26 August 2008

MFI - a matter of perception

The news that MFI is going to sell Nobilia kitchens from Germany under the Küchen Lab brand (even if it was a little coy about saying who the manufacturer is) prompts a number of questions, starting with why?

You no longer have to go to Germany to get a well made rigid kitchen. Grays in Essex and Birmingham are both a lot closer to MFI's home and these are just two areas of contemporary kitchen production expertise in here in Dear Old Blighty.

Does MFI believe that having a German-made rigid offer puts them on an equal footing with the UK's independent kitchen Specialists, many of whom sell German-made kitchens?

Forget it! Many of the smaller independents are family firms who offer a level of individual service that is vastly superior to that available from MFI.

Or does MFI think that for Jo Public, kitchens made in Germany equals superior design and superior quality?

Design innovation

Its got that one right, even if the majority of design innovation now originates in Italy. While we in Britain do have companies that can equal the quality of kitchens coming from Germany, Ms Public still thinks you have to buy from abroad if a good quality, contemporary-style kitchen is what floats her boat.

Unfortunately, MFI's move to import a range of kitchens fro Germany will only enforce this belief.

Ironically the generally low opinion of UK kitchens - albeit a misplaced opinion - has to a large extent been caused by MFI itself. For years now, the UK's largest kitchen company has been content to churn out low-cost, low-spec, lookalikes of the very type of kitchen it is now going to sell itself!

One of MFI’s strongest assets has traditionally been its marketing, and in this department they take no prisoners. Full page advertising in support of Küchen Lab has been appearing in the national press for several weeks.

'Affordable' 'bespoke' German-made rigid kitchen offering savings of 'between two-thirds and a half of the typical price of a similar kitchen from an independent boutique will probably form the cornerstone of MFI's campaign if the press release it sent me is anything to go by. Although how MFI can compare prices of kitchens from independent boutiques without knowing the precise make up of the complete kitchen order in every case is not explained in the press release.

Scary stuff

At first glance this seems scary stuff for the independent kitchen showroom, but is it?

Previously MFI sold a kitchen it made itself that was built to a price and unique to them. The independent could argue that the reason its kitchen were more expensive (if they were), was because of the superior quality but old Jo couldn't see it. By the time she did find out precisely what quality of kitchen she had bought, the deal was done.

But with a Nobilia kitchen, they are playing in the independent's park for real. I'm sure MFI got a good deal out of Nobilia, but I will be amazed if the deal is so good that on a genuine like-for-like kitchen comparison it can undercut an independent by two-thirds on the cost of the complete kitchen (including working surfaces, appliances, sinks, taps, lighting etc plus design and installation) and still make a profit on each sale.

Nobilia is a good, midrange kitchen, and certainly of a higher quality that the previous kitchens sold by MFI, but it is not exceptional in terms of product quality or features compared with several other German kitchens currently being sold by the independent showrooms with whom MFI is comparing ‘prices’.

Price point

MFI may be past-masters at the attractive price point, but something in that MFI kitchen will probably be used to make money. The smart retailer will probably find out what the secret is PDQ. You will know when they do because signs saying 'We Can Beat MFI on Price and Service' may well start appearing in showroom windows.

If Küchen Lab is going to be a success and as a result threaten the independent sector, it has two big hills to climb.

First it has to raise its design skills, installation practice and customer care services to those offered by a good independent showroom. This is going to be both difficult, because there is an industry-shortage of good people, and expensive, because the best guys and girls already earn good money.

Its second problem is one of perception. MFI is probably not the first name that springs to mind when a consumer is looking for good quality furniture and I suspect very few people buy a second kitchen from MFI.

Typically, the sort of kitchens MFI hopes to sell under the Küchen Lab brand has a strong appeal to consumers looking for their second or third kitchen.

And this consumer probably does not traditionally shop at MFI.

(First posted on the kbb News website 115 August 2008)

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