KETTNAKER

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Text of KETTNAKER

2009

KETTNAKER PROJECTInternational Marketing

Mukanaeva Irina Nikita Popov Malik Philipp Zhang Bo

CONTENTS

WHO WE ARE? ................................ ................................ ................................ ........... 3 COMPANY PROFILE ................................ ................................ ................................ 3 PRODUCT ................................ ................................ ................................ .................. 3 INTERNATIONALISATION MOTIVES ................................ ................................ ... 3 TARGET MARKET ................................ ................................ ................................ ..... 3 TARGET MARKET FEATURES ................................ ................................ ............... 4 MACRO LEVEL: PESTLE ANALYSIS ................................ ................................ ..... 5 INDUSTRY LEVEL: 5 FORSES ................................ ................................ ................ 5 MICRO LEVEL: SWOT ................................ ................................ ............................. 9 VALUE CHAIN ANALYSIS ................................ ................................ .................... 10 PRIMARY RESEARCH ................................ ................................ ............................. 11 QUESTIONNAIRE ................................ ................................ ................................ ... 11 IN-DEPTH INTERVIEW ................................ ................................ .......................... 14 ENTRY MODE ................................ ................................ ................................ ........... 15 LOGISTICS................................ ................................ ................................ ................. 16 PRICING ................................ ................................ ................................ ..................... 16 PRODUCT & BRAND ................................ ................................ ................................ 17 STP ANALYSIS ................................ ................................ ................................ .......... 17 PROMOTION ................................ ................................ ................................ ............. 18 SALES FORECAST ................................ ................................ ................................ .... 18 CONCLUSION................................ ................................ ................................ ............ 20 REFERENSES ................................ ................................ ................................ ............ 20

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WHO WE ARE?COMPANY PROFILE Established in 1870, Kettnaker is the top class German luxury furniture manufacturer which plays an important role in the premium furniture segment in the most of Europe. PRODUCT The products of KETTNAKER include living room furniture, bedroom furniture, beds, wall units and TV stands. As a successful luxury manufacturer, KETTNAKER has its own characteristics: Uniqueness: The basic requirement for luxury consumers is the unique approach. KETTNAKER provides customers with individualized furniture. There are hundreds of different materials and colors for customers to choose from. Moreover, designers can offer various designs of furniture patterns according to the customers individual taste. Specialty: As experienced luxury manufacturer, KETTNAKER focuses only on living room and bedroom furniture. This gives KETTNAKER a very clear brand image in the luxury furniture segment. Best quality: KETTNAKER has the best quality in the furniture field. As a rule customers of luxury goods are very critical and KETTNAKER can bring customers superior and glorious feelings with its perfect products. INTERNATIONALISATION MOTIVES

Proactive motives Profit and growth goals Russian market opportunities Managerial urge Economies of scale

Reactive motives Competitive pressures Saturated Domestic market

TARGET MARKETFirst step of our research was the overview of the top Russian interior magazines to understand the current situation on the Russian luxury furniture market, mainly if minimalistic style is popular in Russia. We analysis the following magazines: Salon Interior Architectural Digest Interior + Design The several conclusions based on this analysis could be made. First of all, luxury is measured not in terms of gold and silver, but in terms of design1, as the art-director of one of the most fashionable design company Georg Jense said. Thus, luxury is defined by design, therefore it is important to be in the tune with modern trends in order to promote certain furniture in the Russian market. Secondly, we have found that nowadays the1

Salon Interior #6 2006 http://www.salon.ru/article.plx?id=5411

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most wi spread st le of desi of furniture is eclecticism. Ecl ctici i th lit f th 2 ti , said Alexandr Erman, very respectable Russian desi ner. And t irdly while reading the magazines we found out that the number of article concerning minimalism as a style of design gradually increased from 2006 till 2009. For example, in 2006 there were two articles on this issue in Salon Interior, and in 2007 the number was three times as many as one year ago. This statistic shows that the interest of Russian citizen concerning this stream of design has grown.

On the next step of our research we tried to define Russian luxury furniture market features and conducted several secondary date analysis: PESTLE analysis 5 forces analysis SWOT analysis Value-chain analysis

TAR ET MAR ET FEAT URES Russian Luxury furniture market is not sufficiently formed. Its development isjust about to start but the growth is quite fast. Home Furni hings value growth in Russia, 2003-2013 Value growth (%) Russia (RUR mln)

2003-2007 7.6

2007-2008 2.1

2009-2013 4.5

Note: Constant value growth at 2008 prices The number of people with the high income in Russia has recently increased andpersonal incomes have achieved real gains more than 12% per year since 2000. People with high level of income tend to own un ique luxuries as status symbols. This trend is due mainly to the ostentatious tastes of rich people.

% of total expenditure of Russian people in 2006 Strong retail growth in Russia. Russia has experienced a strong growth of retail trade that goes in hand with its rising consumer income and expenditure. In 2007, Russia was ranked the world's 10th largest retail market. Russian consumers have a high purchasing power since the er majority of the populations own houses without the burden of mortgage repayments, having inherited their housing from the state following the collapse of the communism.

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Salon Interior #5 2006 http://www.salon.ru/article.plx?id=5583

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MACRO LEVEL: PESTLE ANALYSIS Poli i l E ironment The strengths of Russia political environment are presidential republic, 3 branches of power and opportunity to lobby. The weakness is corruption and weak judicial system. 2. E onomi Environment Russia has constant growth of GDP and income level, high economic growth and relatively low corporate tax. However the world economic crisis makes a slowdown of economic growth recently. 3. Soci l- ltur l Environment Russian rich people have increase interests in luxury furniture and most of them have high level of education. But the high level of mortality and morbidity and a decrease in the birth rate lead to a decline of the population. 4. Technical Environment On the one hand Russia has advanced technology in different spheres and sufficient skilful professionals. On the other hand in Russia there is a lack of investment in this sphere, in addition the level of piracy is really high. 5. Legal Environment Russian government is struggling against corruption both in internal and external level. Nevertheless there is still a high level of corruption. 6. Ecological Environment Attention to ecological issues in Russia has recently increased. But communication problems are among the main bodies in dealing with these issues. PESTLE anal i summar Even though now Russia goes through the crisis, in general economic indicators are more or less tolerable (GDP, Income level, Economic growth). Basically one of the main problems in Russia is corruption, but nowadays a lot of efforts are taken to struggle against it. The presence of both the interest of Russian citizen to buy luxury furniture and their ability to do it. INDUSTRY LEVEL: 5 FORSES 1. COMPETITORS INTERLUBKE MDF POLIFORM 5 1.

We assume Interlubke as the main competitor by results of our primary data research questioner to sales manages of interior shops chain in Moscow and Saint-Petersburg. Interlubke overview: Interlubke is also German brand which is represented into the Russian market since the end of 90th and as a consequence nowadays it poses a certain amount of ma rket shares. For instance, while screening the pages of Salon interior it was picked up that the brand Interlubke was firstly noted in 1998 and from that year till now there were 24 mentions concerning this brand. This is a quite a big number if we compare it with the same indicator of other German brands. In particular, a famous German brand Hulsta was mentioned only 10 times and another one Walter Knoll was noted just 6 times. Thus amongst German brands Interlubke is the most well-known for Russian costumers. Hereinafter there is an SWOT analysis of Interlubke STRENGTHS Strong brand image in Russia Fashionable design OPPORTUNITIES Growing number of wealthy people in Russia Retail growth in Russia WEAKNESSES The furniture scratches Time for delivery THREATS New entrants Slow down in the housing market Unstable economic situation Change in exchange