Jones-Blair Company Case Report. Their current issue at hand is to decide on where and how to deploy corporate marketing efforts among the different architectural paint coatings markets in southwestern United States.

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Jones-Blair Company Case Report

Problem Statement

Jones-Blair Company is a privately held corporation that produces and markets paint and paint sundries under the Jones-Blair brand name. Their current issue at hand is to decide on where and how to deploy corporate marketing efforts among the different architectural paint coatings markets in southwestern United States. Continuing disagreements between proposals made by the VPs of different Jones-Blair divisions are delaying a course of action.

One unmet company objective is the application of their efforts towards the correct market segment in geographic terms between the eleven-county DFW areas and the non-DFW areas. Another unfulfilled target is the positioning of the Jones-Blair brand name in terms of price and awareness for the consumers. There is also an expressed discrepancy between the service quality and commission granted towards Jones-Blair sales representatives. Competition has increased with regards to other major producers (accounting for up to 60% of sales) and private store brands of paint (in which 50% of architectural coatings are sold under these store brands).

The best solution to attend to these conflicts is to divert marketing efforts towards the dealers in the DFW areas and towards the do-it-yourself painters in the non-DFW areas. Adding appreciable commission rates to the sales representative will further increase their already-satisfactory customer relationship skills.

Analysis

There are many alternative courses of action that were offered at the meeting between the VPs of Jones-Blair and Alexander Barrett, the President of the Jones-Blair Company. Focusing on advertising to build awareness, targeting a series of mentioned market segments (even further penetrating accounts), hiring more sales representatives, and lowering product prices were main topics of discussion.

On the first topic at hand, efforts to build awareness via advertising may not be the most efficient way to reach Jones-Blair’s target audience. The suggested proposal of advertising through TV will take from the available advertising and sales budget. Because 3% of net sales are used for advertising expenses (as of 1999, this value is $24 million) and 45% of that amount is directed towards advertising and sales promotion towards consumers, this will mean that expenses must be increased by $350,000 to provide sufficient promotion (Exhibit 3). The increase in costs negatively impacts the original objective of Jones-Blair, which is to allocate correct market segment penetration. However, if advertising methods are applied towards non-DFW areas, this can combine proposals from both the VP of advertising and the VP of sales. By enhancing awareness in non-DFW areas, this may distribute a greater number in sales. The only conflict is that advertising does not seem necessary in non-DFW areas, where non-DFW outlets have grown in gallonage volume purchased (Kerin, Roger A. and Peterson, Robert A.). Non-DFW areas have also demonstrated consistent growth in sales, beginning from 1995 at $24.8 million to 1999 at $32.0 million (Exhibit 3). Therefore, there is no need to expand advertising efforts in non-DFW areas.

In the conflict of where to allocate business development and account penetration, there is greater potential in non-DFW areas due to the growing sales from that particular segment. This brings to attention the unmet objective of Jones-Blair’s lack of account penetration (staging at a diminutive 16%), which can be resolved by focusing efforts towards adding new accounts (Kerin, Roger A. and Peterson, Robert A.). There is vast sales potential in the non-DFW areas as well as room to grow from the reported 16% account penetration rate in that specific region. This may require more sales representatives to complete the task, which leads to the next topic of discussion.

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The VP of sales discussed one particular proposal at hand: hiring more sales representatives. It may not be beneficial to Jones-Blair to increase advertising and sales promotion expenses at the cost of building brand awareness. Many consumers often decide on a store prior to deciding on a paint brand (Exhibit 2), while 50% of the do-it-yourself paint market in the DFW area are controlled by mass merchandisers because they are attracted by the price (Kerin, Roger A. and Peterson, Robert A.). Increased advertising will not appeal to Jones-Blair because they are a paint producer and marketer – consumers will ...

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