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... displayed 300 characters
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Spend an additional $350,000 on corporate advertising
B. Cut prices by 20% on all paint products
C. Add a new representative to acquire more accounts in non-DFW areas
D. Do nothing
Recommendation
Jones Blair Company should actively pursue the non-DFW do-it-yourself and professional markets by hiring an additional sales rep whose sole responsibility is to develop new accounts... displayed 300 characters
