Abstract
Home Interior’s Ltd was established in 2002, as a designers’ office for planning cosy home interiors, office business environment and others such as exhibitions, clubhouses, shop decorations or window displays. As interior design becomes more and more important in any business sphere, such designing companies have sufficient chances to succeed, if the services they provide are really high-quality. The research is claimed to analyze the key concepts of a company’s market activity. It includes the analysis of internal and external factors of the company activity. The product life cycle analysis includes both theoretical and practical data, related to interior design marketing in general, and interior design in particular. The work is also about to regard such theoretical approaches as SWOT analysis and Boston Matrix.
Introduction
The interior design market is a steadily growing segment in the world market. It is considered, that the nearest future will be rather fruitful for the further development of that segment, and especially the Asian market of design is about to grow. But the design approach in Asia corresponded with the global demand calamity for the designers’ services. The case of Asian market growth will be regarded in one of the following chapters.
The regarded company tends to grow rapidly in the signified market sector, and the statistics show that is steadily approaching the maturity stage (according to the life cycle analysis).
The internal environment of the enterprise
The team of the company – is the professional designers, who are able to define the necessary changes in the design in order to shape either home or business interior. The process of designing, as a part of the corporative strategy is divided into three periods. Period one includes the mutual discussion and agreement of the future design. At this period customer proposes and is proposed the possible projects: colour, tone, materials or some other specific requirements. The lineout design and ready sketches are provided to the customer at this period. The second period includes the final discussions with the agreement of the costs. The preparatory works to construction are made. The third stage of the process includes the constructions themselves with steady control by the managers. The customer is offered to purchase furniture and decorations at this moment. At the moment company needs qualified and experienced specialists to work in the sphere of design.
The market of design is a steady and rapidly growing business sphere. The place of design in business is a subject of lots of discussion. It is difficult to account for the real situation, in which the nowadays market of interior design is located. The variety of the offers of exact designers’ offices is the response to customer’s request “Make it beautiful and attractive” – in the field, where the search of adequate, saving solutions, implemented in design is led. The solutions, on the basis of which the recognition of the design as goods or services lays, encourage the sales of other goods and services.
The proper choice of the necessary and efficient design, which is the main provision of transformation of the design into normal business, is the tool in the environment of the developed and strengthening economy. At least, design has become the real competency tool: the company strives to overcome its opponent, and arranges press conferences, or presentations of the production, using the services of the designers’ office. Companies strive to conquer new markets by promoting the products in an attractively designed exhibition hall. Some researchers argue that design is not so demanded as it could be, and just acquires the civilized form. The fact is that design just places its own position in the integrated chain in the system of commercial communications.
The interior design today (including home, office, and exhibition) is the basis of the market in lots of countries. As the advertisement theory affirms, in order for the brand name to be recognizable, the presentations of new logos and features of the production need to be presented regularly. The decoration of the exhibition halls for that purpose needs to be granted to the professionals.
It is expected, that the interest in the Asian market of design will grow. But the design fashion in Asia coincided with the world demand crisis for the designers’ services. Thus, for example, the total money turnover of the 100 largest British companies 10 per cent decreased in 2001, and the staff amount decreased from 3000 to 2500 employees. Obviously, these specialists will be required in the Asian design market. This may cause dual consequences: both destabilize or empower the Asian design market.
As for the issues of branding, it is rather difficult to define the role of brands in design, as in any company brand forms the imagination of others about the enterprise, but designers’ offices are claimed to create, or help with the promotion of other brands.
The brand is the main tool of product differentiation and promotion to markets. Some argue that branding is the new language of modern society, basing on market relations.
Essentially, the nowadays consumer’s market – is the brand struggle. The brand is implemented by the complex of marketing communications thus achieving especial preciousness. It can be named communicative membrane, the aura of a brand.
In spite of the five years history of the Home interior’s Ltd, the brand leaves much to be desired. It can not be regarded as recognizable enough and it looks the company does not strive to promote the brand. Moreover, the brand had been either stolen, as the Home Interiors Limited in London already exists, or if it some of the filiations, the brand should be the same. The third variant, if the London office opened later, it testifies, that the brand name of the company being analyzed in the current research is too unrecognizable in the sphere of interior design.
The recruitment policy of the company lays in the frames of recruiting high-experienced designers in order to create original and unique interiors of the offices, exhibitions, clubhouses and other entertainment establishments. The company’s policy suggests the division of the team into several sub-teams, each specializing in the exact kind of design.
External environment analysis
The economic, legal, political, technological, social and cultural environment of the company mainly promotes the successful company’s activity. The developing stage of the Asian design market coincided with the demand decrease in the rest of the world, so, the company will no lack professionals in all the possible fields and subfields of interior design. According to the economical forecasts, the Home Interior’s is already expanding its activity to the sphere of landscape design and will succeed in it, as the demands in this region are growing. As for the legal and political environment, it can be mentioned that it fully promotes such activity, as it observes all the rules and laws of fair competition. The legislative base is claimed to enhance the market economy, and experts believe, that the process of development occurs according to all the norms of international legislation.
The social and cultural surroundings of the design market as any other help the successful activity of designers’ offices. The creativity of Asian culture is known and appreciated all over the world, and the ancient art traditions with the modern design trends would be able to create a new branch in interior design.
Customer analysis
The main segment of the company’s customers consists of the business companies which orient their business policy on the customers, and the original design of the interior is claimed to attract and preserve customers. Various exhibitions and presentations which are the essential part of marketing strategy also can not deal without interior design to catch visitors’ eye.
As for the demographic division of the customers, it is argued that women, being more creative and able to critical evaluation of the interior compose the main part of the customer’s segment.
Competitor analysis
It is necessary to point out, that Home Interior’s Ltd acts in comparatively easy circumstances, as the developing market still can not includes lots of interior design companies. But the innumerous competitors face the same problems, and possess almost the same advantages, as the company is regarded in the current paper.
These are the wars for the customers, price wars in order to attract or pirate customers. But it could be mentioned, that Home Interior’s Ltd is the largest company in the Asian design market, and instead of struggling competitors, it may afford to pay all the efforts to steady economic development and achieving its goals of entering the global market.
Product Life Cycle Analysis
Any company is steadily searching for ways to increase future cash flows by increasing revenue from the product and services sales. Cash Run allows an enterprise to preserve capability, invest in new products expansion and improve its staff; all in an attempt to obtain supplementary market share and become a leader in its particular industry.
Marketing theory affirms that there are four cycles of product life. In general, the life cycle graph is the interdependence of time and money parameters. These are introduction, growth, maturity and decline. Some researchers emphasize the development stage, which is before introduction. There is a direct dependence of unit prices on popularity and sales volume growths. With the growth of sales volume, which starts at the end of the introductory stage, the unit price starts falling. The sphere of interior design can not be an exception. With the growth of office popularity, the sales also increase.
Also, production life cycles tend to shorten more and more and lots of goods and services in “adult” industries are refreshed by-product separation and market segmentation. Organizations steadily re-evaluate product life cycle costs and profits as the time which is available to trade a product and recover the investment in it minimize.
Even as product life cycles minimize, the working life of lots of products is increasing. Thus, the working life of some durable productions, such as cars and appliances, has enlarged significantly. This causes that the companies producing these goods to take their market life and service life into account when planning. Increasingly, enterprises are striving to optimize life cycle incomes and profits through the deliberation of product warranties, extra parts, and the capability to improve existing products.
As the presented company offers the services of design, the price and the product life cycle depend not only on the level of the repute of the company but also on the prices and popularity of the decoration materials. But, being a comparatively young company, Home Interior’s Ltd has been already achieved the end of the growth period, which often can be the beginning of the maturity stage.
Boston Matrix
The essence of the Boston Matrix is similar to the life cycle analysis. It is claimed to describe the stages of the development of any product, though the names of the cycles are more poetic. These are child – star – cash-cow – old dogs. It is necessary to mention, that the theoretical material is closely linked with the practical, and is applied to the Home Interior’s Ltd practice and activity.
Child stage suggests:
Technology is hot (principally new) and immature. According to the design market activity, this means that company provides some new service, which is innovatory (for example plate-glass ceiling), but it has not been so popular yet, and customers are attracted in lower volumes, that it could b expected.
A new vendor is usually hired at this stage. It usually happens that the previous one, dissatisfied with the incomes quits the work, and the new shows higher promotional abilities, and is able to advertise the plate glass ceiling so that the customer could not imagine his / her life without the plate glass ceiling.
The customers support service is implemented at this level. The same happened with Home Interior’s Ltd, when in 2002, after the first few orders, management decided to improve customers’ service and put into service the support system. Functionality at this stage stays rather low. Home Interior’s were not so popular, and the designers’ staff stayed in numerous, moreover, they could not boast with their professionalism. Costs stay low, and the prices for the services are a bit heightened. The main reason for that is the company’s low incomes, and inability to provide the highest quality services and expensive materials.
The star level
Technology improves, the company becomes able to buy new equipment and hire new professionals. Home Interior’s chose to provide training courses for the staff: both creative and technical. The vendors grow professionalism, so does the customers’ support service, though the professionalism of the designers and the popularity of the enterprise causes a sufficient decrease of complaints. Customers’ support service just takes and leads the orders, solving the coming on issues. The costs and the income of the company grow and become moderate and subject to the points of the inner statute. The establishing base grows rapidly and greatly increases in the comparison with the child stage.
Cash-cow
If comparing with the life cycles analysis, the Cash-cow stage could be compared with the maturity level. In spite of the enormous income growth and the decrease of prices and costs, the maturity level is often the beginning of the decline stage. But the Boston Matrix approach mentions nothing about the start of the decline. It points out that the technology continues growing significantly; the professionalism is at the highest level, and the staff is able to train the newcomers by their own means.
The important change in the inner environment is that the customers’ support service becomes bureaucratic. Costs and incomes reach their peak and the company realizes its highest potential.
Old Dog
As it can be judged from the name of the stage, nothing good can characterize it. Technology becomes old (everybody has already ordered the plate glass ceiling, and some competitors make it cheaper, or with better materials). Functionality starts declining, and no more new technologies are implemented, and any professional is not interested in the company to work in it. The support system becomes passive and is not able to cope with all the tasks or solve the conflicts.
SWOT analysis
First of all the theoretical background must be enlightened. SWOT study is a strategic planning measure used to estimate the Strengths, Weaknesses, Opportunities, and Threats engaged in a scheme or in a commerce venture. It involves identifying the object of the trade gamble or project and identifying the inner and outer issues that are positive and negative to accomplishing that purpose.
Originally, the SWOT analysis can be visually imagined like the following table
In application to the design market in common, and to the Home Interior’s Ltd in particular, the SWOT analysis may be rather difficult, as such point as weakness may be very arguable. Thus, some designer’s innovation may be regarded both as a weakness and as a strength, as some customers may like or dislike it.
So, the Strength of the Home Interior’s is that it provides a unique service of interior design, making various types of inner decorations. The company plans comfortable home interiors, company’s office environments and others such as expositions, clubhouses, shop beautifications or window displays. The company’s staff has great experience in decorating various objects. These are Tsuen wan industrial centre, Lockhart Rd88, Hang Seng. Moreover, the Company won the national trends for being engaged in the preparation of several national exhibitions. The national-scale projects, such as Caribbean Coast, Banyan Mansion, City Garden, The Pacifica, heng fa Chuen, green knoll court, Grand Promenade, City One Shatin, Chelsea Court, The Cliveden, Park Island and Serenity park were also elaborated by the Home Interior’s Ltd, and it can add only positive characteristics to the whole image of the company.
Weakness
The weak side of any designers’ office is that it can not keep innovations in secret from the competitors. Thus it needs steadily create the projects with lots of additional details, and the projects should not be repeated in any way in any circumstances, even if they are equal (if the only customer asks to make the alike project, he/ she had already seen). The problem of originality can also be raised in the case of professional’s quit and hiring at competitor’s enterprises.
At the beginning of the company’s activity, the main weakness is the lack of marketing activity experience. It causes some faults in the everyday work and failure of some points in competence rivalry.
Lack of brand awareness is also rather sufficient point in marketing activity. It has been mentioned above, that the brand name, In spite of the five years history of the Home interior’s Ltd leaves a lot to be desired. It can not be viewed as identifiable sufficiently and it seems that Home Interior’s Ltd does not struggle to advance it. Furthermore, the similarity of the brands is strange enough (that also had been described above)
The location of the company can be regarded both as advantageous and disadvantageous. The Asian design market seems to grow rapidly, and the company expects to gain mentionable profits as one of the pioneers of that service. But these are just economic forecasts, and it is difficult to presume, how much time will be required to advance the market and make the demand level sufficient for gaining proper income level.
Opportunities
The greatest opportunity of any company is the possibility of further development. Thus, Home Interior’s Ltd has the great possibility to expand its Asian market, and step by step enter the international design market.
The company implements the world standards of design also implementing its new technologies and innovations.
It is necessary to provide security for customers’ confidential information storage, as the confidential data needs to be stored securely, in order competitors could not get it, even applying the methods of industrial espionage.
Threats
Threats of the company, which relate to the external environment, are usually the competitors, who act at the same segment of a market. The other designer’s offices who are engaged in the interiors design just threaten the stability of the company’s position in the market. It is caused by the essence of competence itself. An additional threat of competence is the price war.
For such companies as Home Interior’s Ltd, it is rather difficult to build steady relations, as the customers of design marketers are often one-time.
As the company strives to enter the international design market, it may face problems with regulatory challenges in different countries.
And the last but not the least threat is technological development. The designers’ offices from developed countries who strive to enter the Asian design market possess better-developed techniques and technologies.
Marketing Capabilities and business
The capabilities of the Home interior’s Ltd are rather impressive for the company with only 5 years history, and which acts on the developing market. As it has been pointed above, the company had been engaged in the elaboration of large scale projects. It is necessary to emphasize, that Home Interior’s Ltd had already contributed a lot in the enhancing of its client base by improving the quality of the services, implementing new technologies and inventing new styles of design. The perspective of success may be obscure, but if observing some rules of achieving success on a market it may become clear and not so tough to reach.
Home Interior’s have been already working on the expansion of the market and enforcing the existing relations with the customers.
Creates a PR agency to help plan and carry out a Custom Advertising Program.
The company is eager to become an expert in some particular field by focusing on specific clients and types of projects.
It is investing to research its client’s problems, concerns and frames of reference, and create the network in client circles. There is no substitution for “face-to-face” interaction.
Conclusion
The company analysis shows, that it tends to develop steadily, and able to enter the global design market in the nearest future. The Life Cycle and Boston Matrix analyses clearly demonstrate that the company’s development is on the stage of Introduction (Star level), and it only approaches the Maturity stage (Cash-cow). The optimistic forecast argues that expected success will be caused by the correct actions in the spheres of recruitment, promotion advertising and customer care policy
References
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