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INTRODUCTION
Jones Blair is a private company that deals with the production as well as
marketing of architectural paints. It is quite important to know that Jones Blair is simply
not a manufacturing company. Rather, it is an established brand name which is sold at a
premium price, charged exclusively for its quality and services. This company deals
specifically with architectural paints that are generally used general use in residential,
institutional and commercial sectors. The main users of this type of paints include DIY
(Do-It-Yourself/Household) consumers and professional painters/contractors. The target
market of Jones Blair Company is spread over 50 counties in the United States where as
its chief operations are handled from its headquarters which are situated in Dallas, Texas.
The current paint industry is filled with manufacturers who manufacture and
market their own products. However, some of the major producers of paint such as
Sherwin-William, PPG Industries, etc tend to not only sell the product under their own
brand name, but also market it via certain store brand names. For instance, SherwinWilliam tends to sell its products as a brand itself, and also produces paint for Sears.
Similarly, other retail stores such as Wal-Mart, Kmart and Home Depot get supplies by
various paint producers. Having available a huge variety of brands in the market, a
consumer may not always be loyal if he doesn't get what he is looking for. For instance,
the DIY consumers tend to go for appropriate pricing strategy, choosing the brand
available at the most convenient price. In contrast, the professional contractors/painters
opt for a higher quality as their reputations are at stake.
In the scenario of Jones Blair, its biggest challenge is to overcome the competitors
that are emerging daily. Moreover, the regulations imposed by governments to curb the
environmental damage caused by paints are also a big hurdle. The main issue faced with
regard to its competitors, is the price. It is a growing dilemma as the competitors are
specially targeting towards low prices which attract the DIY consumers. In contrast,
according to its standards, Jones Blair cannot compromise its quality by reducing to a
price which is able to face competition.
The target market of paint industry is divided into two key areas: the DFW –
Dallas Forth Worth area and the non-DFW area. Jones Blair company does have its
distribution in the 50 counties via 200 retail outlets, lumber yards and paint stores.
However, the rising competition and their tactics have managed to decrease the gallon
age volume that Jones Blair used to extract from these outlets.
The problems faced by this company are comprehensive and have many factors
attached with them. This report tends to evaluate the problems faced by Jones Blair
Company and give out an optimum marketing solution that is catered to fulfill their needs
and enable them gain a substantial share in the paint industry.
PROBLEMS FACED BY JONES BLAIR COMPANY
With newer developments in this technological world, companies at some point of
time, do have to face numerous challenges. Jones Blair Company, is facing a multi-factor
problem from the other giants in the paint industry.
However, in order to have a better insight of the problems faced by Jones Blair
Company, it would be better to first understand the market segmentation that Jones Blair
caters to. Basically, Jones Blair has established itself in the DFW and non-DFW areas, as
mentioned in the preceding text. However, amongst these areas, it specifically targets to
two types of populations i.e. the professional painters and the DIY consumers. Amongst
the 50 county outlets, Jones Blair has 20 outlets in DFW areas (40%) and 30 outlets in
non-DFW areas (60%). However, it is quite surprising to find that according to a retail
survey, 70% of sales in the DFW areas went towards the professional painters where as in
the non-DFW areas, 70% of sales went towards the DIY/Household users.
Keeping the above given statistics in mind, it becomes easier to comprehend the
problems that Jones Blair faces with respect to its competitors:

The pricing strategy of Jones Blair prevents it from gaining a good market share
from the DIY/Household consumers in the DFW areas as the DIY consumers
generally go for lesser pricing.

Though the Jones Blair has good reputation in non-DFW areas, it is still getting
only 16% of the sales that is generated from those areas. This indicates that there
is a thriving need to further development, marketing, advertising and gaining
more outlets in the non-DFW areas.

Jones Blair Company’s majority sales in the DFW area arises from Professional
painters. This indicates that there is a lapse between the marketing strategies of
Jones Blair and the consumer buying behavior of the majority users in the DFW
areas. The majority users in this case are the DIY/Household consumers who
make up the 50% population that buys architectural paints in the DFW areas.

Jones Blair Company, therefore, has a varying market share. This market share, is
calculated as under:
DFW AREAS
NON-DFW
AREAS
DIY/Household consumers
$ 1.8 M / $ 33.6
M = 5.4%
$ 4.2 M/ $ 28.8
M = 14.6%
$ 6 M/ $ 62.4 M
= 9.6%
Professional Painters
$ 4.2 M / $ 14.4
M = 29.2 %
$ 1.8 M/ $ 3.2 M
= 56.3%
$ 6 M/ $ 17.6 M
= 34%
$ 6 M/ $ 32 M =
18.8 %
$ 12 M / $ 80 M
= 15%
Total Market share of Jones $ 6 M / $ 48 M =
12.5%
Blair Company
The above given statistics show that the key areas of weakness are the DIY/Household
consumers in the DFW areas and the non-DFW areas. A further evaluation and analysis
of these factors is given in the next segment of the report.
PROBLEM ANALYSIS AND SOLUTION
The market share of Jones Blair company is given in the previous section of the
report. Keeping in perspective the market share that Jones Blair currently occupies, it is
important to prioritize the following markets:
Developing the DIY/Household consumers in non-DFW market:
The non-DFW areas where Jones Blair currently has 30 outlets is a good
opportunity area. This is so because the outlets in these areas carry lesser brands as
market penetration has not yet been done by other brands in these areas. Therefore, if
Jones Blair develops high-end client relations in this area, then it can gain a strong hold
in due time before others penetrate this market.
Professional painters in DFW areas:
As seen by the statistics, Jones Blair has an almost 30% market share in the
Professional segment of the DFW area. This is a good sign for the sales team, which can
target to get more business from these professional painters. These professional painters
demand high quality regardless of the price, which is exactly what Jones Blair’s brand
image is opted to be.
Others areas such as Non-DFW area with Professional painters is quite well
developed as Jones Blair Company has more than 56% share and therefore, simply needs
to maintain its hold there. The remaining market of DFW area with DIY/Household
consumers is quite sensitive to pricing strategy and therefore, would be quite difficult for
producing companies like Jones Blair to cash on.
CHOOSING THE RIGHT ALTERNATIVE:
According to the Jones Blair Company, they have suggested the following four
alternatives, which will enable them to deal with the situation. Being a marketing
consultant, it is important to understand the consequences of the above given alternatives
that Jones Blair Company has proposed.
Invest $ 350,000 more on TV advertisements:
The first option is to invest $ 350,000 on advertisements in the DFW area.
However, in order to recover the extra cost that is spent on advertisements, Jones Blair
company needs to have an additional sales of $ 350,000 / 0.35 = $ 1 M. This $ 1 M
means that the current sales should increase by 8.3%. While it is a good option to create
brand awareness in order to influence buying behavior, it should be well known that
according to the consumer buying process, the DIY/Household buyers tend to opt for a
good store rather than opting for a brand. Moreover, it will not only double the
advertisement expenses by would also guarantee little results as 75% of TV viewers do
not buy paint. Therefore, rather than TV advertisements, the company can opt for
promotions with-in stores which would build their relationship with the consumers.
Reduce prices by 20%
The second option was to reduce the price by 20%. Reducing prices that much
would also reduce contribution margin from 35% to almost only 15%. At current sales of
$ 12M, the company earns a gross margin of: 12M * 35% = $ 4,2M. At a contribution
margin of 15%, the extra sales required would be: ($12M + x)*0.15=$4,2M. The resultant
value is $ 28 M further increase which means 233% increase in sales. This option is not
feasible as it is quite impossible to have a 233% rise in sales. Moreover, the outlet dealers
wouldn't accept to keep the paints at such low profits. Also, Jones Blair has set its
standard too high from the beginning. Users tend to buy Jones Blair paints as they deem
high quality along with high price. Therefore, the reduction in price might have a
negative impact regarding the quality of the paints.
Build up their sales team
Building up the sales team also requires an additional cost of $ 60,000 per year for
one more sales representative. This option seems attractive if the representative is placed
in the right market. Moreover, the additional services that the representative would impart
would add value to the dealer outlet.
No change in current strategies:
Doing no change currently would not hinder the short term profits of the company
but would impose difficulties in the long run. The increasing competition requires Jones
Blair to adapt towards changes so that it can benefit in the future.
CONCLUSION:
The analysis of the alternatives in the preceding section leads to the following
conclusions:

The company should develop the DIY/Household consumers in the Non-DFW
area while maintaining its professional painters in that area.

The company can hire one sales representative who would develop new retail
outlets in the non-DFW areas (both in Household and professional markets). In
future, it can also hire more representatives as per the need and growth of their
market.

The company should save the additional $ 350,000 and rather spend some on the
in-store promotional activities in both the DFW and non-DFW areas. This would
enhance customer relationships and appeal more convincingly to both the
professional and household consumers.

Lastly but most importantly, the company should not opt for price reduction.
Keeping the same prices would help it maintain its niche as a high quality,
premium product.
The above mentioned suggestions would enable Jones Blair Company to maintain
its brand image as well as cope with the marketing challenges that it is facing.