By James Wells
SAN FRANCISCO: Narta managing director, Kay Spencer today provided her buying group with an objective to take 25 per cent of Australia’s $11 billion electrical market by 2008.
“Our primary objective for 2008 in Australia is to lift our total market by around two points to 25 per cent,” Spencer told delegates on the opening morning of the buying group’s conference at the San Francisco Four Seasons Hotel.
As the strongest buying group for major cooking appliances with well over a third of the market, Spencer said she will use this advantage to leverage growth.
“In cooking we are the dominant market player. We will use our strength to maintain the investment our members have made in building this segment,” she said.
Spencer also addressed the group’s challenges in the audio-visual category where Narta commands strong market share in categories including the important plasma and LCD flat panel television sectors.
“Legitimising emerging channels that do not invest in display and education is of concern. Whilst we reluctantly understand the inevitability, and the pressure on margin at entry point our business is both new technology and volume. In this new environment a formula needs to be found.”
Spencer also said that the computer and IT category would be a focus area in 2008 to meet the group’s challenge to embrace new technology categories.
Spencer said the group will continue to refine and examine its cost savings after benefits were derived from its shift to HSBC providing members with more competitive finance options and the introduction of a new advertising agency.
“We have just changed our adverting agency to give us fresh creativity, reduce costs, and offer extended services to our members. Interestingly, a recent AC Neilsen review of advertising expenditure on all media except catalogue showed the Harvey Norman/Domayne group commanding some 40 per cent of the industry spend for around 27 per cent of the market. Is that efficient?” Spencer asked.
“Narta members on the other hand accounted for 26 per cent of spend for a 23 per cent market share. And on the catalogue front, the comparisons are even worse. Does it mean we are under-generating revenue, or efficient?”
Spencer said Narta is committed to meeting with suppliers to discuss trading requirements in the lead-up to 2008.
“Be assured once the hand shake is done, the target set, we know the rules, and will keep our end of the bargain,” she said.