Bates Manor Furniture

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Case Recap This case recap is in regards to a conversation that Charlton Bates, president of BatesManor Furniture, INC., and Dr. Thomas Berry had. Dr. Berry a marketing professor at a private university in the Northeast and a consultant to the BatesManor Company. Bates: “… Hello Tom…I want to get you’re your thoughts on the tentative.2008 advertising program proposed by Mike Hervey of Hervey and Bernham, our as agency (Kerin & Peterson, 2010, p. 301). Berry: “…What did they propose?” (Kerin & Peterson, 2010, p.301). Bates: “…their proposal is that we should increase our advertising expenditures by 225,000. They suggested that we put the entire amount into our consumer advertising program for ads in several shelter magazines…” (Kerin & Peterson, 2010, p. 301). Berry: “The increase is slightly out of line with your policy of budgeting 5 percent of expected sales for total promotion expenditures, doesn’t it? Hasn’t John Bott [vice-president of sales] emphasized the need for more sales representatives? “(Kerin & Peterson, 2010, p. 301). Bates: “Yes, John has requested additional funds. Your right about the 5 percent figure too, and I’m not sure if our sales forecast isn’t too optimistic. Your research has shown that our sales historically follow industry sales almost perfectly, and trade economists are predicting about a 4 percent increase for 2008 Yes, I’m not too sure” (Kerin & Peterson, 2010, p.301). Berry: “Well, Chuck, you can’t expect forecasts to be always on the button. The money is one thing, but what else can you tell me about Hervey’s rational for putting more dollars into consumer advertising?” (Kerin & Peterson, 2010, p. 301). Bates:”…increase our exposure and tell our quality and styling story to the buying public—increase brand awareness, enhance our image, that sort of thing. He also cited industry research

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