Janmar Coatings, Inc.
In-Depth Case Analysis
Prepared by:
Elliot Thome
In partial fulfillment of the requirements of
Marketing Management and Policies
Submitted
February 26th, 2015
Case Synopsis
In early January 2005, Ronald Burns, president of Janmar Coatings, Inc., and his senior management executives were faced with the issue of deciding where and how to deploy corporate marketing efforts among the various markets served by the company. To resolve this issue the company must:
• Understand the markets that Janmar services, and know where and how the customers obtain their products.
• Identify a strategy that will be beneficial for marketing to its customers to keep long-term profitability.
Janmar Coatings, Inc. is a privately
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Specifically,
• Where and how to deploy corporate marketing efforts among the various architectural paint coatings markets served by the company in the southwestern United States.
• More specifically it is to find cost effective ways to market their products in rural areas outside of the DFW area.
• Evaluation of this problem will be measured using break-even analysis, a metric that Janmar Coatings, Inc. has already been using to measure their goals.
Alternative Identification
1. Do nothing.
The company has been operating fine for years and total dollar sales have been increasing each year. If the company sticks to the status quo, they will continue to stay profitable. 2. Increase brand awareness
Janmar could increase brand awareness by adding an extra $350,000 to the traditional advertising budget.
3. Cut prices
In an attempt to compete with the lower cost brands of paint, Janmar could cut its prices by 20%.
4. Hire a new sales representative
Janmar Coatings, Inc. could add in a new sales representative whose sole job is to generate new leads in retail and professional accounts. This would come with a direct cost of $60,000 each year, excluding
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Specialty paint stores, lumberyards, and independent hardware stores have a larger share of the market in nonmetropolitan areas.
a. Customer relations is more important in these areas
b. Could be accredited to less competition in these areas
The amount of competitors that are in direct competition with Janmar Coatings, Inc. has diminished over the years, but those who are still around have been capturing a larger portion of the market due to competitive pricing. Specialty paint stores are able to control a larger portion of the market in nonmetropolitan areas, which makes this an attractive region for paint companies with premium products.
Customers
50 percent of architectural coatings dollar sales come from do-it-yourself (DIY) painters. Professional painter purchases account for 25 percent of dollar sales. The other 25 percent of dollar sales is attributed to government, export, and contractor sales.
DIY painters view paint as a commodity.
• Look for the best price when purchasing paint.
• Large number of these DIY painters also would like services to go along with their purchase in the form of information about how to properly apply the paint and use its accessories.
Professional painters look for premium