From: Saad Ali S, Kakeru Nemoto

To: samzell@hotmail.com
Sent: August 03, 2014
Re: Recommendation Report for the Penn Mall


Introduction
The aim of this report is to suggest the opening of a furniture store in Penn Mall. As of today
there is no furniture store or similar offering in the University City area. One of the worlds
leading furniture stores is IKEA which offers furniture for the whole home. IKEA is located and
operated for the most part in suburban areas. Commuting and traveling from and to the stores
is inconvenient. We suggest the opening of a Mini-IKEA in the new Penn Mall with the target
group being students and families living in the University City area. We have divided the
recommendation report into three sections: Background, Findings and Recommendation.

Background
Last week we conducted our market research and surveyed 14 people. This constituted 6 men
and 8 women. All of them were students in University City and more than twelve were living in
apartments with one living in a dormitory and another living in a shared house. More than 85
percent of our subjects were interested in Mini-IKEA and wanted affordable but high quality
furniture. This is as we expected; therefore, we are assured that there would be a certain
demand for Mini-IKEA in Penn Mall. For the next step, we have to analyze our survey results in
more detail, summarize our data in charts and graphs, interpret them and then write a short
recommendation report for the Penn Mall based on our data.

Findings
3.1. Demand for Mini-IKEA in Penn Mall

Fig. 1 Interest in Furniture Fig. 2 Interest in Mini-IKEA


7%
57%
29%
0%
7%
Very much
Somewhat
Neutral
Not really
Not at all
36%
50%
14%
0% 0%
Very much
Somewhat
Neutral
Not really
Not at all
Recommendation Report 3rd Draft August 7
Saad & Kakeru
As we expected, the interest in furniture among students was high; 64 percent of the students
were particular about their furniture. They were no longer satisfied with merely cheap
furniture. Also, most of them were interested in Mini-IKEA; more than 80 percent of them
would like to go to Mini-IKEA if it is in Penn Mall. Therefore, we found that there is a certain
demand for Mini-IKEA in Penn Mall.

3.2. Purchase Behavior of Target Market


Fig. 3 Annual Budget for Furniture Fig. 4 Last Purchase of Furniture

According to the survey data, the annual furniture budget of our target market is not high; the
average budget is about $ 928. This budget includes all the furniture they buy in one year. In
addition, Figure 4 shows that they dont seem to buy furniture frequently; half of them havent
bought furniture for a year. In other words, they tend to buy furniture once a year. Generally,
furniture is an expensive product and is supposed to last for a long time; so, the repurchase
rate of furniture is not high. In order to increase the repurchase rate of our target customers
under a limited budget, we should deal with Mini furniture, such as small-book shelves,
desks, light stands as well as everyday items that might be purchased regularly such as sheets,
towels, kitchen utensils and so on, more than large furniture, such as beds, chests, kitchens,
and so on.

3.3. Services we should provide

Fig. 5 Most important factors for buying furniture
0.0
10.0
20.0
30.0
40.0
50.0
$500 ~
749
$750 ~
999
$1,000 ~
1,249
$1,250 ~
1,499
$1,500 ~
1, 749
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Annual Budget for Furniture [$]
0.0
10.0
20.0
30.0
40.0
50.0
1 week
ago
1 month
ago
6 months
ago
1 year
ago
3 years
ago
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Last Purchase of Furniture
0
10
20
30
40
Price
Design
Functionality Brand
Quality
%
Figure 5 shows that the most important factors for customers when they buy furniture; 36.8 %
of them think design is the most important and 21.1 % of them think the price is the most
important, which is the same as quality and functionality. Nobody cared about the brand! This
survey result proves that people want to buy affordable but high-quality furniture.

Fig. 6 Demands for Other Services

Figure 6 shows the customers demands for other services. As you can see in Figure 6, the
demand for a home delivery service is the highest; 30 % of them require it. We can guess that
the customers will come to Penn Mall by public transportation. It will be inconvenient for them
to bring their purchases back home, even though their purchases are not large furniture.
Therefore, we should provide a home delivery service. Subsequently, the demand for online
shopping is also high. These days, the number of people who prefer online shopping is rapidly
increasing because of its convenience. Some people just look at the product in the shop and
then, they buy the same product via online shopping. We can provide an online shopping
service but we have to keep the sales in the shop as well.

Recommendation
In conclusion, we would like to suggest that you include a Mini-IKEA in Penn Mall. Our specific
recommendations are as follows:
Deal with small furniture and household items more than large furniture in order to
increase the repurchase rate.
Provide customers with affordable but high-quality products.
Start a home delivery service and an online shopping service.
Add a special service or discount when the customers purchase products in the store.


Please feel free to contact us if you have any questions.




0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0
Resale
Home delivery
Fixing/Repairing
Online shopping
Customized order
Other
Percentage [%]
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%