Analysis: Jones Blair Company - Case Study Example

? Case Analysis: Jones Blair Company Case Analysis: Jones Blair Company Case Background and Problem Jones Blair Company is a privately held corporation reported to produce and market architectural paint under the Jones•Blair brand name. Given that the industry and architectural paint coating sector is in the maturity stage, coupled with a sluggish growth in sales, the need for continued research and development efforts and required compliance to governmental regulations regarding adherence to stipulated levels of volatile organic compounds (VOCs), Jones Blair is reflecting on the marketing strategy to apply to a potentially identified segment. The President of Jones Blair Company, Alexander Barrett and his team of senior executives are currently reflecting on the best course of action to decide where and how to deploy corporate marketing efforts among the various architectural paint coatings markets served by the company in the southwestern United States. Characteristics of the Architectural Paint Coatings Industry The architectural paint coatings industry parallel the trend of the U.S. paints industry manifesting maturity in growth level, with only one to two percent growth rate per annum. The demand is reported to be affected by: (1) competition from alternative materials and (2) development of high quality products that require lesser paint applications. There are decreasing numbers of paint companies, currently totaling 600, with a two to three percent declining rate. Opportunities are seen in the do-it-yourself segment by household consumers for paint sundries. There is a trend for merger and acquisition especially for large paint companies “seeking growth and a higher sales base to support increasing costs” (Case Facts: Consolidation, n.d., 1). Jones Blair’s Trade Area Jones Blair is considered a regional paint manufacturer that manifests competitive advantage due to readily available technology and the difference in paint formulation due to regional climatic needs. Case facts reveal that it “markets its paint and sundry items in over 50 counties in Texas, Oklahoma, New Mexico, and Louisiana from its plant and headquarters in Dallas, Texas. The eleven county Dallas–Fort Worth (DFW) metropolitan area is the major business and financial center in the company’s southwestern service area” (Exhibit 2, n.d. par. 1). Segmentation for Jones Blair’s Market Area VARIABLE SPECIFIC DETAILS Geographic Region 50 counties in Texas, Oklahoma, New Mexico, and Louisiana from its plant and headquarters in Dallas, Texas. Eleven county Dallas–Fort Worth (DFW) metropolitan area Density DFW, metropolitan, and non DFW, rural areas Demographic Occupation Professional painters, contractors, household consumers (do-it-yourself painters) Distribution Independent specialty stores, lumberyards, hardware Purchase per annum Less than $25,000, $25000 - $50,000, $50,000 above Behavioristic Purchase type Interior paints, exterior paints, lacquer, other applications Buying preference High quality, known brand, Promotional efforts Sales representatives, cooperative advertising for retail accounts, newspaper advertising and catalogs, in store displays, outdoor signs, regional magazines Segments Representing Opportunities for Jones Blair Brand The segments representing opportunities for Jones Blair brand are the non DFW areas where total dollar sales potentials are increasing as shown in Exhibit 3. It could be noted there that DFW sales had been declining since 1995 to 1999. Likewise, retail accounts for non DFA also show that 60% is contributed by that sector. Jones Blair Competitive Position The competitive position of Jones Blair is in brand awareness when compared to local brands. It should be noted that Jones Blair is considered a regional paint manufacturer that should emphasize strengths in knowledge and expertise in paint formulation depending on climatic needs. Despite its high price, the image perceived by customers is high quality and appropriately distributed and shelved in independent specialty stores, lumberyards, and hardware. Segments Jones Blair should Target and Pursue The segments that Jones Blair should target are non DFW areas for both professional painters and do-it-yourself household consumers. These segments are not price sensitive and are more concerned on quality of the paint. Likewise, their brand should be marketed in home centers and department stores where the do-it-yourself segment frequently makes purchases. Professional painters’ requirements are already being addressed by specialty stores. Alternative Courses of Action 1. As suggested by the VP for Advertising: focus on DFW area and on the do-it-yourself market by increasing awareness to 30% and spending P300,000 to achieve targeted awareness level. The advantage of this is that brand awareness would be increased but focusing on DFW is not eminently productive given the decreasing area sales from this sector. 2. The VP for Operations suggested: be competitive in the do-it-yourself market by cutting prices by 20% on all paint products. This could attract the identified segment but the drastic decrease on gross sales due to the cut in price could significantly affect the financial position of the company. 3. The VP for Sales proposed: focus on non DFW area and intensify efforts through increasing the sales representatives by one to develop new retail accounts. This is a feasible alternative given than the increase in cost for hiring is $60,000 per annum which could be compensated by the increase in accounts to be solicited by the new representative. 4. The VP for Finance suggested status quo – meaning not to change anything. This is feasible in the short term but since the belong to a maturing industry and facing increasing competitive pressures, not doing anything might erode their market share in the long run. 5. The President suggested focusing efforts on non DFW areas, increasing brand awareness by directing the advertising efforts to regional areas and possibly reflecting on hiring the sales representative. Marketing Strategy to Reach Target Segments The best option is the President’s recommendation with the following marketing strategy to focus on the following: (1) apply the $350,000 budget to increase brand awareness to newspapers, regional magazines and catalogs in the non DFW areas; (2) hire an additional sales representative to focus on professionals in the non DFW areas and do-it-yourself segment in DFW areas; and (3) market products to home centers and department stores to capture the do-it-yourself segment. By increasing brand awareness, despite the high price, consumers would recognize and associate the Jones Blair brand to high quality product which would likewise emphasize its ability to conform to regional climatic needs. The additional sales representative would assist in promoting brand awareness to the do-it-yourself market, whose purchase decision could be guided in terms of information assistance in step 2 of the buying decision process. By marketing the product to home centers and department stores, the do-it-yourself segment would be captured. The sales representative would also be assigned to capture the professional painters in the non DFA area and the do-it-yourself segment in the DFA area, as needed. Conclusion The marketing strategy of Jones Blair Company is a collaboration of capitalizing on their strengths, addressing their weaknesses in identified areas and in pursuing opportunities in the environment. By using resources to the identified market that is most capable and possible to purchase their products, coupled with promotional efforts and enhancing brand awareness, the future for the company is expected to be optimistic despite the slow growth potentials of the maturing industry they are in. References Jones Blair Company. PowerPoint presentation for Exhibits 1 to 6. Read More