|
|
Manufacturer of Audio/Video Components
Background
The firm produces high-end, high performance audio/video components for the
consumer durables market. The problem the firm faces is competition from
imported products from Pacific Rim countries that can sell their components at
below cost because they employ cheap labor and use inexpensive materials.
At certification, the firm had 17
employees and annual sales of approximately $1.7 million.
Because the firm cannot compete on price alone, management realized the need for
a dynamic advertising/promotional campaign. The firm lacked the expertise to
develop a campaign in house. Thus, every new technological development, cosmetic
change, and/or product enhancement the firm made lacked promotion. As a result, the firm's market share was
eroding.
Assistance Provided
The recovery strategy proposed developing a strong, action-oriented,
advertising/promotional campaign. The campaign was based
on the features and benefits of the firm's product line and developed to promote the firm's
products to buyers of excellent quality, state-of-the-art
equipment. The campaign was accomplished at a cost of $60,000.
Once the campaign was successfully underway, certain information began to flow
into the firm, such as the public's response to the firm's product offerings. This information helped the
firm evaluate the product line's cosmetic features in planning for next
generation product. As a result, a second project, a new front panel
design for the next generation of product, was implemented for a cost of $15,000.
After the firm had been introduced to the general public in a big way, and the
cosmetic features of the product line had been changed, the need for UL/CSA
certification was addressed. UL/CSA certification was completed at a
cost of $10,000.
Project Results
The results from the projects
exceeded original expectations. During the first year after completion of the
projects the firm nearly doubled sales to $3 million and increased employment by 28
workers. The firm also received its largest contract ever
when it signed with a 40-store electronics chain to supply its complete product
line. Management expects more of the same for the future, as brand name and product recognition
continues to increase for the firm.
|
