Jones Blair Case Analysis
The Industry and Jones-Blair
The U.S. paint industry is a maturing industry estimated to have over $13 billion in sales in 1999. The US paint market is divided into three segments: architectural coatings, original equipment manufacturing (OEM) coatings, and special-purpose coatings makes up 22% (Appendix A). Architectural coatings make up the majority of U.S. paint sales. About 50% of architectural coatings sales came from do-it-yourselfers and 25% came from professional painters (Appendix A).
Jones-Blair Company is a small company that produces and markets premium priced architectural paints under their Jones-Blair brand. Jones-Blair’s total sales were $12 million in 1999. Jones-Blair emphasizes on quality paints and excellent services. Dollar sales increased 4% over the past decade. Jones-Blair markets its product in over 50 counties in Texas, Oklahoma, New Mexico, and Louisiana. The Dallas-Fort Worth (DFW) area makes up 60% of Jones-Blair’s service area in dollar volume. Jones-Blair’s market can be divided into two areas: DFW and non-DFW that have two main consumers: do-it-yourselfers and professionals.
Key Issues
Architectural coatings are considered a mature market because of it slow 1-2% growth in long-term sales. This is caused by alternate materials such as aluminum and vinyl siding and the sales of higher quality paints that reduced the amount of paint used and the rate of reapplying new paint. Also, research by the Home Improvement Research Institute explains that do-it-yourselfers choose retailer first, then choose paint brand. Also as Alexander Barrett, President of Jones-Blair, mentioned that”once paint is on the wall, you can’t initially tell the difference between premium priced and competitively priced paints” to describe the thinking of do-it-yourselfers with their paint purchases. Competition at the retail level has increased with retailers such as Kmart and Sears placing multiple locations in the DFW area. It will be hard to keep up...
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