Question

3. The Chair Trade is an independent furniture store that specializes in selling Amish-style furniture and household items. Until the first of the year, its overall sales revenue was slowly increasing. Since the first of the year, however, sales of small items increased while sales of furniture decreased, leading to declining sales revenue. How could the owner of the store rely on market intelligence to understand the change in consumer buying behavior? Should the owner rely solely on market intelligence? Why or why not?

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Answer 1

The owner must know what is happening in the market, which includes changes related to demographic conditions of the target groups, fashion trends, condition of economy and its impact on a common man ( both positive and negative), changing lifestyles, household patterns and its impact on the buying pattern of furniture, alternative products which might be more flexible and versatile in nature, etc. Decreasing sales means that either more and more people are switching over to small pieces of furniture due to smaller home sizes or increasingly mobile nature of the jobs which makes it necessary to move more frequently, thereby causing the people not to invest in the bigger furniture items or it can be the emergence of the new age businesses such as furtinutre rentals for shorter period of time, which affects sales.

The right way is to analyse the market data for sales pattern of furniture..If a paradigm shift in the nature of purchases is visible, the company might change its business strategy, and make a change in its product portfolio. However, it might also be possible that the company is not being able to keep up with the latest trends of fashion, or not keeping up with quality and thereby is not able to attract buyers who are getting better furniture elsewhere.

Market intellgence will provide information about the market as whole, but for issues specific with the company, additional research is essential. The company, besides market intelligence, should try to know the first hand opinion of its customers about their preferences and their opinion about the company. It can also look into the reviews of its existing customers or the ones who visited its store sometime. It might reveal some of the hidden issues such as the quality issues, lack of training of salesperson, ineffective communication, bad after sales service, old fashioned items, unresolved complaints and so on. An information that is complete in all aspects can be useful in reaching the root cause of problem.