Business / Paint Industry

Paint Industry

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Autor:  anton  21 April 2011
Tags:  Industry
Words: 471   |   Pages: 2
Views: 246

1. How is the architectural paint industry to be characterized?

o The industry is matured, i.e. the sales are high and no longer growing

o Competition is fierce as the market is very profitable

o Prices tend to drop due to proliferation of competing products

o 43% of total industry dollar sales account to architectural painting = 559 Million

o Growth amounts to 1-2%

o 50% of brands in this industry are private brands

o The market is dominated by do it yourself shops and home centres

o Still specialty stores manage to surveive (36% of total sales within the market).

o There are currently 600 companies on the market, whereas this no. is declining (2% - 3% yearly)

2. How might one segment Jones BlairЎ¦s market area

o Small company

o Specific paint, special formulation

o Mid- to high income customers who value quality

o specialists

o focusing on the DFW area (450 companies)

o Distribution through 200 independent paint stores, lumberyards, and hardware outlets

o 40% of outlets in the DFW area (11 country)

o 60% in the other 39 countries

o 14 stores in the DFW carry Jones Blair exclusively

3. Which segments represent opportunities for Jones Blair

o non-metropolitan areas

o non DFW areas, where 70% went to do it yourselfers

o professional painters, due to their high quality goods and services

o do it yourselfers are interesting, hence the trend is upward sloping

4. What is Jones Blair competitive position in this market area (find out what their market share is)?

o Total sales in 1997 = $80Mil. (whereas 60% out of DFW)

o Market share = 6.9%

5. Which segment or segments should jones Blair pursue

o Blair should pursue the non-metropolitan areas as total sales in the DFW are declinging (see p. 83, Exibit 3). Whereas non DFW areas are growing

o Focus on professionals

o Focus on Accessories (to make margin)

6. What strategy should Jones Blair adopt to reach the segments sought?

o Cut prices a little bit to reduce cost

The company

- Sales through architectural paint in

- 1997: $12 Mil.

- Profit: 1,14Mil

- i.e. cost: 95% i.e 60% of net sales

- The company spends 3% (360,000) of net sales on advertising (55% of this together with retail accounts).

o Distribution through 200 independent paint stores, lumberyards, and hardware outlets

o 40% of outlets in the DFW area (11 country)

o 60% in the other 39 countries

o 14 stores in the DFW carry Jones Blair exclusively

The company is focusing on the DFW area, whereas 60% of their sales are generated in the non DFW areas

I donЎ¦t agree with VP Alex, bolstering DFW area will not help, as market is declining

„« An increase of $350,000 would mean to increase marketing expenditure by nearly 100% up to ca. 6% of net sales. Moreover 75% of buyers do not buy due to marketing

„« Nevertheless, as the consumer first chooses the shop an then the brand, they should focus on the outlets and branding within these outlets rather than advertising in tvs.

I agree partially with VP of operations:

„« DFW is to narrow

„« Do it yourselfer paint market is important

„« Cutting price by 20% is to harsh, due to high costs

I agree partially with VP Sales

Non DFW area

Account penetration is too low (only 15%)

Add sales rep. ($60,000)

VP Finance

DonЎ¦t agree



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