RASTON FURNITURE COMPANY
Edward Meadows, president of Raston Furniture, met with representatives of Kelly, Astor & Peters Advertising (KAP) and Andrew Reed, Raston’s vice president of marketing and sales, to discuss the company’s advertising program for 1989. The KAP Advertising representatives recommended that Raston Furniture increase its advertising in shelter magazines (such as Good Housekeeping and Better Homes and Gardens, which feature home improvement ideas and new ideas in home decorating) by $250,000 and maintain the expenditures for other promotional efforts at a constant level during 1989. The rationale given for the increase in advertising was that Raston Furniture had low name ...view middle of the document...
“Having our own sales group is a policy my father established 30 years ago,” noted Meadows, “and we’ve been quite successful having people who are committed to our company. Our people don’t just take furniture orders. They are expected to motivate retail salespeople to sell our line, assist in setting up displays in stores, coordinate cooperative advertising plans, and give advice on a variety of matters to our retailers and their salespeople.”
In 1988, Raston spent $2.45 million for total promotional expenditures, excluding the salary of the vice president of marketing and sales. Promotional expenditures were categorized into four groups: (1) sales expense and administration, (2) cooperative advertising programs with retailers, (3) trade promotions, and (4) consumer advertising. Cooperative advertising allowances are usually spent on newspaper advertising in a retailer’s city and are matched by the retailer’s funds on a dollar-for-dollar basis. Trade promotion is directed toward retailers and takes the form of catalogs, trade magazine advertisements, booklets for consumers, and point-ofpurchase materials such as displays for use in retail stores. Also included in this category is the expense of trade shows. Raston Furniture is represented at two trade shows a year. Consumer advertising is directed to potential consumers through shelter magazines. The typical format used in consumer advertising is to highlight new furniture and different living and dining room arrangements. Dollar allocation for each program in 1988 was as follows:
The household wooden furniture industry is composed of more than 5,000 firms. Industry sales at manufacturers’ prices were $10 billion. California, North Carolina, Virginia, New York, Tennessee, Pennsylvania, Illinois, and Indiana are the major U.S. furniture-producing areas. Although Ethan Allen, Bassett, Henredon, and Kroehler are well-known furniture manufacturers, no one firm captured more than 10 percent of the total household wooden furniture market. The buying and selling of furniture to retail outlets centers around manufacturers’ expositions at selected times and places around the country. At these marts, as they are called in the furniture industry, retail buyers view manufacturers’ lines and often make buying commitments for their stores. However, Raston’s experience has shown that sales efforts in the retail store by company representatives account for as much as half the company’s sales in a given year. The major manufacturer expositions are held in High Point, North Carolina, in October and April. Regional expositions are also scheduled in June through August in...