Jones-Blair Case
Problem Statement:
Where and how to deploy corporate marketing efforts among carious architectural paint coatings segments served by JBC in the southwestern USA? Will JBC pursue the Non-DFW DIY or DWF Professionals as to increasing advertising, reducing prices and or add more sales reps.
SWOT Analysis:
Strength | Weakness |
■ Privately held corporation | ■ DFW dollar volume is flat, slightly declining |
■ Non DFW DIY market segment is increasing | ■ Slow sales growth of 4% increased over the last decade |
■ Paint gallon age remained stable over last 5 yrs | ■ Highest priced paint in the service area |
■ Sales reps has a great reputation w/customers | |
Opportunity | Threats |
■ Competition is increasing at both Mfg and retail levels | ■ Increased competition for substitute products: aluminum, vinyl siding, interior wall covering and paneling |
■ Increasing demand for paint sundries due to a trend toward DIY consumers | ■ Paint is viewed as a durable good and it is infrequently purchased |
■ Gradual overall volume growth of 1 to 2% annually | ■ Mature industry |
| ■ Reduced emissions of volatile organic compounds (VOC's) form paint and to limit the consumption of solvent |
Critical Issues:
1) V.P. of Finance must recover 935% on all expenses in year one.
B/E = $350,000.00 (Incremental Expense)= $1,000,000.00
.35 (Contribution Margin)
B/E = $350,000.00 = $1,372, 549.00
(.35-.095)
2) Quality of paint: There aren’t any issues with the quality of the paint. The issue maybe with the awareness of JBC brands. JBC brand awareness is 25% of customers are aware of the JBC brands; however 50% are aware of the mass merchandiser brands. If JBC would spend the additional $350K in advertising which links to awareness of the brand name. Brand names are important to the consumers because of the advertising they see.
3) Increase Market Share: Market share can be increased...