Janmar Coatings Case Study

MK3101-Cases in Marketing Strategy.

Dr. Declan Fleming

Case study two: Janmar Coating

Authors:          Clare-Marie Leonard 15382326

               Andrew Wilson 17102694

                 Matthew Hourigan 15510103

Paul Kelly 14350001

Date:                 19th September 2017

Group:         UG 5

Janmar Coatings Case

1. Situation analysis

The U.S paint coating industry is divided into 3 different segments.

1. Architectural coatings
2. Original equipment manufacturing (OEM)
3. Special purpose coating

Industry sales of $16 billion per annum.

Market segmentation:

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Focusing on Architectural coatings:

• A maturing industry.
• $12 billion industry with growth expected of between 1-2% per annum.

Janmar Coatings sales and financials:

• In 2004 $12,000,000 in sales and net profit before taxes was $1,140,000
• Dollar sales had climbed at an annual rate of 4% over the last decade.
• Maximum priced paint in service area. In 2004 paint cost of goods sold including freight expenses was 60% of net sales.

Janmar Coatings distribution:

• Janmar coating issues its products through 200 independent paint stores, lumberyards and hardware outlets.
• 40% of outlets located in the 11 county DWF area
• The remaining outlets situated in the other 39 counties.  

Janmar Coatings promotional effort:

• Employs eight sales representatives. (Paid a fixed salary plus 1% commission on sales)
•   The company spends 3% of net sales on advertising and sales promotion efforts.
• 55% goes to corporate advertising and the remaining 45% goes to instore displays.

Janmar Coatings competition and threats:

• US paint manufactures are under growing pressure to reduce emissions of volatile organic compounds from paints and to limit the consumption of solvents. Compliance with EPA regulations eroded historically low profit margins in the paint industry.  
• Hardware stores and big firms marketing their own paint brands.

1. Janmar’s Issue

Where and how should Janmar Coatings position corporate marketing efforts in the architectural paint market to advance their position in the industry?

Suggestions:

1. Vice President of advertising:

Increase of $350,000 in corporate brand advertising focused on TV adverts. Strengthening the company’s presence in the DWF ‘do it yourself ‘market.

1. Vice President of operations:

We decrease  prices by 20% to remain competitive.