1. FACULTY OF BUSINESS MANAGEMENT
STRATEGIC MARKETING MANAGEMENT
(MKT 750)
CASE STUDY
JONES BLAIR COMPANY
PREPARED BY:
ROSAZILA BINTI MUSA
2011627906
SITI NORHABIBAH BINTI HASSAN
2011822068
NURULAIN BINTI MAZLAN
2011772643
NURATIQAH NABILAH AB MANAN
2011370547
AHMAD MUSTAPHA A.WAHAB
2011174185

2. PREPARED FOR:
DR ANIZAH
GROUP:
BM7702P
1. Company Description
1.1. U.S Paint Industry
The US paint industry is divided into three broad segments which are:
a. Architectural coatings
- consist of general-purpose paints, varnishes, and lacquers used on residential,
commercial, and institutional structures, sold through wholesalers and
retailers, and purchased by do-it-yourself consumers, painting contractors and
professional painters.
b. Original equipment manufacturing (OEM) coatings
- are formulated to industrial buyer specifications and are applied to original
equipment during manufacturing. These coatings are used fro durable goods
such ad automobiles, trucks, transportation equipment, appliances, furniture
and fixtures, metal containers and building products, and industrial machinery
and equipment.
c. Special-purpose coatings
- are formulated for special applications or environmental conditions. These
coatings are used for automotive and machinery refinishing, industrial
construction and maintenance, bridges, marine applications, highway and
traffic markings, aerosol and metallic paints and roof paints.

3. Segment Architectural Original equipment Special-purpose
coatings manufacturing coatings
(OEM) coatings
% of total industry 43% 35% 22%
dollar sales
1.2. Jones Blair Company
The Jones Blair Company is a privately held corporation that produces and
markets architectural paint under the Jones Blair brand name. The company distributes its
products through 200 independent paint stores, lumberyards and hardware outlets. 40%
of its outlets are allocated in the 11-country Dallas-Fort worth (DFW) area and the
remaining is situated in the other 39 countries in the service area. Retail outlets outside
the DFW area with paint and sundry purchases exceeding $50,000 annually carry only
the Jones Blair product line but except for 14 outlets in DFW which carry the Jones Blair
line exclusively, the retailers only carry two or three lines with line being premium
priced. Currently, Jones Blair employs 8 sales representatives which responsible for
monitoring inventories in each retail outlet, taking order, assisting in store display and
coordinating cooperative advertising programs. They are paid a salary and a 1%
commission on sales. The company spends approximately 3% of net sales on advertising
and sales promotion efforts.
2. Situation Analysis
The problems of the case studies are where and how does the Jones Blair deploy
corporate marketing efforts among the various architectural paint coatings markets in
their service area.
a. Should they target professionals or do-it-yourselfer market?
b. Where should they target? Either Dallas-Fort Worth or non- Dallas-Fort
Worth area?

4. c. How they going to accomplish this matter?
3. SWOT Analysis
Strengths Opportunities
- Founded in 1980 whereby Jones - Long-term sales growth projected in the
Blair is an experience company range of 1-2% per year
in the industry - Distributed in 200 independent paint
- Strong relationships between stores, lumberyards and hardware
sales representatives and Jones outlets.
Blair retail outlets. - 40% of the retailers in rural area
- High quality of product - Researches indicate that the average
- Sell to both professionals and dollar paint purchase per purchase
do-it-yourselfers occasion is about $74.00 and average
- Cooperative advertising dollar sundry purchase by purchase
programs with retailers occasion is about $12.00
- Researches indicates that do-it-yourself
painters first choose a retail outlet for
paint and then choose a paint brand
Weaknesses Threats
- 3% of net sales for advertising - 600 different competitors in the industry
purposes - Competition is spending more on
- Advertising only reach 25% of advertising and is less expensive
target audiences - Do-it-yourselfer purchase paint once
- Only 8 sales representatives in every 4 years and get what’s convenient

5. retail outlets and inexpensive
- Narrow market penetration - Contractors want large quantities of
(DFW areas) paint for the lowest price
- Highest priced of product in the - Demand effected by substitutes, long
market lasting products and volatile organic
compounds (VOC)regulations
4. Core Competency and Sustainable Competitive Advantage
In terms of core competency, Jones Blair seeks to achieve a unique ability a) to
provide distinctive, high-quality of paint which is the best on market and good fit with
professional painters and b) provide excellent sales representatives (well liked, helpful,
knowledgeable, and can run the store) in retail outlets for them to help customers and
they also good fit in rural area.
5. Alternatives
Jones Blair senior management team has developed four different suggestions to
lighten the companies marketing problem as below:-
5.1. Spend additional $350,000 for television advertising
The advertising department proposes a television campaign targeted at the DFW
do-it-yourself market to increase customer’s awareness. A recent survey noted that only
25% of this population is aware of Jones Blair product range and only about 12% of this
population would make a purchase. This cost for television advertisement targeted mainly
in the Dallas Fort Worth (DFW) area at the do-it-yourself market and also to reach non-
DFW customer as well which will significantly increase the awareness of Jones Blair

6. products. Research has proven that brand awareness is a major factor in purchasing
decisions.
If Jones Blair does agree to use this method the company will need to make at
least $1,000,000 sales to break even and cover the cost of this new promotion
($350,000/.35= $1,000,000). Most of the DFW consumers are do-it-yourselfers, so
television advertising will be beneficial in this market.
5.2 Have an overall 20% price cut
Compared to other leading national brands, Jones Blair is priced relatively high.
This is based on the extremely high quality and performance of the products. By cutting
price, Jones Blair will be able to stay competitive in price with other the other products
on the market.
In 1997 architectural product sales volume was $12,000,000. Jones Blair has a
current net profit of $1.14 million, and to stay profitable it must maintain this amount.
$12,000,000*.35= $4,200,000
If Jones Blair reduced its price by 20% the contribution margin will drop to 15%.
New contribution margin = 35 % (current contribution margin) – 20% (price reduction)
= 15%
How much sales will John Blair achieve with this new contribution margin?
($ 12,000,000 + X) * 15% = $ 4,200,000
$ 1,800,000 + 0.15X = $ 4,200,000
0.15X = $ 2,400,000
X = 16,000,000 (New Sales Volume)
$16,000,000 – $12,000,000 = 4,000,000 (Sales Increase Amount)
$4,000,000 / $12,000,000 = 0.33

7. = 33% (Sales Increase)
Referring to the above simulation, 20% price reduction will drive the company to a 33%
increase in sales.
5.3 Hire additional sales representatives
Hiring an additional sales rep will allow Jones Blair to focus on new markets.
They would develop new retail account leads and call on professional painters to solicit
their business through our dealers.
Sales of non-DFW territory are crucial for maintaining competition in the market.
A sales rep would cost the company $60,000 a year. So the company would need about
$171,428.58 ($60,000/.35) of additional profits to cover this yearly cost. Current existing
120 retailers are located outside of DFW. From the current achievement, $4,200,000 is
the amount needed to be maintained in order for Jones Blair to stay profitable. Profit
amount required from each retailers in order to maintain the profit is $35,000
($4,200,000/120). From the figure, Jones Blair would acquire at least 5 new accounts in
order to get breakeven return on new representatives’ investment ($171,428.58/$35,000 =
4.89).
5.4 Continue to guard margins and control costs
Jones Blair has continually making profits year by year; so they should maintain
their current marketing objectives and operate their business as usual. Jones Blair has
done an excellent job in the past by watching the margins and controlling costs. The
company will not need to spend any additional money.
Jones Blair will not change any of their current marketing strategies and practices. By
guarding margins and cost controlling, Jones Blair will still continue to make profit.

8. 5.5 President Barrett’s suggestions whereby additional dollars used for print media
(newspapers and catalogs) in non-DFW areas instead of television advertising and
40% price cut to attract contractors to buy large quantities of paint from Jones
Blair outlets
6. Alternatives Analysis
Alternatives Strengths Weaknesses
a) Spend additional $350,000 on • Increased customer • Almost doubling current
corporate advertising awareness advertising costs
• Low added cost (extra ($360,000+$350,000).
1million in break-even) • Has little guarantee of
results because about
75% of the viewing
audience does not buy
paint.
b) Have an overall 20% price • The company will sell • May not be able to sell
cut more because of enough in volume to
competitive price cover cost of goods sold.
• Gain more market share in • Lower perception of
do-it-yourself market quality because of
cheaper price in the
market
c) Hire additional sales • Potential for success • Risky
representatives • Does not cost the company • Sales representatives
a significant amount of aren’t that effective
money to do.
d) Continue to guard margins • Not risky • No solution for the
and control costs • Keep doing what company problem

9. does best
e) President Barrett’s • Attract more contractors to • Increase more cost,
suggestions purchase paint from Jones expertise of competitive
Blair bidding for large jobs
• More focused advertising • Will continue losses
in rural areas
7. Suggestion for Jones Blair Company to Solve the Problem
i. Actively pursue non-DFW Household and Professional markets
ii. Seek more retail accounts in non-DFW markets.
Jones Blair should concentrate on increasing the number of distributors of its
products in rural areas. The Dallas-Fort Worth market may be saturated and place
importance on quality and service, but the rural market is still in expansion and in
need of a producer to fill the quality-service niche. Any producer that wants to
secure this niche needs to be present. Being present which means selling paints in
a large percentage number of retail stores. Jones Blair is currently lacking in this
area, and should be able to improve its position by hiring a new representative.
iii. Hire one additional sales representative who is in charge of developing new
accounts. If budget permits, hire two. Each can be assigned to Professional and
Household markets respectively.
iv. Engage in cooperative advertising with current advertising budget.
Four facts have led us to a preference for in-store promotion. First, the audience
reached by expensive television campaigns is made up essentially of people who
don't by paint. More precisely, 75% of the viewing audience falls into this
category. Secondly, the majority of consumers decide which brand they will buy
before entering the store. Thirdly, the majority of advertising is based on price

10. competition. Lastly, other forms of publicity, such as mailers and newspaper ads,
are often overlooked or find their way directly to the trash. In order to counteract
these advertising inconveniences, we feel that in-store promotion should be tested
and further developed if resultants are positive. In-store promotion is more
economical than an expensive television campaign. And most importantly, it
counteracts the brand decision that many customers have supposedly already
made before entering the store. Also, in-store advertising can be more easily
based on quality and service.
v. Maintain prices