January 31, 2012
Table of Contents
How might one characterize the paint coating industry?3
How might one segment the Jones Blair market area?3
Which segments represent opportunities for Jones Blair?4
What is Jones Blair’s competitive position in its market area?4 II.Case Problems/Opportunities:4
Increase corporate brand advertising by $350,0004
Reduce price by 20%5
Add one additional sales representative5
Which segment should Jones Blair pursue?6
What strategy should Jones Blair adopt to reach the segment identified?6 V.Conclusion:7
I. Factual Summary:
The executives at Jones Blair find themselves at an impasse. The company is trying to decide how to best deploy marketing efforts with valid solutions presented by each executive. The status of the industry was examined in detail in the case and a number of challenges were revealed. The U.S. paint industry, an industry that has been estimated to have $16 billion in sales in 2004, is a mature, slow growing market, many different factors impact demand and also EPA regulations are eating away at profit margins. How might one characterize the paint coating industry?
The U.S. paint industry is considered a mature, slow growing market with many factors affecting demand. Industry sales in 2004 were approximately $16 billion. How might one segment the Jones Blair market area?
The U.S. paint industry is segmented into Architectural coating, Original Equipment Manufacturing and Special purpose coating. For this analysis, the focus will be on Architectural coating. Also, Jones Blair’s market can be divided into two geographic areas, Dallas-Fort Worth (also the company’s headquarters) and non-Dallas-Fort Worth. Both of these segments can be broken down again into two consumer segments of do-it-yourselfers and professional painters. In 2004, Jones Blair’s total sales for the architectural paint coatings were $12 million which is split evenly throughout the company’s distribution area. 70% percent or $4.2 million of the company’s sales in the DFW counties were accounted for by professional painters while the other 30 percent or $1.8 million was sold to do-it-yourselfers. In the non-DFW areas it was the exact opposite. 70 percent or $4.2 million of these $6 million in sales were to do-it-yourselfers while the remainder was accounted for by the professional painters in the area. Which segments represent opportunities for Jones Blair?
The most opportunity for Jones Blair exists in the Architectural Coating segment. Jones Blair also can focus on the do-it-yourselfers in the DFW area and professional painters in the non-DFW areas. What is Jones Blair’s competitive position in its market area? Jones Blair niche is the do-it-yourselfer and wanting high quality paint and customer service. These consumers want a knowledgeable sales representative that can assist with not only selecting the paint, but also how to prepare the wall and apply the paint properly. Jones Blair is also desirable to the professional painter that wants high quality paint (requiring only one coat, washable, long life) to enhance the painter’s reputation.
II. Case Problems/Opportunities:
The problem Jones Blair executives have is how and where to deploy corporate marketing efforts. The company has a small distribution area and with the increase of large stores, the company must find a way to increase profit and market share. Jones Blair has an opportunity to use the status of high quality, customer service name the company has created for themselves to solve this problem. The executives only need to decide on which strategy will fit the company best. III. Alternatives:
Increase corporate brand advertising by $350,000
On the positive side, by increasing advertising, consumers will be more aware of Jones Blair’s products. Since most consumers...