Furniture Store

Topics: BusinessManagement

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Last updated: April 17, 2019

This document analyses problems and opportunities faced by the Furniture Store which is a local non profit organization. Recommendations have been made based upon market research and supporting academic literature. Furthermore, it outlines a marketing communications plan for the business.Key difficulties for the Furniture Store concern the expired lease of their current premises, ongoing financial problems, staffing levels, volunteer recruitment and retention.

To address these problems research was undertaken to identify potential fundraising/donation opportunities, explore avenues for attracting volunteers to the project and to identify businesses suitable for affiliation or partnership. Furthermore, to profile key audiences and to identify cost efficient and effective channels of communication with these.A combination of Informal Interviews / Open Ended and fixed Questionnaires were used, to meet our research objectives. Data collected through Interviews and questionnaires was collated and analyzed.Several key volunteering, fundraising and affiliation opportunities were identified.

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Local Universities indicate opportunities for fundraising, attracting volunteers, collaborating in organizing events and advertising for students. Also, trade schools were identified in order to collaborate in providing the FS with skilled volunteers. Additionally, social clubs presented an opportunity for funding resources, volunteer opportunities but also in networking with important members in Oxford community.DIY stores highlight opportunities for the FS to receive donations of materials for the refurbishment of their furniture. A range of valuable advertising opportunities have been identified through organizations such as furniture stores, real estate agencies, universities, community centres and Church Centres. These will all contribute towards increasing awareness through efficient and effective use of advertising channels. Results of interviews with social workers, FS customers and English students including other organizations that sell second hand furniture, provided valuable insight into the needs of the FS’s target markets.

Although the store has demonstrated core competencies of identifying, sourcing, and distributing furniture, it has failed to do so in a profitable manner. So the furniture store needs to focus on 1. PR activities targeting untapped fundraising opportunities such as the Oxford Rotary club. 2. Broader acquisition of volunteers in collaboration with universities volunteer clubs and trade schools based in Oxfordshire area. 3. Development of their brand, and implementation of database software to track customer profiles utilizing related university departments.

4. The formation of business partnerships with organizations such as the Break Through and Cancer Research UK improving their current distribution. 5.Increasing advertising gradually based on two phases according to the FS capacity levels.The furniture store (FS) is a non profit organization operating within Oxfordshire.

The store collects donated furniture and white goods and distributes these to financially vulnerable people with furniture needs in the community. The stores guiding principles, goals and values expressed through its mission statement, are to assist these groups of people, by providing quality, used furniture, and white goods, priced at a nominal value whilst providing an opportunity for volunteer work, a rehabilitation program for vulnerable people and work for the elderly. Subsequently, they play an active role in the recycling and reuse of household furniture, by reducing the quantities of goods delivered to land fill.The key objectives and strategies of the organization, are 1.To increase and retain numbers of volunteers 2.

To increase their sources of funding 3. To improve training and employee development opportunities, whilst concurrently, enhancing working conditions and the general aesthetics of the store. 4. To expand the existing workshop in order to increase output by undertaking higher levels of furniture restoration. 5. To improve their logistical efficiency and effectiveness 6. To increase awareness of the FS with donors, partners and customers.

7. To meet the requirements of the end customers.The furniture store operates, with a centralized organizational structure. Due to limited and inconsistent staffing resources, most operations are currently the responsibility of the manager (Carl) and the White goods manager. The workshop (furniture restoration/recycling) is currently operated by a single volunteer.

Many procedures used to perform their internal operations are managed informally. The lack of technology to support operations, such as databases of stock holding, inhibits their ability to manage the various customers of the store in an efficient and effective manner.The FS is dependent on funding from OCVA, the Social and Health Care Council and minimal proceeds from sales. The FS is currently operating at a potential loss of 27,000(GBP) p/year. The stores pricing policy is central to their organizational objectives. This ensures that furniture is provided at a nominal price, or free of charge to those who demonstrate their suitability.

The manager expressed that this pricing policy is somewhat antiquated, and requires amendment, especially as the store has now begun to sell to the general public. He feels that his current prices are pitched too low, and that a clearer pricing policy for both customers(target market and general public) based on consumers price perception is essential for the future development of the FS, thus facilitating greater profits, whilst maintaining the central mission and service to those in need.Research identified 81 charities operating within Oxfordshire (Yellow Pages, 2005).

These represent indirect competition for funding identification and acquisition. Research identified quarterly Swap/meets run by the West Oxford Community Centre, which focus on household furniture and electrical goods. These represent competition on the supply side. These indirectly target similar consumers as the FS for their acquisition of furniture. There is currently, no directly comparable non-profit organization; however there are some second hand shops within Oxfordshire that could represent alternatives, for segments of the FS’s target market. Research has indicated (see appendix 4. Positioning Maps) the target markets of these stores are different.

These stores however, also offer an opportunity for cooperation, in meeting the needs of their individual target markets, through development of business to business relationships promoting sales or exchange of products/inventory between both parties.Oxfam operates nineteen specialized furniture stores, in cities throughout the UK (Oxfam, 2005). This deserves considerable attention, as it may potentially expand its operations.

Oxfam being an internationally recognized organization, has built a strong brand, reinforced by intensive promotional activities, which has positively impacted upon prospective donors and consumers perception of the organization, hence their willingness to contribute to the various causes (Oxfam, 2005). With this in mind, there is a need for a strategic shift in the FS brand management. Adopting similar strategies, on a localized scale will aid the FS in establishing and improving awareness of their brand name within community, whilst contributing to strengthening existing relationships and enhancing potential exposure to new sources of funding, volunteers and donors.Information obtained and collated from interviews with Social Workers, people undergoing resettlement of, students, customers and managers of the FS was used to profile customer segments. According to the ACORN classification model, the primary market falls into the category of aspiring and striving (Megalist Associates, 2005)The Furniture Store currently services only 1.8% of their target market. They have recently become a registered company. This dramatically expands their market size and potential reach.

Numbers of unemployed and those on benefits (see appendix 6, Market Analysis) are increasing significantly within OxfordShire and surrounding districts. This indicates a growing need within the community, for a service such as the FS. South Oxon, followed by Cherwell and Valley of the white horse all have large concentrations of pensioners. These present significant opportunities for targeted advertising.

(see appendix 6, Market Analysis)Business to business research indicated several stores that deal with second hand furniture within Oxfordshire, however they currently do not compete directly with the furniture store. The analysis, identified several key opportunities in developing key partnerships with other business such as the Cancer Research UK (See appendix 1.9 Business-to-Business) and the Break-Through Co.

(See appendix 9, Contact list), which may play a key role in improving the distribution service of the FS.The FS has a dyadic service offering, targeting two key audiences on the supply and demand sides of the business. Core product values target both psychological and functional benefits with these consumers. On the supply side, the store provides a functional service to those who wish to dispose of unwanted furniture, whilst on demand side, the core product has the functional value of servicing people with furniture needs.

From a psychological level/perspective, they aim to deliver the service in an accessible and non-intrusive/exclusive way, to people who are victims of poverty or social exclusion (FS handout).The tangible component of the service is of particular importance. Consumers are more likely to purchase, and re-purchase a service if they can take away something tangible from the experience (Sargeant, 2005).

Also tangible qualities, assist in word of mouth advertising. The FS has a wide range of second hand furniture and white goods, some of which are in good condition; others need restoration. The exterior of the store is in poor condition and the FS has one delivery van which is ageing, and in need of constant repair.Augmented elements of the service are an integral value adding and differentiating features, which can effectively distinguish the product or service in the mind of the consumers (Sargeant, 2005). The Furniture Store provides both collection and delivery of products. Furniture can be restored or recycled, which is an integral value adding activity.

Although operating with limited resources such as equipment and staff, the FS has demonstrated the ability to provide reasonable quality, second hand furniture at the lowest possible price. Moreover it represents a valuable, if not completely efficient and effective service to their target market. They have some difficulties managing supply and demand, and meeting the exact needs of their target market. This is also, intrinsically linked to their current resources, or lack there of. The FS indicated they are currently operating at maximum capacity. Additional to distribution delays the store has difficulties in restoring furniture to the desired level.Due to financial constraints, limited resources and ongoing costs associated with maintaining the business, the FS is currently failing to meet their critical success factors. Although the store has demonstrated core competencies of identifying, sourcing, and distributing furniture, it has failed to do so in a profitable manner.

The pricing policy, and target market are central to the organizations mission, hence these cannot be altered dramatically. However, as they have now begun to sell to the general public, there is a need to identify how much is a reasonable mark up to establish a clearer and more consistent dual pricing policy (see pricing strategy).These factors, coupled with, the uncertainty of their lease, are drastically constraining and restricting strategic capability. Affiliating or joining forces with ‘Emmaus’ is currently the favourable long term strategic goal, although there is uncertainty as to if and when this will happen. In light of this, we recommend the FS focus on 1.

PR activities targeting untapped fundraising opportunities. 2. Broader acquisition of volunteers 3. Development of their brand, 4. The formation of business partnerships. 5. Database software to track customers.

Fundraising and identifying sources of donations is integral for the FS to establish itself as an independent organization. Although they have opened the doors to the general public, they are currently operating at maximum capacity restricting them from focusing increasing sales, to in turn increase capital within the company. Previously the FS has done little in the way of actively seeking opportunities to raise money, other than applying for grants from various institutions. Research indicated several organizations which were interested in collaborating with the FS to establish fundraising events. We recommend that the FS collaborate with local organizations, with the goal of establishing regular fundraising in support of the project.Volunteers are critical to the success of most non-profit organizations (Andreasen and Kotler, 2003). Organizations should create a range of opportunities and job experiences for both potential and existing volunteers to gain and expand their experience. (Andreasen and Kotler, 2003).

Working together with volunteer organizations, trade schools, universities and churches (see appendix. B2B opportunities), the FS can increase the potential for volunteer development. Such collaboration could facilitate timber and electronic workshops, creating a positive exchange between volunteers and the FS. Opportunities would also be available for office work (answering phone calls and e-mails) or with the pickup/delivery. These exchanges, not only improve practical skills but also provide a social reward (of being part of a team, testing themselves, of making new friends, work experience, to be challenged, as therapy, etc.) and the intangible rewards from identification with the organization and its mission. (to donate their professional skills, to feel proud, to do something for the society, to help people with social and economical problems, for recognition, etc).

According to Andreasen and Kotler, (2003) “present volunteers represent such an important target and clearly merit a specific effort of internal marketing” (Andreasen, Kotler 2003). Focusing on motivating current volunteers will generate harder-working, more loyal, and committed volunteers. Through positive ‘word of mouth’ from existing volunteers, time and costs associated with attracting new volunteers is decreased.

Managers of the FS could have targeted regular conversations with their volunteers 1. to gain an understanding of their expectations 2. to give them an appropriate training 3. to support and define job responsibilities times and goals clearly 4. to create stronger relationships, 5.

To show appreciation for extra effort (Recognition Programmes: notes of thanks, mention in the newsletters, nominate volunteers, certificates, etc), 6. Actively deal with complaints and value their opinions, 7. to treat them as professionals. “Studies show that the intentions to leave are more closely related to the amount of organizational support the person receives” (Andreasen and Kotler, 2003).”Successful brands grow from organizations which have a clear view about their values, in particular a culture which is focused on doing the right things for the customer” (Chernatony, 2003). These values have been the foundations of the FS activities and are central to all operational and cultural aspects of the business.

Integral to the development of the FS brand is the reinforcement of the philanthropic nature of values of a business. The FS should capitalize upon this strategic approach, reinforcing this message through all communications, with both internal and external stakeholders. Brands succeed through consistency of approach across all stakeholders, not just (see appendix 6, Market Analysis) terminology. This is referring to both the representation of values embodied in all communications, and the importance of consistency and clarity of message when communicating with varying stakeholders of the business. We recommend that 1. The FS establish clear and representative branding. 2.

To establish consistent procedures for communication with stakeholders, both internally and externally. These practices will increase possibilities for affiliation with local organizations, which either share similar values, or are interested in affiliation with organizations that embody philanthropic values.Corporate “giving”, in whatever form, it takes, (philanthropy, sponsorship, CRM) can be seen as potentially generating a competitive resource for those firms involved (Hoffman, 1998). The FS is positioned to attract both an altruistic association and the firm-recipient association as mechanism to achieve promotional services.

For example, through inclusion of sponsors logos on all modes of communication and vehicles.Berry (1995) argues that relationship marketing was particularly relevant for organizations which offer complex and personalized services, which is frequently the case in the charity sector, and where the client “identifies” with the service provider.”Relationship marketing aims to establish, develop, and maintain relationships with clients” (Berry, 1995). This differs from “transactional” marketing, which focuses on attracting and satisfying new clients, as opposed to building relationships. Being a relatively small business, the FS is in close contact with their customers.

This facilitates good communication between both parties and easier identification of each others needs. In the interest of building, and maintaining, long term relationships with customers, it will be integral for the FS to consistently track and monitor relationships with partners and potential partners. By actively adopting principles of relationship marketing it will enable the FS to implement effective procedures for communicating with their different customers.

It is also recommended that the Furniture Store seek to identify ways to implement a basic customer database to effectively track their relationships, however this is not a high priority.A local charity, Break-Through expressed interest and the possibility of collaboration with the FS, through shared inventories, and distribution resources. The Cancer Research UK shop in Headington and the English church also expressed interest in such collaboration. (See appendix 9, Contact lists).

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