1. The United States paint industry and the architectural paint coatings industry is a large maturing market. In 2004 US paint industry sales were estimated at slightly over $16 billion dollars with $12 billion of that focuses on architectural pain coatings and sundries. With a growth rate at the approximate rate of inflation expected for 2005. Of the national $12 billion market, Dallas Fort-Worth (DFW) regional sales were estimated at $80 million dollars with Jones Blair capturing $12 million dollars. It is characterized by a slow growth rate that be attributed to a number of things such as the housing market, and the increase in products and materials that don’t require paint (aluminum siding for houses, injection molding plastics). These substitute products reduce the availability of new markets. Additionally the increase in the quality of paint has affected the market as well. The average dollar pain purchase occasion is $74 mainly attributed to the fact that most paints are one coat only. The US Paint industry is divided into three broad segments.
Internal to the Architectural Coatings Division can be broken down like this into three main segments.
Competition on the retail level and the paint manufacturing level is on the rise, although the number of paint companies is presently declining roughly 3% a year. Currently around 600 paint companies exist a number 40% fewer than in 1980, however merger activity has boosted market share for larger companies. Larger private controlled store brands such as Sears or Lowes have entered into the market and have assumed approximately 50% of the market share. The industry focuses its sales on three main areas. Do it Yourself (DIY, Professional Painters and Governmental, Exports, and Contractors. See chart below for market distribution of architectural coatings dollar sales.
Growth opportunities have a fluctuating demand with the market. When the economy is low, there is an increase in DIY purchases, when the economy is more robust, there is an increase in Contractor and professional purchasing. The major growth opportunities lie in the growing DIY market, the distributorship opportunities and in the differentiation of your brand from others. 2. Jones Blair is a privately held corporation that markets and produces an architectural paint brand. It also produces a full line of coatings, sundries and operates a line of OEM coatings which it sells globally. Jones-Blair markets its paint and sundry items in over 50 counties in Texas, Oklahoma, New Mexico and Louisiana from its plant and headquarters in Dallas, Texas. The 11 county DFW metro areas are the major business and financial center in the company’s area. Of the $80 million in sales of architectural paint products in the DFW 50 county area, Jones Blair accounted for $12 or 15% market share regionally. Of the $80 million in sales the DIY market accounted for 78% of dollar sales and 22% were professional sales. DFW has been estimated to be approximately 60% of the market with outside of DFW consisting of the remaining 40%. Of Jones Blairs 15% market share it was broken down into three main customer groups. See Figure 2 on question 1 for the graphical layout. Competition has increased with the influx of department stores (Sears, WalMart), and specialty stores (PPG, Sherwin-Williams). Jones Blair distributes its products into private stores, specialty paint stores and hardware and lumber yards.
3. The Jones Blair product market should be broken down into the following market segments. I would first divide the market into two geographic segments (DFW and Non-DFW) and then subdivide each segment into two benefit segments DIY and professional. The figures below represent the total market for the Jones Blair market area, not the Jones Blair company figures. All numbers are approximated and not actual company data.
4. Of the four segments, I think that there is identifiable market...
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