Jones Blair Company Essay

Jones Blair Company is into producing and marketing architectural paints and coatings. They mainly offer 3 products lines to their consumer’s i.e. architectural coatings (which account for 43% of market share in total sales revenue), original equipment manufacturing coatings (which account for 35% of the total sales revenue market share) and special purpose coatings (which account 22% of the total sales revenue market share). Jones Blair Company is currently facing a problem of coordinating its marketing efforts and is not sure to implement which of the following strategies to boost their sales. They can invest $350,000 in advertising or hire some additional sales representatives to control their activities in both rural and urban area`s efficiently

They can hire one or two sales representatives based on their budget additionally, to break even earlier and target both the professional and household markets successfully in and around Dallas Fort Worth. They should increase the advertising budget, as they account to spend only 2-3% of sales revenue in their promotional activities. They can alternatively increase their retail accounts outside their main area segments. If the company performs the advertising and promotional activities, i.e. $350,000/.35 = $1,000,000 then the firm should achieve the sales figure of $1000000 million to break even and recoup the marketing costs incurred. Advertising would also be a feasible as most consumers are of household consumers. The cost of an additional sales representative would cost them $60000, so (60000/.35) = $171,429 of additional margin to be generated to recover the cost. If they implement the price cut by 20% then their actual current sales of $12000000 should be replaced by a sales figure of 1600000 as their contribution margin would reduce from 35% to (35%-20%) = 15%. Hence, the price drop will trigger a $400000 additional sales ($16000000-$12000000) i.e.33% increase in sales revenue ($4000000/$12000000). Else they do nothing and just stick to their current strategy and focus on quality developments and