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Table of Contents




Situation Analysis

Objectives, Strategies & Tactics







Market Situation
The Year 2000 proved to be a pivotal one in many ways for STYLEX. Sales continued to climb, reaching an increase of more than2} percent over 1999. The company introduced three new products at NeoCon 2000, entered two in the Best of NeoCon competition and won gold awards for both. The accumulation of three NeoCon Golds one in '99 for RHYTHM and the pair in '00 for REVERB and ZEPHYR - thrust STYLEX solidly into the A&D arena. Due to the substantial investment in product development and brand-building activities, market momentum is growing for STYLEX. -While awareness among architects and designers is still low overall, the NeoCon wins have precipitated more editorial coverage in industry publications, an important contributor to name recognition. That coverage, plus the increased exposure in terms of location and traffic at NeoCon, should act as a contributing factor toward increased awareness among designers.

Activities by reps also reinforced perceptions about STYLEX among designers. The Lunch & Learn program was well received, drawing a greater number of attendees than expected - nearly 1,000 over a six-month period. Advertising dollars increased, as did the advertising schedules and number of publications in which STYLEX ads ran. Other support activities and materials, such as jqzr. CDs and follow-up surveys to the Lunch & Learns, kept the company top-of-mind among this market. STYLEX binders and product literature were completely redesigned during the year with an eye toward designer appeal. Inquiries from the website increasingly are coming from designers and architects, pulled through in many cases from direct mail and advertising efforts. COM and COL orders have jumped dramatically as well. With the exception of the website, everything is in place to market to this audience. Website reconstruction and design will be a priority in 2001, incorporating a revamped, more user-friendly price list. When the website is brought up to date and in line with all other support materials representing the STYLEX brand, the company will be poised to exploit opportunities from every medium, thus reaching the market and increasing percentage of sales derived from the designer community.

The purpose of the 2001 Marketing Communications Plan is to provide the results of a coopirative effort between Thomas Advertising and the Marketing Services Department of SiyLgX, which will serve as a basis for discussion to determine branding strategies, tactical directions and budget choices for the marketing communications activities of the coming year. Together, we have agreed to present and recommend all tactics that we feel will continue to build the momentum begun during 99-00. We do so despite the knowledge that budgets may be cut. We unanimously agree that we are obligated to give you our best recommendations for the brand, irrespective of potential budgetary constraints. We have, however, structured this plan in such a way that it reflects what we believe to be the minimum requirements for accomplishing the mission we have set forth - to build upon and support the image, position and brand STYLEX has created and promoted, so that these values/pdrceptions carry across all product lines to all target markets, particularly A&D. Additional projects that we believe would enhance the brand and our marketing activities are included, but may be tabled until a later date without having a deleterious effect on the progress we have made.

Situation Analy3is


The A&D Market

During the first half of 2000, STYLEX funded a benchmark research project among designers in five major markets throughout the United States. The cities included were Atlanta, New York, Chicago, Philadelphia and San Francisco. In all,l52 designers were interviewed by phone. While the results proved that many of our perceptions about the market were accurate, we nevertheless learned some valuable facts that can help STYLEX position itself more competitively in the marketplace. For example, we learned that the demographic profile of the A&D community remains a primarily female, middleaged market, so we need to be sensitive to gender issues and the values of this age group -in all our materials and rep inter4ctions.
We also learned how this group perceives each of the Big Four - Steelcase, Knoll, Herman Miller and Haworth. This information was presented to the rep groups at the national sales meeting to help them learn how to present the STYLEX line competitively within this market segment. It may be one of the most important pieces of information we have at our disposal to help STYLEX become a serious competitor against major manufacturers. Further, we learned that while designers want to be perceived as politically correct, especially in the area of "green" design, in actuality they look at aesthetics, comfort, ergonomics and price before considering the environment when they speciff products.

Finally, the premise that designers choose companies with whom they have strong relationships was supported through the project. Because doing business with this segment of the market is crucial to the success of STYLEX, reps need appropriate and accurate information to help them build these important relationships.


Industry Trends

Color trends. According to the Color Marketing Group (CMG), the leading color forecasting association in the United States, blue is the most important color of this new decade, supported by neutrals with subtle shades of reds, browns and yellows to add interest. Consistent with the consumer preference for blue is a growing use of the purple spectrum in both fashion and furnishings. As acceptance grows, purple is no longer considered radical or feminine. The CMG suggests that the clear preference for blue results from exposure to and interest in all things futuristic. Interest in the internet has also influenced color tastes by making vibrant colors much more acceptable. Because computers offer a narrower color selection than traditional print media and websites are vying for attention, the preference for brighter colors is growing.

Additionally, ways to make standard colors take on greater dimension are also increasing in popularity - translucents, holographic effects, vapor colors (that change when viewed from different angles) and metallics. Materials that can support such effects and look innovative will generally be very well received.
There is a lot of orange in the retail arena, but according to the experts, orange will never replace preferences for blue and green, which the majority of the population favor. And it definitely takes second place to blue, which has moved front and center. Women and the move to home offices. The number of at-home workers has doubled in the past five years to about 10.5 million and is expected to double again by the year 2005. Themajority of these workers are women and furniture lines are being developed that are targeted specifically to them. Statistics show that women are leaving corporate America and starting businesses at twice the rate of men. These numbers suggest that either the home office market or women entrepreneurs may become a larger, profitable target for seating. Such product lines, however, would need to appeal to feminine tastes and sensibilities to be successful.

Technology influences. Technology, led by dot-com companies, has had a profound influence on the way companies approach and conduct business and on interior design in the contract market. Interiors are leaning toward the casual and the budget-conscious without giving up style.


The State of Seating

Ergonomics. Ergonomically designed, comfortable and healthy seating continues to be a priority in the marketplace. In 1999, two major ergonomic chairs were introduced at NeoCon with much fanfare - Leap by Steelcase and the Freedom Chair by Humanscale. Both of these took nearly ayear to get into production. In the case of the Freedom Chair, the industry buzz suggested production problems with the product and some financial problems due to the tremendous promotional push. Steelcase, on the other hand, seemed to get even more kudos once Leap was in the marketplace, in part by adding fun and funky upholstery options to the line.

At NeoCon 2000, ergonomic technology did not have the impact of the previous year. Rather, the emphasis was on aesthetics. Both STYLEX and Vecta won golds for hightech, funky seating designs that nevertheless featured advanced ergonomic mechanisms' The aesthetic style no doubt was influenced by the growing interest in an pursuit of dotcom business. Because of the design of STYLEX's most recent product lines, the company is in a strong position to exploit this technological segment of the market.
Stackers. The stacker business throughout the industry continues to appear strong. During the last year and a half, STYLEX has created a full line of product in this category and has redesigned the BOUNCE ARM for a fresher, more contemporary look. The line can fill a diverse range of needs, from short-term seating capability with highdensity stacking capacity (VIBE), to very stylish high-density stacking with unusual

upholstery options (RHYTHM), to fully upholstered options (BOUNCE) that can sit comfortably for longer period of time, to high-end guest chairs at home in the most upscale offi ces (ZEPHYR).


Expanding Markets/lVlarket Opportunities

Healthcare. This market has virtually exploded during the last decade, as the average life span continues to lengthen and the medical community places more emphasis on preventative care. Continuing cire corlmunities have become popular and such institutions require a variety of seating applications. Hospitals represent another opportunity within this segment for seating sales in administration, cafeteria, seminar rooms and waiting areas. as tne large Baby Boom generation begins to age, they will place even greater demands on the healthcare system, thus expanding this market further.

Financial. Some analysts believe that Baby Boomers will have significant impact on the economy in the next few decades. This group currently has the largest income and due to the economic boom, has invested in a variety of growth instruments - all of which will be converted to income-producing vehicles as this generation retires in growing numbers. All this financial activity will require servicing, with workers who sit for long hours at
phones and computers.

High-tech. The explosion of dot-com companies has made news beyond the confines of the business pages. The October issue of Interiors magazine focused on such businesses and their significant impact on the interior design business. Despite the decline in investments in this sector due to the high number of failures, this market is here to stay. It represents particular characteristics, such as a preference for fashion-forward (and funky) design, and an eye toward tighter budgets so that capital can be channeled into other areas in this ever-changing, dynamic business climate. Another category within the high-tech arena includes more manufacturing-oriented businesses. STYLEX'S ESD-capable CLICK is a serviceable, durable choice for clean rooms or other manufacturing environments that work with or produce sensitive equipment, such as computer hardware or medical equipment. Hospitalitv. Thii market has increased dramatically due to the healthy American economy. Business travel is up, but so is personal/recreational travel. Higher incomes mean more disposable cash, which has resulted in vacations to exotic destinations. The hospitality industry has responded with an increase in hoteVresort construction and retrofits of existing structures, creating a surge in interior design projects in this market segment. Over the next year or two, STYLEX may want to take a closer look at adding lounge seating to the line.
Education. While educational institutions may not provide high margins for seating sales, the life expectancy of nearly all products associated with this market is limited, thereby affording

the entrenched vendonlong-term opportunities. Educational institutions at both the college/university level and the secondary (private school) level have been chasing endowments for the past 20 years and now exhibit some major buying power in order to stay competitive. Because of typically low margins, this market should probably not be a top priority for STYLEX at this time, but neither should it be ignored. There is business to be acquired and reps should plug into upcoming opportunities.

Conclusions. The markets described above offer growth opportunities for STYLEX. To exploit them most effectively, each of these vertical markets should be addressed with messages specific to its needs.


Competitive Environment

While STYLEX still competes with major manufacturers, it has become a more serious player during the past year. There are both advantages and disadvantages to this position.

Because the company is small, concentrates solely on seating and offers a broad range of mechanisms, sizes and arms, it can compete quite effectively in

o . . .

terms of meeting specific sPecs. STYLEX also can come in at a lower price in nearly every case because it can change options within a single seating line to meet a spec. More than ever, STYLEX can create a spec that no other competitor can match. Additionally, shipping and delivery times generally beat competitors, giving STYLEX an edge when turnaround time is crucial. The lifetime warranty is "real", with no fine print limiting the guarantee and undermining customer relationships.


The current fabric program does not meet designer needs and expectations. Fortunately, plans are being implemented to correct this deficiency. Another disadvantage is the incomplete CAL 133 program, which has caused STYLEX to be left out of some competitive bidding situations.

Sales representation can be considered both a strength and a weakness. The company has done a great deal of work to replace rep groups that could not develop strong ties to the

be done, but with new, designeroriented representation in Florida, the Northwest, Washington, DC and New York City, the STYLEX line is being more readily introduced to and accepted among this critical

A&D community. Work in each territory still must


Opportunities. o The winning combination of aesthetics, function and price points can open competitive doors and get STYLEX into more bidding situation than ever before.

Because of-the number of choices each line can offer, STYLEX is in a position to create a preferred spec that cannot be matched by the competition. The Quick Ship program is one of the best in the business, making STYLEX a preferred choice when delivery times are critical and adding one more reason to spec STYLEX chairs.

STYLEX offers a "real" lifetime warranty, without the hidden loopholes of some seating companies. This kind of guarantee from a company that has been in business for nearly 50 years can be a selling tool for the reps when selling to designers and other specifiers looking for dependable quality and

the assurance that problems will be addressed and solved. The research study completed in March 2000 provided reps with guidance on how to position STYLEX vis-i-vis major manufacturers (Knoll, Steelcase, Herman Miller and Haworth).




(See note)


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(See note)


Haworth STYLEX

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Note 1: Knoll seems to have the least vulnerability due to choices based on reputation and brand only. However, in real life, Knoll's seating line is weak, making the forwardthinking designs of STYLEX more appealing to designers. While Knoll is acknowledged to offer a strong fabric line, it is a subsidiary company that competes with the contract furniture division.
can win against Steelcase on the basis of both aesthetics and price, because the A&D world does not perceive Steelcase to offer great design, yet does consider them competitively priced. One of their strongest advantages in the Design Tex



fabric line, which is considered innovative by A&D practitioners.

Designers love Herman Miller, but don't perceive that Miller is price-competitive. Haworth is perceived to offer good prices, but STYLEX product is priced lower than Haworth. Price may play an important role initially for STYLEX in gaining entry into large projects.

Still, the table above doesn't tell the entire story. The largest percentage of designers prefer to work with a small company like STYLEX because of the personal attention. Additionally, the table itself reflects the perceptions of designers about the large manufacturers, but not necessarily about STYLEX, with whom they are unfamiliar. Factually, STYLEX can compete against price and design now, thought the challenge remains getting in front of designers so they know there is another choice.


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STYLEX is handicapped by a fabric program that has not kept pace with the overall gains in product design. Designers are more likely to spec products from a manufacturer with a strong upholstery program, especially if ih"y ur. in a hurry and don't have time to deal with COM orders. In fact, well designed fabrics were cited in the research study as a reason for specifring a partiiular brand. Thought Momentum and Maharam are graded in, the Quick Ship fabrics and the patterns that are carded by STYLEX are not competitive at this time. The decision to grade in Design Tex and possibly Knoll fabrics, as well as to window future cards, will vastly improve the position in terms of making STYLEX more desirable by offering well designed fabrics that are easy to speciff. STYLEX is still a relative unknown in the all-important A&D community'
Unless the momentum that has been generated continues - through advertising, public relations, direct mail and other kinds of exposure - the company will not gain the recognition it needs to be a player in A&D. While being a small company can present advantages and opportunities, it can also be a handicap in terms of sheer dollars spent to accomplish the goals of increasing awareness and gaining market share. Major manufacturers like Steelcase and Haworth have the financial resources to launch intensive promotional campaigns that establish and intensiff awareness quickly - as each of these competitors did recently for Leap and "if', respectively. The challenge for STYLEX is to find a way to create attention and increase awareness steadily, despite a limited budget.



There are several yardsticks available for measuring the increase in awareness among the various targetaudiences during 2000 versus 1999. Besides the results of the benchmark research study, partially reflected above, the following quantitative tallies reflect a steady rise in brand awareness for STYLEX:

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Leads from NeoCon - 960 in 1999; 1456 in2000 Survey responses from Lunch and Learns I75 out

of 800 attendees


sunmary of feedback below) Advertisingresponses: t999 Rhythm New Icon... 38

2000 (to date)






Here Kitty.. 152 Swing 66 Music


Reverb Hear more.

50 29

Feel more

Reverb/Zephyr Gold ad

Rhythm Vibe Swing

Swing+ Reverb

Publicitv leads: t999

37 94




Zephyr Reverb/Zephyr



Total Advertising leads: 1999 -256;2000

Total Publicity leads: 1999 - 151; 2000 -268

The survey response rate among attendees of the Lunch & Learns was very encouraglng, wtthzzpercent of all participants returning completed surveys. In general the responses reflected and supports our research frndings of the benchmark research project. Favorite chairs (before the introduction of REVERB and ZEPHYR): RHYTHM (41 percent) SWING+ (13 percent) VERVE (11 percent)


Most appealing aspect of the model chosen as their favorite: Product design (71 percent) Materials used
What they look for as priorities when speciffing seating products: Good design Comfort Favorite publications: Interior Design

Interiors Architecture

Preference, ubout how they like to received information was relatively evenly split and included mail, CD, internet, discussion with rep, e-mail, print ads, trade show and word of mouth. Positive feedback from reps has been extremely strong across the board, throughout all regions of the country. Additionally, their response to the new literature system has been ovirwhelmingly positive, with the exception of the loop staples. STYLEX should proceed in investigating whether or not the manufacturing shop and create a tool for a i*g*r staple. If so, STYLEX can approach Oxford Bindery regarding a division of the costs incurred in producing such a tool.


Commurrication Obiectives. Strategies and Tactics

Architects and Desisners
Objectives: o Continue to build the brand and increase awareness among this key audience . Begin to capture market share from major competitors o Leverage A&D sales to create brand image among other markets

o - . o .


Maintain/expand promotional tactics directed to A&D market Support rep efforts in all key territories to present the STYLEX brand most effectively Use advertising and public relations tactics to increase awareness among markets


Advertising schedule. The 2000 media schedule should be expanded to include greater frequency in Interior Design and the Architecture/Interiors package. Additionally, we recommend adding Metropolis to the mix. Metropolis reaches a different segment of the A&D community, making it a good choice to extend reach within this audience. While the publication is more consumer-oriented, it claims that its subscribers spent, recommended or authorized the purchase of $1.6 billion in the contract fumiture category during 99-00. (That figure was the highest mentioned among the various product categories surveyed.) It includes Ginsler, Skidmore Owings & Menill and Rockwell Group among its subscribers.
Because the current ad campaign, which features STYLEX award-winners, is new and has been designed for some longevity, we don't recommend producing new ads ... unless Sava's new product is introduced at NeoCon.

Market Blitz. Choose one design-focused market and blitz the A&D community in the city with direct mail. Lunch & Learns should continue in this market and other PR events and installations (in public areas) can be done to build awareness and increase sales in the designated market. This will serve as a "test" and once the year is through and the results are measured, a new market will be chosen to focus on. Recommended market: San Francisco.

STYlE)Ulnreriors Roundtable. The publication invites about a dozen designers from the top firms in New York to discuss issues that the staff of Interiors develops in conjunction with STYLEX. The business session is fun much like a focus group, giving STYLEX the valuable insight by industry leaders on the company's products and brand. After business is concluded, designers and STYLEX personnel have dinner, providing an opportunity for STYLEX to develop important contacts and sales within this target market.


Key points to learn from the roundtable: Brand perception of STYLEX and key competitors _ Decision making process _ Process for projects _ Publication impressions/other resources Opinions of STYLEX product literature, ads and products (have samples of ALL to show) _ Awarenesslknowledge of STYLEX

Pubticity. Product releases and ongoing personal contact at shows will continue to be an important part of the marketing communications package. In addition, major efforts will be made to place profiles or feature stories in the major trade publications whenever possible. To that end, professional photos should be taken of important STYLEX installations.
Seating and Sava Seminar. Work with trade shows to have Sava put on the list of seminar leaders. Work with him to develop an appropriate presentation to designers that will show them how he works, his philosophies about seating design, the rationale for his ergonomic designs, and other topics of interest to the design community. He should also have presentation materials in digital form, as well as actual product materials as visual aids.

Designer competition. Devise an annual competition for designers to present their most outstanding projects involving STYLEX seating. A panel ofjudges consisting of designers (one might be Sava), STYLEX management and an editor of a key trade publication will choose the winner/s. Winning entries will be based on size ofjob, unique solutions met by STYLEX seating options and enduser satisfaction. The winner will receive a trip for two to a city known for style and design, such as Paris, Florence or Milan. The project would be covered in the publication of the editor who agrees to help judge. If no editor can be lined up as a juror, we can shop the story to all trades that carry such editorial. Once the article is published, reprints can be ordered to market the story in press kits, to reps, design firms and others.


Rens and Dealers Objectives:

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Develop a national network of reps & dealers with the knowledge to represent STYLEX products and the STYLEX brand accurately and appropriately. Increase sales among all markets. Develop and expand new markets.


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Provide appropriate materials, information and training to improve knowledge of the product line, the brand and the company's design rationale. Offer programs to incentivize reps and dealers to sell STYLEX. Provide appropriate support and education so that reps and dealers know more about new target markets and feel comfortable penetrating them.


SPIFFS. Expand the ongoing spiffprogram to include additional products that would be appealing for large projects (WORKCHAIR and BOP are being added to the First Quarter 2001 spiff.) Consideration can also be given to adding special rewards to dealers who consistently land large projects that include STYLEX seating. This bonus program can be structured in a number of ways to include highest volumellowest discounting, most Category 1A products sold, etc.
Ouarterly postcard mailings. On a quarterly basis, send the latest tips and news from STYLEX to dealers to keep the brand top-of-mind and to keep them informed about important product changes, policies and other news. The cards will be designed so that they promote STYLEX graphically on one side and provide the current news on the other.

STYLEXpress. Continue on a bimonthly basis to provide reps with information they need in the field. If feasible, look into creating an e-masthead so that the newsletter can be e-mailed. For those who don't have access to e-mail or feel uncomfortable with the medium, the newsletter can still be faxed.
How to choose the right chair. Based on the mapping profile that leading ergonomist Marvin Dainoff will provide us, transfer that information, which is intended for a new section in the price list, into a stand-alone handout for both specifiers and end-users. This kind of information has never been provided in the contract seating industry and STYLEX should make the most of this leadership initiative. Rather than describing what each control does, the brochure will tell why to choose one kind of control and arm over another. Because STYLEX will


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a process that has remained nearly incomprehensible, this promoted to fte industy through the various tades. Once literature should be produced, ttre piece wilt be sent otrt with.a cover news release explaining why it is uniquely beneficial to anyone speciffing ergonomic seating.

be the first to



Vertical Markets

o o o . o o

To penetrate more deeply markets with expanding opportunities To create/increase aw.feness within these markets To capture/increase market share within these markets


Discover and exploit various media within each target market Create messages that speak to specific needs of each market Use direct mail and public relations tactics to capture greater market share within each target market


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Purchase or rent lists from key publications for multi-wave direct mail effort. Learn the characteristics and needs of each audience to tailor messages

appropriately. Routine news releases and announcements should be distributed to ttre media in each of these markets. In order to create media lists, a resource guide like Bacon's Publicity Guide may be purchased. They list pertinent contact persons, the editorial conten! the kinds of stories editors are looking for, etc.


Umbrella Programs '


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To maintain consistent brand image and messages across all targeted audiences. To blend vertical market activities into a homogenous whole, building the STYLEX brand.


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Provide forums for brand-building across markets. Create consistent brand identity in every cross-market activity.

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Scope-of-the-line brochure. The first of these was one of the most popular pieces we have produced. It's a wonderful leave-behind for prospects, who can look at the STYLEX product line at a glace. The second edition affords an opportunity to add new products and to produce a piece in different dimensions with a different look. Once complete, this will be mailed to the A&D mailing list of 2,500leads. Publicity. Place at least two feature stories in trade publications, showcasing products, Sava Cvek or the STYLEX story. Mat news release. Write a 250-word story on ergonomics and how choosing the right task chair can contribute to good health and higher productivity. Submit to NAPS, a service that creates camera-ready art and distributes to a paid subscriber list of small to medium-sized newspapers across the United States. Use clip reports and circulation analyses to market publicity efforts and results to field.




Note that a campaign concept for NeoCon will follow once there is more accurate information about whether or not Sava's new product will be introduced, what other product introductions may be part of the show and a definitive budget is set. The area iormerly used to provide an "outdoor" appearance can still be allocated to the brand and to showcasing Sava's new product, if the introduction is to take place. Once these initial decisions are made, specific tactics and creative support can be developed and a time line can be established for accomplishing such tactics.

As a general guidetine, however, whatever campaign concept is approved should include the following elements: - . Direct mail to entire database to invite attendees to the showroom o Apremium/giveawayiterhselected/developed o An innovative display in the "outdoor" niche of the showroom o Teaser ads to increase showroom traffic o Product introduction rollout plans for Sava's important new product to create the level of awareness such a product requires.
















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Interior Design: Due to postal increases, all publications have been forced to raise rates (the postal service has presented the industry with a 20 percent surcharge). Interior Design is offering the 12-time rate for eight insertions at a $8,755 rate each' Total cost: $70,040

Metropolis: l1 x, discounted rate at$5,702

Last ad no charge One fuIl-page spread in all 3 Restaurant Guides, no charge Two l/S-page Contract Furniture Resource Guide Ads, no charge One full page in the no charge January issue is the 20ft anniversary issue (the reason Metropolis will appear 11 times, rather than the normal l0). Closing is January 3, so a commitment needs to be made if STYLEX is to be in this important issue. The pub is overprinting for distribution beyond normal subscription list.

o o o o

ea., plus these additional bonuses:

Total cost: $62,TA


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lnteriordArchitecture:. Recommend six insertions in each book at a rate of $8,925 each for a total of $53,330. with representatives from key design firms at a suitable restaurant, arranged and coordinated by the publication" will cot only about $4,000 Additionally,
a roundtable

Total recommended media cosh $1281433