Where and how should Jones Blair Company deploy their corporate marketing efforts within their various southwestern U.S. architectural paint coatings market segments to maximize their return on investment?
The current U.S. architectural paint industry is considered to be a maturing industry with growth expectations equivalent to the general rate of inflation. Industry-wide profit margins are hitting record lows and continue to be eroded by EPA regulations, dim sales growth, and an ever-increasing need for research and development. The trend for companies seeking to grow operations and increase geographic coverage is to acquire smaller paint businesses that cannot afford to invest the required capital in research and development to stay competitive. However despite this trend, companies such as Jones Blair have been able to remain competitive against nationally-distributed paint offerings due to regional paint needs based on climatic differences.
The market in which Jones Blair primarily conducts its architectural paint business is in a 50-county spread in the southwestern region of the U.S. – Dallas-Fort Worth being the primary metropolitan area. 2004’s total sales in this market were split 60:40 between the DFW area and the non-DFW area which is lower than in years past. As illustrated in Exhibit 1 of the analysis, the DFW market sales have been shrinking over the past 5 years by ≈ 1.5% per year (down 5.7% since 2000) while the non-DFW market sales have been expanding by ≈ 7% per year (up 29% since 2000). Jones Blair’s sales are currently split evenly between the two markets. Within each market, there are two relevant primary segments of consumers who purchase architectural paint – professional painters and do-it-yourselfers. Based on a recent survey conducted by Jones Blair to their retail outlets, 70% of JB’s sales in the DFW area are attributed to professional painters while 70%... [continues]
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