Jones Blair Case Study Workout
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Transcript of Jones Blair Case Study Workout
JUSTINDIAL
A MARKETING ANALYSIS
ASHLEYFARNSLEY
TONYHINKEL
NICOLEMALOTT
SUMMARY
THE PAINT INDUSTRY
JONES BLAIR MARKET
U.S. PAINT INDUSTRY
THING OF THE PAST DOLLAR AMOUNT CATEGORIES
The manufacturing of paint is generally considered an aging industry
Sales estimates from 2004 are slightly above $16 Billion total
The paint industry can be divided into three broad segments:1. Architectural Coatings2. Original Equipment
Manufacturing Coatings (OEM)
3. Special Purpose Coatings
ARCHITECTURAL COATINGS
RESIDENTIAL
‘DIY’ CONSUMERS
COMMERCIAL
PAINTERS
GENERAL PURPOSE PAINTSVARNISHES LACQUERS
DIY = DO-IT-YOURSELF
43% OF TOTAL INDUSTRY SALES
OEM COATINGS
INDUSTRIAL SPECIFICATIONS
USED FOR
OEM Coatings are formulated to the industrial buyer’s unique specifications
Durable goods that architectural coatings paint isn’t suited for
35% OF TOTAL INDUSTRY SALES
SPECIAL-PURPOSE COATINGS
SPECIAL APPLICATIONS OR ENVIRONMENTAL CONDITIONS
22% OF TOTAL INDUSTRY SALES
FOR
OUTLOOK FOR ARCHITECTURAL
SALES
TYPE
Mature Market
Estimated sales of architectural paint & sundries to be more than $12Billion in
2004
DEMAND
GROWTH
Sales expected to grow roughly 1-2% per year
Reflects levels of housing redecorating, maintenance, repair, and sales of existing
homes
FACTORS THAT DECRESE DEMAND
1. ALTERNATIVE MATERIALS 2. HIGHER QUALITY PRODUCTS
ARCHITECTURAL COMPETITION
NOW AND THEN OTHER PRODUCERS HOW SELLING WORKS
Rough estimate of current paint supply companies : 600
Roughly 40% fewer companies than in in 1980
Rate of decline is estimated to be 2% a year
The producers account for upwards of 60% of sales
Market paint under own brand name as well as private labels for retailers
50% of architectural coatings are sold under private labels
36% sold by speciality paint stores
14% sold by hardware stores and lumberyards
FREQUENCY
Speciality paint stores outdistanced mass merchandisers and home improvement
Home centers and mass merchandisers are more frequently visited by “DIY’ers”
Speciality shops and lumberyards most visited by professionals
WHO PURCHASES PAINT?
ARCHITECTURAL COATINGS PURCHASING BEHAVIOR
50.00%
25.00%
25.00%
Do-It-Yourself Painters Professional Painters Government, Export, and Contractor Sales
WHAT TYPES OF PAINT?
ARCHITECTURAL COATINGS PURCHASING BEHAVIOR
60.00%
38.00%
2.00%
Interior Paints Exterior Paints Lacquers and other applications
HOW MUCH IS BOUGHT DIY AVERAGE DOLLAR
Just short of 25% of households buy interior paint each year
DIY’ers have increased product lines
Average dollar per paint purchase roughly equals $74
WHAT’S THE MARKET LIKE?
ARCHITECTURAL COATINGS PURCHASING BEHAVIOR
JONES BLAIR MARKET
DALLAS , TEXAS TEXAS
OKLAHOMAMAJOR BUSINESS/FINANCIAL CENTER
BUSINESS FOCUS ON SOUTHWEST STATES
NEW MEXICO
LOUISIANA
50 COUNTIES IN:
COMPETITION MAN. COMPETITION CONTROL OF DIY
1,000 outlets operate in JBC 50 county operating area
Aggressive pricing to capture home construction industry for manufacturing competition
Low prices = attraction
50% control by mass merchandisers
JONES BLAIR SERVICE AREA
THE JONES BLAIR MARKET
JONES BLAIR SERVICE AREA
JBC DOLLAR VALUE
KEY TO SUCCESS
Getting/keeping widespread distribution is key
Dollar value in volume in architectural coatings and allied products was $80
Million in 2004; 60% of which was DFW area
DIY BUYERS
Made up 70% of non-contractor sales in DFW areaMade up 90% of non-countractor sales in other
areas
THE JONES BLAIR MARKET
JONES BLAIR COMPANY
ARCHITECTURAL RISE IN SALES/PRICE COG
Architectural paint and allied supplies sales volume in 2004 was $12 million with a net profit of $1,140,000
Dollar sales increased by 4% per year in the past decade
Successful in maintaining margins but reaching the price threshold as they are the highest priced in the service area
2004 paint Cost of Goods Sold was 60% of net sales ($7.2 million)
JONES BLAIR DISTRIBUTION
DFW
INDEPENDENT
200 independent paint stores, lumberyards, and hardware stores
40% of outlets located in the DFW area
PREMIUM
EXCLUSIVE
Non-DFW area outlets that exceed purchases of $50,000 annually, only carry the Jones
Blair brand
Except for 14 outlets, all other outlets carry 2-3 other names and the Jones Blair
name is the premium priced brand
THE JONES BLAIR MARKET
PROMOTION AND SALES
INVENTORY
ORDERS
IN-STORE DISPLAYS
8 SALES REPSMONITOR
COORDINATE ADVERTISING PROGRAMS
JONES BLAIR WORKOUT
GROUP A
THANK YOUJUSTINDIAL
ASHLEYFARNSLEY
TONYHINKEL
NICOLEMALOTT