JBC’s market area and segmentation
The market of Jones Blair can be divided to two groups: Dallas-Fort Worth area and Non Dallas-Fort Worth
JBC’s potential segment(s) and strategy
In order to reach these business goals at a time when growth is nonexistent, Jones-Blair must take immediate action and increase their sales team and refocus their sales energies.
Jones Blair is a regional paint manufacturer that has to compete in a mature market (sales growth are expected to be the general rate of inflation) and also very concentrated, since the seven major producers account for upwards of 60 percent of sales.
Therefore, in this market context, Jones Blair will need to increase its sales in volume, but keep its profit margin. The strategies to be considered in this case can be based on: consumer segmentation, targeting and managing marketing mix.
Recent research indicated that do-it-yourself painters do not care much about the brand and, consequently, about the quality of the paint (brand reputation was the 4th key criteria mentioned by the buyers to choose a covering) and it has become a commodity for this kind of consumers.
Also, the company has been facing strong environmental pressure due to new regulations about the emissions of volatile organic compounds (VOCs). It is necessary for the company to invest in R&D and it is also likely that the company will not see its costs of production decrease due to the activities of R&D. -
High quality products
High quality service with
Knowledgeable sales representatives that know customers personally Mature market 1-2% sales growth long-term
Shelf goods 43% of total industry dollar sales
Specialty paint stores & lumberyards most frequently patronized Distributes through 200 independent paint stores
Maintaining margins while increasing R&D, material, & labor costs Market to major business/financial center (DFW)
Total sales/year increasing dollars sales rate 4% each year Weakness
Slow sales growth
Reduce emissions of volatile compounds
Compliance w/ EPA = low profit margins
Presence in DFW do it yourself market, in-home centers
New accounts, only added 5 in last 5 years
High costs for product
DFW Sales decreased
Paint gallon-age hasn't changed in years
Highest priced paint in service area, especially in DFW
Awareness of the company
Need to increase customer awareness by 30%
Increase demand for paint sundries due to trend towards do it yourself painting Interior more popular than exterior
Expand beyond paint
Primarily in DFW area, so advertising outside of DFW
Increase advertising over all mediums, catalogs etc
Develop new retail accounts leads and penetrations
Professional painters could solicit business to them
Discount coupon offers on every purchase after first to build loyalty Increase contractor sales
Number of paint companies are declining at a rate of 2 to 3% a year US Paint industry is maturing, over $13 billion in 1997Threats Research & design= low profit margins
Customers choose store first, then brand
Companies like Wal-Mart becoming bigger
Competition from cheaper paint brands
More options besides painting
Competition in DFW market
Competition in non-DFW market
Sherwin Williams, Benjamin Moore, Sears, Kmart, Home Depot etc., strong brand...
There are a few options to consider when determining how Jones-Blair Company will achieve their business goals of exponentially increasing company sales. One would be to make an additional expenditure in advertising in the DFW area to increase the awareness of the company brand to do-it-yourself painters. Another would be to cut the price in both the DFW and non-DFW areas of all paint products by 20% in order to achieve parity with national paint brands. As well, the company could consider increasing their present sales reps,...
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