Janmar coating, incPresident Ronald Burns

Presented by EEMAN BALOCH IKRAM ULLAH KAKAR SAMAN SAED TOOBA

Janmar coating Paint IndustrySegmen

tArchitectural

CoatingsOriginal Equipment

Manufacturing Coatings

Special-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:

Customers of Architectural Coatings

50%

25%

25%

Sales

Do-It-YourselfersProfessional PaintersGovernment, Export, and Contractor Sales

Substitutes:Big Box Retailers, Paint Stores and Lumberyards, Hardware StoresJanmar is priced at a premium level compared to competitors  

Market Size:$16 Billion annual Sales1-2% Annual Growth

• Industry Analysis

• Industry is considered to be established, with growth projected to match inflation

• Barriers to Entry/Continued Success•  • High level of competition due to low-cost alternative national

retailers• Frequent R&D(research and development) Expenditures • Competition from Alternative siding materials (aluminum &

vinyl)• Increase in higher quality products that reduced number of

coats and application time.•  

• Attractiveness/Un-Attractiveness:• Increased Government and Environmental Regulations• Slow sales growth• Increasing number of Do-It-Yourselfers that would

purchase both paint and sundries.•  • Competitors/Advantages:• National Retailers: Low Prices, National Reach• Lumberyards/Specialty Stores/Independent Hardware

Stores: Access to non-metropolitan markets, Customer Service•  

About Janmar coating• 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

• 2004: • $16 billion net sales of Janmar

coating architectural paint and allied products

Janmar coating marketing strategies

• Distribution:• 200 independent paint stores, lumberyards, and hardware outlets.• 40% outlets are located in 11 country DFW area and other 60% are located

in the 39 countries service area.distribution is the key success factor in this industry which is architectural paint and sundry 

Promotion:8 sales representatives Salary:

$60,000 1% commission on sales

3% of net sales advertising & sales promotion

efforts

What do you think Janmar coatings problem

is?

Where and how does Janmar coating 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?

Problem

·         What tactical plan should be implemented?

Internal Strengths

• Large number of stores (40%) in the DFW area• Strong relationships between sales

representatives and retail stores• High quality• Sell to both professionals and DIYers• Cooperative advertising with retailers• Motivated, determined and passionate• Knowledgeable and friendly sales reps

Only 3% of sales goes to advertising Ads only reach and influence 25% of target Low brand awareness Only 8 sales representatives Low rate opening accounts (5 in 5 years Narrow market penetration with sales reps No exclusive rights with retailers Highest price in market

Internal Weaknesses

External Opportunities

• 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$75.7 $76.4 $77.6 $78.4

600 different competitors Competition is spending more on advertising Competition is less expensive Major in-house retailers have little knowledge Contractors want paint for the lowest price. Demand effected by substitutes, long lasting products and

VOC regulations Increased Government and Environmental

regulations

External Threats

Total Market

$80 Million

Net Sales2004

Professional

DIY

Urban$48,000

,00060%

$14,400,00030%

$33,600,00070%

Rural $32,000

,00040%

$3,200,000

10%

$28,800,00090%

$14,400,000

$33,600,000

$3,200,000

$28,800,000

Chart Title

Urban Professional Urban DIYRural Professional Rural DIY

Janmar coating Market

$12 Million

Net Sales

Professional

DIY

Urban$7,200,0

00 60%

$5,040,00

070%

$2,160,000

30%

Rural $4,800,0

0040%

$1,440,000

30%

$3,360,000

70%

5040000; 42%

2160000; 18%

1440000; 12%

3360000; 28%

Janmar coating Market

Urban Professional Urban DIYRural Professional Rural DIY

Market Share

Professional

DIY

Urban 35% 6%

Rural 45% 12%

Urban Pro-fes-

sional; 35%

Urban DIY; 6%

Rural Pro-fes-

sional; 45%

Rural DIY; 12%

Janmar Market Share

year Total Dollar sale

DFW area sale

NON-DFW area

2000 $75.5 50.24 24.8

2001 76.5 50.8 25.6

2002 50.5 50.5 27.1

2003 50.7 50.7 27.7

2004 80.8 48.0 32.0

Industry sale volume

Industry five year average sale volume is 77.62%

What do you think Janmar coatings

distinctive competencies are?

Distinctive Competency• Quality• Best on the Market

• Solid distribution network • High quality product

• 1 Coat Coverage• Pleasant

Fragrance• Good fit with

professional painters

• Service• Sales Representatives

• Well Liked• Helpful• Professional• Knowledgeable• Discuss both Business &

Family• Run the Store

• Good fit with rural area

Market Positioning      Janmar has two distinct market segments:

·         Dallas Fort Worth ~ 80 stores·         70% of Sales to Professional Painters

·         Non-Dallas Fort Worth ~120 stores·         70% of Sales to Do-It-Yourselfers

Alternativesof

media planning meeting1. Increase advertising dollars by $350,000 and use it

for TV ads2. Have an overall 20% price cut3. Add one more sales representative4. Continue to guard margins and control costs5. President Ronald Burns suggestions

1. Ad dollars used for print media instead of TV2. 40% price cut to attract contractors

Which Alternative Do You Think Is The

Best?

VP of Advertising RON

• Direct efforts to Dallas Fort Worth DIY market• Increase awareness to 30 %• Advertising Increase of $350,000• Television Coverage in 15 Counties

% of DFW population Brand awareness

mass marchandise brand

national paint brand

mass marchandise brand

janmar brand

local paint brand

50%

45%

35%

25%

15%

Awareness question: what brand come to mind when you think of paint?Last brand bought: what paint brand did you purchase last time you bought paints?

VP of Operation

• Advertising isn’t right• Need to be competitive in DIY • Consumers are Price Sensitive• Cut Price by 20%

Vice President of Sales• Putting our effort into non-DFW areas.• As we know in non-DFW area is only 16%• 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 ask their business through our dealers

• Cost to add another dealer is $60,000 per year

Vice President of Finance

• Keep everything the same• Continue to guard margins and control costs

Recommendation• VP of Sales• Extra Sales

Associate• $60,000

annually• Focus on Rural

Pro

Why Rural Professional

• Distinctive Competency• Good Service & High Quality

• Good Fit• On a 1st name basis with store owners

• Control 45% of the market

Implementation

• Hire 1 additional Representative – NOW!• Sales Training• Clarify Roles• New focus: Rural Professional Painters• Increase personal sales by 5%

Analysis• Focus on Rural Professionals • Additional Staff• 57.5% Sales Increase• Annual Savings of $969,730• Almost $1million!!!

• Invest• Growth?

An Offer You Can’t Refuse!!!

40% price cutRedirect Advertising

Newspaper & CatalogsFocus on Rural

Conclusion• AS the president Burns say all of you have valid

arguments. Vp of sale, finance, president of sale, advertising give their best alternative. So for as our concerns we should suggested the alternative strategy of VP of Sales and vp of advertisement.

• Control 45% of the market Extra Sales Associate• $60,000 annually• Focus on Rural Pro

Direct efforts to Dallas Fort Worth DIY marketIncrease awareness to 30 %Advertising Increase of $350,000Television Coverage in 15 Counties

Questions?

Comments? Concerns?