Jones∙BlairCase #1Introduction In 1999, U.S. paint industry sales were expected to be more than $13 billion. The industry has slow sales growth and is constantly changing due to government regulations. In 1999, Jones∙Blair reported sales volume of $12 million with an annual growth rate of 4%. Jones∙Blair manufactures and sells architectural coatings, OEM coatings and various paints. However, the President, Alexander Barrett and senior leaders know there are some areas where they need to improve. Problem Statement Jones∙Blair has major problems with sales of their architectural paints in the DFW areas. This is because they have the highest priced product in a very competitive market segment in terms of pricing. Their sales are better with professional painters in non-DFW areas; professionals are much more oriented towards quality rather than price. Unfortunately, they have a very low market share with the non-DFW, “do it yourself” home market. They must decide where and how to distribute the company's marketing efforts across the various architectural paint markets. Problem Analysis Assumptions We have assumed that the advertising budget allocation is equal. That is, they advertise the same amount in both the DFW and non-DFW areas. Alternatives1) Our VP of Advertising suggested we focus our primary attention on the DFW DIY market, while still reaching 15 counties in the non-DFW area. The Vice President suggests to increase the awareness level to at least 30% so that we can increase our sales. A $350,000 increase in corporate advertising should lead to this level of awareness. We believe this pl...... means of paper ...... Recommendation We recommend an incremental increase of $350,000 in advertising and apply it to newspapers and catalogs in the non-Dallas Fort Worth area. The non-Dallas Fort Worth area is still fairly untouched by national competitors. This solution would allow Jones-Blair to reach a fairly untouched home DIY market. Currently in the non-Dallas Fort Worth area, paint is distributed through specialty retailers carrying only one brand, so Jones-Blair isn't losing ground to a cheaper competitor. In the Dallas Fort Worth area, paint is distributed primarily through large retailers where there is more competition and Jones-Blair, the highest priced paint, is almost always undersold. The metro area is not the primary market for Jones-Blair, and focusing on the $12.8 million pristine rural home market could prove effective.