Jones Blair

Essay text:

sales of architectural paint coatings and sundries are estimated at $10 billion plus in 1999 Architectural coatings are considered to b a mature market with long-term sales growth projected in the range of 1-2% per year Demand is affected by 2 factors: Competition fro alternatives such as aluminum and vinyl Higher quality products have reduced the frequency for repainting The trend toward do-it-yourselfers may help increase demand Growing pressure from the EPA to reduce emissions of volatile organic compounds (VOCs) and limit consumption of solvents Many mergers and acquisitions are taking place The are currently 600 paint companies ? 40% fewer companies than in 1975 The rate of decline is 2-3% per year 7 major producers of paint account for 60% of sales in architectural coatings 50% of architectural coatings are sold under private, controlled, and store brands Specialty paint stores account for 36% of paint sales 50% of architectural coatings dollar sales is accounted for by DIY painters Professional painter purchases account for 25% of dollar sales The remainder is from government, export and contractor sales 60% of architectural sales are for interior paints 38% of sales for exterior paints 1 in 4 households purchase interior paint in any given year The average dollar paint purchase per purchase occasion is $74 The average dollar sundry is $12 Paint is becoming a commodity Jones Blair Company Service Area Jones Blair markets paints to 50 counties ? 11 counties are in DFW Competition at retail level and manufacturing level are increasing The estimates dollar volume of architectural paint and allied products sold in Jones Blair 50-county service area in 1999 was $80 million DFW was estimated to account for 60% of this figure DIY household buyers account for 70% of non-contractor-related volume in DFW 90% of non-contractor-related volume is in other areas Jones Blair Company A privately held corporation Sales volume in 1999 was $12 million Net profits before taxes were $1,140,000 Sales have increased at an average annual rate of 4% per year over past decade 1999 COGS was 60% of sales The company distributes it products through 200 independent paint stores 40% of outlets are located in the 11-county DFW area The other 39 counties are in the service area Sales are distributed evenly between DFW and non-DFW accounts They employ 8 sales representatives 3% of net sales are spent on advertising and sales promotions Approximately 55% of advertising/sales promotions dollars are allocated to cooperative advertising programs with retail accounts Problem Where and how to deploy corporate marketing efforts among the various architectural paint coatings markets served by the company...