Promotion Analysis DP

1

Place and Price Analysis.

Devan Pouncy

Capella University

BUS-FP3030

Professor: Daniela Pavel

February 10, 2021

Place and Price Analysis

Herman Miller has been in existence for over 100 years and plays great importance in design to date. The company's award-winning office chairs are available through retailers, dealers, and e-commerce websites around the world. Herman Miller's headquarters is based in Zeeland, Michigan. The manufacturing and distribution facilities in North America are at Atlanta, Batavia, Hildebrand, Holland, Sheboygan, Spring Lake, Stamford, Yaphank, and Zeeland. Europe, Middle East, and Africa have their distributors at Melksham, United Kingdom. The Asia Pacific has their manufactures and distributors in Bangalore, Dong-guan, and Ningbo. Sao Paulo, Brazil is the sole manufacturing and distribution facility in Latin America and the Caribbean.

One of the classic 4 Ps in marketing is distribution. Distribution channels play a key role in the marketing strategy since they catalyze the expansion and revenue growth of a company. Herman Miller sells their office chairs through the dealer networks mentioned. The office chairs are sold through a geographical network of dealers. The dealers are then responsible for selling the office chairs to the end-users in their areas. The dealers are essentially customers of Herman Miller and may be trained and supported on the marketing materials and campaign.

Herman Miller office chair components were shipped as they were produced. The components arrived intermittently and erratically. This forces the distributors to store, track and retrieve the office chairs when needed. Herman Miller has allocated more installer period to each project. The company is represented through corporate offices and subsidiaries, independent retailers, and dealers in over 40 countries. Herman Miller is known for maintaining showrooms in the US and other markets around the world. This is the strategy used to get the office chairs to the market.

An exclusive distribution strategy used to create an effective competitive advantage over the other companies was implemented. The collected parts produced were combined in a single delivery and delivered independently on the same date. A developed system was established and used to allow Herman Miller to promise both customers and distributors a specific product shipment day. Herman Miller Performance System (HMPS) was created to assist the dealer office design representatives to develop other layouts, equipment, and specific parts, and submit ordered office chairs by collapsing several processes into a single digital tool. The dealers are offered training to support them in the execution of a more streamlined and efficient installation process. The place distribution strategy used was essential in the success of the business by creating greater end-customer satisfaction.

The diversity in the Herman Miller office chairs impacted the product issues in where the products did require delicate handling after a shipment was done. The installation process was instilled thoroughly in the distributors' training. The price of the office chairs increased due to the increase in expenditure during the distribution process and the increase in the number of distributors. Through a specialist channel, the office chairs needed to use extensive salespersons to cater to the user interaction needs. This factor affected the promotions required to sell the Herman Miller office chairs.

I would recommend a more effective distribution strategy to clear the delays incurred on the distributor's end on specific types of office chairs. There should be thorough statistical research on the types of Herman Miller chairs used in a particular area to know the exact chairs needed in a particular area.

Herman Miller used the value-based pricing strategy to price their different types of chairs. They set a price based on the quality of the product they produced. From previous testimonies, they were assured that the office chairs were worth the expense. Since the office chairs considered the customers who sit for long hours, their products were not similar to other chairs. They placed a financial value on the differences and made sure the value of the customer is higher than the cost. The customers were explained as to why the price will be accepted.

Most of the competitive companies use the competitive pricing strategy in their pricing. This strategy must compare other company’s prices on the same products. The price of the office chairs had a positive impact on the product since they had unique features and benefits. The Henman Miller Inc. spends a lot on promotions and hence has a high position in the customers' mind and therefore higher prices as well. The distribution strategy affects the price strategy since Herman Miller office chairs are delivered to every corner of the world.

The value-added pricing strategy had a positive impact on the economic success since Herman Miller office chairs bridged the gap that was left by most office chairs manufacturing companies. Despite the intense competitor price competition, Herman Miller emerged the recent market recession with a greater market share, stronger brand, and profit position that envied their competitors. This strategy also resulted in a more loyal network of value-added distribution partners.

In conclusion, place and price strategies are key factors to consider for effective economic growth. Herman Miller used their difference in price strategy to market their additional features which brought more customers. The place strategy was used to increase their sales across the world through their several distributors.

References.

Olivares, J. (2011). A taxonomy of office chairs: The evolution of the office chair, demonstrated through a catalogue of seminal models and an illustrated taxonomy of their components. London: Phaidon Press.

Kubicki, M., Milano, C., & Probert, C. (2015). Marketing mix. Miejsce nieznane: 50minutes.com.

Schindler, R. (2012). Pricing strategies: A marketing approach. Thousand Oaks, Calif: Sage Publications, Inc.