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4.Which segment(s) should Jones Blair pursue? Why? a.First, how attractive is each segment to Jones Blair? -Size of each segmentHouseholdProfessionalUrban(DFW)80MM * 60% * 70% =33.6MM(42% of the total market)80MM * 60% * 30% =14.4MM(18% of the total market)Rural(non-DFW)80MM * 40% * 90% =28.8MM(36% of the total market)80MM * 40% * 10% =3.2MM(4% of the total market)NOTE: 50% of the urban/household is captured by mass merchandisers (p5, 2ndlastpara) so effective size of this segment is only 16.8MM.-Characteristics of each segmentUrban/Household: (1) price sensitive due to heave low price emphasis by massmerchandisers. (2) ease of purchase and opportunity for comparative shopping.Large number of paint outlets, outlets carry multiple brands. (3) Quality is important,but probably not knowledgeable enough to tell the difference.Rural/Household: Fewer opportunities for comparative shopping. No mass merchandisers. Professional (rural AND urban): Care about quality and service, less concerned aboutprice -Future growthUrban market little growthrural market growing rapidly. 15.5% growth between 1996 & 1997
b.Second, what is Jones Blair’s competitive position in each segment? -Jones Blair’s current market share in each segment HouseholdProfessionalUrban(DFW)12MM * 50% * 30% = 1.8MM1.8MM / 33.6MM= 5.4%OR 1.8MM / 16.8MM= 10.7%12MM * 50% * 70% = 4.2MM4.2MM / 14.4MM= 29.2%Rural(non-DFW)12MM * 50% * 70% = 4.2MM4.2MM / 28.8MM= 14.6%12MM * 50% * 30% = 1.8MM1.8MM / 3.2MM = 56.3%-Company's capabilities.JB is the premium-priced paint. It loses competition in urban outlets that carry multiple brands.