Mr. Barrett faces different propositions of where and how to organize corporate marketing efforts in the architectural paint coatings market under Jones-Blair Company. Each executive has a different proposal such as: increasing brand advertising, lowering paint prices, hiring new representative or keeping status quo. This executive community still has not decided on which proposition to choose. I recommend hiring a new representative in non-DFW areas. Analysis
Jones-Blair Company, regional paint manufacturer, has successfully competed against paint manufactures despite trends of mergers and purchases of smaller companies by major producers. Architectural paint coatings industry has an estimate of $12 billion-plus sale in 2004, but since it is mature market the growth rate of sales is only 1-2 percent per year. Therefore, it is difficult for companies to have greater sales growth rate than the previous years. In addition, government requirement of lowering emissions of volatile organic compounds causes expensive R&D. Therefore, due to slow sales growth, constant research and development and government regulations on VOCs there are more mergers and acquisitions. Jones-Blair Company (JBC) markets their paint and sundry items in U.S. states such as Texas, Oklahoma, New Mexico, and Louisiana which totals over 50 counties. In addition, the Dallas-Fort Worth (DFW) area is JBC’s major business and financial center. Competition has increased in construction market where competitors price their products to capture a higher percentage. However, these companies have yet to reach the painting firms in DFW, professional painters in non-DFW areas, or the do-it-yourself market. Therefore, Jones-Blair Company still holds advantage in the market by providing great service to do-it-yourselfers and high quality paint to professional painters. However, due to increased R&D and overhead cost Jones-Blair Company has the highest priced painted in their service area. Now the company must select a marketing plan to preserve their position in the industry.
Jones-Blair’s market area can be segmented into two geographical areas: DFW and non-DFW. These segments are further divided into Do it yourself and Professionals. JBC’s architectural paint and allied products sales volume was $12 million with the sales evenly distributed between DFW and non-DFW. In addition, 70% of sales through the DFW dealers went to professionals while 70% of the sales through non-DFW went to do-it-yourselfers. Below are the results of market segments in percentages. | Do-It-Yourself| Professionals|
DFW| 5.4%| 29.2%|
Non-DFW| 14.6%| 56.3%|
Jones-Blair is strong in DFW professional market (29.2%) but they dominate in non-DFW professional markets with 56.3% of the sale shares. Due to mass merchandisers JBC’s DFW do-it-yourselfer market share is weakest with a 5.4%. In addition, JBC is weak in the DFW area, where they represent only 12.5%, compared to non-DFW area (18.8%). Non-DFW do-it-yourselfers is high potential for opportunities for JBC. There is currently no large volume distribution and fewer brands competition than in the metropolitan area because of the non-DFW area’s low population. In addition, client-seller relationship overshadows price. DFW professional painters prefer high quality paints to maintain their reputation for quality work. Professional painters are willing to pay more for better quality. Therefore, JBC must convince DFW professionals that their paint is the best quality and is worth the price. Since non-DFW professional market is already dominant, there is opportunity left for JBC to expand. For DFW do-it-yourselfers, price is a key element for them since there are already numerous distributers. JBC is also priced higher than competitors so it is difficult to sell to DFW do-it-yourselfers. Recommendations
Jones-Blair Company should pursue Non-DFW...