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Jones Blair Case Analysis

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Autor:   •  March 22, 2011  •  Case Study  •  1,644 Words (7 Pages)  •  2,321 Views

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Current Situation: Jones Blair executives find themselves at a fork in the road. The company is trying to decide how to best deploy corporate marketing efforts for the various architectural paint coating markets served by the company in the southwestern United States. The senior management team has recently met after examining the paint industry, especially the architectural paint markets, and they have yet to come to a conclusion. The president of Jones Blair, Mr. Alexander Barrett, is planning to have another meeting with his executive team where they will each present their suggestions and he has exclaimed a decision must be made.

The U.S. paint industry is divided into three broad categories which include architectural coatings, original equipment manufacturing (OEM) coatings, and special-purpose coatings. Although Jones Blair is also active in the OEM coatings market, the management team is focused on decisions involving the architectural coatings.

Jones Blair competes in a 50-county area throughout Texas, Oklahoma, New Mexico, and Louisiana. Their major business and financial center is located in eleven county Dallas-Fort Worth metropolitan areas. The estimated dollar volume for architectural paint and allied products sold in this area in 2004 was $80 million. The DFW are accounted for 60 percent or $48 million, while the remaining 40 percent or $32 million is sold in the other areas outside the DFW area. 70 percent of the DFW sales are accounted for by do-it-yourselfers while the other 30 percent is sold to professional painters. In the other areas outside of the DFW area 90 percent of sales are accounted for by do-it-yourselfers while the other 10 percent is sold to professional papers. (see Exhibit 1).

Jones Blair's total sales for the architectural paint coatings are $12 million which is equally distributed between the Dallas-Fort Worth market and the market for the counties outside the DFW area. A survey of the retail outlets explains that 70 percent or $4.2 million of the company's sales in the DFW counties were accounted for by professional painters while the other 30 percent or 1.8 million was sold to do-it-yourselfers. In the non-DFW areas it was the exact opposite. 70 percent or $4.2 million of these $6 million in sales were to do-it-yourselfers while the remainder was accounted for by the professional painters in the area. (see Exhibit 2).

Jones Blair has a 15 percent market share in the areas in which they compete with the 12 million in total sales or architectural paint coatings. The organization is much weaker in the DFW market controlling 12.5 percent market the in the areas outside the DFW area where they control 18.8 percent of the market. The company has a strong presence in the total professional market with dominance in the professional market in non DFW counties. The company is especially week in the DFW do-it-yourself market. (see Exhibit 3).

Executive Team Suggestions: With the market and industry information at hand Mr. Barrett has gathered The Jones Blair Company senior executive management team backed together to come to a conclusion on where to go with their marketing plan. Each of the members of the team have made different suggestions on what they believe the best plan of action is. The cost associated with each of these suggestions can be found on the table in Exhibit 4.

The Vice President of Advertising made the first suggestion. He stated he believed the company needed to bolster their presence in the DRW do-it-yourself market. He explained how a brand name is important to consumers because they do think about paint they have seen advertised when choosing a brand, this is very important in stores that carry more than one brand. He further explained the company would need at least an awareness level of 30 percent among do-it-yourselfers to materially affect sales. He continued stating that an increase of $350,000 in corporate brand advertising beyond their current spending, with an emphasis on television, would be necessary in order achieve the necessary awareness level. In order to cover this increase in cost Jones Blair would need to increase their sales by 8 percent over their current sales volume. This is a valid suggestion; studying the case Exhibit 5 you can see that Jones Blair's awareness is considerably lower than many of the competing brands. This increase in advertising and promotion may allow them to make gains on their competitors. On the other hand, according to the case Exhibit 1 do-it-yourself consumers chose a store first and then a brand a name, so spending the money on corporate branding versus cooperative branding may not be the best move. It would be more economically efficient to spend money on cooperative advertisement and in-store promotions.

The second suggestion came from the Vice President of Operations. He disagreed with the VP of Advertisement's first suggestion. His suggestion was to think beyond the DFW area to the do-it-yourself market as a whole. He explains that dealers quickly back off from the Jones Blair

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