Uploaded byBenu Sagar Dubey
The Family Tree - Case Study
The document discusses the business strategy of 'The Family Tree', a manufacturer of brass beds, detailing the market testing, manufacturing process, pricing, and distribution methods. It highlights the company's successful sales to antique dealers in the southeastern US and outlines competition and expansion plans into other regions. Recommendations for future action include focusing on high-margin accessories, long-term contracts with dealers, and expanding the product range.
The Family Tree - Case Study
- 2. Agenda Brass Beds Test the market Inception of “The Family Tree” Manufacturing Process & Expansion Pricing Market Competition Distribution Q&A
- 3. Brass Beds Brass beds arebeds in which the headboard and footboard are made of brass & rails are usually made of steel. The brass used in making brass beds is usually 70 per cent copper and 30 per cent zinc. Brass beds popularity at its peak at the turn of the century, post World War II & in 1970’s
- 4. Test the market Totest the market for reproductions of antique brass beds in Southeastern US •Contacted bed supplier in Pennsylvania •Began selling beds to furniture and antique dealers Mr. Jim Epps (An Antique Dealer) Mr. Sanford Pattern (Businessma n) •300 beds sold •Mostly to Antique dealers 6 months later
- 5. Inception of “TheFamily Tree” Encouraged by Initial success Began manufacturing beds To minimize transportation cost Control quality & deign With in 2years “The Family Tree” began manufacturing brass beds in Colbert, Georgia
- 6. Manufacturing Process & Expansion Raw Material •Small investment in fixed assets • Import brass tubing from West Germany Producti on • Cut into pieces and polished with cutting rouges • Drilled holes to easy assemble with nut & bolts • Started producing 8 beds/day Expansio n • Started selling accessories like brass spitoons, oak china cabinets & chairs, wrought iron tables & glassware • Less margins but are valuable trade & display items
- 7. Pricin gItems Cost RangeStart From in $ per unit Range End To in $ per unit Brass beds cost to dealers 200 500 Direct labor & material cost 130 230 Misc. expenses 20 70 Profit margin 50 200 Discounts given on large orders Commissions paid to sales person only on initial order Repeat business was non- commissionable
- 8. Marke t • High pricedantique brass beds • Refused to reproduction brass bedsNorth Region • Shortage of antique beds • Antique dealers purchased reproduced brass beds • Furniture chains also plays a major role South Region
- 9. Competitio n 30 brass bedmanufactures in US Out of 30, 2 were located in Southeast region except The Family Tree Those 2 were located at Virginia & New Orleans The Family Tree dominates the Southeast US market due to its presence in central location at Colbert, Georgia
- 10. Distributio n 95% bedssold through antique dealers Initiated to gain profits through furniture chains. Ex: Tie up with Ethan Allen Sold limited no. of bed through retail from Colbert Two large trucks with sample, travelled through southeast, cover as many dealers as possible, Trucks returned only when everything had been sold Truck & driver is born by The Family Tree while the customer had to pay for gasoline
- 11. Q&A- 1What were thefeasible alternatives for The Family Tree? Continue as a dominant player in southeast region Continue as a dominant player in southeast region + expand in southwest region Continue as a dominant player in southeast region + expand in southwest region + expand in north region
- 12. What do yourecommend for a course of action? Q&A- 2 Should also focus on high end and high margin accessories. Long term contracts & profit sharing with dealers and distributors Conceptualizes institutional sales Increase in sales force Incentive on repeat orders Broader product range