Background and Problem Definition
Jones Blair Company is a Dallas, Texas based company and regional paint manufacturer. They market their paints and sundry items in various counties, with the largest being in the DFW southwestern area. Jones Blair Company annual sales volume in the DFW area is $48 million of their total $80 million in 2004. Competition has steadily increased throughout the DFW area, as well as other counties, and they need to come up with a plan to remain competitive before the peak season begins.
Market and Industry Analysis
Half of architectural coatings dollar sales come from do-it-yourselfer painters. They represent the largest section of architectural coatings ...view middle of the document...
Next they decide on a store and then the product. The paint industry is a maturing industry that had sales in 2004 of $16 billion. Architectural coatings or shelf goods in particular have long-term sales growth projected from 1 to 2 percent per year. The paint market contains direct competition between the companies involved. Also, the paint industry is one of an oligopoly since there are a small number of sellers. This is an example of an imperfect competition.
Evaluation of Alternative Courses of Action
The first course of action recommended is to increase advertising expenditures by $350,000. This is the result of exhibit 5. This exhibit gives the percentage of the DFW population that is aware of paint brands and whom also purchased them in the last 12 months. Jones Blair's brand awareness is particularly low and has room for improvement. They are the lowest as compared to mass merchandiser brands and National paints brands. This point is particularly important when stores carry multiple brands and consumers see a brand that they are familiar with. The television coverage will also carry past the DFW area and into other counties that Jones Blair may or may not market to already. This is an excellent idea to increase brand awareness in new and previous customers. The second idea is to cut prices by 20...