Janmar Coating INC is currently facing a problem of where and how to enact corporate marketing efforts among various paint coatings market. Several top executives cannot come to an agreement on if they should expand to non-Dallas Fort Worth (DFW) areas or construct additives to the current budget for advertising, hiring a salaried employee, or cutting prices so that the customers and retailers who are price sensitive will not be discouraged to use the product. According to the case study the U.S. paint coating industry has three segments. The smallest of the three with only 22% of the market is the special coatings segment. This group is particularly used on items that may have extreme temperature fluctuation or environmental factors. The middle segment with 35% market share is the Original Equipment manufacturing (OEM). OEM is used on objects such as cars, trucks, building products and more.
The largest segment with 43% market share is the architectural coatings used on homes, buildings, industrial structures and more. Industry sales for paint coatings in 2004 were around 16 million with expected sales to increase in the next year. Analyzing the data reflects that the segment of Architectural Paint coatings and sundries have a strong position in the industry. This 12 billion plus group is expected to grow more with the extreme demand of maintenance and repairs on new and old homes increase. Although its competition such as aluminum and vinyl siding appears to have a grip on the market but APC is still holding steady. In addition, the do it yourself painters are increasing in popularity making the trend successful and providing stability in the market.
Knowing the competition is not hurting but this segments growing concerns are the mandatory regulations regarding a reduction in emissions caused by the production of paint. This has stigmatized the industry causing sales to decrease which resulted in many business closing or merging with bigger firms. Janmar’s mission is to gain more market share across the industry. With sales being steady in the DFW area there should be an emphasis on the non DFW area which may provide an increase in sales which will result in increased revenue. A strength of the company is great customer relationships.
Many believe to sell a particular product you must know the product very well and Janmar’s representatives has demonstrated this according to several internal customer surveys. Team perseverance believes a weakness in this company may be its inability to begin penetrating the market outside the DFW area. Also the indecisiveness of the leadership of the company may prevent them from taking advantage of the upcoming peak season. In the past before the specialty stores or the big retailers like Walmart and home depot were around Janmars competition was minimal. Although they have many professional painters that purchase their product it may be considered a weakness because it limits gaining more share. The alternative course of action in the Janmar case are being able to excel their presence in the DFW do-it-yourself market. A con to this alternative is that many consumers select a store before selecting the brand.
With many stores having more than one brand this may leave the consumer a chance to purchase a less priced product. It is very common for consumers to purchase from advertising they have also seen although a very small percentage. A pro would be the increasing of brand awareness. The cost to enact this alternative is around $350,000 in brand advertising over the current budget. Another alternative which counter acts the previous mentioned alternative is to issue a special coupon in the newspaper. A con may be that in the time of the internet print marketing is out of date and seen as less effective. The alternative is to hire a new sales representative that may be aggressive in the non DFW area may be a better suggested alternative. A pro to this alternative is the direct cost in salary vs $350,000 in addition to the budget which the salary is dramatically lower in price. The final alternative is to continue with the current approach.
Team recommends that Janmar Coating Inc. should chose the last alternative with a twist. Keep everything the same with small increments of change. The first change would be adding a new sales rep. We believe this individuals role to recruit new accounts may show a faster result in revenues via new accounts than advertising on the television which carries a higher cost and more time to see sales increase. This representative may have the ability to get more accounts in one year than they have in five years. One of the strengths of Janmar is its ability to satisfy its retailers. It is crucial that Janmar begins to aggressively attack the non DFW area in order to get there presence and product known. With globalization it is very easy for a company to be left behind.