Jones-Blair Case

Jones-Blair Case

Problem Statement:

Where and how to deploy corporate marketing efforts among carious architectural paint coatings segments served by JBC in the southwestern USA? Will JBC pursue the Non-DFW DIY or DWF Professionals as to increasing advertising, reducing prices and or add more sales reps.

SWOT Analysis:

Strength | Weakness |

■ Privately held corporation | ■ DFW dollar volume is flat, slightly declining |

■ Non DFW DIY market segment is increasing | ■ Slow sales growth of 4% increased over the last decade |

■ Paint gallon age remained stable over last 5 yrs | ■ Highest priced paint in the service area |

■ Sales reps has a great reputation w/customers | |

Opportunity | Threats |

■ Competition is increasing at both Mfg and retail levels | ■ Increased competition for substitute products: aluminum, vinyl siding, interior wall coveringand paneling |

■ Increasing demand for paint sundries due to a trend toward DIY consumers | ■ Paint is viewed as a durable good and it is infrequently purchased |

■ Gradual overall volume growth of 1 to 2% annually | ■ Mature industry |

| ■ Reduced emissions of volatile organic compounds (VOC's) form paint and to limit the consumption of solvent |

Critical Issues:

1) V.P. of Finance must recover 935% on all expenses in year one.

B/E = $350,000.00 (Incremental Expense)= $1,000,000.00

.35 (Contribution Margin)

B/E = $350,000.00 = $1,372, 549.00

(.35-.095)

2) Quality of paint: There aren't any issues with the quality of the paint. The issue maybe with the awareness of JBC brands. JBC brand awareness is 25% of customers are aware of the JBC brands; however 50% are aware of the mass merchandiser brands. If JBC would spend the additional $350K inadvertising which links to awareness of the brand name. Brand names are important to the consumers because of the advertising they see.

3) Increase Market Share: Market share can be increased if JBC change the structure of the segmentation to the illustration below.

Paint Market

Urban DFW

Non Urban DFW

DIY

Professional