Marketing

URL for the electronic course textbook: https://spaces.hightail.com/receive/EHeTBDCcLC

 

Access Code: 28C07D71C602

 

 

Jones Blair Company case is from page 100 ~ 108

 

Please read the case scenario first and create a case brief based on the case pointers doc file

Branching Paths: Jones Blair Paint Company

Background and Problem Statement

Jones Blair is a private firm that specializes in plant manufacturing and marketing architectural paint coatings under its subsidiary brand Jones Blair.The company makes high-quality products and has a wide range of coats that appeal to professional painters and contractors and do-it-your-selfers based on quality and price. It also operates an extensive network of original equipment manufacturing departments.  According to the senior management team Jones Blair it is becoming difficult to remain competitive due to mass merchandising of high-quality paints at affordable prices. In this light, Jones Blair faces a pricing issue due to its high premium prices in the Dallas, Fort Worth area.

Market and Industry Analysis

In Jones Blair, Do-it-yourselfers represent 50 % of the architectural coatings revenue while professional painters make up 25 %, and the 25% are government purchases. The architectural coating market is matured and It is expected to grow by 1 or 2% per annum, with the industry sales expected to skyrocket to 12billion. The market segmentation in Jones Blair varies. Do it yourself have first choice is paint stores and brands as second.  Most professional painters who look for quality products while doing –it yourself are motivated by the price range. The ongoing rise in mergers and acquisitions has caused a 40% decline in paint manufacturing companies (Kohli, 2021). However, the company has maintained its competitive edge by offering high-quality brands with unique formulations.  Jones Blair has positioned its brand as a major supplier of more than 40% of the 200 retail stores, hardware, and lumberyard in the DFW area. Jones Blair holds a higher selling power due to its ability to manoeuvre the competitive market despite all the arising governmental regulations to limit the emission of harmful substances in the atmosphere. In this light, the corporation has a high affinity for research and development, which fuels its technological advances to maintain a competitive edge in the paint market.

Evaluation of Alternative Courses of Action

After an in-depth review of the current pricing issues at Jones Blair, it is pertinent to derive solutions to restore its competitive power. The first alternative is to  reevaluate the budgetary costs to establish the target needed to cover the cost and profit. Theoretically, this will include a 20 per cent cut on the selling price.

Furthermore, the company can initiate an Ad campaign costing 3,50000dollars that would hugely benefit 70% of the DFW customers who are Do it yourselfers. Thirdly the market division can devise a working formula to increase sales representatives in retail distribution. Lastly the company can retain its t break even share currently 35%. At the moment the company accrues $1,140,000 profit. However the market rapidly changing and there is continuos influx of new competitors. As a result the company need to put effort to avoid market share lose to other

Conclusion

The best strategy for Jones Blair is to tap into the non-DFW household and professional market. This approach will help the company maintain profit margins for the company. In essence, this strategy opens up the company to new prospects to restore the company’s competitive power. In conclusion, Jones Blair is a market share leader in the paint industry in the US and has the potential to grow into multimillion company.  market share leader in the paint industry in the US.

ReferenceIn conclusion, Jones Blair is a market share leader in the paint industry in the US

Kohli. (2021). Marketing Strategy. California: California State University Fullerton.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix

If Blair reduces prices by 20% the contribution margin goes down to 15%

New contribution margin=35 %( current contribution margin)-20 %( price cut)

=15%

With new contribution margin Jones Blair sales add up to

($12, 0000, 000+X)*13%=$4,200,000

$1,800,000=0.15X=$4,200,000

X=16,000,000(New Sales Volume)

 

$16,000,000-$12,000,000 =4,000,000(Sales Increase Amount)

$4,000,000/$12,000,000 = 0.33

=33 %( Sales Increase)

Exhibit 1

 

 

 

 

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