization: Coirex are becoming distant leaders in Coire Mattress because they specialize in coire mattress. Head-hunting: Swans employees are lured away with better salaries from other competitors. Cannibalism: Re-bonded Mattress is eating away other product’s market share due to cheaper price and superior quality and longevity. Durability: Re-bonded mattress is tested to be much more durable than the other mattresses, as claimed by Swan. This may extend the re-buying time too much. Newer Technology: There are a number of new technologies in the foreign market such as Natural Latex mattress, Air Mattress and Water Mattress.


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Strengths

Weakness Figure 4. Strength & Weakness Analysis

Qualitatively, Swan falls in the upper right region because its strengths greatly outweigh the weakness, as compared to the competitors.

Opportunity

Threats Figure 5. Opportunity & Threat Analysis

Qualitatively, it falls in the lower left region since the threat greatly outweighs the opportunities.


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5.4 Swan Marketing Mix Product This includes the variety, quality, design, features, brand reputation, packaging, sizes, services and warranties of the products sold. 

Swan is has the most variety of mattresses in the market, this includes Foam, Coir, Spring, Re-bonded, tight and light and memory (health) mattress.



Swan has good quality in most mattresses, market leaders for quality in Coir mattress is Coirex and Spring mattress is imported Chinese brand Prance Dragon.



All the mattresses in the market have similar design and features



Swan has the best brand reputation in the market



Swan has excellent after sales services regarding customer complaints, responses to customer complaints are prompt



Warranties on all categories of mattresses are same for all brands.

Price List prices of products, discounts and sales, payment periods and Credit 

Prices of products vary according to location and retailer’s bargaining, the market price for each mattress category varies very little for all local brands. Imported brands are charged a bit higher by retailers.



Swan never offers any discounts on sales price to customer, the sales discount practice is almost absent in the mattress market



Swan gives a commission of 15% as claimed by Swan, one retailer backed this claim. Swan has distributor between them and the retailers. Because of this distributors commission, the profit margin of the retailers is the least of all brands.



There is a bidding culture about commission in the market. Companies try to outbid their competitors. Swan always keeps their commission fixed. (Information from the Swan.) 5. Swan Mattress Model Analysis

25

Promotion This includes promotional activities such as sales promotion, advertising, sales force, public relations, Direct Marketing. 

Swan has now yet undertaken any sales promotion. The practice of sales promotion is absent in the market.



Swan regularly s in Newspapers and magazines. It also s in T.V but less frequently than its competitors like Karmo and Bengal.



Swan has a dedicated sales force of 33 marketing executives who are actively involved distribution and selling process.



Swan is doing Direct Marketing with Business buyers, direct marketing with consumer buyer is still at experimental stage.

Place This includes the channels of distribution, geographical coverage, available locations, and inventory management. Currently, Swan has the largest distribution network with around 700 retailers spread throughout the country. People All people involved in the consumption of a service or a good. Regarding technical expertise, Swan is the market leader. Swan Industries have highly trained workers and a functional R&D department. Also, they have the highest number of employees among other mattress companies and the largest sales force. Among the mattress companies, only Swan Industries have an organized corporate structure. However, the responsibilities of each position are not always clearly defined. 5. Swan Mattress Model Analysis

26

Process Procedure, mechanism and flow of activities by which goods or services are consumed. Swan Industries is the clear technological leader in the market. Most of the new mattress types have been pioneered by Swan in the market. Consumers can buy their products from any of three existing mechanisms: Swan office, distributors and retailers. Also, Swan has 33 marketing executives who roam around the country to identify sales opportunities and provide after-sales service. Swan readily repairs any mattress brought by a customer and also, has an easily accessible help service. Physical Evidence The ability and the environment in which the service or good is delivered. Since all types of mattresses are sold at the same retail outlets, the tangible experience is largely the same for all the companies. Also, since the retailers are the sales people here, the intangible aspect is also irrelevant.

5.5 GE Model Analysis The GE model takes into consideration two major variables, the business strength of the company and its market attractiveness. Both these variable for quantitative as well as qualitative variables.


27

Business Strength Table 3. GE Model Business Strength Rating

Serial no.

Factors

Weight

Rating (1 to Value 5)

1

Company Reputation

0.20

5

1.00

2

Retailer Commission

0.15

3

0.45

3

Market Share

0.10

4

0.40

4

ment

0.15

5

0.75

5

Push Sales

0.15

3

0.45

6

Cost

0.10

1

0.10

7

R&D

0.05

5

0.25

8

Availability

0.05

4

0.20

9

Capacity

0.05

4

0.20

Total

1.00

3.80

Explanation: 1. Swan has been selling a diverse range of products for a long time. They also have high availability and a long running TV ments. 2. Swan gives a moderate commission to its retailers. Some of the competitors like Karmo give more commission while other companies like Tiger/Sleepwell give less. 3. According to Swan and the retailers, Swan and Karmo have almost similar market share. Each company claimed to be the market leader. Almost half the retailers claim that Swan is the market leader while the other half claim that Karmo is the market leader. 4. Swan gives more ment compared to its competitors. Also its ads have been here for a long time. It gives ads in TV, newspaper, billboards and frescoes. 5. Mattress sales are largely dependent on retailer push sales. Among the retailers surveyed, most of them preferred pushing other brands in comparison to Swan. 6. Swan itted that compared to other companies, they had the highest cost. 5. Swan Mattress Model Analysis

28

7. Among the local mattress companies, only Swan has an organized R & D department. Most types of mattresses were pioneered by Swan in Bangladesh. 8. All retailers sell Swan. Swan is available in the maximum number of places. 9. Swan has a very large production capacity. However, they fail to deliver their products to their customers on time.

Market Attractiveness Serial no.

Factors

Weight

Rating (1 Value to 5)

1

Target Market Size

0.15

3

0.45

2

Sales Promotion Requirement

0.15

1

0.15

3

Dependency on Retailer

0.15

1

0.15

4

Annual Market Growth Rate

0.10

2

0.20

5

Competitive Intensity

0.10

1

0.10

6

Consumer Income Level

0.10

3

0.30

7

Substitutes

0.05

4

0.20

8

Complementary Products Sales

0.05

4

0.20

9

Consumer Awareness

0.10

4

0.40

10

Entry/Exit Barrier

0.05

2

0.10

Total

1.00

2.25

Table 4. GE Market Attractiveness Rating

Explanation: 1. Swan claims that their target market starts from the middle class and moves upwards. Also they said that they focus on urban areas and upper class buyers of towns. They did not define the income range of a middle class. New entrant’s interest in entering into this market hints toward a huge market potential.


29

2. Consumers generally have very little information about mattresses. Swan claimed that promotion is directly related to increasing sales. So, companies are extremely dependent promotion on sales. 3. All retailers claimed that sales were completely dependent on them. Also, Swan and Karmo itted that retailers were vital for sales. 4. The market for mattresses is very small. 5. The number of competing companies in the market is very large. Also, the market is heading towards specialization. For example, Coirex is the leader for coir mattresses, while Eurasia is the leader for felt mattresses. Also there are a number of new entrants. 6. We could not reach any conclusions since it requires extensive customer survey. Swan claimed that there is still enough money in the consumer’s hand but it is shrinking day by day. 7. There is an only one major substitute product namely local felt mattress (Jajim). 8. Bed is Mattresses complementary product. Currently, beds are being sold with mattresses in Mirpur - Shawrapara region. 9. Consumers are aware of mattresses. In general mattress is a symbol of social class. But there is a lack of awareness about product quality and product type. 10. There is some entry/exit barriers but still there 4 big new entrants.

Strategy for Swan Mattress A total of 3.80 on business strength and 2.25 on market attractiveness puts Swan mattress on Protect and refocus strategy Protect and Refocus   

Manage for current earnings Concentrate on attractive segment Defend strength


30

5.6 Extended BCG Matrix Swan Mattresses Market Growth Rate : Low Market Share

: High

Position

: Cash Cow

Explanation

: Swan Mattress as a whole is facing low growth because its spring and

foam mattress markets are falling. However it is booming in the re-bonded mattress section. It has very high market share.

Star

High

Mark

Growth

Market Growth Rate

Question

Rate Low

Cash Cow

Growth

Underdevelope

Rate

d Orphan

Negative

Dead

Growth Rate

High Market

Low Market Share

Share Relative Market Share

Figure 6. The BCG Matrix


31

Swan Spring Mattresses: Market Growth Rate : Negative Market Share

: High

Position

: Orphan

Explanation

: Retailers as well as Swan said that the demand for Spring Mattress has

fallen but they both said that it still has one of the biggest market shares.

Swan Coir Mattresses: Market Growth Rate : Negative Market Share

: Data Insufficient

Position

: Data Insufficient

Explanation

: Retailers said that the market share of Swan Coir Mattress is falling but

Swan said that their sales are rising. Swan has not been able to give a proper estimate of their market share.

Swan Re-bonded Mattresses: Market Growth Rate : High Market Share

: High

Position

: Star 5. Swan Mattress Model Analysis

32

Explanation

: Swan as well as their distributor’s claims that re-bonded mattress is

their star product. They are the only producer in Bangladesh and thus hold almost all of the market share.

Swan Foam Mattresses: Market Growth Rate : Negative Market Share

: High

Position

: Orphan

Explanation

: Sales of Foam mattress is very low in the summer, so appropriate data

was hard to get. Overall growth rate is negative because of the introduction of new products. Swan still holds the highest market share in the foam mattress market.

5.7 Porter’s Five Forces Analysis for Swan Mattress New Market Entrants 

Entry ease/barrier: The initial investment is very high but the market is very big. So, this market attracts big investment players such as Akhter Furniture, Bengal Group, OTOBI, and Curl-on Mattress.



Geographical Factors: The recent entrants have some form of geographical specialization. For instance, LOCO coir Mattress Company specializes in selling in the Chittagong region. Only Swan and Karmo has extensive network in most of Bangladesh. Most other companies still have untapped areas. Eurasia has mattresses in Dhaka and Khulna. There network in the other divisions are not that strong.


33



New Entrant Strategy: The last big new entrant was Coirex. They focused on Specialization into coir mattresses. Currently they have a very good image about their coir mattresses in the market.



Routes to Market: Swan uses three routes to the market. 1. For corporate buyers, they sell directly via personal negotiation. This includes their sales with OTOBI. 2. For Distributors, they sell their mattress to their distributors who sell to the retailers. 3. They also have 33 Marketing executives roaming around Bangladesh. They find potential distributors or retailers.

These are three potential routes to market that the new entrants can avail.

Buyer Power 

Buyer size/number: Since mattress is a luxury product, the number of buyers is very limited in Bangladesh as it is costly compared to the available substitutes.



Bargaining leverage: In a particular market, there is very little option for bargaining. However, the prices vary from area to area. Such as, elephant road markets sell at a lower price than the gulshan markets.



Product differentiation: Consumers have more than one choice for mattress types.



Buyer incentives: None of the companies provide any incentives for returning customers.



Price sensitivity: In a retail market in a particular area, the prices of the different brands of mattresses are the same. So, there is no option for price sensitivity in relation to brands.



Substitutes available: There is only one significant substitute, which are the local felt mattresses.

Product/Technology Development 

Alternatives’ price/quality: The local felt mattresses are very cheap compared to the factory mattresses. However, they are not as long lasting as the factory ones. 5. Swan Mattress Model Analysis

34



Fashion and trends: Coir mattresses are becoming very popular with older customers. Also, foam mattresses are rapidly declining in demand due to health hazards.



Potential alternatives: There are many different types of mattresses in other countries not sold in Bangladesh.

Supplier Power 

Supplier concentration: There are only two suppliers of coir mattresses in Bangladesh. For the other types, most of the raw materials are imported from China.



Geographical coverage: Since communication in Bangladesh is sufficient, so coverage is not an issue in this regard. Most of the raw materials are imported in Chittagong port, so the coverage is similar for all the competitors.

Competitive Rivalry 

Number and size of firms: There are many small and big players in the market.



Industry size and trend: The market is not that big. The industry is growing but at a very low rate.



Costs: There is a huge establishment cost, but unit costs are not very high.



Products ranges: There are many different types of products like spring, coir, felt, rebonded, foam, etc.



Differentiation: The perceived differences are made by the retailers and the ments. The companies claim quality differentiation but customers are largely unaffected by it according to retailers.

5.8 Cont Matrix The data for the cont matrix could not be collected because the customers could not be identified. The retailers did not have any database and because the product has a huge lifetime so one customer could tell us about one brand at a time. 5. Swan Mattress Model Analysis

35

6. Strategies 6.1 Goal Setting

Problem Identification:  Unrealistic periodic targets  Limited production capacity  Retailer Dissatisfaction Proposed Strategy:  Goal Setting

There are problems with the organization goals of Swan Industries. They subjectively set the targets for each month. They have incentives for people who achieve their targets and punishment systems if they fail to reach 80% of their target mark. However, the goals are largely unrealistic and seldom met.

Also, the company does not take into the

variability of sales on a per month basis, even though the management recognizes that there are some off-seasons. As a result, the employees are not motivated enough to achieve the organization targets. Also, they assign sales quotas on retailers and dealers. They have 15% commission on sales below target and extra commissions for every unit sold above target. This sales quota is often very unrealistic to attain. Also, the 15% commission is the lowest amongst all the other competitors. So, the retailers are largely de-motivated to sell Swan products. So, retailers try to push brands with higher commission rates.

6. Strategies

36

So, realistic goals need to be defined. This will not only help improve employee performance but also serve as the benchmark against which employee performance can be evaluated. For this purpose, sales forecasting needs to be done. If sales are predicted accurately, then realistic targets can be set for the firm, retailers and the employees will be motivated to work harder. Also, if employees can actually achieve their targets and get the associated benefits, the turnover rate of employees will also decrease. From the retailers, realistic targets will ensure achievement of goal if they give proper effort. Then they can get the extra incentive regularly. This will motivate them to sell Swan products. Survey on 22 retail outlets has shown that almost all retailers have dissatisfaction over Swan’s commission. But, the commission cannot be changed because the price of the market is set according to Swan’s product prices. If, Swan cut down their price, the competitors immediately respond to place themselves below Swan’s price. ‘Proposed Goal Setting Method

Period

Beginning of the year Forecasting

January-March

120% of actual sales of the last period of previous year

April-June

80% of projected sales of the first period this year

July-September


October-December


Table 5. Yearly Forecasted Sales Table 6. Periodic Forecasted Sales

Period

Per Period Forecasting

January-March

120% of actual sales previous period

April-June

80% of Actual sales of the previous period

July-September


October-December


6. Strategies

37

We are proposing to implement a quarterly Goal Setting strategy. In their sales graph, we can see a vague cyclic pattern. There are two rises in the sales graph of most of their products. One starts from around November and goes downhill towards the February. Then there is a spike of sales during June-July. To broadly incorporate these changes, we propose a quarterly sales target setting. For each quarter, the per-month target should be fixed. For that purpose, we have analyzed the re-bonded mattresses sales data and came up with these ratios. Some of the actual analysis is given below

Month

January February March April May June July August September October November December

Actual Sales (in Thousand CFT)

Average Quarterly Sales (In Thousand CFT) 2007

1.22 1.77 3.05 3.13 2.89 1.96 2.97 2.78 2.59 2.97 3.04 3.30

Projected Quarterly Sales (In Thousand CFT)

3.05

Base Year

2.66

2.44

2.78

2.74

3.11

2.90

3.66

3.73

2.56

2.98

3.41

3.35

2008 January February March April May June July August September October

3.60 4.02 3.36 2.59 2.47 2.63 3.71 3.32 3.20 2.67

6. Strategies

38

November December

3.24 3.88

3.27

3.54

4.03

3.92

3.31

3.14

2009 January February March April May

4.33 3.82 3.95 3.20 3.42

Table 7. Rebonded Mattress Sales Analysis

We have also conducted the chi-square analysis for this data. from the

table at

Result

95% confidence interval 2.04

8

2.73

Accepted

Table 8. Chi-Square Analysis

Currently, Swan Industries have a lot of pending orders for business buyer in both the foam and the mattress divisions. The negative implications of this scenario are two-fold; firstly, existing buyers become unhappy, thus hampering future relationships and secondly, Swan Industries loses out on a lot of potential buyers and orders. With a proper method of forecasting demand, Swan can find a value of expected sales and thus adjust their production capacity accordingly.

6. Strategies

39

6.2 Demand forecasting

Opportunity Identification:  High demand seasons Proposed Strategy:  Demand forecasting of occasions  Change in order receiving method

Mattress is a product which is bought most by people when they are starting a family or moving into a new home. According to retailers and manufacturers, people buy mattresses mostly when a wedding is about to take place sometime in the near future. (See appendix for sales data and histograms) So, if data can be found which foretells during which months most weddings take place, then promotional activities can be directed to hit those opportunities. Sales Data shows huge sales in June-July and in December-January. Interestingly, these are the times when wedding usually take place. For this purpose, the propose strategy is to elicit wedding cycle trends by collecting information from different community centers. Data will be collected from different community centers and the collective trends will be analyzed to find out the most appropriate time for the promotional activities. Since people start shopping for weddings a months prior to the event, so promotion should be highest around that time. Also, there is a problem that data is not recorded about those orders which are not accepted. So, the actual demand cannot be fully understood. Swan already employs an operator service. 6. Strategies

40

What we propose is that the operator records every order data before diverting the call to the sales executive. This way every order data will be recorded even if the executives do not record it. This will help forecast future demands and prepare production capacities accordingly.

6.3 Memory foam Opportunity Identification:  Blue Ocean for therapeutic foam Proposed Strategy:  Marketing public relations

Swan Industries has the technology and the capacity to manufacture a special type of foam named Memory Foam (industrial name Visco-elastic foam). The uniqueness of this foam is that it has therapeutic qualities. People who have orthopedic problems can use this foam to relieve pain. Since Swan Industries is the only company who produces this product in Bangladesh, this product has enormous market potential. To promote this product, Swan should use Public Relations (PR) as the initial marketing strategy. Doctors who specialize in orthopedics should be provided free samples so that they can see the beneficial effects of this foam. If the product gives significant benefits to the ailing patients, then this product could be recommended by doctors to patients, thus increasing demand and subsequently, sales. Since Swan already has the machineries for manufacturing memory foam, no extra fixed costs will be incurred.

6. Strategies

41

Project Evaluation We have analyzed the Project of taking Memory Foam Mattresses. For that we had to calculate Weighted Average cost of capital = WACC. For Swan Mattresses the WACC=23.52%. The Calculation is shown below:

Return on Debt

Return on Equity

Debt/Value

Equity/Value

Tax Rate Weighted Average Cost of Capital Table 9. WACC Calculation

In this project, there are three main cash flows. 1. Cash Inflow = Contribution Margin generated through seller 2. Cash Outflow = Initial Investment 3. Cash Outflow = Tax Effects of All related cash flows 4. Cash Inflow = Tax Benefits of Additional Strategy 5. Cash Outflow = Erosion Effect of Swan Foam After Calculation, Net return for Memory Foam for two year in Swan is 26.25 Lac. Here, we have assumed that Memory-foam Mattress will follow the same promotional pattern as their rebonded mattress. Also, we took Contribution Margin to incorporate cost into revenues. Total project evaluation is shown in the next page.

6. Strategies

42

Calculation of Return on Investment for two years 0 Cost to provide Sample

Q1-Y1

Q2-Y1

Q3-Y1

Q4-Y1

Q1-Y2

Q2-Y2

Q3-Y2

Q4-Y2

৳

৳

৳

৳

৳

৳

৳

৳

30,043

525,193

810,164

676,880

898,099

1,187,406

1,240,455

1,385,679

৳

৳

৳

৳

৳

৳

৳

৳

৳

5,088,972

28,527

473,543

693,638

550,291

693,305

870,402

863,419

915,847

৳

৳

৳

৳

৳

৳

৳

৳

(12,017)

(210,077)

(324,066)

(270,752)

(359,239)

(474,962)

(496,182)

(554,271)

৳

৳

৳

৳

৳

৳

৳

৳

(189,417)

(277,455)

(220,116)

(277,322)

(348,161)

(345,368)

(366,339)

৳

foams to Doctors (105,000) Misc. Cost for Initial

৳

Promotion (100,000) Tax Benefits of Cost

৳ 82,000

Projected Profits

Discounted Profits

Tax (40%)

Discounted Taxation

৳

(2,035,589) (11,411) 10% Erosion Effect on

৳

৳

৳

৳

৳

৳

৳

৳

Swan Super

3,004

52,519

81,016

67,688

89,810

118,741

124,046

138,568

6. Strategies

43

৳

৳

৳

৳

৳

৳

৳

৳

৳

2,853

47,354

69,364

55,029

69,331

87,040

86,342

91,585

Tax Advantage Erosion

৳

৳

৳

৳

৳

৳

৳

৳

(40%)

1,202

21,008

32,407

27,075

35,924

47,496

49,618

55,427

৳

৳

৳

৳

৳

৳

৳

৳

৳

Advantage

203,559

1,141

18,942

27,746

22,012

27,732

34,816

34,537

36,634

NPV (Dollar ROI)

৳

Discounted

Erosion

Effect 508,897

Discounted

Tax

2,625,045 Percentage ROI

1380.51%

Table 10. ROI Calculation

∑

∑ ∑

6. Strategies

44

6.4 Customer awareness Problem Identification:  Low consumer knowledge Proposed Strategy:  Revamping ments

From the people interviewed and consumer surveys conducted, it was found out that most consumers know little or almost nothing about mattresses. They are unaware of the types of mattresses and their qualities and most of the time; their purchase decision is affected by the retailers who tend to push sale other brands for more profit. Swan has the biggest portfolio of products. They are the pioneers of most of the different types of mattresses in Bangladesh. Also, Swan Industries is the only organization which organizes periodic consumer-manufacturer forums. The most recent of them was held on May 24, 2009. In these forums, the views and suggestions of the consumers are noted so that they can be used to improve the quality of the products. Also they supply to various manufacturing giants such as OTOBI and Akhter Furniture. Swan can use these companies Brand Equity by mentioning this information in their ments. It will be a win-win situation for all of the companies as Swan itself has a large Brand Equity. Swan’s ments do not reflect their strengths. (See appendix for sample print ad). Most consumers do not have any knowledge about their consumer-manufacturer forums. For this reason, our proposed strategy is to redesign their ments. If consumers are made aware of Swan’s advantages over other companies, this can significantly improve their brand image.

6. Strategies

45

We also propose that they make specialized ments for different product divisions. Currently, all their ments are focused on mass marketing. They try to sell adhesives to woodworkers with the same ment which tells modern high range income group to buy Swan’s mattresses. This strategy is very unlikely to work. Proposed Swan ment 

Swan Mattresses

Catch Phrase   

How far can you go for your best nap? It pays to sleep well. Good sleep, great day.

ing Data     

Certification related data (Swan has ISO-9001) Famous Suppliers of Swan (Akhter Furniture, Bengal etc) Quality Ensuring data Warranty Information about Forum

Since Swan mattresses already give print ads in newspapers regularly, the new ads will not cause any additional costs.

6.5 Customer retention Opportunity Identification:  No retention strategies offered by any company Proposed Strategy:  Exchange offer

6. Strategies

46

Swan Industries is the pioneer in the mattress industry. Although quantitative market share data could not be determined, according to retailers Swan has the highest market share and the largest base of existing customers. Currently, none of the mattress companies have any sort of retention strategy for the consumers. The old mattresses are made of materials that can be reused and incorporated into new mattresses. So, our proposed strategy is introducing an exchange offer for the consumers. They can give their old mattresses back to Swan and take new mattresses in exchange. This will help retain old consumers and improve sales. To develop this strategy, we need the price of the old foam mattress which Swan buys from others. Also we need the demand state of re-bonded mattress so that we can assess the amount of leverage we can attain. We have used project analysis to assess the NPV and the Percentage ROI from this campaign for rebounded Mattress. We only assessed the effect of retaining foams and selling re-bonded mattresses at a discount. The actual project can retain foam, rebounded and spring mattresses and sell any mattresses. The discount will be in the form of a buy-back offer. Discount will be equal to the buy-back rate of the mattress. This will also have some retailer benefits which will exceed their cost for retaining one of these old mattresses. This will further motivate them to sell Swan products. Since almost all competitors still cannot produce Re-bonded mattresses themselves. So, this move will be hard to mirror for the competitors. (See overleaf for calculations) Assumptions include: 1. 20% of the required foam for rebounded mattress will come from this retention campaign. 2. Re-bonded mattress price will be fixed at BDT 790 till the second quarter of 2011. 3. There will be a 10% synergy effect on sales of mattresses for this campaign. 6. Strategies

47

Table 11. ROI Calculation

0 Cost Retailer advertising Tax Benefit on Cost

Cost of Acquisition Benefits from Campeign ৳ 1,230,621

Tax on Benefits Discounted Tax Synergy Contribution Margin Discounted Synergy

৳ (492,248)

৳ 1,341,497

Tax on Synergy Discounted Tax

Q4Y2009

৳ 359,254 ৳ (119,751) ৳ (71,851) ৳ 167,652 ৳ 159,195 ৳ (67,061) ৳ (63,678) ৳ 182,757 ৳ 173,538 ৳ (73,103) ৳ (69,415)

৳ 379,212 ৳ (126,404) ৳ (75,842) ৳ 176,966 ৳ 159,562 ৳ (70,786) ৳ (63,825) ৳ 192,910 ৳ 173,938 ৳ (77,164) ৳ (69,575)

Q1-Y2010

Q2Y2010

Q3-Y2010

Q4Y2010

Q1Y2011

Q2Y2011

৳ 364,044 ৳ (121,348) ৳ (72,809) ৳ 169,887 ৳ 138,115 ৳ (67,955) ৳ (55,246) ৳ 185,194 ৳ 150,559 ৳ (74,077) ৳ (60,224)

৳ 409,549 ৳ (136,516) ৳ (81,910) ৳ 191,123 ৳ 147,541 ৳ (76,449) ৳ (59,017) ৳ 208,343 ৳ 160,834 ৳ (83,337) ৳ (64,334)

৳ 432,302 ৳ (144,101) ৳ (86,460) ৳ 201,741 ৳ 147,882 ৳ (80,696) ৳ (59,153) ৳ 219,917 ৳ 161,206 ৳ (87,967) ৳ (64,482)

৳ 518,763 ৳ (172,921) ৳ (103,753) ৳ 242,089 ৳ 168,506 ৳ (96,836) ৳ (67,402) ৳ 263,901 ৳ 183,688 ৳ (105,560) ৳ (73,475)

৳ 415,010 ৳ (138,337) ৳ (83,002) ৳ 193,671 ৳ 128,005 ৳ (77,469) ৳ (51,202) ৳ 211,121 ৳ 139,538 ৳ (84,448) ৳ (55,815)

৳ (300,000) ৳ 120,000

Value of Foam Acquired (Cost Saving) Commission

Discounted Benefits

Q3Y2009

৳ (536,599)

৳ 455,055 ৳ (151,685) ৳ (91,011) ৳ 212,359 ৳ 181,815 ৳ (84,944) ৳ (72,726) ৳ 231,492 ৳ 198,197 ৳ (92,597) ৳ (79,279)

6. Strategies

48

NPV (Doller return on ৳ Investment) 1,363,271 Percentage ROI 554.42% ∑

∑ ∑

Q3 Y2009 Q4Y2009 Q1Y2010 Q2Y2010 Q3Y2010 Q4Y2010 Q1Y2011

Projected Quantity

Projected Sales Volume

Quantity after Synergy

10886.48

৳ 8,600,320 ৳ 9,078,116 ৳ 10,893,739 ৳ 8,714,991 ৳ 9,804,365 ৳ 10,349,052 ৳ 12,418,862

11975.13

11491.29 13789.54 11031.63 12410.59 13100.07 15720.08

12640.41 15168.50 12134.80 13651.65 14410.07 17292.09

Sales Volume after Synergy ৳ 9,460,352 ৳ 9,985,927 ৳ 11,983,113 ৳ 9,586,490 ৳ 10,784,801 ৳ 11,383,957 ৳ 13,660,748

Value of Foam Required

Value of Foam Acquired

৳ 1,796,269 ৳ 1,896,062 ৳ 2,275,275 ৳ 1,820,220 ৳ 2,047,747 ৳ 2,161,511 ৳ 2,593,813

৳ 359,254 ৳ 379,212 ৳ 455,055 ৳ 364,044 ৳ 409,549 ৳ 432,302 ৳ 518,763

6. Strategies

Synergy Quantity

1088.65 1149.13 1378.95 1103.16 1241.06 1310.01 1572.01

49

Synergy Sales Volume ৳ 860,032 ৳ 907,812 ৳ 1,089,374 ৳ 871,499 ৳ 980,436 ৳ 1,034,905 ৳ 1,241,886

Synergy CM

৳ 182,757 ৳ 192,910 ৳ 231,492 ৳ 185,194 ৳ 208,343 ৳ 219,917 ৳ 263,901

Q2Y2011

12576.06

৳ 9,935,090

13833.67

৳ ৳ ৳ 10,928,599 2,075,050 415,010

1257.61

Table 12. Projected sales figures

6. Strategies

50

৳ 993,509

৳ 211,121

7. Conclusion The market for mattresses is growing at a very slow rate. Recent trends indicate that firms that specialize in a single type are making profit than larger firms with more diverse portfolios. Also, the high rate of imitation among competitors is a detriment towards the introduction of new products. This is because the firms that bear the cost of R&D cannot recover their investment if their technology is adapted by competitors too quickly. So, the government needs to impose certain restrictions in this regard. Swan Industries have the largest resources among the manufacturing firms. If they invest in the right areas and implement effective strategies, then they should be able to maintain their position and market share in the long term.

7. Conclusion

50

Appendix A – References Bibliography 

Principles of Marketing 10th edition by Philip Kotler and Gary Armstrong



Marketing Management 12th edition by Philip Kotler and Kevin Lane Keller



Foundations of Marketing Theory (2002) Shelby D. Hunt



Bangladesh Bureau of Statistics Year book 2006



Blue Ocean Strategy by W.Chan Kim & Renee Mauborgne



Jack Trout & Steve Rivkin “Differentiate or Die”



John P Maggard“Positioning Revisited”, Journal of Marketing, vol.40 1976



Syed Ferhat Anwar, Sharif RayhanSiddique, Shakil Huda, “ Extending the BCG matrix: strengthening the Portfolio Analysis, Journal of Business stration, 1998



www.marketingpower.com



www.wikipedia.com



www.valuebasedmanagment.com

List of People Interviewed  Mr. Khabeer Uddin Khan – CEO (Swan Industries)  Mr. Tarin Khan – MD (Swan Industries)  Mr. Ali Ahmed - General Manager Marketing (Swan Industries)  Mr. Md. Hafizur Rahman – MD (Karmo Mattresses)  Mr. Mahbubul Alam – MD (Coirex Mattress Company) Appendix A – References

51

Appendix B– Sample Questionnaire Company Analysis Questionnaire 1

Mattress Industry Analysis

Important: This survey is being conducted by students of the University of Dhaka for the course Marketing Management. The data collected will be used solely for educational purposes.

1. When was the last time you modified your product? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------2. What technologies do you use? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------3. How long does your product last? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------4. Where does the Raw Material (Coir, Fabrics etc) come from? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Appendix B– Sample Questionnaire

52

5. Who are your competitors? Rank Them according to their competitiveness. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------6. What type of products do you have? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------7. What are their prices? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------8. Do you have any control over market prices? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------9. Rate your commission in of competitors? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------10. Rate your dealership network and distribution channels in comparison to your competitors. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Appendix B– Sample Questionnaire

53

11. What are the Sales Method you employ (check the appropriate box):  Do you sell to Distributors  Do you sell to Dealers Directly  Do you sell to Corporate Buyers

12. Do you sell on Credit? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------13. Are you advertising using any form of media? If yes what are the medias, Do you have any advertising campaign or Media? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------14. What is overall company image you want to create in the market? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


54

Company Analysis Questionnaire 2



1. Sort the following factors in of your company performance. Factor

Strength

Weakness

Company reputation Market share Customer service Customer retention Product quality Availability Sales force Innovation Cost Type of products Delivery time istration Promotion


55

2. What are opportunities could your company avail in the future? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3. What factors could become threats to your business in the future? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


56

Consumer Top-of-the-Mind Awareness Survey Questionnaire



1. Name a mattress company. ------------------------------------------------------------------------------------------------------------------------------2. What types of mattresses are available in Bangladesh? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


57

Retailer Questionnaire



1. Which do you think is the best mattress brand? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------2. If you sell 10 mattresses, what would be ratio of each brand? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------3. Do you have any regrets about any brand? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


58

4. Rate the brands? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------5. What do the customers ask? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------6. In case of commission, rate the brand? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------7. In case of sales volume, rate the brand? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------8. What brands do you have? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9. What are the new companies? Appendix B– Sample Questionnaire

59

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------10. What are the new technologies available? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------11. Who gives what benefits? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


60

Extensive Questionnaire for Swan Industries



1. Company profile a. When did Swan Mattress Start? b. What products were offered initially? c. How was each product introduced? d. What is your organizational hierarchy? e. How many products do they currently offer? f. How many employees do you have?(Corporate, Factory, Sales) 2. Product a. What measures do you take to ensure quality from production to sales? b. What services do you offer with the product? c. How do you differentiate your products to customers? 3. Pricing a. What is Swan Mattresses sales volume? Can we have the data for the past year b. Can we get a cost breakdown for each type of mattress? c. What type of market research does Swan Mattress do? d. How do you decide on the price? 4. Distribution a. What is your distribution channel (Forward Linkage)? b. How good is your backward linkage? c. How much does it cost Swan to distribute? Appendix B– Sample Questionnaire

61

d. What is your incentive plan? 5. Promotion a. What Promotional activities to do you have? (Sponsorship, trade fair, ment etc) b. What packaging do you have? c. Is your sales force effective? What kind of motivation do you offer for them? d. What customer retention strategies do you have? 6. Branding a. How do rate your competitor brands? b. What measures do you take to ensure brand position? c. What benefits do you get for your brand? d. What do you provide for your brand? 7. Competitor Analysis a. Who are your competitors? b. Do you know about the competitor’s price and cost? c. What distribution channels do your competitors use? d. Who are the new entrants that you know of? e. What promotional activities do your competitors do? f. Evaluate the competitor’s product quality in comparison to yours. g. Do you have company’s sales information? 8. Market situation a. Did you get hit by global recession? b. Can you describe your customers in of knowledge, buying pattern, taste etc? c. What are the characteristics of customers you target(Income, demographics) d. What are the market trends,(How has customer preferences changed).


62

Appendix C – Sample Swan Print Ads


63


64


65

November

Appendix D – Sales Data Analysis

66

December

September

August

July

June

May

April

March

October

February

January"08

December

November

October

September

August

July

June

May

April

March

February

January"07


Total Mattress Sales Histogram 7000000

6000000

5000000

4000000

3000000

2000000

1000000

0

Total Mattress Sales Data Sales Of Rebonded Mattress Units

Rate

Value

Sales Of T&L Units

Rate

Sales Of Spring Mattress

Value

Units

Rate

Value

Sales Of Coir Mattress Units

Rate

Total

Value

January"06

0

650

207.7794

825

171418

6630.582

325

2154939

2821.389

650

1833903

February

0

650

286.1879

825

236105

4430.96

325

1440062

2235.377

650

1452995

March

218

650

141378

169.1806

825

139574

6193.662

325

2012940

2831.852

650

1840704

April

940

650

611265

194.1467

825

160171

5122.932

325

1664953

1855.762

650

1206245

May

1176

650

764445

190.7564

825

157374

6608.874

325

2147884

1336.038

650

868425

June

1686

650

1095786

127.2267

825

104962

3775.16

325

1226927

730.8431

650

475048

July

1907

650

1239327

127.7891

825

105426

5394.828

325

1753319

1601.766

650

1041148

August

2328

650

1513460

124.0315

825

102326

4693.068

325

1525247

1529.245

650

994009

September

1630

650

1059749

125.3358

825

103402

4509.551

325

1465604

1094.003

650

711102

October

1548

650

1006073

68.28121

825

56332

3670.892

325

1193040

1044.452

650

678894

November

1581

650

1027329

205.6788

825

169685

6419.105

325

2086209

1293.885

650

841025

December

1772

650

1151916

223.9442

825

184754

4787.951

325

1556084

2053.64

650

1334866

January"07

1217

700

851875

228.0582

825

188148

4125.197

375

1546949

1602.273

700

1121591

3708563

February

1772

700

1240327

232.7879

825

192050

3542.888

375

1328583

1716.854

700

1201798

3962758

March

3049

700

2134145

213.377

825

176036

3213.955

375

1205233

9.647143

700

6753

3522167

April

3126

700

2188435

302.84

825

249843

3332.968

375

1249863

51.40714

700

35985

3724126

May

2892

700

2024567

242.5042

825

200066

3118.84

375

1169565

685.8829

700

480118

3874316


67

June

1964

700

1374792

183.8788

825

151700

3046.459

375

1142422

1365.09

700

955563

3624477

July

2966

700

2075912

246.5612

825

203413

4156.144

375

1558554

1714.446

700

1200112

5037991

August

2783

700

1947953

286.857

825

236657

4039.416

375

1514781

1392.156

700

974509

4673900

September

2591

700

1813572

300.3552

825

247793

4097.891

375

1536709

1640.75

700

1148525

4746599

October

2972

700

2080713

258.7733

825

213488

3806.237

375

1427339

1105.473

700

773831

4495371

November

3042

700

2129051

294.4279

825

242903

4845.643

375

1817116

962.7629

700

673934

4863004

December

3302

700

2311077

488.657

825

403142

5402.485

375

2025932

1098.914

700

769240

5509391

January"08

3604

790

2846822

343.0551

925

317326

4986.515

390

1944741

1607.023

815

1309724

6418613

February

4025

790

3179680

274.7762

925

254168

3879.181

390

1512881

1727.125

815

1407607

6354336

March

3362

790

2656189

274.5741

925

253981

4590.656

390

1790356

1415.087

815

1153296

5853822

April

2589

790

2045145

299.9168

925

277423

3534.482

390

1378448

2160.558

815

1760855

5461871

May

2465

790

1947703

248.7232

925

230069

3805.815

390

1484268

1350.75

815

1100861

4762901

June

2632

790

2079107

177.5589

925

164242

3684.821

390

1437080

1384.013

815

1127971

4808400

July

3711

790

2932070

417.2314

925

385939

4548.797

390

1774031

1620.844

815

1320988

6413028

August

3317

790

2620278

236.8768

925

219111

4153.133

390

1619722

1474.917

815

1202057

5661168

September

3204

790

2531293

337.9892

925

312640

4522.659

390

1763837

1762.402

815

1436358

6044128

October

2673

790

2111762

194.1254

925

179566

2420.331

390

943929

1253.499

815

1021602

4256859

November

3241

790

2560463

346.5429

925

320552.2

4868.921

390

1898879

1174.585

815

957287

5737181

December

3884

790

3068270

277.947

925

257101

3310.31

390

1291021

929.173

815

757276

5373668

62361929

7568886

56589447


68

37176205

Re-bonded Mattress Sales Histogram

Sales Quantity 5000.00 4500.00 4000.00 3500.00 3000.00 2500.00 2000.00 1500.00 1000.00 500.00 0.00

Re-bonded Mattress Sales Data Sales Of Rebonded Mattress Units

Rate

Quarter Average

(Overall)

Value

January"06

0.00

650

February

0.00

650

March

217.50

650

141378

April

940.41

650

611265

May

1176.07

650

764445

June

1685.82

650

1095786

July

1906.66

650

1239327

August

2328.40

650

1513460

September

1630.38

650

1059749

October

1547.80

650

1006073

1267.43

1955.15


69

November

1580.51

650

1027329

December

1772.18

650

1151916

January"07

1216.96

700

851875

February

1771.90

700

1240327

March

3048.78

700

2134145

April

3126.34

700

2188435

May

2892.24

700

2024567

June

1963.99

700

1374792

July

2965.59

700

2075912

August

2782.79

700

1947953

September

2590.82

700

1813572

October

2972.45

700

2080713

November

3041.50

700

2129051

December

3301.54

700

2311077

January"08

3603.57

790

2846822

February

4024.91

790

3179680

March

3362.26

790

2656189

April

2588.79

790

2045145

May

2465.45

790

1947703

June

2631.78

790

2079107

July

3711.48

790

2932070

August

3316.81

790

2620278

September

3204.17

790

2531293

October

2673.12

790

2111762

November

3241.09

790

2560463

December

3883.89

790

3068270

4330.40 3817.52 3948.18 3199.62 3417.22

790 790 790 790 790

3421016 3015841 3119062 2527700 2699604

January February March April May

1633.50

2012.55

2660.85

2779.73

104.47%

3105.16

111.71%

3663.58

117.98%

2562.01

69.93%

3410.82

133.13%

3266.03

95.76%

4032.03

123.45%

3300.00

81.84%


70

Spring Mattress Sales Histogram 7000.00 6000.00 5000.00 4000.00 3000.00 2000.00 1000.00 0.00

Spring Mattress Sales Data Date January"06 February March April May June July August September October November December

Actual Quarterly Quantity Data 6630.58 4430.96 6193.66 5122.93 6608.87 3775.16 5394.83 4693.07 4509.55 3670.89 6419.10 4787.95

Projected Quantity

5460.36

Base Period

4912.57

5648.56

E=(fo-fe)^2

E/fe

541692.87

95.89923


71

January"07 February March April May June July August September October November December January"08 February March April May June July August September October November December January"09 February March April May

4125.20 3542.89 3213.95 3332.97 3118.84 3046.46 4156.14 4039.42 4097.89 3806.24 4845.64 5402.49 4986.52 3879.18 4590.66 3534.48 3805.82 3684.82 4548.80 4153.13 4522.66 2420.33 4868.92 3310.31 5855.87 4601.59 4336.92 5491.55 4548.47

3396.72

4629.57

1519918.94 328.3069

4391.30

3513.79

770024.69

219.1435

4080.25

4138.33

3374.23

0.815359

3970.69

4280.97

96271.83

22.48833

4966.88

3741.95

1500447.58 400.9799


72

Coir Mattress Sales Histogram 3000 2500 2000 1500 1000 500 0

Coir Mattress Sales Data Date

Actual Quantity

January"06 2821.389 February 2235.377 March April May June July August September October November

2831.852 1855.762 1336.038 730.8431 1601.766 1529.245 1094.003 1044.452 1293.885

Quarterly Projected Data Quantity 2629.54

E=(fofe)^2

E/fe

Base Year 250.1208

1307.55

2018.00 504744.14 61.4634

1408.34

1734.88 106631.83 8.024536

1463.99

1359.54

10909.70 Appendix D – Sales Data Analysis

73

December January"07 February March April May June July August September October November December January"08 February March April May June July August September October November December January"09 February March April May

2053.64 1602.273 1716.854 9.647143 51.40714 685.8829 1365.09 1714.446 1392.156 1640.75 1105.473 962.7629 1098.914 1607.023 1727.125 1415.087 2160.558 1350.75 1384.013 1620.844 1474.917 1762.402 1253.499 1174.585 929.173 1808.27 2339.54 2650.20 2380.22 2178.83

348.6503 1659.56

2614.27 911466.26 204.9208

1365.09

2006.28 411129.22 11.74977

1582.45

1724.81

20266.12 64.79176

1055.72

1351.65

87575.69 48.42013

1583.08

1885.21

91281.99 23.65584

1631.77

1446.77

34224.68 113.4171

1619.39

1243.80 141067.89 21.38741

1119.09

974.70

20846.37 35.8439

2266.00

1998.37

71629.26 362.7885

2279.53

1533.62 556378.58


74

PE Mattress Sales Histogram 600 500 400 300 200 100 0

PE Mattress Sales Data Date

Actual Quantity

January"06 207.7794 February 286.1879 March April May June July August September October November

169.1806 194.1467 190.7564 127.2267 127.7891 124.0315 125.3358 68.28121 205.6788

Quarterly Projected Data Quantity 221.05

E=(fofe)^2

E/fe

Base Year 8.100178

170.71

212.17

1718.58 44.07372

125.72

225.39

9933.61 24.7231

165.97

243.57

6021.76 Appendix D – Sales Data Analysis

75

December January"07 February March April May June July August September October November December January"08 February March April May June July August September October November December January"09 February March April May

223.9442 228.0582 232.7879 213.377 302.84 242.5042 183.8788 246.5612 286.857 300.3552 258.7733 294.4279 488.657 343.0551 274.7762 274.5741 299.9168 248.7232 177.5589 417.2314 236.8768 337.9892 194.1254 346.5429 277.947 186.00 113.51 127.59 286.08 263.81

44.83676 224.74

144.30

6470.12 3.471629

243.07

215.71

748.86 10.3814

277.92

229.15

2378.90 40.09986

347.29

247.64

9930.16 0.066637

297.47

301.95

20.12 7.8681

242.07

289.82

2280.33 1.691509

330.70

307.88

520.78 10.76356

272.87

332.71

3581.20 37.94877

142.37

237.25

9003.47 9.794325

274.95

227.72

2230.35


76

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