A 100MM € privately held home furniture manufacturer entering a new market space

A 100MM € privately held Central-European home furniture manufacturer had developed steady sales over the years. With new leadership appointed by the family owners it was looking for new growth drivers for its business. Internally the C-suite had identified that there could be a sizable opportunity to enter new emerging “hideaway home office” furniture space and developed an attractive line-up of products to enter this space combined with executing test marketing and sales, which had provided promising feedback for the business. To assist the C-suite, HKH Management Consulting together with GCP was engaged to develop a comprehensive Marketing Strategy how to scale in this new market. Over a period of eight weeks our team of 3 partners approached the assignment with a 10-point plan.

Our team approached the marketing strategy by first conducting, using various versatile analysis tools, a thorough market and competitor analysis (including opportunities and threats that the client could face as a result and likely competitive reactions) combined with reviewing results of the conducted tests with the new product line as well as looking into historical sales information with granularity across regions and product lines to get a full understanding on capabilities to capture value as an organization, hence determining its strengths and weaknesses.

Our team also researched, identified, and calculated total available market size (TAM), serviceable available market (SAM), and the size of the identified target market within the “hideaway home office” space. The team identified strategic objectives (aligned with the mission and vision of the company) for the new market space combined with specific KPI’s and targets for each strategic objective. We then investigated both digital and traditional marketing levers for how to reach these strategic objectives and made a recommendation what levers to pursue. For each of the products in the product line key customer benefits as well as unique selling proposition’s (USP) were identified alongside with key product attributes. Our team proposed a holistic pricing strategy (including a discount strategy) for the product line-up as well as for each individual product. Our research and analysis of past performance combined with new industry insights allowed us to recommend a highly robust distribution channel plan that would intend to capture value step-by-step moving the company towards a true omnichannel environment. Required marketing team size and budgets were identified and recommended.

In the final step of the marketing strategy our team developed an overarching marketing plan including all the recommended marketing levers (monthly timeline) combined with a detailed marketing plan drilling down to specifics on each marketing lever on a month-by-month basis. To measure success, comprehensive dashboards were developed allowing the marketing team and C-suite to follow how the strategic objectives were accomplished based on delivering on the specific KPI’s and targets. The tactical marketing plans (high and detailed level’s) had their own dashboards developed.

Case outcomes

The recommended strategy highlighted marketing levers that the company had not previously used or tested, it gave the client an opportunity to develop, if not sustainable, at least temporary competitive advantage by capitalizing on these channels that had no direct competition present. As the levers were new in nature for the client, they lacked many of the needed core competencies and skillsets. Hence, as defined in the strategy, new competencies were needed and some of the existing ones reskilled. One and a half a year after, the client had successfully entered the “hideaway home office” space and launched its product line up. It had also developed a sizable 15% market share and clearly differentiated its value proposition from the competition for the consumer segment.

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