Jones Blair Company

Introduction

The U.S. paint industry is very large and competition among the coating company is quite intense. Jones Blair Company markets its paint and sundry items in over 50 countries and in order to know which the customers of Jones Blair Company are, we have to break down and build up the potential buyers into groups to structure the market.

Market Segmentation

The market of Jones Blair can be divided to two groups: Dallas-Fort Worth area and Non Dallas-Fort Worth. Among these two areas, we have got the contractor, professional painter and DIY household but the number of contractor is so minimal so we do not focus on this. From the case, we can get the estimated dollar volume of architectural paint and allied products sold in Jones Blair’s 50 countries service area in 1995 was $80 millions; 40% of its outlets are located in the 11-country DFW area and the remaining are in the other 39 countries. So, the estimated dollar volume for the DFW area is $48 millions and for the non-DFW area is $32 millions. Besides, 70% of its sales through the DFW dealers went to the professional painter, while 70% of sales through the non-DFW outlets went to DIY. It means the percentage of the market segment is as following:

DFW ($48 millions) Non-DFW ($32 millions)

Professional Painters 70% ($33.6 millions) 30% ($9.6 millions)

DIY households 30% ($14.4 millions1) 70% ($22.4 millions)

Market pursued

Professional In Downtown

Professional painters in downtown area usually put the focus on the quality of the product rather than the price when choosing suitable painting products. Those professionals choosing the painting products with better quality are because of the outcome of painting may affect their reputation directly. In order to create a better reputation and maintain the high standard quality of apartments furbishing, high-end painting products using is a must, therefore, they have to adopt the inevitable burden over their shoulders by increasing their expenditures. This segment reveals that price is not the first element the customers to consider, but the quality.

Family In Downtown

Customers in this segment make difficulties to the producers since the families are not quality-oriented customers as the professional painters alike. This type of customers in this segment thinks highly of price, therefore, price floating may cause a more conspicuous influence under this segment. As regarding to the importance of price setting in this market area, price becomes the key element of creating the most competitive advantage for this market segment.

Strategy Jones Blair should adopt to reach the segments sought

After the meeting, the senior management executives of Jones Blair Company had made four valid alternatives. The Pros and cons for each of the alternatives are shown below.

A) Spending additional $350,000 on corporate advertising in the DFW do-it-yourselfer market

Pros: Firstly, as we can see from the DFW consumer advertising awareness indicator in the case study, the do-it-yourselfers are in the majority for the sales. If Jones Blair does advertise to them may enhance the awareness level and this can increase the sales, when emphasis on television, which will reach non-DFW consumers as well. Secondly, although Jones Blair’s awareness is lower than national paint brand’s and mass merchandiser brand’s awareness, advertising can really be a tool to facilitate brand recognition and awareness that can have a subtle influence on the consumers’ purchase decision. The last but not the least, advertising can affect the consumers’ buying process. In those stores carrying multiples brands, brand name is also important to consumers because they do think about paint they have seen advertised when choosing a brand.

Cons: As a large number of do-it-yourselfers choose a store before selecting a brand, so that Jones Blair should focus on cooperative advertising rather than corporate brand advertising. Also, only apply this to the DFW area alone is too narrow. Moreover, the research indicated that about 75 percent of the audience does not buy paint, thus using large budget for this strategy cannot guarantee of the results. Originally, the company spends approximately 3 percent of net sales ($12million) on advertising and sales promotion. If the company spends $350,000 more will nearly double the expense. In addition, paint is less image sensitive than other products for the audience so that television