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Furniture purchase and DFS

Furniture purchase and DFS


Our chosen subject is about downfall in furniture purchase and DFS is the company of our study. Our hypothesis is the fact that the number of coming back customers has lowered. To achieve this first we've done the SWOT on furniture market. The power for the business, what exactly are its weaknesses, what are futures prospective for furniture market and lastly what exactly are the possible risks it can in the foreseeable future are protected.

After that people have pin directed several points that have caused its devoted customers to get back from purchasing. These include people attitude towards renewable environment where customers feel that use of solid wood in furniture should be avoided as by cutting down trees and shrubs the furniture supplier is going against eco-friendly environment which is also one of the main reasons for bankruptcy of MFI, one of the leading furniture retailer. Then people love for pet animal has increased which includes led to boycott of the merchandise made from pet fur that they have seen how cruel it to get hair from pets or animals is. Credit crunch is the biggest problem encountered today; there are a lot of job slashes, forcing people to cut down on their expenses that may eventually end into less shopping in furniture sector as well. Downfall in house prices which is consequence of no new purchasers in the market has also effect on furniture market as no new purchasers means no new house purchase means no need for new furniture leading to decrease in furniture market. Folks are searching for equipped / unfurnished houses due to credit situation. For furnished houses furniture is provided by the owner of the property and for unfurnished apartments, in most cases people are taking their old furniture with them. There are increased rivals of furniture market so, the interior competition between stores and manufacturers have increased causing customers to shatter between these different stores. Regarding to Maslow's Hierarchy of needs there is required to understand about the habit of the customers as well. The upper degree of theory handles individuals who buy furniture very often and are able luxurious furniture which they can get through DFA, IKEA or other big creator brands. While the customers at budget of hierarchy tend to be involved in fulfilling their basic needs and they're looking for cheaper and durable furniture. Design is not a matter for them except for the price which is a good issue for the coffee lover.

Then, at the end of the study there are some advice made and summary is drawn.


DFS is a maker of furniture items. The items range between normal wooden chairs to leather sofas. DFS means Direct Furniture Items.

Its Chairman Kirkham began his business as a boy who rented out a small room where he made furniture and sold directly in the market. DFS at that time supplied Northern Upholstery with organic material. When DFS ran into Personal bankruptcy, Kirkham purchased it and merged both of his brands into one i. e. DFS. Kirkham now retains share for 9. 97% for his family. Since that time DFS has made his name as one of the biggest sellers in UK for furniture resources.

It is human being nature from the beginning to stay in a well resolved, good looking, attractive and well decorated house. To do this they need to devote some furniture to make it look more desirable.

Due to their Quality of service and an exceptional price range, they have become UK's one of the biggest furniture business.


DFS is the UK's greatest supplier of sofas. DFS products are Leather Sofas, Fabric Sofas, Leather and textile sofas, place sofas and sofa beds. With 40 years experience in providing the best quality sofas, leading edge designs and excellent customers service.


Biggest ongoing controversy is of market meltdown people don't possess enough money to buy new furniture. There are so many job slices. Relating to Alliance &Leicester, "The ongoing ramifications of the credit crunch have kept keeping at the top of Brits' monetary agenda, according to a study by Alliance & Leicester. New research by the charge card provider suggests just under one in three (29 %) of respondents say they may have reduced their spending and are making goes to save more. " Before, Lenders have been lenient in giving out credit to its customers. However when Banks realized that they are writing off a huge amount of money on a monthly basis, they started tightening up the credit facilities to its customers. So, the only option customers are kept with is to lessen their expenses. One of the primary expenditure for folks specially the home owners is buying new furniture every year. Though it induced big source of earnings for furniture companies but individuals were going down deep into credit. After Banking companies being rough in offering loans, customers have to stop their spending aspect. The primary problem sits within the costing factor of furniture sector. Either furniture is available for high prices like at MFI, DFS or IKEA or it is available for very cheap at small furniture shops which is very cheap in quality as well. DFS is wanting its better to tackle this problem but still it is not able to solve this problem. DFS is doing half price sales but nonetheless the prices at DFS are so high that it is not feasible for a middle class family to buy any furniture from DFS.


DFS use Channels for marketing are Electronic Channels and Printing media Channel. In electronic stations they advertise their products on TV, By Mobile phone, By Fax. DFS use Printing Media Channels through Publication, website, news papers etc.


A market exists where buyers wishing to buy a good or service touch sellers wishing to sell that good or service, so that trades happen. For DFS they have their own stores, they take part in biddings whenever they want to eliminate any stagnate product. Their current market is the United Kingdom, and the Target Market Portion is middle and upper middle income families


DFS have few major competition such as John Lewis, IKEA, Harvey's furniture. There is a propensity to conflate competitiveness with monetary growth or performance. In other words, the question of whether environmental regulation harms competitiveness is seen as the same as whether environmental rules harms economic growth. The growth of a specific market is determined by the competitiveness in that market.


If we discuss recent recession that we are facing it effects DFS business a lot the graph of its sales demonstrating a downward move that's the hyperlink of DFS using its economic environment. And due to recession buying vitality of DFS customers is not that much powerful with the comparability of sales each year before.


Demographic environment has a crucial role in businesses. Changes in demographic factors affect the sales. For example a female with children comes to DFS and wishes to buy a sofa so we must convince her with that specific type of sofa which is suited to her family as compare to a wedded girl without children. So choice of product reflects by the kind of demographic factors.


In DFS employees proportion has increased which will effect the costs for DFS who are focused on pension payments because of their employees because their employees are living much longer. That's the reason DFS have began to recruit more aged employees to tap into this growing labor pool.



Recently DFS tendencies has observed some changes. The advantages of age discrimination and disability discrimination legislation, an increase in the least wage and increased requirements for companies to recycle are examples of relatively recent laws and regulations that impact an organization's actions. Legal changes can affect a firm's costs and demand.


DFS has good technological environment such as they have fastest pcs which operate fastest producers machines, DFS have online website where customers order there requirements. Online shopping, bar coding and computer aided design are all improvements to the way DFS do business because of this of better technology.



For the effectiveness of furniture market, it is with the clients who are always shifting from one location to another or who are renovating their residences after some periodic interval. Especially most targeted ones are first time home purchasers.

Quality of product made by DFS is of high standard. It's Leather and Cloth Sofas and other items are created with quality and control. Items from DFS are believed some of the best and highly quality manipulated items available in the market. Also other furniture outlets use quality requirements as defined by law but still the quality taken care of by DFS is considerably older and much better than ordinary furniture retailers.


There are people coming from all over the World to UK. DFS does not provide full selection of furniture for a variety of customers. Even products exported from DFS to certain countries where they have their own unique test might not accept the product which will cause lesser sales. For instance, in countries like Saudi Arabia, the people over there would rather have bad set in place composed of very heavy solid wood. But western tastes is completely different compared to that whereas people in american countries want to have light weight furniture. DFS is not creating whatever would be making good business in such countries.

There is not a raw materials market for DFS locally inside UK. Since, there issues of echo friendly environment making companies aren't allowed to cut the trees. So, they need to import real wood from other parts of the World. The price of their product thus raises in this way.


Foreign investment is the biggest opportunity for DFS and other furniture supermarkets. As the market of UK is very good and also furniture market does perfectly as whole lot of countries are exporting ready-made furniture from UK, so that it creates an attraction for international investment.

UK is member of EU which makes it relatively easy to export to free market using its high standard and quality satisfactory to both EU and non-EU countries.

Olympics 2012 forward, furniture market will be turning over a boom lately as new furniture is to be expected in new hotels or guest houses. Especially in make of Stadium a whole lot of furniture will be utilized. Also, new shopping Malls opening in UK will raise the sales for furniture market.


Labor cost is always the largest problem for manufacturing industries. UK faces the same problem with minimum amount wage placed to 5. 73 per hour. Furniture made with this much high labor cost will not be easy to compete with the overseas market. Especially the countries with cheap labor when sell its product for cheap UK must sort out something out to stand still in this competitive environment. But as the merchandise exported from UK are of high standard and high quality price subject can be jeopardized.

In the queue are the price of raw material and governmental regulations. UK has its own regulations and EU has its rules and legislation. For furniture industry it has to talk with both UK and EU regulations. Among the examples is that cutting trees is not allowed. So, furniture manufacturers have to transfer solid wood from other countries which will also improve the cost of natural material for furniture sectors.

The factors that require the clients from restrictive shopping of furniture are as follows:

Green Environment

Everybody is curious about going green. A lot of men and women buy furniture one time and change it out only when you can find need to. This is because they have started caring about the surroundings. They know that the furniture is made using the hardwood even if it's furniture composed of leather or textile but still the base used is of lumber. But this issue is gradually handling as furniture made up of glass and metallic are on the market.

This is a resource and demand graph. It shows what sort of business is influenced by customers thinking of becoming enviromentally friendly. First the price tag on the product is P and number is Q. It has a big market talk about. But as people shifted towards renewable environment frame of mind the new price P' with number Q' is attained. Now the business enterprise accommodates the customer area of just one 1, 3 and 5 where as replacement for furniture market accommodates the group of customers at 1, 2 and 4? Although it is not large amount to cause big injury to the business but still it is big enough to cause at least some injury to the business enterprise.

Animal Protectionism Rights

Furniture made up of fur or leather that relates to animals, is also offended by few people. Customers who are against the utilization of animal epidermis are not in greater amount but still they are simply enough to impact the business. A number of the prominent names that not like furniture made after getting rid of family pets are Amy, Ana Nicole, Charge Maher, David Combination and many more.

Credit Crunch

Biggest ongoing debate is of credit crunch people don't have enough money to buy new furniture. There are so many job slices. Matching to Alliance &Leicester, "The ongoing effects of the credit crunch have kept conserving at the top of Brits' monetary plan, according to a study by Alliance & Leicester.

New research by the credit-based card provider suggests slightly below one in three (29 %) of respondents say they have got reduced their spending and are making movements to save lots of more. " Before, Banks have been lenient in giving out credit to its customers. However when Banks realized they are writing off plenty of money every month, they started securing the credit facilities to its customers. So, the only choice customers are kept with is to lessen their expenses. One of the primary expenditure for folks specially the home owners is buying new furniture each year. Though it caused big way to obtain income for furniture companies but individuals were heading down deep into credit. After Lenders being rough in offering lending options, customers have to avoid their spending nature.

Search for Furnished and unfurnished Residences:

According to research carried out it's been found through Halifax that there surely is sheer land in customers looking for homes to buy. On the other hand, it has been affirmed through other property agents that people are looking of rentals properties more. Simple fact can be confirmed by the house prices heading down and the hire of properties has almost increased by two-third of its actual hire that was a year ago. Secondly, people are not in feelings of spending money. They are searching for furnished property. Before market meltdown people even finding property to rent, they searched for unfurnished property but now as to cut down on their expenses people want for furnished property and even people looking for unfurnished property are taking their old furniture with them.


Marketing Objectives make reference to sales, market shares, market standing, customer satisfaction, customer awareness, customer retention, circulation penetration and product launches.

DFS marketed their 50 percent price sales at often on different situations in order to get these marketing aims through marketing and newspapers. The next will be our marketing aims.

We job our marketing plan to achieve the aforementioned shown results percentage


Ansoff's matrix

We can plainly see that there surely is a relationship between products and the marketplaces where they are really being sold. Inside our case we have chosen market penetration and market development strategy.


Our strategy is based on Ansoff's product-market matrix. Penetrating the current market with strenuous marketing of the products and discovering new Target Markets. Clearly the range of products currently is feasible for upper middle class, but also for increasing sale they ought to broaden their market, they ought to produce cheap items for students or office goers, where profit margin is much higher.

Acquisition or a merger in the EU will be another great idea as it'll open a huge market as there are 27 member countries with at least 500 millioncustomerson it is doorstep.


For the customer have modified their frame of mind towards going green, the furniture made should tried not be produced of timber. Substitutes for hardwood available like furniture made of leather, fabric or even metallic and a glass. If natural look is desired it could be helped bring artificially by painting the steel into color of hardwood. Fake fur should be used instead of original fur to get your business safe from person in the group who hate eliminating animals just for fur. Market meltdown s something that cannot be drop by company work as it is the macro environmental factor and should for a couple of years to go it away.

Best way to bypass what folks like best is to go through Maslow's hierarchy of needs. Different people have different tastes. People at budget of the Maslow's hierarchy will not be centered towards high respected and attractive furniture. What they will be looking at is the furniture that will do to fulfill their daily needs. While the people at higher level will be more considering furniture that is of interest, interesting and makes their home appears like heaven.


The problem is situated within the pricing factor of furniture sector. Either furniture is designed for high prices like at MFI, DFS or IKEA or it is available for very cheap at small furniture retailers which is really cheap in quality as well. DFS is trying its better to tackle this issue but still it is not in a position to solve this issue. DFS is doing 50 percent price sales but still the costs at DFS are so high that it's not simple for a middle class family to buy any furniture from DFS. They need to give seasonal discount rates as other companies are doing now.


It requires a very long time for an order to complete and turn up to the customer. So, customer prior to going to buy new furniture item typically Sofas they have o wait for 3 to 4 months for his or her order to arrive. First you go directly to the shop and choose your model and make from displayed items or from catalogue then you place your order. It will take around 90 days for your order to be provided. For the time being you'll get a free sofa and they will take it away when you receive your order. That's taking place with the newest models. This thing creates pressure for lots of folks to hold back for something and by the time product reaches there are new more beautiful products out there. Getting started with their hands with any delivery company can be considered a key, vertical integrating with UPS or DHL will ensure better service and can reduce much hassle.


Rigorous Advertisement on the internet, recognition of business customers and offering better discounts will help in customer retention. Just like the Landlords that lease their property largely try to buy cheap furniture and most of them buy second hand furniture items. Landlord uses the cheapest available furniture and uses it till it breaks down and there is need for new furniture. Regarding to a study almost 65% of UK population lives on rent, 15% lives in council houses and the remaining have their own residences. So, 80% of the population relies on the furniture that is resilient in support of replaces when it's fully cracked. Pawning old furnitures and offering offers will not only help preserve customers but will pull more customers and help recycle the products reducing the price tag on input and assist in preventing pollution.


After going through SWOT for furniture market and getting through some of relevant Porter's Five Makes, we realise there's always solution to a challenge. Sometimes, it requires bit longer to resolve a difficulty and it is sometimes resolved with blink of the attention. Things like becoming enviromentally friendly and use of fur in furniture can be changed as the company can change consequently. But something that is out of control of management of company can't be controlled by company. But still the approach utilized by DFS is a good solutions that to provide any furniture at half price and buy now pay later after having a year. Of course, if you are still not able to pay after a year you can certainly do four year rent. The strategies suggested along with the current practice will open doors for new market segments and help better reach the prospective customers. Corresponding to analysts following a year recession is going to end and market will develop again.


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