In 1999 the U.S. paint industry sales were projected to be more than $13 billion. The industry has slow sales growth and is constantly changing due to government regulations. In 1999, Jones∙Blair had sales volume of $12 million with an annual growth rate of 4%. Jones∙Blair produces and sells architectural coatings, OEM coatings and paint sundries. However, the President, Alexander Barrett and the senior management executives know that there are some areas that they need to improve on.
Statement of the Problem
Jones∙Blair has a major struggle with the sales of their architectural paints in the DFW areas. This is because they have the highest priced product in a very price competitive segment of the market. Their sales are best with professional painters in the non-DFW areas; the professionals are much more quality oriented rather than being driven by price. Unfortunately, they have a very low market share with the non-DFW household, “do-it-yourself”, market. They have to decide where and how to deploy corporate marketing efforts among the various architectural paint coatings markets.
Analysis of the Problem
We assumed that the allocation of their advertising budget is equal. That is to say they advertise the same amount in both the DFW and non-DFW area.
1) Our vice president of advertising has suggested that we place our primary focus on the DFW do-it-yourself market, while still reaching 15 counties in the non DFW area. The Vice President suggests that we increase the awareness level to at least 30 percent so that we can increase our sales. An increase in $350,000 in corporate advertising should lead to this level of awareness.
We feel this pl...
... middle of paper ...
We recommend a $350,000 incremental increase in advertising and apply it towards newspapers and catalogs in the non-Dallas Fort Worth area. The non-Dallas Fort Worth area is still fairly untouched by national competitors. This solution would allow Jones-Blair to reach a fairly untouched market of house hold do-it-yourselfers. Currently in the non Dallas Fort Worth area, paint is distributed through specialty retailers carrying only a single brand, therefore Jones-Blair does not lose out to a cheaper competitor. In the Dallas Fort Worth area, paint is mainly distributed through large retailers where there is more competition and Jones-Blair, the highest priced paint, is almost always undersold. The metropolitan area is not Jones-Blair’s major market and concentration on the 12.8 million dollar untouched rural household market could prove effective.
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