Know your Customers in the Furniture Industry

1. Know your Customersin theFurniture Industry

2. Agenda • Frost & Sullivan • Background data on this research • Results

3. Market Reports Bespoke Consultancy Market Forecasts End-User Analysis Frost & Sullivan Primary Research

4. The European Wood Coatings Market • Total market size: € 1.25 billion 400,000 tonnes

5. Furniture Coatings: Options for Growth MarketDevelopment New Markets MarketPenetration ProductDevelopment Existing Existing New Products

6. How to Penetrate the Market:Find Out What End-Users Want • 140 end-users interviewed • Smallest customer uses approx. 1 tpa • Largest customers purchased over 200 tpa • Total annual consumption (for end-users) estimated at 5,500 ktpa

7. Structure of the Analysis • The Purchasing Process • Customer Needs • Supplier Performance • Market Positioning of the Leading Suppliers

8. Purchasing Process (1) • How Often do End-Users See Their Suppliers? • "we currently meet every two months, as we are using new products; then when they are put in action, twice a year… With e-mail there is no point in seeing each other all the time."

9. Generally satisfied Generally not satisfied Purchasing Process (2) • Are They Happy with This?

10. Purchasing Process (3) • How Many Suppliers do They Use? "You should not put all your eggs in one basket. We have most of the big suppliers, their products are satisfactory but it's better to have several in case you can't get hold of something at a particular time, then you can contact one of your other suppliers."

11. Customer Needs: What are They? “Product range is not so important considering the fact that we have more than one supplier and whenever one lacks a certain type of product, there is always one of the others that can usually provide us with it.”

12. Customer Needs (2):Who Considers Technical Service Important? “Generally speaking it's the after sales support that needs working on, for instance Milesi who want to mass produce and supply on a large scale but cannot supply you with a few litres.”

13. Customer Needs (3):What are the Important Product Attributes?

14. Supplier Performance (1):Comparison of Customer Satisfaction

15. Supplier Performance (2)Where is Customer Service Lacking?

16. Market Positioning of theLeading Suppliers • Do their customers have different needs from the overall market? • Do their customers feel they are better in these areas than the overall market? • Are customer needs and strengths in line with each other?

17. Needs Performance Whole Market Akzo Nobel Customers Market Positioning of Akzo Nobel “In the past, it had occasionally occurred that there have been some technical misunderstandings on the hardness or flexibility of a paint [from Akzo], but any problem has always been solved co-operatively.”

18. Needs Performance Market Positioning of Arch Coatings Whole Market Arch Customers “Hickson are good because they always let me know what is happening. If Hickson puts the price up, as it fluctuates with oil prices a bit, they would notify me in writing which products are going up.”

19. Needs Performance Market Positioning of Becker Acroma Whole Market Becker Acroma Customers “I use ICN who developed smaller quantity products for us. I have a good contact with them... I just give them a ring and they are able to come rapidly, which is fantastic, really good service. It would be good if Beckers [themselves] could be as proactive.”

20. Needs Performance Market Positioning of IVM Whole Market IVM Customers “I shook [another supplier] up about it last week, and this morning again, and waved Milesi in their face. I am using the Milesi water-based tints and they are performing.”

21. Know your Customersin theFurniture Industry None of the four biggest suppliers is the same, either in the needs of their customers or in the areas in which they perform well. In an industry where consolidation has been the over-riding focus of attention in recent times, it is apparent that there is still genuine choice in the market.