Jones.Blair Company produces and markets architectural paints and coatings in the US and worldwide. It faces increasing competition and rising research and development costs. The document analyzes alternatives for marketing Jones.Blair's products in the important southwestern US market. The alternatives include increasing advertising spending, reducing prices, hiring a new sales representative, or making no changes. The recommendation is to increase advertising and focus on the current southwestern market, as Jones.Blair can afford the costs and still be profitable.

1. JONES.BLAIR CASE ANALYSIS – By Rohit Deo, BLP004
BACKGROUND AND PROBLEM DEFINITION : US paint industry can be categorized into three
segments - 1) Architectural coatings – consists of general purpose paints and varnishes used on residential
and institutional structures. 2) Original equipment manufacturing (OEM) coatings – produced as per to
industrial buyer’s specification and applied to original equipment during manufacturing. 3) Special
purpose coatings – used for special applications or extreme conditions. Jones.Blair Company produces
and markets architectural paints as well as OEM throughout US and worldwide. Due to stringent
regulations of Environmental Protection Agency, paints manufacturing companies had to invest a lot in
research and development (R&D) of new solutions which will reduce Volatile Organic Compounds.
Jones.Blair mainly targets the customers seeking high end product. They strive to produce best quality of
coatings. Because of increasing R&D costs Jones.Blair have to keep their product’s prices high. They
cater mainly to do-it-yourself customers which is approximately 50% of sales and to professional painters
which comes near to 25% of sales. Another effect of rising R&D costs is that their sales volume remained
same during past year although sales has increased. Southwestern America is the potential market for
architectural paints. But now Jones.Blair Company is facing the stiff competition in this region and is
currently looking for viable solutions for marketing their architectural coatings and sundries.
MARKET AND INDUSTRY ANALYSIS: As do-it-yourself customers comprises major portion of
market in southwestern America, their behavior must be analyzed. Advertising and brand image are the
area of attention in such market. They distribute paints and sundries through around 200 stores.
Jones.Blair spends around 3% of net sales on advertising and sale efforts i.e., 3% of $12,000,000 =
$360,000. Out of which 55% i.e., $198,000 they spend on cooperative advertising programs. To find the
solutions for marketing their architectural coatings and sundries, the management executives have
suggested some alternatives.
ALTERNATIVES: a) Increase in corporate brand advertising up to $350,000 in addition to what
Company is spending now. Current contribution margin is 35%, to recover this cost of promotion
company needs to achieve {$350,000*(35/100)} =$1,000,000 as breakeven point. It will almost double
the cost of advertising ($360,000+$350,000). The only highlight which comes out of this alternative is
consumer will become aware of Jones.Blair and it may contribute in increase in sales.
b) Reduce the price by 20% - Jones.Blair Company is making profit of around $1.14 million, to sustain
this value they have to produce more if cost is getting reduced by 20%. That implies the production cost
and operation cost will shoot up. Reduction will also affect the contribution margin which will come
down to 15%. The only pro can be found out as company will be able to sell more products in market.
c) Hire an additional sales rep. – The new sales rep will be focusing on new markets outside southwestern
America and opening the gates of new markets for Jones.Blair.A sales rep costs $60,000 a year to the
company, so additional {$60,000*(35/100)} ~ $171450 profits to cover this extra sales rep cost. It will be
able to bring new opportunities but we will not be concentrating on existing more profitable market.
d) Not to change anything – company’s future will not be profitable as R&D cost is always going to
increase, and to sustain in the current market at current selling price the profit margin will decrease in
future. They will not be able to stay competitive.
RECOMMENDATION: From above alternatives I think company needs to invest in marketing and
advertising in market to capture the attention of majority of target consumers. It is good alternative to be

2. focused in current market which is southwestern America. As Jones.Blair can afford to achieve
$1,000,000 as break even and still be profitable.