1. Introduction
In this article, a comparative analysis of Magic Koil mattresses is made in terms of price, quality control requirements (labeling requirements) and real quality of produced goods in the European and Hong Kong markets. For this analysis, 25 Magic Koil mattress samples were taken in August-September of 2018 from their respective/original manufacturers from the warehouses in Europe, Latvia, and in Hong Kong, China. Two main marketing tools – the commitment to sell certified products only and the possibility to raise purchase demand for particular products through prize competitions in the retail network – are highlighted in this article. These marketing tools make it possible not only to compare the real quality of specific magic koil firm mattress with the received quality certificates, but also to assess the importance of the mandatory price component (retail price) for their cooperation partners – producers.
Many manufacturers provide the international furniture market with various lines of orthopedic mattresses. Each producer traditionally tries to advantageously position its particular products. According to the author’s long-term observations, the main tools for advertising campaigns and product positioning within both the European and Hong Kong furniture markets are preference of “brand mattresses” and creating “elite product” images. One mattress manufacturer, “Magic Koil”, promotes its products in the markets of different countries with the same brand name but under different brands of partners (importers with the local/foreign names) and with the different price positioning on identical labels.
1.1. Background of Magic Koil Mattresses
“Magic Koil is not an ordinary mattress. It’s a mattress with affordable comfort designed for all.” This statement is from the Official Website of WBL Mattresses Group, which provides comprehensive information on magic koil hk size mattress. Magic Koil mattresses are constructed of superior types of raw materials and components, such as natural latex, memory viscoelastic foam, foam box, King Koil i-spring, different kinds of foam, specially designed spring, etc. These components are of various sizes, densities, different heat tempering processes, and are bonded with different materials. In recent years, most developed countries in the world are anxious to achieve “Development with zero pollution (zero pollution).” High-quality green multi-functional Magic Koil mattresses provide a great alternative to the traditional hypo-sensitive mattresses found in the current market.
Magic Koil mattresses (called Magic Koil) are mattresses produced by the King Koil Group, which is a member of the International Sleeping System, Inc. According to Adventurers, Magic Koil is “the largest existing bed factory in Singapore, with the widest range of products catering to consumers with different needs. Its greatest asset is its service when it expands and maintains its market presence locally and overseas”. Magic Koil has penetrated the European market since it aims to establish high-quality mattresses in the consumers’ consciousness. Also, the company has entered the Hong Kong market through the player Highths Laboratories, using a generic brand which is also a quality focus strategy. Magic Koil adopts the brand strategy, which is a mix of distribution and positioning.
1.2. Purpose of the Study
• To define such factors as Magic Koil mattress quality or Magic Koil bed advertised on the Internet, and their influence (comparing of current investigation outcomes with secondary data) on the company’s performance.
• To carry out descriptive statistics analysis for consumer product prices in the European and Hong Kong markets (Magic Koil mattresses were tested);
• To examine the basic features of the mattress market in the European and Hong Kong markets;
• To conduct a comparative analysis of the main indicators of the company’s performance in Europe and Hong Kong considering the company’s current economic activities;
Study Objectives:
The purpose of the research is to make a comparative analysis of the European and Hong Kong markets of Magic Koil and, considering the results of the conducted research, to reveal certain factors of the company’s competitive advantage in these regions.
Comparative study of such mattresses allows analyzing the European and Hong Kong markets of Magic Koil mattresses. It identifies the factors of the Magic Koil’s competitive advantage in these regions and reveals the features of consumer behavior in the European and Hong Kong markets.
2. Methodology
Conjoint analysis can examine consumer needs for product design in different product types and classes. The analysis approach has been used in a number of market research studies. For example, conjoint analysis has been used to evaluate and analyze respondent evaluations of concept tests. It is also used to provide feasibility for the introduction of new energy efficient products rated by energy costs and environmental efficiency. It has been used to examine the customer value of different types of mugs used for different activities. It also has been used to examine the benefit factors for new industrial products. These studies indicate the broad applications of conjoint analysis and also its potential for product manufacturers.
This study aims at identifying the best product design strategy for Magic Koil mattresses in different markets (Hong Kong and some European countries). The five design options examined are as follows: (1) Pocketed innerspring without quilting, (2) Pocketed innerspring with quilting, (3) Bonnell innerspring without quilting, (4) Bonnell innerspring with quilting, and (5) extra firmness. This study employs conjoint analysis with a fractional factorial design to examine consumer needs for marketing research. Findings indicate the differences in consumer needs for the two markets, and the information becomes invaluable for the manufacturer of Magic Koil mattresses.
2.1. Data Collection
Every year, the brand owner (IES WIDER COMPANY LIMITED) has a number of retail activities in Hong Kong. Other than the market in Hong Kong, in fact, they have another market in Europe. There are three products under the Magic Koil brand and more than 15 types of products under each of the three. In this study, 200 pieces of mattress data were collected in the European market. However, physical retail for this brand is only available in Hong Kong, but not in the place where the brand was originated. This study also investigated the online performance of the mattress in the Hong Kong market. In 97% of the years in a decade, the revenue from online retail has an increasing trend.
This study consists of a cross-sectional design. The data were obtained from the official website of Magic Koil in 2020. The descriptions of the types, names, and specifications of the products and their corresponding retail prices were documented, classified, numbered, and processed into analyses for comparison. A descriptive analysis and two proportion statistical tests were conducted in this study. It is interesting to find out the performance of an online mattress business in Hong Kong considering the European and Hong Kong markets are quite different in many aspects.
2.2. Data Analysis
On the other hand, quality is not determined by the relative location, neither of individual mattress nor the price position of the brand. The brands have adjusted their prices to the subjective quality rather than blindly defended the value of mattress for the Hong Kong consumers. Finally, sampling tests employed commonly in the survey discipline were performed to ascertain the reasons for brand choice, and the validity of the number of questions posed to the staff and also to assess the market share distribution of the various brands.
The data collection for the European mattress market originated from the UK, while for the Hong Kong mattress market it was obtained mainly from the major department stores and the Magic Koil Sleep Centre. The prices for the European market could not be accurately determined from raw data, but were interpolated from the questions posed to sales staff, such as “Is this the best price?” A similar approach was adopted in obtaining the Hong Kong price data, and the responses were further verified using internet sources. Analysis of the price data revealed significant differences between the Hong Kong and European markets. An in-depth study of the price data for this international market research revealed that in European markets, prices are affected by both the state of the economy and the price position of the brand, while in Hong Kong product price is largely determined by the price position of the brand in the market.
3. Magic Koil Mattresses in the European Market
Magic Koil has been in operation in Hong Kong for the past 38 years and has earned international prestige for its high-quality mattress, especially in Asia and in other parts of the world. The company was granted ISO 9001 certification in 1996 and ITTS/161: 2002 – Heat-tempered Steel Wire Springs for the upholstery Industry license. All Magic Koil mattresses are genuinely made in Hong Kong. The company’s key markets are China, Singapore, and Nigeria. Despite having built a strong and reputable brand in these markets, no company has been given authorization to sell Magic Koil mattresses in the European Union. Only My Cozy Home Co OÜ has managed to get the rights to do so in Estonia. I have identified numerous options Magic Koil has at its disposal to stop the unauthorized sale of its mattress in Estonia but also internationally.
Magic Koil is one of the leading manufacturing companies in Hong Kong of spring mattresses. The company has been producing and exporting mattresses to different European markets. This is what explains my interest to further learn how the company’s mattresses are distributed in the European Union with a focus on Estonia. The first thing I learned is that My Cozy Home Co. is a legal distributor of Magic Koil and MaxCoil branded mattresses in Estonia.
3.1. Overview of the European Mattress Market
According to statistical data, the lion’s share of the European mattress market is occupied by foam mattresses, most of which are imported from China. At the same time, the growing demand for products that contribute to a healthy lifestyle, including mattresses, increases the popularity of mattresses with advanced properties. These include equalization of the pressure exerted by the body on the mattress, temperature regulation, pain relief, and moisture and odor control. The main factors that affect public demand include population age, income growth, environmental awareness, and tourism development. At the same time, due to the generally low marketing activity of manufacturers, most potential buyers do not have objective rating criteria for mattresses. When choosing a product, they rely on external criteria, such as price, brand, or color.
The European mattress market is quite large and diverse in terms of product range and use cases. The most common mattress categories include foam, spring, and combined mattresses. Most of the popular sizes of mattresses (European, Single, Queen, and King) are a little different from the Asian ones (SS, S, Q, and K). Some mattress categories have no direct analog in other countries. For example, the so-called orthopedic mattresses are largely unknown in the Asian market. Instead, the producer provides a more detailed classification of mattresses by their stiffness (soft, medium soft, medium, firm, and extra firm mattresses) or a more detailed classification by the technological features used to manufacture them.
3.2. Key Features of Magic Koil Euro Mattresses
(a) Manufactured with the Bonnell Spring System – tightly coiled springs are connected on both sides by a spiral wire, which is also known as the open-coil spring system. These mattresses are mainly of medium firm feel. There are five collections in the Euro series with different firmness/filling for selection. All beautiSleep mattresses also carry the BeautiSafe foundation, which is eco-friendly. The 3-Part Folding Mattress is designed for convenience. It is manufactured using the 3-part Bonnell Spring System. The center zone is heavily covered for firm support, while the head and leg zones are covered with Vision-Soft Quilting for a soft touch.
The main function of mattresses is to provide optimal comfort and rest. Magic koil euro mattress use the Bonnell Spring System. They are mainly of medium firm feel and are eco-friendly. Roll packed for convenience and easy carrying, these mattresses are good for rooms that are hard to move things in. Mattresses for this series are designed with different outer coverings, such as aloe vera, bamboo fiber, cooling fabric, and Euro top. The following section will look at each feature and discuss how Euro design is different from the original design in detail.
4. Magic Koil Mattresses in the Hong Kong Market
In Hong Kong, normally, Magic Koil uses three firmness categories as mattress series: Silver, Gold, and Platinum Series. They are displayed in the following table. However, the number of Magic Koil series in Hong Kong is not the most. There are six series in the detailed mattress catalog, and three of them are new products. It’s interesting why Magic Koil exports more new mattresses to Hong Kong. I will briefly introduce the other series to the readers because the retailer also sells them, even though I have little information about them.
4.2 Magic Koil Mattress by Firmness
In Hong Kong, normally, we can buy Magic Koil mattresses at all large bedding retailers, and most of the retailers will put a sample mattress in the shop to let the consumers try the Magic Koil mattresses’ quality. I think that it is worth studying what Magic Koil offers in Hong Kong.
At present, the number of countries that produce Magic Koil mattresses is far larger than European countries. Mainland China and Malaysia are two countries in Asia that produce Magic Koil mattresses. Normally, Magic Koil has a distributor in each country, and it just has one or two distributors in the largest city of the distributor’s country. The distributor in Hong Kong is responsible for selling mattresses to Hong Kong’s largest bedding retailer, and then the retailer is responsible for selling the mattresses to consumers.
4.1 Introduction
4.1. Overview of the Hong Kong Mattress Market
The latest available data from the Hong Kong Census and Statistics Department revealed a mattress market with a retail value of furniture and mattresses. This was achieved with a steady increase in expenditure, as indicated by the United Nations’ trade map, which showed that both the average prices of exported and imported mattresses were around $80. The majority of Hong Kong imports originated from mainland China, comprising about 91% of the import market. Apart from exporting to Hong Kong, China also serves as a major re-exporter of contemporary, execution, and budget mattresses for companies like the UK, France, and Vietnam multinational companies, with Europe being the main regional source of mattress imports. Importing countries include China, the United States of America, Hong Kong, the United Kingdom, Germany, Japan, South Korea, Canada, and the United Arab Emirates. By importing from China, these multinational companies saved on costs, mainly through the use of cheaper labor.
With this understanding of the European mattress market, this section will present an overview of the mattress market in Hong Kong. As the majority of companies, including Magic Koil, will be the subjects entering the Hong Kong mattress market, the section will also provide information on the strategies each company has employed. Finally, the section will focus on the multinational strategies of ThinkCoil to offer a starting point. In a black and white context, analysis can be made in the following section. Therefore, this section also contributes to the topic of comparative analysis of mattress companies in different countries, though this mainly concerns business strategies and the home country’s economic condition.
4.2. Key Features of Magic Koil HK Size Mattresses
One fundamental feature of Magic Koil HK size mattress is that virtually all of them come with a topper. The topper is used to cushion the topmost spring system so that it would not be felt by the users. It provides extra comfort. Instead of a topper, the mattress manufacturer may choose to use a box-top with foam. Both designs allow a plain sleeping surface. The Hong Kong size of the topper and box-top is 4cm thinner in thickness compared to the European counterpart. Unlike the European Magic Koil mattress with a topper, the HK size topper is permanently encased and only half of the surface could be enjoyed at a time.
In this part, we will examine the key features of Magic Koil HK size mattresses. Comparisons will then be drawn to the European counterpart to see if the features would add value to it. Magic Koil HK size mattresses are divided into three series: Royal Luxury, Dream Touch, and Euro Deluxe. In addition, there is a special Dream Touch line called “Haven Plush” designed for Hong Kong only. In each series, there are mattresses with different firmness levels ranging from extra firm to extra plush. The three series have two layers of spring systems of different designs. They allow certain choices to be made that allow pairing of various firmness levels.
5. Comparative Analysis
Initially, Magic Koil is a European company, and Hong Kong Custom Manufacturing is its subsidiary. It looks at both company’s websites and exports joint venture products. Unlike Hong Kong, which has limited land, European mattresses are diversified, including latex mattresses, coconut coir mattresses, and natural mattresses outside of inner spring mattresses. Although Hong Kong Magic Koil has been established for a long time with nearly 20 similar mattresses, it only has 6 mattresses in spring mattresses and innerspring variations. Hong Kong Magic Koil has identified the strengths and weaknesses of the two companies and pointed out the core causes of the problems. On the other hand, the main weaknesses are high rent, overcrowded urban areas, and high levels of customer service that can demand mattress sales from Hong Kong’s few friends.
One special characteristic of Hong Kong is that many people use limited land beds, houses are rented for a period, and custom manufacturing can only produce expensive mattresses.
The primary difference between the Hong Kong and European branches of Magic Koil mattresses is the variations in mattress styles. In the Hong Kong branch, the focus is more on spring mattresses and their variations, offering only two types of foam mattresses. In contrast, the European branch has diversified with both spring mattresses and variations using different natural ingredients such as latex, coconut coir, and sheep wool, taking advantage of European geographical features. The prices of mattresses in both regions are similar, and there are 20 mattress models that are priced the same in both branches.
5.1. Price Comparison
Comparing all mattresses, only one HK SKU0, which serves the European market, is cheaper than the rest served in the Hong Kong market, while the others are more expensive after handling international shipping and import duties. In addition to price differences in the market served, specifications of their accompanying box springs are also different.
It is believed that mattresses manufactured in China usually are cheaper than those manufactured in European countries, given currency differences in China and the European Union, and high incomes in most European countries. However, price differences in equivalent mattresses are not as large as compared to physical product differences for comfort and luxury sleep experience.
During these researches, we received a friendly showroom tour guide in the Hong Kong showroom, and all displayed mattresses in the showroom look luxurious. The demonstrations are professional and appealing.
In the text that follows, we present the price comparison for each Magic Koil mattress model, and we provide some comments about the effect market differences might have on prices. It is estimated that less-developed markets like the Hong Kong market would have less quality of side information for customers, and consumers might not be able to acquire all relevant information for product selection. While online shopping platforms sometimes provide basic information, it is harder to test product quality off the internet.
5. Price comparison
Comparative analysis of Magic Koil mattresses in the European and Hong Kong markets
5.2. Comfort and Firmness Comparison
Another issue to consider is the level of the change in firmness properties of the mattress due to wear and tear. The firmness properties of the at least one year’s old mattress should be compared to memory foam, latex, and innerspring mattresses published by Norman Beaudin in the Journal of Chiropractic Medicine. Therefore, in this study, 1 year and 5 years are considered to be old memory foam, latex, and innerspring mattresses. In the studies where the overall firmness, supports firmness, and disable firmness are included, the old or old and new mattress firmness should be specified. Matco et. Al reported that, due to the comparison of the Magic Koil spring and foam mattresses was done in the sleep research laboratory, they proposed that the main and key interests were the body adaptation period and spinal trial embedding state in the initial phase of the prolonged sedentary individual study design; and not to the local body part’s firmness nor the mattress surface properties. Since they did not have a high number of participants, unfortunately, the leg discomfort was intensified while sleeping on memory foam mattresses and their results suggested a superior effect of the springs and foam than a single material mattress, including its higher capacity to restore shape and its suitable sleeping position. Therefore, a limited number of new or old Magic Koil mattress and a flat bed have been structured by the same latex foam mattress. To provide suitable mattress comparisons lab design was used. Support firmness, overall firmness, and disable firmness were all used to interpret the subjective response, and the mattress surface and biomechanical properties during sleep were individually evaluated. The user sleeping posture variation and back pain measures were part of this study and were also discovered. Other studies have offered information about the sleeping posture and pressure reduction of the Magic Koil foam mattress in combination with other types of bedding, for example using the mattress together with a topper.
The most crucial properties of the mattress are defined in the comfortability and firmness properties. In the comfortable mattress, the user sleeps in the natural position and it decreases the possibility of having back pains. In the recent mattress market, a lot of discussion has occurred concerning the comfort and firmness of the spring and foam mattress. Memory foam mattress gives much comfort but does not assure to provide the firmness because it lacks sufficient counter-pressure for particular body curvatures. Although some spring mattresses consist of innerspring, the key element to provide much firmness, it may have the least seating comfort due to some metal forming springs for easy folding and fewer support areas. A mattress that combines the advantages of memory foam and innerspring with adequate assistance and seat convenience for specific body curvatures does not exist. The Magic Koil spring and foam mattresses that are widely sold in both the European and Hong Kong mattress markets have been known for years to provide exceptional firmness and seating comfort. However, little scientific studies have demonstrated to confirm this suggestion. In this study, the loading capacity, surface hardness, sagging properties, and motion efficiency of the slatted bed base with memory foam on innerspring and innerspring foam mattresses and latex mattress have been compared. The subject back pain rating during sleep and also their sleeping posture variation was also presented.
5.3. Consumer Preferences
For the purposes of the research, GFKV provided the data on the sales of Magic Koil mattresses, models, collection seasons, contents, materials, thickness, and firmness. Additionally, GFKV created two preference maps based on the adjusted number of sales. To control market characteristics, an additional questionnaire survey was conducted during the three collection seasons in both markets. Afterwards, regression models were used in order to test the formulated hypotheses. Therefore, data were collected during twelve collection seasons of Magic Koil mattresses in the European and Hong Kong markets. According to Magic Koil management, the intensity of mattress sales is measured by SKU (Stock Keeping Unit) sales quantity. The data from GFKV included the SKU sales of Magic Koil mattresses during the 1st, 2nd, and 3rd collection season of 2009-2013 in the European and Hong Kong markets. All three questionnaires were prepared in English, translated into Cantonese, and validated with the help of forward-backward translation by both western and southern researchers. The results were discussed with GFKV in the headquarters of the company and suggestions were made in relation to the relevant market factors, in order to include them into the survey as well as possible problems expected by both data collection teams. Although Chinese and Europeans were interviewed with different actual questionnaires, not all market characteristics were controlled in both interviews; still the same statistical tools were applied. Consequently, statistical tests were conducted and suggested techniques were discussed in order to prevent possible differences within the two surveys. Eventually, the validity of the surveys was guaranteed before Magic Koil managers accepted them.
Some of the main factors determining consumer preferences when purchasing a mattress were outlined in the “Introduction”. In the previous chapter, four hypotheses about the preferences of consumers of Magic Koil mattresses, according to the content of the mattress, materials used for its production, thickness, firmness, and the presence of additional toppers when purchasing the mattress, were formulated. The consumer preferences in the European and Hong Kong markets were determined by the analysis of the preference map based on GFKV data. We have statistically tested the formulated hypotheses with the help of the regression models. Our explanation was that the observed differences could be explained by the different historical, cultural, psychological, climatic, and lifestyle factors prevailing in these regions. Indeed, the necessity of the analysis of the mattress market, differing from other household goods in many tactical and strategic features, was confirmed by the results of the research conducted.
6. Conclusion
One of the main limitations of the study arises from the sale issue, particularly from a lack of business time for Magic Koil to open a European retail store, and to make this trial, as a retailer, was refused by Magic Koil due to the fact that it did not want to take out their market too quickly. The company usually makes use of the fact that there is no need for market survey data in the sales of foam rubber for some size furniture store orders in Europe. However, the motto “no need for market survey” should be considered with caution. The shortcomings need to be overcome before extending this project. Information missing from Magic Koil, and thus from the present case study, include European market size determinants, the cost of opening a European chain, the possible sales volume of a retail store, the number of potential store opened in shopping center, and eventually other relevant hard figures. Information missing from the researcher and the study design, at last, include not having granted some samples. Also, only free Wi-Fi in the outlet station was used for online study. It was suggested that future studies should increase the online data sample and examine store display.
The guiding aim of this research was to analyze Magic Koil mattresses and to find a better strategy to penetrate the European market. However, the analysis did not yield important differences between the Hong Kong and European consumer sleep. Due to this failure, no USP for the European market could be determined, and the two different markets – Hong Kong and Europe – were found to be more similar than was at first believed. The research findings are mainly of interest to Magic Koil, but it is also expected to have value to the European retailers who are planning to take part in the market and, of course, to researchers who are interested in Magic Koil’s way of overseas expansion, particularly in Europe.
6.1. Summary of Findings
In the European market, Magic Koil mattresses can be regarded as a lower middle-range product; is the repositioning of the mattress company appropriate? To change its market position, Magic Koil should change the price level and/or select innerspring and foam materials and need to launch new ranges or designs to attract a larger number of customers. The company should have to expand the strength of the Magic Koil brand in new products targeting both the lower and upper subjects. Magic Koil mattresses are not inferior to other similar products in terms of workmanship and product quality. The price level is reasonable; Magic Koil’s mattresses do not have the premium price level which was the trend among the innerspring mattresses of certain other brands. From a service perspective, increasing the number of sales people to provide more professional services is one of the most important topics.
We found that in general, Magic Koil mattresses are considered as medium to high end sandwich mattresses in Hong Kong. With this positioning and rapid changes in design and price level in the European market, the positioning of Magic Koil mattresses in the Hong Kong market could vary depending on the model and design. If the company launches more different ranges of designs or price levels, the positioning of Magic Koil mattresses in the Hong Kong market could be seen as two different market positions. As the number of different living standards have changed, customers are willing to pay a higher price for a product that they consider they like. The price differences among the models in the Classic range are small, as are those within the Premier range. From the products display, the most expensive product in Magic Koil’s mattress product line is the Memory Rest model in the Classic range. However, it seems that memory foam and visco materials are rarely seen. From a service perspective, the delivery service and the model presentation at the point of sale are good. The sales staff have good product knowledge and earn many sales.
6.2. Implications for Magic Koil
This refers to the statement that high variation in prices for the same branded product is consistent with the behavior of trade-discriminating retailers exploiting consumer search costs incurred by buyers. At the retailer level, high price dispersion affects the power of the retailer and the manufacturer, who is in charge of pricing and distributing the products to the retailers mainly via independent wholesalers. Retailers with high price variation are retailing price discriminating and are exploiting the differences in available consumer information about the price of the product. This type of retailer will just follow the wholesale pricing strategy, price lower than the wholesale price, and pass on the cost associated with different consumer information. Therefore, Magic Koil should consider limiting the retailers’ power to price and distribute their own products, arrest their price discriminate actions, and instead help establish more brand-consumer relationships. In summary, expansion into different markets is not always beneficial and at times a greater variation in prices is reflective of less market maturity.
The variation in price dispersion, price differences, and the levels of prices observed for Magic Koil from the various markets of interest provide some insight and implications. Price dispersion for Magic Koil is highest for Hong Kong and lowest for London. Perhaps this could be a factor of the number of retail outlets in each market. There are nine retail outlets for Magic Koil mattresses in Hong Kong, six in Finland, and five in London. The spread of prices for different Magic Koil models in Hong Kong could be the result of a larger number of retail outlets. Yet, the variation, spread, and levels of prices are much lower in London, Spain, and Finland.