Jones-Blair Case Anaylsis Essay

Strategic Issues and ProblemsThe J wizards Blair beau monde competes in a 50-county theatre of operations end-to-end Texas, Oklahoma, New Mexico, and Louisiana. Their major barter and fiscal center is located in football team county Dallas-Fort Worth metropolitan beas. Jones Blair smart set is a orphicly held corporation that produces and marts key down the stairs the Jones-Blair grade allude. A bounteous arrogate of the maturing winder industry, $10 billion, is established from architectural covers and the one- stratum growing rate is anticipate to equal that of general inflation in the coming course of studys. Dollar gross revenue build add-on at an average annual rate of 4 part per year over the past decade. The play along has been genuinely successful in maintaining their allowance distinguishs even with increased look and development material and outwear greets. A small number of regional paint manufacturers engage competed successfully against pain t manufacturer that distribute their reapings theme. Major producers of paint for the architectural coatings fragments account for 60 per centum of sales in the architectural coating segments. The disputation is pretty stiff when it comes to private store brands or specialty stores. even so with the growing success of Jones Blair it is non plentiful and in order to r each(prenominal) their stage business goals at a time when growth is nonexistent, Jones Blair must take immediate activity and surge their sales team and dislodge their sales energies. Mass merchandisers pose a serious threat to the future achieved sales levels of Jones Blair Company. Jones Blair Company is circulating(prenominal)ly looking for solutions for gaining much consumers by means of marketing their architectural coatings and sundries in the southwest unify States. Market partitioningThe market of Jones Blair peck be divide to deuce groups Dallas-Fort Worth nation and Non Dallas-Fort Worth. Among these two atomic number 18as, there are thecontractors, the DIY ho rehearseholds and the paid painters. From class period case, I gathered that the estimated dollar intensity level of architectural paint and allied produces change in Jones Blairs 50 countries serve up area in 2004 was $80 cardinal (excluding contractor sales). The DFW are accounted for 60 percent or $48 million, while the be 40 percent or $32 million is sold in the separate areas outside the DFW area. 70 percent of the DFW sales are accounted for by do-it-yourselfers while the some some 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 depict 2). This would means the percentage of the market segment is as following DFW ($48 millions) Non-DFW ($32 millions)Professional Painters 70% ($33.6 millions) 30% ($9.6 millions) DIY households 30% ($14.4 millions1) 70% ($22.4 millions)Plan of ActionThe higher-ranking management team has examined the paint industry, specially the architectural paint markets, and they have yet to come to a conclusion. The president of Jones Blair, Mr. black lovage Barrett, is planning to have a nonher face-off with his executive team where they go forth each present their suggestions and he has exclaimed a finding must be made. RecommendationsJones Blair executives have authentic four alternatives to relieve the connections marketing problem (which are depict as follows) a) Cut harm by 20%b) take place supererogatory $350,000 on corporate advertizingc) Hire one surplus sales exampled) Do cipher (Status Quo)a) Cut wrong by 20%Compared to other leading national brands, Jones Blair is priced relatively high. This is based on the super high quality and performance of the products. By cutting price, Jones Blair go out be adapted to stay competitive in price with other the ot her products on the market. b) Spend an additive$350,000 on corporate advertizementThis nones testament be use to increase cognisance. Most of it volition be spent on television ads gulled in the main in the Dallas Fort Worth (DFW) area at the do-it-yourself market. Brand throw is important to consumers and television ads are a great way to get their name out. Most of this population is aware of this product and only some of this population would leveraging it. c) Hire an redundant sales reppresentativeHiring an additive sales representative result resign Jones Blair to focus on cutting markets. These markets should be outside of the DFW area and allow for immature cities and states to recognize Jones Blair. d) Do Nothing (Status Quo)Since Jones Blair has continually seen profits each year they should maintain their current marketing objectives and do nothing. Jones Blair has done an excellent job of this in the past by watching the margins and coercive costs. By d oing nothing, the high society will not make to spend any additional money. e)Alternative Recommendationsa.) Cut price by 20%In 2004 architectural product sales volume was $12,000,000. Jones Blair has a current net profit of $1.14 million, and to stay moneymaking it must maintain this amount. $12,000,000*.35= $4,200,000If Jones Blair reduced its price by 20% the contribution margin will drop to 15%. ($12,000,000)*.15 = ($1,800,000)If the community drops the price by 20% the company will see a 33% increase in sales. ($1,800,000 * .33) =$4,200,000 ($594,000)STRENGTHS Jones Blair will take more products, because it will be up to(p) to compete with its competitors in price. WEAKNESSES May not be able to sell plentiful in volume to cover cost of goods sold. If the price is more competitive with other companies it may not be looked at as superior quality. b.) Spend additional $350,000 on corporate publicise.The marketing section proposes a television campaign targeted at the DFW do-it-yourself market. This will cost an additional $350,000, but will significantly increase the awareness of Jones Blair products. Research has proven that brand awareness is a major constituent in purchase decisions. If Jones Blair does agree to use this method the company will need to make at least $122,500 to hurly burly even and cover the cost of this sensitive promotion ($350,000/.35= $122,500). Most of the DFW consumers are do-it-yourselfers, so a television ad will be beneficial in this market. STRENGTHS Consumers will become aware of Jones Blair. Do-it-yourselfers account for 70% of volume in the DFW area. publicise is proven to increase awareness, and awareness is a critical factor in consumer purchasing decisions. WEAKNESSES Almost two-baser current advertising costs ($360,000+$350,000). This recommendation requires a large budget and has little guarantee of results because almost 75% of the viewing audience does not buy paint. Consumer buying process shows househ old buyers choose a store first, not a brand therefore, cooperative ad is required, not brand advertising. c.) Hire an additional sales representative.Sales outside of our foundation territory DFW are crucial for maintaining competition in the market. A sales rep would cost the company $60,000 a year. So the company would need ($60,000/.35) about $171,428.58 of additional profits to cover this. 120 retailers are located outside of DFW. If we look at our current dollar amount required to stay paid $4,200,000 and divide that by stores$4,200,000/120= $35,000 So $171,428.58/$35,000 = about 5. So the company would require a new sales rep to acquire at least 5 new accounts a year to breakeven. STRENGTHS New clients may act upon more opportunity to the table through word of mouth. Doesnt cost the company a significant amount of money to do. WEAKNESSES Does not promise new clients. Its only concentrating on most juicy market, DFW. d.) Do nothing (Status Quo)Jones Blair will not change any of their marketing strategies. STRENGTHS Does not cost the company any spear carrier money to maintain current objectives. Jones Blair is presently making money, why change? WEAKNESSES Jones Blair will not always be profitable in the future the cost of research and development will only increase. necessarily to stay competitive in the market and not looking into long bourne vision of the company.Final recommendationJones Blair call for to look into the future and envision the company competing with competitors. Its best bet is to focus on the consumers in its main mansion market, DFW. If they can gain awareness of the home market, earlier or later word will spread throughout all of their markets and business will boom. Making a $1,000,000 minimal income looks like pocket change. Right outright Jones Blair can afford this and still have a $400,000 profit. Target MarketThe target market for Jones Blair is consumers in its main home market, DFW. Specifically the consumers i n their architectural coatings and sundries arena. marketing MixPromotion Jones Blair Company advertising can potentially boost their job bringing more awareness to the DIY segment in the southwesterly area of the United States. This was essentially the objective of the executive skirmish and advertising is proven to increase awareness, and awareness is a critical factor in most consumer purchasing decisions.Place The Company distributes its product through 200 indie paint stores, lumber yards and hardware outlets. With the spread out advertisements Jones Blair can expand to their marketing stretch connecting with more consumers, especially in the southwestern area of the US. Price Almost doubling current advertising costs ($360,000+$350,000), advertising would be the best way to clear the masses in the regions that are deprivation unnoticed. Product Architectural coatings and sundries supplied throughout the southwestern United States.