Case Assignment #1: Jones Blair Company
Jones Blair sells paint products in over 50 countries and Dallas-Fort Worth area is their most important market. Competition in this market has increased with the coming of department stores, paint stores, lumberyard, hardware stores, and at the manufacturing level.
The JB market can be broken down into the following market segments: urban and rural. And each segment can be divided into two sub-segments: household (do-it-yourself) and professional. The rural-household segment should be the highest priority. It shows a high potential for growth because the "client-seller" relationship is more important than the price. The next most important segment to pursue is the urban-professional sector because they are more concerned with quality rather than price. The rural-professional subdivision is already the most dominate and therefore not a current concern. Lastly, the urban-household is the lowest priority because they are very price-sensitive. Unless Jones Blair sells a high quantity at a very low price, this segment is not going to make the company profitable.
Jones Blair holds the high-end trade market providing mostly to do-it-yourself customers that want good service and information about how to apply the paint and how to prepare the surface. They also cater to professional painters that want high quality paints. In order to appeal to the rural-household segment, JB needs to spend an additional $350,000 on corporate advertising, cut prices by 20%, hire an additional sales representative, or do nothing and maintain the status quo.
I recommend hiring an additional sales rep because it could potentially generate significant sales if assigned to the right territory and professional painters would appreciate the additional service, especially considering that Jones Blair distributes to exclusive dealers. This financial investment is much smaller than the necessary investment in publicity, and has a greater chance of...