PirMehr Ali Shah

Arid Agriculture University, Rawalpindi

Office of the controller of Examinations
Mid Exam / Spring 2020 (Paper Duration 48 hours)
To be filled by Teacher

Course No.: …MGT-663………………..…Course Title:……Services Marketing…………

Total Marks:……….…18(Eighteen)……Date of Exam:……22-06-2020....................................
Degree: ………BBA(Hons)……………….Semester:…………8th……… Section:…Marketing Specialization…
Marks
Q.No. 1 2 3 4 5 6 7 8 9 10 Obtained/
TotalMarks
Marks
Obtaine
d
Total Marks in Words:
Name of the teacher: Dr. Muhammad Maroof Ajmal
Who taught the course: Signature of teacher / Examiner:

To be filled by Student

Registration No.: 16-ARID-4178 Name: Muhammad Mehdi

Note: Answer the following questions with the reference of cases below, please do not
copy/paste, personal correct opinion will be entertained. Answers should be in detail.

Q.No.1. Conduct an internal and an external diagnosis of the company. Use the SWOT tool to 
synthesize this information. (Reference case: 1) (Marks 06)
Answer:
This logical examination is about the importance for exploring the interior (Strength and
weaknesses) and outer or outside (opportunities and threats) factors that impacts the
association's execution and how they can stay forceful in the business and picking upper
hand. The association was arranged in France; it's called MPO Fenetres.

Internal analysis is the company’s strength and weaknesses.

STRENGTHS (+)
1. We have encountered in PVC
2. We have a long history of business
3. Individuals know our image
4. Redone administrations
5. Age of the organization
6. Put resources into new office and building
7. Have wide range and an excellent item
8. Represent considerable authority in broad daylight and aggregate markets
9. Deal to singular clients
10. Offer client’s items at cutting edge development
11. Flawlessness
12. Innovativeness
13. Genuineness
14. Business openings
They balanced with the outside condition, they changed over the perils in the external
condition to open entryways as they faced the challenge of the change in administrative
standards and controls and the growing thoughtfulness regarding people on the earth to an
open entryway for their business to wind up discernibly better, along these lines they met the
requirements of the governing body, and everyone. They balanced with the advancing
condition, made upgraded things and benefits, and endure crisis time. Another nature of the
association is they had openness of unrefined materials and resources, enough development
and can re-try their things.
WEAKNESSES (-)

1. Promoting procedures are week.

2. Market territory inclusion less

3. Staff for deal with the advertising and client are insufficient 3000C per sales rep.

4. Need to deal with the business staff deal timing rather then utilizing their time in
organization exercises

5. Twofold coating innovation not well known

6. Fundamental items

7. Low turnover just 10%

8. Unstable market

9. Shopper inclinations

10. Improved specialized qualities of items

11. No space for shopper advertise

12. Constrained land organize

the association couldn't systematize their thing for an overall market as they just made a local
thing. They were not financially strong, along these lines required bank credits. They didn't
have incredible affirmation in the market and required extraordinary scattering channels.

External analysis: is the company’s opportunities and threats.

OPPORTUNITIES (+)
Client advanced about maintainability and Eco agreeable
2. Improve innovation as per natural changes
3. Give more prominent customization could be opportunity.
4. Aluminum share is expanding as analyzed to PVC yet PVC is as yet predominant and we
are as of now increasingly proficient in PVC so by expanding mechanical we can remain
predominant.
5. New legitimate system
6. Specialized and mechanical developments
7. Better protecting materials
8. Sharp ascent in new structures
9. Concentrate on customization
10. Spend significant time underway/producing
the market was not obliged so they got the opportunity of expanding. They have the open
entryway in patching up old structures with their new normal all around arranged windows,
and extraordinary have new possible buyers and get affirmation.
THREATS (-)
1. Client Price Consciousness
2. Duty
3. Vitality Prices
4. Mechanical migrations
5. Customer inclinations
6. Worldwide showcasing
7. Uniquely designed items
8. Importation of crude materials
9. Do it without anyone else's help showcase is limited
10. Exacting guidelines and enactments
nature with everyone, high financing costs on credits from banks, issue of high worth
instabilities, and the alteration in customer's necessities. They ought to develop and
internationalize considering the way that the area promote is limited.

Q.No.2.  Identify the Key Factors for Success from the diagnosis. (Reference case: 1)

(Marks 06)
Answer:
The Key Factors for Success from the diagnosis.
1. Customization,
2. Marketing,
3. Brand name,
4. Eco friendly products.
5. Experience gained through many years in the window business.
6. Wide range and high-quality products.
7. Specialize in public and collective markets.
8. Sale to individual customers
9. Perfection, Creativeness and Honesty
Polyvinyl chloride (or PVC) is one of the most well-known materials for joinery items, and is
presently generally utilized in light of the fact that it has a long life. It is utilized in over half
of joinery items with an existence of more than fifteen years. It is made out of 43% ethylene
(got from raw petroleum) and 57% chlorine. PVC items are utilized in numerous parts,
including general wellbeing, industry, development, and manageable structures in the car
business. What's more, PVC has a positive picture as far as ecological assurance. Logical
investigations looking at the effect of various materials on the earth found that PVC had no
huge negative effect on the earth contrasted and elective materials. In its natural quality,
climate opposition, and its qualification for reusing, PVC is a material that seems to offer all
the vital advantages. Notwithstanding, there is extension for development comparable to PVC
reusing. Today, squander PVC is gathered by the business through explicit software
engineers that can reuse it. Makers in this industry don't yet meet their intentional
responsibilities to consolidate more reused material in their completed items in light of the
fact that there isn't yet enough material to reuse.

Q.No.3. You are given Rs.20 Million to start a service sector business, what kind of business
you will start. Write the pros and corns of that business and how will you overcome the
corns? Also show a tentative spending of the given amount. (Marks 06)
Answer:
INTENATIONAL HOUSE THEATER

(ISLAMABAD)
1- Mission

International House is to give our clients a major city amusement experience. Our clients
will unwind in solace and watch great introductions of well-known second-run motion
pictures, all inside a short walk or drive from home. This is an accommodation that Falls
River occupants have needed to manage without since the neighborhood theater shut
eleven years prior. We mean to satisfy the neighborhood network (who can hold up half a
month to see their preferred films and would prefer not to pay large city, new discharge
costs). We will likewise give our clients fulfilling and sensibly evaluated nibble
nourishments and drinks.

Keys to Success

 Proper film selection for the audience and the theater's environment.
 Revenues from a mix of both traditional movie fare and other quality snacks and
beverages.
 Careful management of internal finances to control costs.
 Great customer service.

1. Objectives

 Healthy sales in the first year, more than doubling by year three.
 Excellent revenues from concessions.
 Modest by stable profit margin by year two.

2. Company Summary

International House Theatre, a movie house with two screens and a capacity of 400,
should be located on Main Street of Islamabad. Islamabad population 1.2 million, has
been with a local movie theatre when the old theatre, some closed down due to not a best
seating, environment and screen displays and the lack of an interested successor. Since
that time, interested movie-goers in Islamabad have had to drive 45 miles to the Bahria
town.

3. Company Ownership

The international house Theatre will begin operations as a sole proprietorship.

4. Start-up Summary

We will be the principle speculator and administrator of the International House Theater.
I have been dealing with a multiplex performance center in Bahria town for as long as
two years, increasing significant experience while searching for chance to claim theater.
The structure where the venue will be housed has been empty, aside from the infrequent
rental to a local gathering, since the end of the previous business. This has made the
structure's proprietors on edge to gather a normal check, so they have consented to lease
the whole structure for $900 every month for the initial three years. There are a few fixes
and redesigns required, particularly in the overhang and café regions. The organizers will
 be liable for those fixes and those assessments are remembered for the beginning up
costs.

Start-up Funding
Start-up Expenses to Fund $21,900
Start-up Assets to Fund $23,100
Total Funding Required $45,000

Assets
Non-cash Assets from Start-up $10,700
Cash Requirements from Start-up $12,400
Additional Cash Raised $0
Cash Balance on Starting Date $12,400
Total Assets $23,100

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0

Capital

Planned Investment
Owner $30,000
Owner $15,000
Additional Investment Requirement $0
Total Planned Investment $45,000

Loss at Start-up (Start-up Expenses) ($21,900)

Total Capital $23,100

Total Capital and Liabilities $23,100

Total Funding $45,000

Total Requirements $45,000

1- Services

The international house Theatre will provide comfortable seating for its customers to
view high quality, second run movies. The theatre's management will be aided in movie
selection by being able to see how movies have fared in their initial run, especially those
that have shown success in the theatre's two target markets: families and young adults.
With two theatres in which to show movies, both markets can be targeted at the same
time with minimal cannibalization.

A variety of quality, reasonably priced snack items and beverages will keep customers
satisfied during their movie experience. The founders understand that the entire
experience can be jeopardized by poor customer service and will seek to hire only the
most customer service-oriented personnel.

2- Market Analysis Summary

The universal house Theater will give open to seating to its clients to see top notch,
second run motion pictures. The theater's administration will be supported in film
choice by having the option to perceive how motion pictures have fared in their
underlying run, particularly those that have demonstrated achievement in the
auditorium's two objective markets: families and youthful grown-ups. With two
performance centers in which to show films, the two markets can be focused
simultaneously with insignificant cannibalization. An assortment of value, sensibly
estimated nibble things and drinks will keep clients fulfilled during their film
understanding. The authors comprehend that the whole experience can be endangered
by poor client care and will try to recruit just the most client care situated work force.

3- Market Segmentation

The global house Theater will be situated in F-11 Markaz, the shopping and diversion
focus of town. This gives simple access to each occupant of Falls River and a feasible
amusement alternative any night of the week. The neighborhood business network is
indicating incredible help for an auditorium since it would keep occupants, and their
spending dollars, in the network rather than one of the encompassing networks. A
common family (there are around 2,300 in F-10 n F-11) can hope to spare roughly
$48 for a night out at the films by going to a neighborhood theater. This reserve funds,
alongside quality film choice, should keep individuals returning routinely.

 Families - this segment focuses on adults and parents with younger children who don't
need to see the latest movies on release and seek an inexpensive, quality, family-
oriented entertainment experience.

 Young adults - this segment is comprised of the 16-24-year-old age group. This group
is interested in seeing comedy and action/adventure type movies that are not directed
at the younger and family markets.
 Chart: Market Analysis (Pie)

Market Analysis (Pie)

Family

Young adult

Other
1- Service Business Analysis

Islamabad’s community has been in need of a local movie house since the failure
of its only theatre 2 years ago. With the closest movie complex located 45 miles away,
movie goers’ options are limited - either a round trip drive of over 90 miles or in-home
rentals. For people who enjoy the big screen, neither offers a satisfying experience. The
international house Theatre can satisfy those needs with quality movies in a comfortable,
old-style movie theatre.

2- Competition and Buying Patterns

Islamabad's people group has been needing a neighborhood film house since the
disappointment of its solitary venue 2 years prior. With the nearest film complex found
45 miles away, film goers' choices are restricted - either a full circle travel of more than
90 miles or in-home rentals. For individuals who appreciate the big screen, neither offers
a fantastic encounter. The worldwide house Theater can fulfill those requirements with
quality motion pictures in an agreeable, old-style cinema.

3- Target Market Segment Strategy

These two market segments, families and young adults, are targeted specifically because
they comprise the two largest segments of Islamabad’s population. The international
house Theatre is determined to be a community-oriented business and seeks to serve as
much of the population as possible. With a small college in town, there is an ample
student market, consumers who often have limited transportation options.

4- Strategy and Implementation Summary

The strategy is simple: provide fair-priced, quality entertainment close to home for the
two markets that comprise the bulk of Islamabad’s population.

5- Competitive Edge

The international house Theatre has a distinct competitive edge in that it is the only movie
theatre within 45 miles of Islamabad. There are no plans at this time to build a theatre
complex in the town and, since the theatre will occupy the town's only building capable
of effectively housing a theatre, there is limited direct competition. Competition will
come mainly from several multi-plex theatres located in Bahria town, the closest being 45
miles from Islamabad.

6- Marketing Strategy

Islamabad is enough town that word gets around quickly. We anticipate that a buzz will
be created once the renovations begin. Excitement will build as the grand opening
approaches. To encourage that excitement, we will have a countdown to opening on the
building's marquee. Concurrently, advertisements in both the local newspaper and the
college's daily will promote the opening with coupons for free items from the snack bar.
Since a large share of profits will come from concessions, we want to let people know
about our tasty snacks. Finally, we will use our website to keep our customers, especially
the more web sally college students, updated on the movie selection, which will change
every two weeks.
7- Sales Strategy

The international house Theatre will appeal to two segments of the market:

 Adults and parents with children who seek local, fair-priced evening entertainment
aimed at the whole family.
 Young adults who are interested in seeing recent releases but are constrained by an
inability or unwillingness to travel.

The main sales strategy is to provide recent successful movie releases that appeal to both
audiences. With two theatres, we will be able to target both segments simultaneously.

Ticket prices will be $5 for adults and $3 for children under 12.

8- Milestones

We will begin the theatre's restoration in mid-January. I will still be working with the
theatre in Bahria but will be able to contribute as-needed. our work will start inside,
repairing and upgrading the facility as necessary. The main theatre's balcony needs
reinforcement. Repairs and upgrades to the concession area are also necessary. Painting
will put the finishing touches on the interior of the structure. Finally, the interior should
be fully restored by mid-March, once the upholstery repairs are finished.

9- Web Plan Summary

The website will be very simple. Its main purpose is to communicate to our customers
what movies are showing at what times with links to each movie's website and reviews.
The design will feature an image of the theatre along with the a list of current movies and
those that are coming soon and will be small enough to quickly load on most home
computers. Since the movies will change every other week, maintenance should be fairly
straight-forward. Arrangements have been made with both the local and college
newspapers for links to our web site from theirs.

10- Website Marketing Strategy

The website address will be printed on tickets and it will be prominently placed on
advertisements that we will run in the local paper.

11- Development Requirements

Development requirements are minimal, since the site will only be a few pages. The site
will be built by a local website development firm. Once it has been created, the founders
will be responsible for updating it with the latest movie listing each week. It is expected
that this will take no longer than 1 -2 hours each week.

12- Personnel Plan

We believe that the key to customer service is happy employees. We will invest in a good
team by compensating our part-time employees fairly.
Pros and Cons of Operating City-Owned Theaters
Government-Run Facilities
Government offices and organizations regularly work social offices, and they can be
powerful as directors. Their direction toward open assistance can give critical advantages
to nearby social associations regarding cost and planning, including an overall assurance
of open subsidizing to help continuous tasks. Also, regions have different abilities and
assets that are essential and gainful to the tasks of a theater. Then again, there is
consistently the danger of political impedance in the activity of the office, especially
around programming decisions. Government planning and acquisition techniques may
build costs, while pay evaluations may restrict the nature of contender for key positions.
Furthermore, it is progressively hard to persuade general society to give assets to an
administration run office, as they accept their duty dollars speak to their commitment to
activities. This is the greatest test, yet there are ways around that, including the making of
an arm's-length establishment that fund-raises and helps program the setting.

An Independent Nonprofit
Much of the time, another, free charitable organization is made explicitly to create and
working a theater. These crucial associations are arranged to open help and network
sway, and in light of the fact that philanthropies are straightforward activities, they take
into account more noteworthy open responsibility. There is a hierarchical direction to
private gathering pledges, which can diminish dependence on earned income and
guarantee more noteworthy curatorial adaptability. What's more, a charitable can speak to
the locale (at any rate the private division) and its inclinations. Yet, there are difficulties
with this model, prominently that charitable associations must raise money to balance
yearly working costs and there are seldom ensured wellsprings of contributed salary.
Such associations regularly wind up contending with their clients for continuous money
related help. Generally significant, not-for-profits are just in the same class as the sheets
that run them. There must be a profound pool of network pioneers willing and ready to
contribute their time, vitality and budgetary assets to the association.

User-Run Facilities
In this minor departure from the not-for-profit run model, the essential client of the office
(regularly a philanthropic) is the administrator. This choice merits thinking about when
there is one association that is a predominant or even an overwhelming client of an office.
That client of a performance center is commonly a solid neighborhood association with
the help of pioneers and funders. Since that client is in the theater so regularly, it ensures
an elevated level of solid programming. What's more, the predominant client additionally
will in general realize the scene better than any other person, making it progressively
powerful at thinking about the office. This is a mainstream model for ensemble lobbies
commanded by an occupant symphony. Then again, the predominant client has a
contention, being both the administrator and the prevailing client, which frequently
implies that different clients make some hard memories getting good dates and
administrations. There is likewise a possible deficiency of office the board abilities,
especially around introducing and rentals.

School and College-Run Facilities

Schools, schools and colleges are progressively keen on working social offices in the
interest of networks. They are ordinarily gifted at working all sizes and states of offices.
Instructive administrators are bound to acquire more daytime action, for example, classes
and practices just as creations. What's more, schools and universities are commonly
talented at fund-raising both to improve and to support offices.
What's going on is that schools, schools and colleges are progressively keen on working
offices off the conventional school grounds, where local gatherings and crowds are
frequently hesitant to wander.

However, in any event, when the setting isn't nearby, there is consistently worry with
regards to how a school-run office will give appropriate access to local gatherings. What's
more, the working approaches of school-run offices are frequently prohibitive for network
and business clients. It has been my experience that this alternative possibly bodes well
when we start with a school or school previously recognized as willing and keen on
thinking about the turn of events and activity of offices with a network, likewise open to
various areas.

Fee-for-Service Facility Managers

At last, there are scenes worked by proficient office the executives associations. There are
commonly two sorts of associations that can be shrunk by urban communities to run
theaters:

1. For-benefit office the board organizations like SMG, AEG and Global Spectrum that
work theaters, fields, arenas and conference halls for government and schools.

2. Nonprofit administrators of existing performing expressions scenes in a similar

market territory. This is a fresher pattern, yet one that we have seen work in a few
districts.

Business and other charitable administrators are competent at programming, advertising

and advancing occasions. Simultaneously, the office can stay accessible to outside
gatherings, including not-for-profit social associations. There are efficiencies related with
employing an administrator with a huge, national system of scenes, including favorable
circumstances around programming and booking acts. What's more, the procedure to
recruit an outside administrator is proficient and straightforward, in view of a
"Solicitation for Proposal" (RFP) process. One RFP can draw in both for-benefit and
charitable administrators, and the city can hold the privilege not to enlist anybody if no
reasonable up-and-comers are recognized.

There are likewise some critical issues with this methodology. Outsider administrators are
not normally slanted to oversee access to offices by nearby expressions associations, and
there is regularly pressure between not-for-profit clients and a business administrator.
This is getting to a lesser degree an issue as these administration organizations perceive
the significance of working with nearby expressions gatherings, however it's as yet a
troublesome arrangement of connections.

The achievement of this methodology is frequently a component of the quality and care
put into the offer and contracting process. Urban communities must be exceptionally
mindful so as to have their objectives and desires converted into a positive working
 relationship. Furthermore, seeking after this alternative doesn't really decrease the city's
monetary responsibility to the theater, as an outside administrator will request a charge
for administrations, rather than paying rent.

So can any anyone explain why when there is such a sensible and sane arrangement of
alternatives for working theaters, such huge numbers of urban areas settle on terrible
decisions

Case No. 1.
Introducing MPO Fenêtres
Founded in 1970 in Alençon (Orne), the company MPO Fenêtres (Menuiserie Plastique de
l’Ouest) was one of the first French companies in the PVC/carpentry sector to offer a customized
service. However, at that time, in France, very little was known about PVC, carpentry and double-
glazing technology: these markets were still in their infancy. It took about ten years, and two oil crises
(in 1974 and especially in 1979) for the PVC window market to really take off. The commercial
policy of EDF (the French public energy provider) at that time favoured the development of this
product, encouraging investors to push for “all electric” installations, which would, according to the
manufacturer provider, require better insulation of public buildings to reduce heat loss.
Despite MPO Fenêtres’s financial losses since the creation of the company in 1978, the
managers decided to invest in new office and production buildings. From 1970 to 1997, MPO
Fenêtres’s products were rather basic. Two new product ranges were then offered by the company: a
range of high quality windows made of aluminium and wood (1997) and windows featuring «+ super
heat», with an improved insulation value, made of aluminum with a thermal break (2007). These
additions to its product range were introduced in line with the company’s desire to widen its target
market. These two new product categories now account for 10% of the company’s turnover.
MPO Fenêtres initially specialized in public and collective markets (professional/ major accounts,
government, schools, municipalities and other communities). However, from 1995 onwards it
developed its sales to individual consumers. The public market today accounts for about 60% of the
company’s turnover, while the (still growing) consumers’ market accounts for the remaining 40%.
There are 200 employees working for the company, and turnover is over €35 million (source: Internal
figures 2010). Significant growth has occurred over the last decade.
The company is constantly on the lookout for technical and technological innovations, both of
which are well represented in its range of low thermal coefficient products. Further the high
requirements of the company in terms of the quality of materials, assembly, and installation exceed
the market standard. This allows the company to offer its customers products at the forefront of
innovation, a key success factor in this industry. Incidentally, this is one of the four founding values
of the company, together with perfectionism (the aim to do the best possible job), cheerfulness within
the company, and honesty with all company’s stakeholders (both employees and customers).
The French carpentry market, and more specifically the market for windows, has undergone several
phases in recent years. We review these below.
Market Figures:2010
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 relocations 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 customization this
phenomenon. 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 sector 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 fluctuations 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:
1. Specialists in manufacture, marketing their products primarily business to business (B2B) but
invest small amounts in niche markets, due to higher profitability expectations.
2. Independent joinery networks (including MPO Fenêtres) usually suffer from a lack of
recognition and limited geographical coverage.
3. The 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.
4. Finally, a new type of actor has recently emerged on the market: 4. 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, Art & Fenêtres. 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. Some of the relevant regulations are detailed
in the next section.
The Statute on Thermal Regulation
Since 1975, the statute on thermal regulation has imposed rules on French companies
regarding the energy consumption of buildings. Since its inception, the aim has been to reduce energy
consumption by 15 to 20% every five years.
The Thermal Regulation of 2012 (“RT 2012”) has been in force since July 2011 for the
tertiary sector and public buildings, and from 1 January 2013 for residential houses. It is intended to
promote better building design so as to reduce overall energy consumption and the need for heating.
In 2012 these statutory requirements were increased, requiring contractors to increase their efforts to
reduce the energy consumption of buildings. The main objective is to achieve self-sufficiency for
energy purposes in buildings by 2020. Thus, this regulation promotes the use of more efficient
technologies for the production and retention of heat, as well as the production of renewable energy.
Many standards apply to the design of buildings, including windows and doors.
 The new ISO 23045: 2008 establishes specific guidelines applicable to the design of
buildings, to improve energy efficiency. To this end, the ISO covers the choice of the raw materials
and components used, the location of the building, and the energy sources used. In theory, the ISO
enables the transmission and sharing of information about a building’s energy efficiency by
standardizing its energy statement. It also defines objectives specific to each construction project from
the design stage onwards (source: ISO Standards habitat).
In addition, companies use independent inspection and certification to prove the increased
performance of their products, and to act as a guarantee of their quality. Thus, the NF and CSTB
labels ensure compliance for window manufacture, with minimum levels of quality and standards
concerning air – and water-tightness, and wind resistance. Such certification of PVC joinery allows
consumers to assess manufacturing quality with respect to those three factors.
Finally, in response to the growing concerns of both individuals and institutions about global
warming, the “Grenelle Environment Forum”, organized in 2007 by the Fillon government, brought
together for the first time the State and the representatives of civil society to define a roadmap for
Ecology, Development and Sustainable Planning (source: Presentation by the Grenelle, October
2010). The Grenelle has achieved some progress by promoting the involvement of all stakeholders. In
terms of development and planning, the Grenelle’s objectives are to: «promote efficient urban land
resources, energy and implement technological breakthrough in thermal improvement renovation and
accelerate the renovation of the old fleet” (source: Grenelle Environment Forum, “Building rises to
the challenge”, October 2010). Following discussions, two key measures were implemented.
The first was the introduction of interest-free loans for qualifying energyefficient building
projects, from early April 2009. Such loans are available for house renovation work to reduce both
energy consumption and the emission of greenhouse gases. The loan is granted for certain types of
work (such as project management and energy consumption assessments, insurance fees, etc.) or for
any work involved in and inseparable from energy efficiency improvements and installation carried
out by a professional. This latter category includes the installation of new windows, including triple-
glazed windows. Specific conditions must be met to qualify for such a loan (concerning the age of the
house, the grant of any previous loan, the amount of the loan, repayment schedule, etc.) These loans
rapidly became popular: by late July 2009, 15,000 applications had been received, and by the end of
March 2010, more than 100,000 loans had been granted.
The second measure introduced were training schemes for companies and craftsmen, to
encourage them to take into account the energy performance of buildings. Since its launch in 2008,
over 10,000 workers have been trained under this measure.
Following this market trend, MPO Fenêtres has obtained certification, allowing the company
to showcase its commitment to sustainable development, from product design through to its
installation. MPO Fenêtres highlights its long-term commitment by ensuring that the joinery products
it sells are environmentally-friendly. MPO Fenêtres maintains its commitment to the continuous
improvement of its products, including products with triple glazing, which allow an increase in
performance of over 40% compared to the best double-glazing on the market. This commitment is
reflected in all companies’ activities, as stated above, but MPO Fenêtres has also improved its
installation and waste treatment along ecological lines, including waste recycling.
In other words, since 1 March 2007, MPO Fenêtres has committed itself to producing more
ecofriendly windows, offering NFcstBat-certified ecofriendly windows and triple-glazed Visio
windows. As such, MPO Fenêtres puts the most efficient windows in terms of thermal insulation
within reach of everyone. The company decided to concentrate on this market sector, which,
according to the company’s CEO, represents the future of the company. Noting that for an average
surface area of 50 to 100 m2, 10 to 15% of heat loss from dwellings comes from windows, it appears
that they are an important element that could improve the overall energy performance of homes.
Indeed, these windows have become the ideal solution in terms of domestic thermal insulation.
The three panes which make up the triple glazing are separated by spaces filled with gas,
giving them excellent thermal performance. Triple glazing captures very little heat. It therefore gives
very good thermal insulation and ensures low heat loss, saving energy by reducing the amount of
heating needed in winter and of cooling in summer. However, triple glazing products are much more
expensive to purchase, and the acoustic insulation offered is not necessarily better than that of
“acoustic double glazing”. Therefore, the company needs to ensure the best promotion in order to
convince clients to invest in these products.
Many consumers are willing to spend large sums on products which produce immediate
benefits. Expenditure on housing (including joinery) often involves substantial outlay, from which the
expected savings are less obvious to individuals. Yet such investment is an effective way to reduce
energy costs significantly. Thus, the company’s marketing should focus on the potential savings in
energy costs for homeowners over the long term.
In order to support sales, MPO Fenêtres has developed products within the framework of
sustainable development, from design to installation. Additional certification for the installation of
windows obtained in 2011 is further evidence of the company’s desire to provide a quality service.
These certificates and service evaluations conducted by independent arbiters are highlighted by the
company’s sales staff in discussions with existing and potential customers. The sales force is therefore
a very important element of the new marketing strategy and the launch of the triple-glazed windows.
Marketing and Distribution Strategies
With regard to marketing and distribution, the business is customer-oriented: therefore, MPO
Fenêtres has chosen to keep control of the entire supply chain, right through from the order to delivery
to (and sometimes installation for) the customer.
For both new and replacement windows, MPO Fenêtres markets, designs, manufactures and
installs its own products, thus ensuring complete control of the order and keeping to a minimum the
number of contacts for the customer.
The company distributes its products through two distribution channels: a central department
in charge of “key accounts” and “communities”, and a network of eight agencies deployed in
northeastern France, all owned by the company. These agencies are the cornerstone of the distribution
network. Each agency employs fifteen salespersons, as the control of about 15% of its market area,
and operates in a sales territory of approximately 45,000 customers. The company’s salespeople
actively seek potential clients, especially at trade fairs and exhibitions. These events are of paramount
importance: they afford opportunities to expand the client base and win new contracts. Up to 25% of
the annual turnover of an agency can be attributed to contacts made during these events.
Today, the continuing strong growth of the market has encouraged MPO Fenêtres’s CEO to
rethink the organizational model of its agencies. In order to improve performance and increase the
commercial strength of the company, an audit of its business performance was conducted. Internal
research within the company enabled the identification of tasks conducted by employees, and the time
allocated to each task, over the course a year. The results are as follows.
Each year, a salesperson has two weeks of training and five weeks of paid holidays (in
accordance with employment law). Two weeks of their annual working time is devoted to attending
trade fairs. In addition, the average salesperson is absent one week per year for personal reasons. In
terms of the organization of their five-day working week, the Director observed that one day is
devoted to purely administrative tasks (making appointments and reporting activities). For the
remaining four days of the week, based on a working day of 11 hours, one hour is devoted to the
management of administrative problems and urgent tasks, and one hour is taken as a lunch break. In
terms of customer contacts, information obtained from sales staff showed that the average sale is
concluded at the end of the third meeting, and that such meetings last on average about an hour.
Convinced that high thermal performance PVC windows are the future of the company, the
company’s directorate decided to develop sales of these as its primary strategic activity. It therefore
needed to develop a marketing strategy for these products on the retail market. Some factors are key
to the strategic approach needed: individuals are not necessarily aware of the technical features of the
products. In addition, although they offer real benefits, triple-glazed products are more expensive.
This may hinder sales of triple-glazed products, because many alternatives, which are cheaper and
perform equally well, are still marketed, both in the company’s own catalogue and in those of its
competitors. Although the triple-glazed products are better in terms of insulation and sophistication,
their price may be an important deterrent.