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Transcript of Jones Blair
![Page 1: Jones Blair](https://reader034.fdocuments.in/reader034/viewer/2022042507/548f48acb4795904298b492b/html5/thumbnails/1.jpg)
Jones Blair
By: Adam Aldrete, Angela Davis, Jaimee Robinson, Mi Lin
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U.S. Paint IndustrySegment Architectural Coatings Original Equipment
Manufacturing CoatingsSpecial-Purpose
Coatings% of total industry
dollar sales
43% 35% 22%
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
Three Segments of Industry:
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Jones Blair Headquarters: Dallas, Texas Service Area:
1. Texas, Oklahoma, New Mexico, and Louisiana.
2. 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
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Jones BlairDistribution:
200 independent paint stores, lumberyards, and hardware outlets.
40% of outlets are in DFW areaPromotion:
8 sales representativesSalary: $60,000 1% commission on sales
3% of net sales advertising & sales
promotion efforts
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What do you think Jones Blair’s problem is?
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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?
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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 Strengths
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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
Internal Weaknesses
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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 sundryMarket Growth
2000 2001 2002 2003$80,000,000 $80,800,000 $81,608,000 $82,424,080
External Opportunities
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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
External Threats
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Total Market$80 Million Net Sales
Professional DIY
Urban$48,000,000
60%
$14,400,00030%
$33,600,00070%
Rural $32,000,000
40%
$3,200,00010%
$28,800,00090%
$14,400,
000
$33,600,
000
$3,200,0
00
$28,800,
000
Total Market
Urban ProfessionalUrban DIYRural ProfessionalRural DIY
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Jones-Blair Market$12 Million Net Sales
Professional DIY
Urban$7,200,000
60%
$5,040,00070%
$2,160,00030%
Rural $4,800,000
40%
$1,440,00030%
$3,360,00070%
$5,040,000
$2,160,000
$1,440,000
$3,360,000
Jones Blair's Market
Urban ProfessionalUrban DIYRural ProfessionalRural DIY
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Market ShareProfessional DIY
Urban 35% 6%
Rural 45% 12%
35%
6%45%
12%
Jones Blair Market Share
Urban ProfessionalUrban DIYRural ProfessionalRural DIY
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What do you think Jones Blair’s distinctive
competencies are?Hint: There are 2!
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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
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Create an Ad
Best ad wins a tasty treat
Inspirational Video
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Alternatives
1. Increase advertising dollars by $350,000 and use it for TV ads
2. Have an overall 20% price cut3. Add one more sales representative4. Continue to guard margins and control costs5. President Barrett’s suggestions
1. Ad dollars used for print media instead of TV2. 40% price cut to attract contractors
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Which Alternative Do You Think Is The Best?
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VP of Advertising
Direct efforts to Dallas Fort Worth DIY
Increase awareness to 30 %
Advertising Increase of $350,000
Television Coverage in 15 Counties
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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
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VP of Operation
Advertising isn’t right Need to be competitive
in DIY Consumers are Price
Sensitive Cut Price by 20%
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Pros/Cons
Pros Competitive Price Gain Market Share
In DIY Sectors
Cons Break Even: $4,480,000
Huge break even Lowers perception of
quality
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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
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Pros/Cons
Pros Motivated to inspire
team Potential for success
Large Market Break Even: $2,571,429
Not affected too much
Cons Risky Sales reps aren’t that
effective
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Vice President of Finance
Keep everything the same Continue to guard
margins and control costs
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Pros/Cons
Pros Not Risky Keep doing what
company does best Cons
Doesn’t solve the problem
Not a lot of results will come
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President Barrett
40% price cut Redirect Advertising
Newspaper & Catalogs Focus on Rural
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Pros/Cons
Pros Attractive for contractors More Focused Advertising
Cons Increase cost for
competitive bidding Constant Loss Break Even: -$14,280,000
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1
-15000000
-10000000
-5000000
0
5000000
Normal
Vp of Sales
Vp of Advertising
Vp of Operations
President & CEO
2400000
2571428.57142857
3400000
4480000
-14280000
Break Even Analysis
NormalVp of SalesVp of AdvertisingVp of OperationsPresident & CEOAxis Title
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Recommendation
VP of Sales Extra Sales Associate $60,000 annually Focus on Rural Pro
35%
6%45%
12%
Jones Blair Market Share
Urban ProfessionalUrban DIYRural ProfessionalRural DIY
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Why Rural Professional
Distinctive Competency Good Service & High Quality
Good Fit On a 1st name basis with store owners
Control 45% of the marketBest “Bang for the Buck”
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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
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Recap
Focus on Rural ProfessionalsAdditional Staff57.5% Sales IncreaseAnnual Savings of $969,730
Almost $1million!!! Reinvest Growth?
An Offer You Can’t Refuse!!!
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Questions?
Comments? Concerns?