Klaussner: Cementing by segmenting
By Furniture Today Staff -- Furniture Today, March 3, 2002
As a domestic leather manufacturer, Klaussner is ratcheting up its leather program in order to compete with imports from Italy, South America and China.
Klaussner offers three distinct categories of leather, separated not only by pricing but also by manufacturing sites.
"Everybody — retailers and manufacturers — is getting into the leather business," said Chuck Welch, leather product manager for Klaussner. "Over the past two years, prices have obviously gone down. Leather used to be luxury item, but now it's a commodity where people can buy a leather sofa for less than the cost of a fabric sofa. Prices have driven everything down to the lowest common denominator."
To that end, Klaussner is beefing up its good/better/best programs.
At the high end ($1,399 to $2,399), Distinctions will offer an enhanced assortment of better product. The broader mix will allow Klaussner to "play off" (maximize) its special-order capability.
"We are expanding that concept," Welch said. The program spotlights better frames, better cushions and better leathers (top grains only), with two- to three-week delivery.
This collection is being pitched to the true leather aficionado: "That customer who appreciates the good stuff."
"The only way domestic sources (like us) are going to win," Welch said, "is by differentiating our sources, finding a niche and sticking with it."
In the mid-range ($999 to $1,399), Klaussner is countering offshore challengers with its own cut-and-sew operation in Mexico, assembled in Asheboro.
This tier, combining top grains and splits, is limited to certain colors and frames.
Klaussner is also seeing results with Klauss-Italia, its "good" pricing program ($699 to $999) comprised of finished frames produced in Italy.
"It's on the upswing," Welch said. "It helps us to compete at the lower end. It's hard to compete as a domestic source at that price. This is good value."
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