Janmar Coating case study
Architectural painting Industry sources estimated U. S sales of architectural paint coatings and sundries (brushes, rollers, paint removers and thinners, etc) to be 12 billion plus in 2004. Architectural coating are considered to be mature market with long term sales growth projected in the range of 1 to 2 percent per year. Demand for architectural coatings and sundries and sundries reflects the level of house redecorating, maintenance, and repair, as well as sales existing homes, and to a lesser extent new mom, commercial, and Industrial construction. .
0 Identify Problem 1. Competitor The competition in Architectural coating segment are increasing. Companies seeking growth Ana a enlarge sales ease to support Increasing costs are making calculation. Major products of paint for the architectural coatings segment include Sherwin- Williams, Benjamin Moore, the Glidden unit of Imperial Chemicals, PEG Industries, Pulsar Corporation, Grow group and Pratt & Lambert. These producers account upward for 60% of sales in architectural coatings segment.
They market under their wan brand names and for retailers under private, controlled and store brand names. 2. Volatile Organic Compound (Voss) U. S paint manufacturer are under growing pressure to reduce emissions volatile organic compound (Voss) from paints and to limit the consumption of solvents. The Environmental Protection Agency (EPA) has adopted a three step plan for reduction of Voss in architectural and industrial maintenance coatings. Compliance with EPA regulations eroded historically low profit margins in paint industry.
3 DEW and Non DEW January Coating, Inc. Reek its paint and sundry item in over 50 countries in Texas, Oklahoma, New Mexico, and Louisiana from its plant and headquarter in Dallas, Texas. The 11- Country Dallas – Fort Worth (DEW) metropolitan area is the major business and financial center in their company’s southwestern service area. According to Vice president of sales ” we have added only five accounts in the five years; our account penetration in non UDF areas is 16%” 3. 0 Consider relevant information There are some alternatives that should be considered: 1 . Customer advertising awareness at least 30 percent among do-it-yourself.
As per Vice President of Advertising, Ron, he believed that they must direct their efforts towards bolstering their presence in the UDF do-it-yourself market by at least 30 percent. The awareness is well related to paint purchase behavior. Through advertising, the customers will be aware about the January Coatings’ paint as well as they have seen it been advertised via media. However according to Mr..
Burns, advertising is not a good idea since he did not sure what advertising it is because 75 percent of the audience in UDF is not buying paint.
He suggested that the cost of advertising amounted $350,000 used for advertising in non UDF areas. 2. Price cut by 20 percent of all paint products. Based on Vice President of Operations, he suggested that they must cut price by 20 percent on all their products to meet customers’ wants. It is because the customers are price sensitive due to the research program.
Their price is still higher than a mass merchandiser’s although they have advertised price-off special. But as per Mr.. Burns, their sale representative has forecasted that their demand for paint will not increase next year. Therefore, they cannot cut price this year.
. Hire a sale representative costing $60,000 a year in non UDF areas. Vice President of Sales wants to develop a new retail account in non UDF areas after only five accounts for the last 5 years. They want to focus on non UDF areas because half of their sales and dealers exist in that particular area. It has been asking by Mr.
. Burns on what the sale representative will do, either focusing on retail account side or on recruiting ten professional painter. /u percent AT sale Is tongue tenet professional minters in UDF areas, while 70 percent of sale went to do-it-yourself in non UDF areas.
They would need 40 percent price cut to attract contractors since they have minimum number of contractor sale in UDF and other areas. 4.
Maintaining their current approach. Referring to Vice President of Finance, he want to pursue the current approach because they are in profitable based on contribution margin by 35 percent. The company Just needs to monitor their margin in control their cost well. 4. 0 Choose the best alternative The best alternative is sales representative, since it focuses on non UDF areas cause half of their sales and dealers exist in that particular area. .
0 Implementation of the alternative: Based on the case study, the way to implement the problem is through market targeting. There is the way of target the market which is: 1. Where to compete January Coating Inc. Needs to specify the market segment that they want to pursue. They need to make marketing improvement in the Dallas-Fort Worth (DEW) and Non Dallas-Fort Worth (Non-UDF) to compete with their competitors such as Sherwin- Williams, Benjamin Moore and Grow Group.
They should pursue the 400 or so reflections painting firms in UDF area and the 200 professional painters outside the UDF area or the do-it-yourself market.
2. How to compete January Coating Inc. Can compete with their rival by increasing the hiring of representative at the UDF area and non-UDF area. This strategy can make January Coating Inc. Customers feel convenience and can build a good relationship with them.
The representative that had been hired by January Coating Inc. Is only eight people. Due to it, they cannot monitor each of the retail outlets all over 50 countries n Texas, Oklahoma, New Mexico, and Louisiana.
By adding representative and allocate them accordingly through the country, they can make a promotion aggressively and can get information about the buying trend of the consumer from the retailers. 3. When to compete January Coating Inc.
Can start to make their new marketing targeting according to the seasonal or trend of the demand from the consumers. For an example, consumers will be attracting to purchase when there is a promotional allowances during seasonal festival such as Charisma festival. 6. 0 Conclusion:
It can be conclude that to make a decision for the problem of where and how to deploy corporate marketing efforts among the various architectural paint coating, the company should adding amount of representative to make a promotion that can Increase level AT ten awareness AT ten January Drank among ten consumer. Due to ten new strategy, the sales of the architectural paint coating will be increase and it can compete with the rival product. 7.
0 Reference A. Peterson, R. A. (2013). Strategic Management Problems: Cases and Comments.
Pearson Education. Kerri, R. A.