Swan MattressA Critical Analysis of the Mattress Sector
A Critical Analysis of the Mattress Sector
PREPARED FOR: Dr. Syed Ferhat AnwarProfessorM302: Marketing Management
PREPARED BY: M.M. Shahnewaz Kabir Shawon(ZR-04)Alim Md. Noor(ZR-12)Saif Ahmed(ZR-21) Damil Alam Prakash(ZR-34)Khandaker Ahad Ahmed(ZR-48)BBA 15th Batch (A)
INSTITUTE OF BUSINESS ADMINISTRATIONUNIVERSITY OF DHAKA
June 02, 2008June 02, 2008
Dr. Syed Ferhat AnwarProfessorInstitute of Business Administration (IBA)University of Dhaka.
Dear Sir:We would like to submit this report titled Swan Mattresses: A Critical Analysis of the Mattress Sector prepared as a part of the requirement for the course of Marketing Management.In the process of preparing this report we had the opportunity to practically implement our knowledge of marketing as well as to gain insight into the mattress sector of our country. We tried our best to follow your guidelines in every step of preparing this report.The whole project has been a huge learning experience for us. We hope you will find this report objective, precise and reliable. Thank you for this assignment.
___________________Damil Alam Prakash(On behalf of the group)ContentsExecutive Summaryvii1. Introduction11.1 Origin of the report11.2 Objectives11.3 Scope21.4 Methodology21.5 Limitations32. Swan Group Overview42.1 History42.2 Swan Group Overview52.3 Organization Structure82.4 Management Team93. Market Analysis113.1 Market Shares113.2 Competitive Forces113.3 Mattress Market Type133.4 Current trends134. Competitor Analysis144.1 Coirex Company Profile144.2 Karmo Company Profile164.3 Other Competitors185. Swan Mattress Model Analysis195.1 SWOT Analysis195.2 Strengths and Weakness Analysis205.3 Opportunity and Threat Analysis235.4 Swan Marketing Mix255.5 GE Model Analysis275.6 Extended BCG Matrix315.7 Porters Five Forces Analysis for Swan Mattress335.8 Conjoint Matrix356. Strategies366.1 Goal Setting366.2 Demand forecasting406.3 Memory foam416.4 Customer awareness456.5 Customer retention467. Conclusion50Appendix A References51Appendix B Sample Questionnaire52Appendix C Sample Swan Print Ads63Appendix D Sales Data Analysis66
List of IllustrationsFigure 1. Swan Group5Figure 2. Corporate structure of Swan Industries9Figure 3. Mattress industry market shares11Figure 4. Strength & Weakness Analysis24Figure 5. Opportunity & Threat Analysis24Figure 6. The BCG Matrix31
List of Tables
Table 1. SWOT analyis of Swan mattresses19Table 2. Strength & Weakness Analysis20Table 3. GE Model Business Strength Rating28Table 4. GE Market Attractiveness Rating29Table 5. Yearly Forecasted Sales37Table 6. Periodic Forecasted Sales37Table 7. Rebonded Mattress Sales Analysis39Table 8. Chi-Square Analysis39Table 9. WACC Calculation42Table 10. ROI Calculation44Table 11. ROI Calculation48Table 12. Projected sales figures49
Executive SummarySwan Industries have been operating in Bangladesh for a long time. Although they are the clear market leader, Swan is currently facing decreasing profits. This report attempts to identify those problems and propose strategies to resolve those.The report is limited to Dhaka city only. Data was collected through repeated interviews with manufacturing company executives and surveys of both consumers and retailers. The mattress industry of Dhaka city is oligopolistic in nature. Swan is the market leader (32%) and the main competitors include Karmo (15%) and Coirex (5%). Swan Industries currently offer five kinds of mattresses: foam, coir, spring, PE (tight and light) and re-bonded mattresses.Swan Industries have a few considerable strengths which include: largest portfolio of products, international certification, corporate structure and continuous R&D. The weaknesses include: lowest retailer commission, higher costs and lack of information systems. Some of the biggest threats are the headhunting of employees, powerful new entrants like Otobi, Akhter Furnishers, etc. and specialization of niche marketing companies.According to the GE model, Swan lies on the bottom-left grid of the GE matrix. So, the strategy of Swan should be to protect and refocus. Also, BCG matrix analysis reveals that Swan mattress division as a whole is a cash cow.To resolve the problems of Swan Industries, the following strategies have been proposed: (I) goal setting, (II) demand forecasting, (III) memory foam PR strategy, (IV) print ad modification and (V) customer retention strategy. If Swan Industries invest in the right areas and implement effective strategies, then they should be able to maintain their position and market share in the long term.
A Critical Analysis of the Mattress Sector
1. IntroductionSwan Industries have been operating in Bangladesh for a long time. Now, they are a powerhouse in the Bangladesh foam and mattress sectors. Despite having the biggest portfolio of products and the widest distribution channel, Swan is currently facing declining sales and diminishing profits. This report attempts to identify those problems and propose strategies to counter those.
1.1 Origin of the reportThis report has been prepared to fulfill the partial course requirement of Marketing Management (M302), for Dr. Syed Ferhat Anwar, Professor, Institute of Business Administration.
1.2 ObjectivesThe objectives of the report are: Identify problems of Swan Industries to find out which issues are pressing and which components of the business need to be focused on. Identify the trends of the mattress industry to recognize the patterns of the mattress sales in this industry. Develop strategies for Swan Industries after identification of the companies problems, formulate strategies that will resolve the problems for Swan.
1.3 ScopeThe information of the report is based on the data collected from retailers and the producers in Dhaka city only. This report includes basic and relevant information that are needed to have an overall idea of sales of mattresses and their preferences. To fulfill our objective we have gathered information from retailers. The products offered by Swan Industries can be broadly classified as into foams, mattresses and hometex (comforters, pillows, etc.). We have narrowed down our study only to the mattress division. Though the mattress companies have distribution and retail outlets in major cities like Dhaka, Chittagong, Khulna, only demand in Dhaka city has been discussed here.
1.4 Methodology Collection of dataTo learn about the sales of mattresses, we have gathered information from various sources. They are as follows:I. Surveys two types of surveys were conducted. a. Consumer survey - a top-of-the-mind survey directed towards consumers to find out their awareness level about the mattress industry.b. Retailer survey retailers were