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Jones.BlairIndustrial Coatings
Presented to : Mr. Abu Daud KhanStrategic Marketing (MKT 732)
ID-13274003 Presented by : Md Shamsul Alam Masud
U.S. Paint IndustrySegment Architectural Coatings Original Equipment
Manufacturing CoatingsSpecial-Purpose
Coatings% of total industry
dollar sales
43% 35% 22%
Architectural Coatings General purpose paints and varnishes used on residential and
commercial structures OEM Coatings
Used for durable goods such as automobiles, appliances, and industrial machinery
Special-Purpose Coatings Used for special applications such as bridges, marine
applications, and highway and traffic markings
Three Segments of Industry:
Jones Blair• Headquarters: Dallas, Texas• Service Area:
1. Texas, Oklahoma, New Mexico, and Louisiana.
2. Dallas-Fort worth (DFW) area
• Competition:– 600 paint companies in the
US• 1997: Total sales $ 80million– $12 million net sales of Jones
Blair architectural paint and allied products
Jones Blair• Distribution:– 200 independent paint stores, lumberyards, and
hardware outlets.– 40% of outlets are in DFW area
Promotion: 8 sales representatives Salary:$480,000annually
1% commission on sales 3% of net sales spend
for advertising & sales promotion efforts
What do you think Jones Blair’s problem is?
Problem
Where and how does Jones-Blair Company deploy corporate marketing efforts among the various architectural paint coatings markets in
their service area
• Should they target: Professionals or Do-it-yourselfers?
• Where should they target: Dallas Fort Worth or Non DFW?
• How are they going to accomplish this?
Internal Strengths
• Experience – Founded in 1928• Strong relationships between sales
representatives and retail stores• High quality• Sell to both professionals and DIYers• Cooperative advertising with retailers• Motivated, determined and passionate• A lot of research available• Low Break Even - Excel
Only 3% of net sales goes to advertising Ads only reach and influence 25% of target CGS is 60% of net sales Only 8 sales representatives Narrow market penetration in DFW area. No exclusive rights with retailers Highest price in market
Internal Weaknesses
External Opportunities• Market Growth: 1-2% per year • Distributed to 200 of the 1,000 retail outlets in the area• 40% of these retailers are in rural areas • DIY painters first choose a retail outlet for paint and sundries
then choose a paint brand.• Pro-painters are frequent buyers and look for paint that is
high quality, durable and easy to clean up• The average dollar paint purchase per purchase occasion:
$74.00. Average of $12.00 on sundryMarket Growth
2000 2001 2002 2003$80,000,000 $80,800,000 $81,608,000 $82,424,080
600 different competitors Competition is spending more on advertising Competition is less expensive Major in-house retailers have little knowledge DIYers purchase paint once every four years and get what’s
convenient and inexpensive Contractors want paint for the lowest price. Demand effected by substitutes, long lasting products and
VOC regulations
External Threats
Total Market$80 Million Net Sales
Professional DIY
Urban$48,000,000
60%
$14,400,00030%
$33,600,00070%
Rural $32,000,000
40%
$3,200,00010%
$28,800,00090%
$14,400,
000
$33,600,
000
$3,200,0
00
$28,800,
000
Total Market
Urban ProfessionalUrban DIYRural ProfessionalRural DIY
Market ShareProfessional DIY
Urban 18% 42%
Rural 4% 36%
Jones Blair Market Share
What do you think Jones Blair’s distinctive
competencies are?Hint: There are 2!
Core Competencies
• Quality– Best on the Market
• 1 Coat Coverage• Mildew & Stain Resistant• Pleasant Fragrance• 1000’s of Colors
– Good fit with professional painters
• Service– Sales Representatives
• Well Liked• Helpful• Professional• Knowledgeable• 1st name basis with
customers• Discuss both Business &
Family• Run the Store
– Good fit with rural area
Alternatives
1. Increase advertising dollars by $350,000 and use it for TV ads
2. Have an overall 20% price cut3. Add one more sales representative4. Continue to guard margins and control costs5. President Barrett’s suggestions
1. Ad dollars used for print media instead of TV2. 40% price cut to attract contractors
Which Alternative Do you think is the best for Jones Blair ?
VP of Advertising
• Direct efforts to Dallas Fort Worth-DIYers
• Increase awareness to 30 %
• Advertising Increase of $350,000
• Television Coverage in 15 Counties
Pros/Cons• Pros
– Low added costs compare to competitors
– Extra $350,000• Break Even: $3,400,000
– Increased Awareness• Cons
– Almost doubling the advertising cost.
– 75% of audience is not buying paint
VP of Operation
• Advertising isn’t right way.
• Need to be competitive in DIYers
• Consumers are Price Sensitive
• Cut Price by 20%
Pros/Cons
• Pros– Competitive Price– Gain Market Share
• In DIY Sectors
• Cons– Break Even: $4,480,000
• Huge break even– Lowers perception of
quality
Vice President of Sales• Target: Non-DFW areas
– Where ½ of the sales and most dealers exist right now
• Solution: Add another sales rep– There are already 8– This rep would develop new
retail account leads and call on professional painters to solicit their business through our dealers
– Cost to add another sales rep is $60,000
Pros/Cons
• Pros– Motivated to inspire team– Potential for success
– Large Market– Break Even: $2,571,429
• Not affected too much
• Cons– Overlooked the DFW area– Sales reps aren’t that
effective for immediate breakthrough.
Vice President of Finance
• Keep everything the same– Continue to guard
margins and control costs
Pros/Cons
• Pros– Not Risky– Keep doing what
company does best• Cons– Doesn’t solve the
problem– Not a result oriented
approach.
President Barrett
• 40% price cut to attract contractors
• Redirect Advertising print media instead TV– Newspaper & Catalogs.– Focus to Rural
Pros/Cons
• Pros– Attractive for contractors– More Focused Advertising
can cover widespread.• Cons– Increase cost for
competitive bidding– Constant Loss– Break Even: -$14,280,000
1
-15000000
-10000000
-5000000
0
5000000
Normal
Vp of Sales
Vp of Advertising
Vp of Operations
President & CEO
2400000
2571428.57142857
3400000
4480000
-14280000
Break Even Analysis
NormalVp of SalesVp of AdvertisingVp of OperationsPresident & CEOAxis Title
Why Rural Professional
• Competitive Advantage:– Good Service & High Quality
• Good Fit:– On a 1st name basis with store owners
• Control 45% of the market by professionals painter.
• Best “Bang for the Buck”
Recommendation
• Actively pursue non-DFW Household and Professional markets.
• Hire one additional Representative – NOW! who is incharge of new account development.
• Seek more retail accounts in non-DFW markets.• Sales Training– Kick their butts into gear– Clarify Roles– New focus: Rural Professional Painters– Increase personal sales by 5%
Recommendation
• Maintain prices, reduction in the price may be boomerang effect.
• Engage in cooperative advertising with current advertising budget.
Questions?
Comments? Concerns?