Project Report on Purchase Process

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Project ReportAnalysis on Distribution of Casper Sleep Inc.Group- 2MBAEx 15/14Badgujar Sunil GovindMBAEx 18/14Deepak VermaMBAEx 21/14Himanshu JainMBAEx 42/14Sachin GuptaMBAEx 50/14Shitij KakkarMBAEx 67/14Visweswara Rao Kolli1
CASE ANALYSISU.S. Mattress Industry (Snapshot)USD 14 Billion annual retail sales; 35 million mattresses purchasedAverage retail price: USD 400; frequent promotions is a normMattress replacement cycle: 7-8 yearsWho are the stakeholders in the traditional mattress distribution channel?Four major brands (2 companies) are market leaders(Serta, Simmons, Tempur-pedic, Sealy)and are selling their products for quite some time. (70% market share of the aforementionedmarket leaders)Distribution happens primarilythrough specialty mattress stores, leading furniture stores,departmental stores, and mass merchants(Traditional channel)Mattress Firm Holding Corporation(MFHC) is one of the strongest player, holding 3 largestspecialty mattress retail chains (50% of the retail sales is done through specialty stores)Focus on personal sellingthrough sales merchants at retail shops; hence customer purchasecould be highly influenced by the profitability of the retailer or commissions of sales merchantoBasic assumption of retailers that buyer is a high value seeker (hence no focus on onlineand more focus on low pricesConsumer Purchase Process for Mattress (Traditional Channel)In traditional mattress distribution, the channel choices to fulfill needs at different stages ofpurchase were limited and themajor task to take a consumer from consideration to thepurchase stage was in hands of sales merchant working for the retailerAnarrow view that a mattress consumer could only be a high value seekerdrove mattressretailers to focus on low prices and broad assortmentHence theneeds of variety-loving shoppers and high engagement shoppers(since a mattresscan be used for at least 5-7 years, habitual buyers would be negligible)remains unfulfilled2PurchaseProcess
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