John Blair Case Study

JONES BLAIR CASE STUDY

1. Jones Blair wants to increase its sales and has four approaches suggested by its management. The two points that they have to consider before they come to a conclusion are as mentioned below.

• The sales representatives are first on the list by the customers. They are having a good relation with the retailers. But since there are only 8 of them it’s better to hire more representatives to capture more market.
• The company has good research and high quality paints available. Increasing the awareness in the customers about the quality and ease of use the company can increase its sales.

2. Jones Blair is a paint and sundry company which has its headquarters at Dallas. It distributes its products in Texas, Oklahoma, New Mexico and Louisiana. Dallas-Fort Worth is its major area of business with 40% of its total sales. Jones Blair is a high premium paint producer. Among the four segments mentioned, the urban consumer segment is the worst fit.

The market share of urban consumer is 5.4% of the total sales which is accounting to 1.8 million dollars, is the least sales seen in Jones Blair annual sales. The sales forecast from 1995 to 1999 shows there is a decline in the urban sales but an increase in the rural area. The urban sales figure for the year 1995 and 1999 are 50.9 Million Dollars and 48 Million Dollars respectively. The rural sales are 24.8 Million Dollars in 1995 and 32 Million Dollars in 1999. There is a decline of 5.6% in the sales of consumer segment from 1995 to 1999.

The consumer segment is ‘Do-It-Yourself’ product line. The behavior of the consumers can be described in 4 stages. First, they decide on the project i.e., the interior or exterior of the house. Second, he gathers information about the product from his friends, retailers or through his research. Third, he selects the best dealer available for shopping (46% of the time they buy from different stores than earlier purchase). Finally, he decides the brand based on brand reputation, quality, ease of use and price. The analysis shows that customers like to buy different products every time.

Many competitors like Sears, Kmart, Sherwin-Williams and Home Depot have opened many outlets. They are giving a tough competition in all aspects. A research done by Jones Blair said that “1000 of these outlets now operate in 50-county service area and DFW houses 450 of them”. These brands have priced their products very aggressively to gain the major market segment. The mass merchandise controls about 50% of the Do-It-Yourselfers paint market in the DFW area with an attractive price.

The DFW retailers are having two or three line products along with Jones Blair products except for 14 outlets. Jones Blair products are the premium segment products in all the retail outlets. The analysis on the sales shows that there is a decline in the retail store sales in DFW compared to the retail stores in non-DFW due to the multiple line products.

3.

a) 350000 spend for advertising:

Total in sales required =  4200000  + 350000

Contribution = 35%

Total sales required = (4200000 + 350000) / 0.35

                = 13,000,000

Therefore 1 Million Dollars increase is required from the existing sales to maintain the previous contribution.

b) 20% price cut:

Existing contribution = 35%

Price cut = 20%

Contribution = 35 – 20 = 15%

Total sales required =  4200000 / 0.15 = 28000000

So an additional sales of $16,000,000 is required

c) Hire a sales representative: