Depending on protective tariffs is a losing strategy
Mark Gillis, Executive Vice President of ABTV

According to a report issued by Anderson Bauman Tourtellot Vos & Company (ABTV), U.S. furniture manufacturers have permanently lost the ability to compete globally based on price and quality.

The group claims it will take "bold strategies" to free manufacturers from the crucial mistakes that have plagued them for more than a decade.

"Focused strategies, combined with substantial improvements in brand management, represent the best hope of increased market share," said Mark Gillis, Executive Vice President of ABTV.

Among the firm's recommendations:

* Effective Brand Management -- Manufacturers must determine how to position each brand for the intended target market. What product consumers think when they hear a brand is not as important as which brand they think of when they have a specific need. Awareness is not the problem -- image is.

* Design Innovation -- Manufacturers need to invest in marketing research to best understand consumer trends. What is needed is an understanding of why consumers make selections.

* Manufacturing Innovation -- While imports currently threaten low to medium price points, eventually they will be aimed at higher-priced products. Manufacturers must transform themselves into innovative research and design centers. It will take revolutionary new products, not incremental improvements, to win the battle of increased market share.

* Smart Distribution Channels -- Selling direct to the consumer is risky at best. Manufacturers have enough problems in their own sector without trying to be retailers as well. A better strategy is to partner with experienced retailers and stay focused on the core business.

"In short, furniture manufacturers need to be proactive, not reactive," said Gillis. "Depending on protective tariffs is a losing strategy. Household furniture imports rose again in 2004 at an expected 12 percent and they'll rise again in 2005. It's time for manufacturers to stop being defensive and go on the offense with bold marketing strategies before it's too late."