Within the Janmar Coatings service area there is $80 million worth of overall market sales. Janmar controls 15% of this market or $12 million specifically. The Janmar service area is constructed of two distinct demographics, Dallas Fort Worth area (DFW) where they distribute to 80 retail stores and the Non Dallas Fort Worth area where they distribute to 120 retail stores. These current retail locations split sales dollar volumes 50-50 despite the 40-60 allocation of retail outlets. Total Marketing spend over the past five years has averaged out to be 3% of net sales or $360 000. This is currently tenfold less than what competitors are spending in the same market. 3
Previous marketing activities have been allocated in the following fashion: 55% of the marketing dollars are allocated to cooperative advertising within the 200 retail accounts that sell Janmar products; the remaining 45% is used for in-store displays, regional publications, promotions, signage and advertising production cost. Janmar's executive leadership is having trouble deciding between the following strategic marketing approaches to keep growing. 1. Do nothing and keep chugging along protecting our margins and grow at a rate twice the industry average 2. Reduce their pricing by 20% to appeal to the DIY market consumers who are very price sensitive. 3. Focus their efforts on the non-DFW areas. 4. Hiring additional representatives has merit. II. Summary of Situation Analysis Analysis will begin with a tradition SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. A more in-depth analysis of other factors will follow. 4
Table 2 Strengths Weaknesses Internal Factors Considered to be a mature market with long term sales growth projected in the range of 1 to 2 percent per year. Lack of mass market outlets and lack of brand recognition Nearly one fourth or the households purchase interior house paint in any given year Even janmar increases sales, it is still at the same production amount Diverse distribution network Customer service weaknesses: Having sales representative and high quality product Access to non-metropolitan markets High price and high cogs Only 16% market penetration in non DFW areas Opportunities Threats External Factor Difference in paint formulations associated with regional climatic needs. Architectural coating segment faced competition from alternative materials, such as aluminium, vinyl siding, interior wall coverings, wood paneling.
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