Preliminary background summary:
Jones-Blair Company (JBC) is a regional paint manufacturer that focuses on high quality paint in the Dallas-Fort Worth area and the surrounding 50 counties. Jones-Blair competes in a mature market, where sales have steadily increased at the rate of inflation. Jones-Blair faces a major problem in that they must maintain their growth and profit margins. Therefore, senior management executives seek to develop a marking strategy to gain its sales and maintain profit margin.
Question 1: How would you segment JBC's market area?
There are three segments in the paint industry but JBC focuses most on architectural coatings and some on original equipment manufacturing coating fields. The front field contains retail and contractor markets. Furthermore, we can specify the retail market as DIY and professional stores.
Chart 1. JBC's market segments
Question 2: What segments represent opportunities for JBC and why?
The highlighted segments in the above chart are JBC's opportunities.
1) Recent research indicated that do-it-yourself painters do not care much about the brand and, consequently, about the quality of the paint (brand reputation was the 4th key criteria mentioned by the buyers to choose a covering) and it has become a commodity for this kind of consumers. CEO, Barrett, admits that JBC is the highest-priced paint in the service area. Only professional painters will pay more for higher quality. In other words, they are more price-insensitive and major JBC's consumers because JBC maintains highest price policy.
2) The market for do-it-yourself consumers is forecasted to reach US$ 5.74 billion by the year 2003 (see appendix 2) and it seems to be the best segment for Jones Blair to focus its resources on, since it represents 90 percent of non-contractor-related volume outside DFW area and 70 percent in DFW.
3) Areas outside DFW have potential. JBC's...