The mattress in bed industry segment is the only commodity that is purchased before customers are able to try and assess it. It is crucial to understand the importance of pricing and promotional rate categories in the mattress industry. Pricing, as the main factor for improving sales while still maintaining customer retention, is becoming more popular among practitioners and scholars. However, some studies have stated that promotional pricing also encourages people to purchase and prefer the product. The competition within the business reflects the increasing economy, hopefully influencing the purchasing behavior of customers. Consequently, in this essay, the examination and understanding of pricing strategies and the types of promotional rates executed are critical for salespeople and consumers. In Davis Furniture, the rate of sales of a viewed product by customers can be influenced by both the promotion and regular price, which will be the basis for the mattress set that the hospitality firm is going to buy. Because this merchandise can cost a great deal of money, the possible rebates on the set costs are very useful. The costs, promotional rates, and category mix decided by industry players are also applicable in creating awareness and increasing the purchase intention of consumers. The operations of the market and the selection of existing customer segments will also depend on economic and cost dimensional analysis. Research has also opened a fresh sector by providing a separate evaluation of cost and discount rates. Whether the price or the promotional rate shows the greatest asset for dealing with market competitiveness is a question worth exploring. Consumers could serve as a reference for practitioners to comprehend and employ effective strategies in the industry.
Background of the Mattress Industry in Singapore
While mattresses are necessities in bedrooms, Singaporeans, in the initial days, utilized mattresses that were fairly firm and placed on some flooring. The standard frames and stools were very minimal. The most costly beds always had a divider constructed of wood and coral, a standard insulating product in the past. A mattress was filled with straw or jute and the casing was made primarily of strong halus string, a local plant. A tikar, which is a faster and less expensive method of fastening pulai poles to the base of the bed, is also available in other conventional bed types. With global recognition in health and rest being a widely recognized trend among consumers in the region, the Singapore mattress market today offers a broad array of options, from exclusive customized styles to organic, eco-friendly items. About a decade before the market was significantly less competitive. Now there are several established solid makers of mattresses, springs, and some foam rubber configurations, while adding several new merchants, in addition to the traditional brick-and-mortar brands, providing online-only sales services. Over the last decade, the mattress industry and wood syndrome brands have gained significant traction in the local and regional market, leaving some of the old wooden mattress retailers concerned. The market constitutes 35% of the bed furnishings sector, valued at roughly 100 million dollars, and domestic production is located in the land of the sun.
Singapore has long been a booming economy with a strong focus on healthcare and housing. Urban dwellers favor comfort and the size of apartment housing leads to mainstream services and products. Inexpensive labor and inexpensive or free raw resources such as rubber wood, solid metal springs, vegetable-like coconut fibers, and homegrown fiber have contributed to the massive production and import of mattresses, including giant metal spring beds. Companies hoping to undertake marketing refer to various standards asking the business authorities they collaborate with here for details on the best for the revenue line unless the government has created its own mattress criteria. Home-based retail stores also supply advice based on weight. The increasing potential for manufacturers and brick-and-mortar sales is the entrance of some Singapore-based commerce initiatives that are solely internet-based and thus avoid the price of dealerships and warehouses, enabling them to concentrate on saving a lot quickly. It was widely offered in the area and in Southeast Asia without any physical outlet. In 2015, there were around four stand-alone bed shops. Singapore easily imports beds and bed accessories, noticeable in the surge of bed imports in previous years, and mattress exports in recent years. Retailers’ high fixed and operating costs combined with easy entry into the country contribute to a good competitive level, which is quite difficult for the merchants. With a standard dimension, there are 60% twin frames in Singapore’s retail. Cut frames with a certain market portion available in various sizes complicate construction and coil import requirements. There are various hundreds in the normal box. For example, household friction values are noted. Singaporeans want thicker mattresses than those in many different nations, with something in height. In certain urban sets, there were capabilities of placing supposedly blanket prisons next to beds, but likely more than that. Model promotions need two products for the importation of two products for mattress sets and foam to construct single-piece boxes. These goods are at statement amounts currently.
Factors Influencing the Price of a Single Mattress
There are a few factors that could influence the price of a single mattress. The production cost of a mattress is largely dependent on the amount of time and skills that the manufacturers put into crafting it, as well as the materials used: the better the quality of workmanship and materials, the more superior the mattress and the more expensive it will be. This is why luxury or designer mattresses would typically fetch a higher price point. Besides that, consumers may also be willing to pay a higher price for something that has a higher demand and a lower supply. This results in a higher price that is typically driven by supply and demand dynamics and is influenced by market variables. Some factors that could also influence single mattress prices in the market would be the status or reputation of a brand, the product’s value and utility, product costs incurred, reasonable profit, and the strategies that the brand has set in place for selling significant quantities of a product.
Economic conditions such as financial crises, inflation, and low purchasing power of consumers can also impact price. If there is an oversupply of mattresses relative to demand, prices drop, which consequently happens in a downturn or recession. Furthermore, research has shown that if prices increase, consumers tend to become more aware of the price changes and become sensitive to the price levels again. This demonstrates that consumer sensitivity to price drops after a price has been increased, just as much as it grows when prices decrease. Overall, most mattresses cost under S$2,000 on average outside of the discount period. Thus, Singapore’s mattress market is comprised mainly of low- to middle-range mattresses. As such, multiple factors have to be taken into consideration when considering single mattress pricing.
Quality and Materials
Materials used in mattress construction come in different gauges and qualities. The quality of the materials is important in determining the longevity, comfort, and support of the mattress. Because of this, different materials and mattresses from different manufacturers use varying quantities of quality properties that allow their mattresses to last longer or provide more comfort. The materials used can be broadly classified as foam, springs, and hybrids of the two.
There are many different types of foam, each with its own characteristics. Memory foam, for instance, is slow to adapt to the movements of the user and can take time to return to its original form. In contrast, latex is buoyant and has a springy feel regardless of density. One of the most common types of mattresses is the innerspring mattress. It is made of various layers, an inner core of metal springs, typically made of steel, and different combinations of foam, latex, or other fillings that make up the top and bottom. The springs, along with the type of materials used in the layers, determine the comfort and support of the mattress. Individually pocketed coils are a durable version of the innerspring mattress meant to provide firmer support. Some of the lowest-priced mattresses use low-density foams that begin to lose recovery within months, thus promoting body impressions. The very highest-priced mattresses, on the other hand, are made of materials with conforming properties and long-lasting recovery capabilities. Emerging technologies and advancements in the field of materials science have spurred the development of new materials with unique properties that can be utilized in the production of mattresses. However, with new technologies come costs. This affects the pricing of mattresses containing advanced phase change materials or other scientific enhancers. This, in turn, enhances consumer perception of the same ‘more quality for the same price’ rather than more but of a higher perceived value.
The selection of material technologies, as well as the engineering behind the goods or services, indicates the quality perceived by consumers. The general implication from the trade-off cost research is that the consumer determines what he is willing to pay as long as the surrogate for price not only covers cost but also provides an acceptable return. These imply, as well, that what makes sense to the firm may not necessarily seem logical to the consumer. However, the variable between price and costs in actual industries has not been studied adequately with another variable in the system, especially in the higher added cost realms. The trade-off cost and price studies offer no empirical background information on what consumers will pay for such quality-distinguished goods. Moreover, there has been little discussion on differentiation due to cost-pricing, so we can infer a strong empirical background between cost and price. The selling price is the best predictor.
Promotional Strategies in the Singaporean Bed Market
Bed promotion Singapore are a way to attract consumers’ interest and must be integrated with other elements of the marketing mix in order to signal the brand’s position and image. A company’s promotion mix can be subdivided into four main elements: advertising, sales promotions, public relations, and personal selling. The aim of the first element of the promotion mix, advertising, is to reach the maximum number of consumers, including current and potential, through a single medium or a range of media. The second element, sales promotions, entails incentives and promotional offers that appeal to the low or instant gratification of individuals. In addition, it can also increase a company’s market share and encourage those consumers who have worked with a company before to repurchase. On the other hand, public relations are a mechanism by which customer awareness of a branded product or service is created and enhanced through stories, features, and high-impact photographs. Finally, personal selling happens between a seller and a buyer, and it is the most effective form of selling. It starts with the salesperson trying to identify possible prospects within their allocated geographic region. The knowledge and skills of salespeople are most important in the sale of highly technical and complex products, or when the product user is unable to fully evaluate and understand the product.
Promotion has evolved over the years, and with this developing world, we have also advanced advertising strategies. At first, there were only a few channels where companies could exhibit their products to the world. Now, with the development of technology and enhancements in mobility, we are able to promote our companies online. This is a major bonus as it gives everyone a chance to utilize this media. Advertising is mainly done through these channels: online or retail stores, sending flyers to customers, and using other online places to show what they can offer. As Singapore is in Southeast Asia, we are less prone to festive time madness compared to countries in the West. We have festive times all over the year, such as Chinese, Tamil, and others. The festive period is a time for potential boosts in sales. Therefore, we can see a minor peak in sales during the festive period. Even college stress will create a peak in sales. Therefore, our promotional strategy can be centered around these periods. Some companies use price promotions as a mechanism for acquiring new customers or for getting existing customers to trade up to products from the same range. For a price promotion to appeal to a consumer’s sense of value, it must be clear and easy to understand. It is also of paramount importance that the offers are perceived as value for money. Attention can be drawn to the price by mentioning the amount of money consumers save; for example, “special offer with savings of up to $100.” To create urgency in a promotion, time limits can be set; “offer valid for 1 week only” creates a sense of urgency about the offer.
Types of Promotions
Mattress promotions, whether for mid-priced or high-priced mattresses, can take several forms. Here, for ease, we will break them down into groups: discounts, profit, loyalty, complimentary products, free special offers, psychological, and digital.
Discounts Discounts are by far the most common promotion. They serve to drive price-wary consumers and are often tacked on as a “whatever it takes” tool to entice a customer on the fence. While they are not an ideal tool if you are looking to attract the more high-demand consumers, discounted mattresses may bring customers in pursuit of a “good deal.”
Buy-One-Get-One-Free Offers Uncommon in the mattress world, BOGO offers strive to appeal to shoppers by creating a sense of added value and “freebies.” One plus of BOGO is not only the potential for extra added value but also the engagement with a rather price-conscious shopper who might not otherwise be prompted to purchase two (or one) dispersed over time. There have been many iterations of the BOGO promotion.
Loyalty Loyalty promotions have also been used as a differentiation model. Like price-based promotions, this incentive aligns itself with a significant market segment – customers who prioritize good value. When repeated, there is also potential for those who miss the promotion to continue following, to wait and buy until the next promotion, essentially operating under the “if it’s not on sale, it’s not worth my time” mentality, because if there is a loyalty offer currently, they surmise within 2 months, maybe there’s more?! Long-term, this may be a dangerous business model. Unlike price in general, where shoppers compare across many shopping experiences, promotions attract buyers expecting value at this particular time. Moreover, the expectation to get this product at this price makes the promotion a necessary intervention, or it may fail – the equivalent of turning the lights off in a big store where a promotion is scheduled and actively supported by off-location advertising. Shutdowns are closely associated with temporary offers in the consumer’s mind; the urgency of the message is loud and clear.
Consumer Behavior and Decision Making in Purchasing Mattresses
Consumer behavior has been of interest to scholars and marketers because the characteristics and reactions of individual decision-makers vary widely, demanding understanding to comprehensively shape the mindset of consumer behavior and present strategically valuable insight on consumers. This also applies to what mattress should be bought by consumers. The consumer’s decision-making process in buying a mattress may involve various phases such as recognition of the problem and the requirements, evaluation of alternatives, assessing buying motives, selection of brands and suppliers, decisions on the purchase rate, and buying. It is also motivated by personal preferences, needs, culture, lifestyle, resources, social class, and economic position.
The quality of a product does not have a universal feature. Quality assessments of products and evaluations of pricing vary according to the customer and time. Pricing is a central issue in marketing. Prices serve as a signal for buyers, representing characteristics including quality, psychological characteristics, and most anticipated evolution. However, such beliefs can still be abstract and not based on anything. Consumers also need credibility about a service before they start engaging with it. It doesn’t end there; once engagement happens, they have to understand the hype and information to make a choice. Before consumers can avail themselves of mattresses, they have to undertake rigorous demand evaluations and context scans. Information sources used range from overviews to relatives, friends, and ads. Additionally, online research is followed by more frequent physical shopping. Word-of-mouth spread by trusted sources leads directly to action. Online data shared by paying clients and press reviews affect customers’ views of products. Brand understanding, the lucrative practice of a buyer, is improved by advertising and access to feedback from other users. Dynamic metrics may show more research on cost and quality, which may result in decisions about lower-cost mattresses. Ads stimulate choice. The price of a mattress depends on assessments and cultural correlates in the behavioral context of consumers. Economizing and benefit evaluations accentuate market behavior regarding mattresses. These facts offer mattress consumers and businesses evident implications for pricing strategies or plan improvements.
Influence of Price and Promotions
Price is one of the major factors influencing what consumers purchase. Consumers respond differently to the same price change based on whether it is a price drop or an increase. Moreover, price also affects consumers’ perceptions of quality and value. Hence, retailers use pricing as a tool to give information to consumers about the quality and value of the products. Pricing is a complex tool, with studies showing that price can moderate and mediate the effect of other stimuli on purchase decisions. A price effect often follows promotional messaging, which can be important in retaining customers and driving repeat business. This suggests that pricing strategies work well in tandem with promotional campaigns.
The use of discounts prompts consumers to make a purchase, as buyers get a sense that they have won, and the feeling of ownership drives them to make purchases. People would rather spend money if they feel that a good offer is only available for a limited time. When faced with the urgency of getting an item at the best price, clear over half of consumers would rather buy an item now than wait in order to get a better price. The impact of promotion is global, as shown in various studies across multiple countries. Consumers around the world show a great interest in promotions, with regard to both product prices and distribution channel factors. In good and bad economic times, consumers use more and more promotional information in their purchase decisions. The negativity bias suggests that negative information and emotions are more noticeable and have a greater effect than their positive equivalents, partially explaining why the negative effects of promotions on brand attitudes can have corresponding effects on brand switching. The preceding discussion suggests that promotions are indeed a signal concerning value, but that the attributes of the promotion and the brand dictate the effectiveness of the signal in either influencing consumer trial or reinforcement of the brand’s value.
This paper analyzes mattress pricing and promotion strategies in an omnichannel—offline and online—competitive scenario. The empirical evidence shows that price is influenced by the cost of goods sold and by user ratings. Promotional efforts, instead, do not seem to affect price; as a matter of fact, reducing a price does not determine future promotions and vice versa. We conclude our paper by repeating that responsive pricing following the online price leadership strategy is a value-creating action for companies in the home-furnishing sector because of the need to adapt to evolving consumer behavior and market dynamics. More specifically, this strategy is particularly fit for the mattress industry, both for manufacturers and retailers. The promotion strategy, instead, is generically attractive for the retailer; while for the manufacturer, it is attractive only in omnichannel scenarios, differentiating the e-commerce promotion from the offline promotion.
Understanding the strategic approaches in terms of price and promotional strategies retailers, pure players, manufacturers, and e-tailers can set in order to improve the price at which the products are sold as well as to stimulate sales; both need to be “responsively” visibly beneficial. This means: first, they might need to better assess and understand continuing evolving demand and each market segment; second, they should promptly study the actual effects of their pricing and promotional strategies on actual product market demand, altering them as necessary, in order to maximize the firm’s contribution, at any point in time, from both a pricing point of view and a promotional point of view. In this respect, further and continuous research and innovation are needed, aimed at measuring the effects of various promotional strategies. Additionally, in an era where the demand for “sustainable” products is increasing, while new technologies and features in the products continuously come up and contribute to consumer demand, the opportunity for this kind of research becomes a truly top value, not only for the academic world but especially for corporate policies and future growth strategies.
