Case Study - Should JonesBlair Company, a privately held corporation that produces and markets architectural paint increase marketing efforts in the South West of the United States?

4. Private  Brands

• Roughly half of the architectural coatings are sold under private brands. These brands include Wal-Mart, Home Depot, Sears, and Lowes.

5. Distribution

• Jones-Blair Company distributes its products through 200 independent paint stores, lumber-yards, and hardware outlets.

• 40% are located within the 11-county Dallas Fort Worth area.
• 60% are located in the other 39 counties it services.

6. Other Products

• Sundries

• The company sells brushes, rollers, and thinners. However, these are not manufactured by the company.

• Original Equipment Manufacturing (OEM)

• The company also operates a large OEM coatings division.

• OEM is applied during manufacturing.

• Used for cars, appliances, furniture, and industrial machinery.

• Sold throughout the U.S. and worldwide

Assumptions:

(1)         The estimates for the future market growth will remain steady.

(2)        All research done into the market is accurate.

(3)        The Jones-Blair company does not want to do nothing.

Analysis:

Possible alternatives for Jones-Blair Company include:

1. Vice President of Advertising suggests the Jones-Blair Company should spend an extra $350,000 on corporate brand advertising.
2. Vice President of Operations suggests the Jones-Blair Company should cut product prices by 20 percent.
3. Vice President of Sales suggests the Jones-Blair Company should hire an additional sales representative.
4. Vice President of Finance suggests the Jones-Blair Company should do nothing.

1. Option one (Spending an extra $350,00 on advertising)

• Pros:

• Will increase brand awareness
• Reach new customers
• Can focus on non DFW areas

• Cons:

• Large cost
• 75% of the targeted audience isn’t buying paint
• Hard to track results

2. Option two (Cutting prices by 20%)

• Pros:

• We can begin to compete more aggressively with other brands
• DIY Customers who are buying based on prices will be more likely to pick this product.

• Cons:

• Weakens brand image
• No guarantee consumers will disregard current brand loyalty for other products
• Will be difficult to retain new customers if they increase prices in the future
• Need to increase sales volumes in order to maintain a profit margin
• Still won’t attract contractions (need a 40% price cut for them)

3. Option three (Hiring an additional sales representative)

• Pros:

• Help expand into new markets and areas
• Can focus on non-DFW areas (market penetration is only 16%)

• Cons:

• $60,000 increase in payroll, as well as commission rates
• What would they be focusing on

4. Option four (do nothing)

• Pros:

• No increase in cost
• No added risk
• Hope to maintain contribution margin of 35%

• Cons:

• No guarantee on customer retention
• May allow competitors to gain an edge on the company

ATTACHMENT 1

        `Customer Environmental Analysis

1. Who are our current and potential customers?

1. Do-it-yourself painters
2. Professional Painters
3. Contractors
4. Government

2. What do our customers do with our products?  What needs do we satisfy?

1. Painting, residential, commercial, institutional structures
2. Redecorating
3. Maintenance
4. Repair
5. Complimentary products include paint thinners, rollers and brushes. These are also sold by Jones-Blair Company.

3. Where do our customers purchase our products?

1. In over 50 counties in:

1. Texas
2. New Mexico
3. Oklahoma
4. Louisiana

2. 200 independent paint stores, lumber-yards, and retailers

1. 40% are located in the DFW area
2. 60% are located outside the DFW area

4. When do our customers purchase our products?

3. Seasonal sales have not been measures for each product line.

5. Why and how do our customers select our products?

1. Why?

1. Quality of product
2. Brand image
3. Brand reputation
4. Style

2. How?

1. Customers select our product through the many retailers, based on quality and convenience of service.
2. Price is important

1. Contractors and DIY prefer low prices. While professional painters prefer quality products and employee expertise when purchasing products.

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6. Why do potential customers NOT purchase our products?

3. Higher pricing
4. Brand loyalty to another brand
5. Simply a lack of need for the product at this time
6. Competition

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ATTACHMENT 2 – SWOT ANALYSIS

ATTACHMENT 3 – COMPETITIVE ANALYSIS

Competitive Analysis

1.         The Jones-Blair Company has many competitors and different levels.

1. They are competing with, Sherwin-Williams, Benjamin Moore, the Glidden unite of Imperial Chemicals, PPG Industries, Valspar Corporation, Grow Group, and Pratt & Lambert, at a national level. They account for 60% of sale in the architectural coating segment.
2. Stores who marketing their own brand including Sears, Lowes, Home Depot, and Wal-Mart. These stores hold about 50% of the architectural coating sales.
3. Total paint companies are decreasing at a rate of 2-3% annually.

2. If the Jones-Blair Company changes their marketing strategy, we can expect the competition to do nothing. Since Jones-Blair is a smaller, local company their strategy will not likely influence the larger national brands.