A survey conducted by the UFME (Union des Fabricants de Menuiseries Extrieures, July 2011) among stakeholders (designers,

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A survey conducted by the UFME (Union des Fabricants de Menuiseries Extérieures, July 2011) among stakeholders (designers, window manufacturers, outlets and installers) reveals the following. In 2010, the French window market suffered a decline of 4% compared to 2009 with a value of about €9 billion (€5 billion relating to installation). The market was at its historical highest in the year 2005-2006, with 12.3 million windows sold, following a steady increase in the global market of about 4% per year between 2000 and 2006. The overall volume of sales in 2010 shows that more than 11 billion windows (excluding opening glazed facades, shutters and doors) were sold. Among these, only 5% were imported: this is because the carpentry sector remained unaffected by the massive industrial relocation occurring in recent years. Local production is an important factor: most consumers prefer to buy from local companies and artisans . Almost all components of windows sold in France are produced in the European Community. Indeed, as consumer preferences vary greatly from one country to another, it is very difficult to market a standard product globally, which partly explains the phenomenon of customization. In addition, over 90% of windows are custom-made, which further limits the importation of materials.The housing sector, and more specifically the sector relating to windows and shutters, employed 110,000 people in France in 2010. A third of this market value is linked directly to the jobs created (€3.25 billion over 10 billion for the housing sec-tor overall).

The market is mainly based on SMEs (around 5,000) who manufacture the windows, and artisans (around 40,000) who install them.Two major markets exist for windows: windows in new buildings account for 26%of market volume, while replacement windows represent the remaining 74% (source:UFME, 2011). In terms of market value, the renovation market is larger, and generates more income. Important price ﬂuctuation can be observed on the market. The average price of a window is €420 (net of tax). However, as soon as the cost of installation is added,the price can rise by at least 80%, to €760. Since 2004, the average price of a window has increased by 38%. Several factors explain this, including the quality and type of material used: the market has shift towards aluminium on one hand, and towards more efficient products on the other hand. However, in terms of the volume of products sold, PVC largely dominates the market, with 62% of market share, followed by aluminium (22%) and wood (13%). However, looking at value estimates, aluminium accounts for 33% of market value and PVC for 49%. Nevertheless, the distribution and installation costs are declining, which, in a highly competitive market, offsets the rising costs of the commodities and materials used in the manufacturing process.The research institute Xerﬁ forecast two major changes in this market by 2011. Its first prediction was accelerated growth in the renovation market, reinforcing its importance. As a result of rising energy prices, individuals will be more likely to invest in better insulating materials for their houses in order to reduce their energy bills. Its second prediction was a sharp rise (expected to be a long-term trend) in new building, accounting for a third of the construction market.Given the likely future development of the market, there are plenty of opportunities for window manufacturers, including a greater focus on customization. However, it is important to note that most of these new products linked to innovations will be linked to improved technical attributes of these products. This does not allow further development toward the consumers’ market. It also protects companies from enjoying a share of the activity of the Do It Yourself market segment. The largest distributor of joinery products in France is Lapeyre (a subsidiary of Saint-Gobain), one of the largest producers, processors and distributors of materials in France. Yet this operator represents only 10% of the market. The market report by Xerﬁ identifies other actors on the market:
Specialists in manufacture: marketing their products primarily business to business (B2B) but invest small amounts in niche markets, due to higher profits expectations.
Independent joinery networks: (including MPO Fenêtres) usually suffer from a lack of recognition and limited geographical coverage.
DIY and unskilled distribution networks: These actors (such as Leroy Merlin), which have become essential market windows, now offer a comprehensive range of joinery (doors, windows, etc.) and benefit from their vast distribution networks to offer promotions. Finally, a new type of actor has recently emerged on the market:.
Online sale specialists: (such as Fenêtre24, Brico-Fenêtre). These target individual customers with specific building or DIY knowledge. Most of these companies use a business and development model based on franchising (to promote rapid development of their distribution network) and aim their products at middlemen or independent artisans. Of these, the company which enjoys the greatest level of customer awareness is FPEE and its associated distribution network.
Sales of windows are governed by a set of strict regulations and legislation. For instance, government initiatives and statutes promote the acquisition or replacement of windows by individual home-owners.
Required
Marketing researches like the ones carried out by UFME and Xerﬁ are important in marketing management. Define the terms Marketing Research and Marketing Intelligence. Using the case study, identify three benefits of the survey done by UFME. [5 Marks]
Conduct an internal and an external diagnosis of the company’ marketing environment. Use the SWOT tool to synthesize this information. Identify the Key Factors for Success from the diagnosis. [10 Marks]
List four marketing philosophy. Discuss the philosophy adopted by Leroy Merlin in the above case study. [ 7 marks]
What ethical considerations are encountered by marketers in the above case study? [5 marks]
Explain how Market planning will assist to turn around the fortunes of Independent Joinery Networks in France. [3 marks]