Jones Blair Case Analysis

Case Brief: Jones • Blair Company

Background and Problem Definition

Alexander Barrett, president of Jones • Blair Company, and his executive group are unable to come to a decision on where to deploy corporate marketing efforts. They have already had two lengthy meetings to discuss their options, and Mr. Barrett wants to ensure that they come to a decision by the end of the next meeting. Their current options are to increase advertising, decrease price, add sales representatives, or maintain their current strategy. 

Market and Industry Analysis

The Jones • Blair Company sells architectural paints, paint sundries, and OEM coatings to over 50 counties in Texas, Oklahoma, New Mexico, and Louisiana. They have separated their market into Dallas-Fort Worth (DFW) and Non-DFW Areas. In 2004, the estimated dollar volume of architectural paint and allied products in the 50-county service area was $80 million, with 78% of those sales going to the do-it-yourself (DIY) market. Jones • Blair currently holds a 15% share of the market in the 50-county service area. Their paint is currently the highest-priced paint in the service area, and competitors have been aggressively pricing their products to capture a higher percentage of the home construction market. If they do not create a new marketing strategy, their competitors may gain an advantage over them in the long run. 

Evaluation of Alternative Courses of Action

The first alternative to increase advertising makes sense, in that it is important to increase awareness of the brand. If increased spending on advertising can successfully bring awareness up to 30%, it may be feasible as an option. If sales were to remain the same, the company would still incur a net profit of $790,000. The second alternative, decreasing price, is a less feasible option. Price cuts would require a higher break-even point, but gallonage sales are not expected to increase. If this were to happen, the company would incur a net loss of $1.26 million dollars. Adding a sales representative, another viable option, could be beneficial to the company as well. The additional cost of adding another sales representative (before commission) would still allow the company to have a net profit of $1.08 million. Finally, keeping the company’s current strategy would not be feasible in the long run. If gallonage sales are not expected to increase, Jones • Blair may continue to lose customers because of aggressive pricing from their competitors. They currently hold one of the highest prices in the industry, and they are marketed as premium paints in certain retailers as well. If non-professional consumers cannot easily tell the difference in quality when making initial paint decisions, they will likely go for the lower-priced options.