Jones Blair

Jones Blair
By: Adam Aldrete, Angela Davis, Jaimee Robinson, Mi Lin

U.S. Paint Industry
Three Segments of Industry:
Architectural Coatings
General purpose paints and varnishes used on residential and commercial structures
OEM Coatings
Used for durable goods such as automobiles, appliances, and industrial machinery
Special-Purpose Coatings
Used for special applications such as bridges, marine applications, and highway and traffic markings

Jones Blair
Headquarters: Dallas, Texas
Service Area:
Texas, Oklahoma, New Mexico, and Louisiana.
Dallas-Fort worth (DFW) area
Competition:
600 paint companies in the US
1999:
$12 million net sales of Jones Blair architectural paint and allied products

Jones Blair
Distribution:
200 independent paint stores, lumberyards, and hardware outlets.
40% of outlets are in DFW area
Promotion:
8 sales representatives
Salary: $60,000
1% commission on sales
3% of net sales
advertising & sales promotion efforts

What do you think Jones Blair’s problem is?

Problem
Where and how does Jones-Blair Company deploy corporate marketing efforts among the various architectural paint coatings markets in their service area
Should they target: Professionals or Do-it-yourselfers?
Where should they target: Dallas Fort Worth or surrounding areas?
How are they going to accomplish this?

Internal Strengths
Experience – Founded in 1928
Strong relationships between sales
representatives and retail stores
High quality
Sell to both professionals and DIYers
Cooperative advertising with retailers
Motivated, determined and passionate
A lot of research available
Low Break Even - Excel

Internal Weaknesses
Only 3% of sales goes to advertising
Ads only reach and influence 25% of target
COGS is 60% of sales
Only 8 sales representatives
Narrow market penetration with sales reps
No exclusive rights with retailers
Highest price in market

External Opportunities
Market Growth: 1-2% per year
Distributed to 200 of the 1,000 retail outlets in the area
40% of these retailers are in rural areas
DIY painters first choose a retail outlet for paint and sundries then choose a paint brand.
Pro-painters are frequent buyers and look for paint that is high quality, durable and easy to clean up
The average dollar paint purchase per purchase occasion: $74.00. Average of $12.00 on sundry
Market Growth

External Threats
600 different competitors
Competition is spending more on advertising
Competition is less expensive
Major in-house retailers have little knowledge
DIYers purchase paint once every four years and get what’s convenient and inexpensive
Contractors want paint for the lowest price.
Demand effected by substitutes, long lasting products and VOC regulations

Total Market

Jones-Blair Market

Market Share

What do you think Jones Blair’s distinctive competencies are?
Hint: There are 2!

Distinctive Competency
Quality
Best on the Market
1 Coat Coverage
Mildew & Stain Resistant
Pleasant Fragrance
1000’s of Colors
Good fit with professional painters
Service
Sales Representatives
Well Liked
Helpful
Professional
Knowledgeable
1st name basis with customers
Discuss both Business & Family
Run the Store
Good fit with rural area

Create an Ad
Best ad wins a tasty treat
Inspirational Video

Alternatives
Increase advertising dollars by $350,000 and use it for TV ads
Have an overall 20% price cut
Add one more sales representative
Continue to guard margins and control costs
President Barrett’s suggestions
Ad dollars used for print media instead of TV
40% price cut to attract contractors

Which Alternative Do You Think Is The Best?

VP of Advertising
Direct efforts to Dallas Fort Worth DIY
Increase awareness to 30 %
Advertising Increase of $350,000
Television Coverage in 15 Counties

Pros/Cons
Pros
Low added costs
Extra $1 million in BE
Break Even: $3,400,000
Increased Awareness
Cons
Less Focused
75% of audience is not buying paint

VP of Operation
Advertising isn’t right
Need to be competitive in DIY
Consumers are Price Sensitive
Cut Price by 20%

Pros/Cons
Pros
Competitive Price
Gain Market Share
In DIY Sectors
Cons
Huge break even
Lowers perception of quality

Vice President of Sales
Target: Non-DFW areas
Where ½ of the sales and most dealers exist right now
Solution: Add another sales rep
There are already 8
This rep would develop new retail account leads and call on professional painters to solicit their business through our dealers
Cost to add another dealer is $60,000

Pros/Cons
Pros
Motivated to inspire team
Potential for success
Large Market
Not affected too much
Cons
Risky
Sales reps aren’t that effective

Vice President of Finance
Keep everything the same
Continue to guard margins and control costs

Pros/Cons
Pros
Not Risky
Keep doing what company does best
Cons
Doesn’t solve the problem
Not a lot of results will come

President Barrett
40% price cut
Redirect Advertising
Newspaper & Catalogs
Focus on Rural

Pros/Cons
Pros
Attractive for contractors
More Focused Advertising
Cons
Increase cost for competitive bidding
Constant Loss
Break Even: -$14,280,000

Recommendation
VP of Sales
Extra Sales Associate
$60,000 annually
Focus on Rural Pro

Why Rural Professional
Distinctive Competency
Good Service & High Quality
Good Fit
On a 1st name basis with store owners
Control 45% of the market
Best “Bang for the Buck”

Implementation
Hire 1 additional Representative – NOW!
Sales Training
Kick their butts into gear
Clarify Roles
New focus: Rural Professional Painters
Increase personal sales by 5%
Projected Sales & New Break Even

Recap
Focus on Rural Professionals
Additional Staff
57.5% Sales Increase
Annual Savings of $969,730
Almost $1million!!!
Reinvest
Growth?
An Offer You Can’t Refuse!!!

Questions?
Comments? Concerns?

Jones Blair

by AdamAldrete on Mar 30, 2010

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