Janmar coating, incPresident Ronald Burns
Presented by EEMAN BALOCH IKRAM ULLAH KAKAR SAMAN SAED TOOBA
Janmar coating Paint IndustrySegmen
tArchitectural
CoatingsOriginal Equipment
Manufacturing Coatings
Special-Purpose Coatings
% of total
industry dollar sales
43% 35% 22%
Architectural Coatings General purpose paints and varnishes used on
residential and commercial structures OEM Coatings
Used for durable goods such as automobiles, appliances, and industrial machinery
Special-Purpose Coatings Used for special applications such as bridges,
marine applications, and highway and traffic markings
Three Segments of Industry:
Customers of Architectural Coatings
50%
25%
25%
Sales
Do-It-YourselfersProfessional PaintersGovernment, Export, and Contractor Sales
Substitutes:Big Box Retailers, Paint Stores and Lumberyards, Hardware StoresJanmar is priced at a premium level compared to competitors
Market Size:$16 Billion annual Sales1-2% Annual Growth
• Industry Analysis
• Industry is considered to be established, with growth projected to match inflation
• Barriers to Entry/Continued Success• • High level of competition due to low-cost alternative national
retailers• Frequent R&D(research and development) Expenditures • Competition from Alternative siding materials (aluminum &
vinyl)• Increase in higher quality products that reduced number of
coats and application time.•
• Attractiveness/Un-Attractiveness:• Increased Government and Environmental Regulations• Slow sales growth• Increasing number of Do-It-Yourselfers that would
purchase both paint and sundries.• • Competitors/Advantages:• National Retailers: Low Prices, National Reach• Lumberyards/Specialty Stores/Independent Hardware
Stores: Access to non-metropolitan markets, Customer Service•
About Janmar coating• Headquarters: Dallas,
Texas• Service Area:
1. Texas, Oklahoma, New Mexico, and Louisiana.
2. Dallas-Fort worth (DFW) area
• Competition:• 600 paint companies in the
US
• 2004: • $16 billion net sales of Janmar
coating architectural paint and allied products
Janmar coating marketing strategies
• Distribution:• 200 independent paint stores, lumberyards, and hardware outlets.• 40% outlets are located in 11 country DFW area and other 60% are located
in the 39 countries service area.distribution is the key success factor in this industry which is architectural paint and sundry
Promotion:8 sales representatives Salary:
$60,000 1% commission on sales
3% of net sales advertising & sales promotion
efforts
What do you think Janmar coatings problem
is?
Where and how does Janmar coating Company deploy corporate marketing efforts among the various architectural
paint coatings markets in their service area
• Should they target: Professionals or Do-it-yourselfers?• Where should they target: Dallas Fort Worth or surrounding
areas?• How are they going to accomplish this?
Problem
· What tactical plan should be implemented?
Internal Strengths
• Large number of stores (40%) in the DFW area• Strong relationships between sales
representatives and retail stores• High quality• Sell to both professionals and DIYers• Cooperative advertising with retailers• Motivated, determined and passionate• Knowledgeable and friendly sales reps
Only 3% of sales goes to advertising Ads only reach and influence 25% of target Low brand awareness Only 8 sales representatives Low rate opening accounts (5 in 5 years Narrow market penetration with sales reps No exclusive rights with retailers Highest price in market
Internal Weaknesses
External Opportunities
• Market Growth: 1-2% per year • Distributed to 200 of the 1,000 retail outlets in the area• 40% of these retailers are in rural areas • DIY painters first choose a retail outlet for paint and sundries
then choose a paint brand.• Pro-painters are frequent buyers and look for paint that is high
quality, durable and easy to clean up• The average dollar paint purchase per purchase occasion:
$74.00. Average of $12.00 on sundryMarket Growth
2000 2001 2002 2003$75.7 $76.4 $77.6 $78.4
600 different competitors Competition is spending more on advertising Competition is less expensive Major in-house retailers have little knowledge Contractors want paint for the lowest price. Demand effected by substitutes, long lasting products and
VOC regulations Increased Government and Environmental
regulations
External Threats
Total Market
$80 Million
Net Sales2004
Professional
DIY
Urban$48,000
,00060%
$14,400,00030%
$33,600,00070%
Rural $32,000
,00040%
$3,200,000
10%
$28,800,00090%
$14,400,000
$33,600,000
$3,200,000
$28,800,000
Chart Title
Urban Professional Urban DIYRural Professional Rural DIY
Janmar coating Market
$12 Million
Net Sales
Professional
DIY
Urban$7,200,0
00 60%
$5,040,00
070%
$2,160,000
30%
Rural $4,800,0
0040%
$1,440,000
30%
$3,360,000
70%
5040000; 42%
2160000; 18%
1440000; 12%
3360000; 28%
Janmar coating Market
Urban Professional Urban DIYRural Professional Rural DIY
Market Share
Professional
DIY
Urban 35% 6%
Rural 45% 12%
Urban Pro-fes-
sional; 35%
Urban DIY; 6%
Rural Pro-fes-
sional; 45%
Rural DIY; 12%
Janmar Market Share
year Total Dollar sale
DFW area sale
NON-DFW area
2000 $75.5 50.24 24.8
2001 76.5 50.8 25.6
2002 50.5 50.5 27.1
2003 50.7 50.7 27.7
2004 80.8 48.0 32.0
Industry sale volume
Industry five year average sale volume is 77.62%
What do you think Janmar coatings
distinctive competencies are?
Distinctive Competency• Quality• Best on the Market
• Solid distribution network • High quality product
• 1 Coat Coverage• Pleasant
Fragrance• Good fit with
professional painters
• Service• Sales Representatives
• Well Liked• Helpful• Professional• Knowledgeable• Discuss both Business &
Family• Run the Store
• Good fit with rural area
Market Positioning Janmar has two distinct market segments:
· Dallas Fort Worth ~ 80 stores· 70% of Sales to Professional Painters
· Non-Dallas Fort Worth ~120 stores· 70% of Sales to Do-It-Yourselfers
Alternativesof
media planning meeting1. Increase advertising dollars by $350,000 and use it
for TV ads2. Have an overall 20% price cut3. Add one more sales representative4. Continue to guard margins and control costs5. President Ronald Burns suggestions
1. Ad dollars used for print media instead of TV2. 40% price cut to attract contractors
Which Alternative Do You Think Is The
Best?
VP of Advertising RON
• Direct efforts to Dallas Fort Worth DIY market• Increase awareness to 30 %• Advertising Increase of $350,000• Television Coverage in 15 Counties
% of DFW population Brand awareness
mass marchandise brand
national paint brand
mass marchandise brand
janmar brand
local paint brand
50%
45%
35%
25%
15%
Awareness question: what brand come to mind when you think of paint?Last brand bought: what paint brand did you purchase last time you bought paints?
VP of Operation
• Advertising isn’t right• Need to be competitive in DIY • Consumers are Price Sensitive• Cut Price by 20%
Vice President of Sales• Putting our effort into non-DFW areas.• As we know in non-DFW area is only 16%• Target: Non-DFW areas
• Where ½ of the sales and most dealers exist right now
• Solution: Add another sales rep• There are already 8• This rep would develop new retail account leads and
call on professional painters to ask their business through our dealers
• Cost to add another dealer is $60,000 per year
Vice President of Finance
• Keep everything the same• Continue to guard margins and control costs
Recommendation• VP of Sales• Extra Sales
Associate• $60,000
annually• Focus on Rural
Pro
Why Rural Professional
• Distinctive Competency• Good Service & High Quality
• Good Fit• On a 1st name basis with store owners
• Control 45% of the market
Implementation
• Hire 1 additional Representative – NOW!• Sales Training• Clarify Roles• New focus: Rural Professional Painters• Increase personal sales by 5%
Analysis• Focus on Rural Professionals • Additional Staff• 57.5% Sales Increase• Annual Savings of $969,730• Almost $1million!!!
• Invest• Growth?
An Offer You Can’t Refuse!!!
40% price cutRedirect Advertising
Newspaper & CatalogsFocus on Rural
Conclusion• AS the president Burns say all of you have valid
arguments. Vp of sale, finance, president of sale, advertising give their best alternative. So for as our concerns we should suggested the alternative strategy of VP of Sales and vp of advertisement.
• Control 45% of the market Extra Sales Associate• $60,000 annually• Focus on Rural Pro
Direct efforts to Dallas Fort Worth DIY marketIncrease awareness to 30 %Advertising Increase of $350,000Television Coverage in 15 Counties
Questions?
Comments? Concerns?