Blair
Background
In early January of 1998 Alexander Barrett, President of Jones Blair Company still did not decided where and how to deploy corporate marketing efforts among the various architectural paint coatings markets served by the company in the southwestern United States. Jones Blair Company markets its paint and sundry items in over 50 countries in Texas, Oklahoma, New Mexico, and Louisiana from its plant and headquarters in Dallas Texas. The eleven county Dallas Forth Worth (DFW) metropolitan area is the major business and financial center in the company’s southwestern service area. The company distributes its product through 200 independent paint stores, lumber yards, and hardware outlets. Forty percent of its outlets are located in eleven county areas of DFW. The remaining outlets (non DFW) are situated in the other 39 counties in the service area.
Competition in paint stores, lumberyards, and hardware stores has risen in the recent years. Big corporations like Sears, Kmart, Sherwin Williams, and Home Depot have all moved into the DFW outlets. These companies have aggressively attacked there pricing strategy to attract a higher percentage of consumers.
Recommendations
1. President of Advertising suggests that the company should direct its efforts toward bolstering the company’s presence in the DFW metro area towards “do it yourself” market. Industry research has shown that a large number of “do it yourself” consumers select a store before selecting a brand. The company needs to have an awareness level of at least 30 percent. An increase of $350,000 dollars in the corporate brand advertising with an emphasis in television commercials would be necessary to achieve new consumer awareness levels.
2. Vice President of Operations suggests that the company should cut its price down by 20% on all its paint products to achieve parity with the national paint brands
3. Vice President of Sales suggests that we should forget about the DFW market and focus on our non DFW areas where most of our dealers exist right now. The company should also add one additional sales rep whose sole purpose is to achieve new accounts.
4. Vice president of Finance is in favor for the current approach, selling to both the home owner and the professional painter in the DFW and non DFW markets through our dealers. We will continue to be profitable by judiciously guarding our margins and controlling costs.
Rationale
Increasing advertising expenses of $350,000 dollars should be eliminated as one of the possible choices. Only 25% of the audience is buying paint. Leaving 75% of an audience, which is a very large gap, that the company has to target in grapping the companies brand awareness.
Staying with the current approach, selling to both the home owner and the professional painter in both areas would not make Jones Blair a competitor in those markets for long. As the big name corporations continue to come into the DWF outlets, competition increases, [next page]