Jones Blair Case Study Essay

Jones • Blair is a company that produces and sells architectural pigment it besides sell pigment sundries which include paintbrushes and rollers. It caters to over 50 states which are divided into two sectors the DFW country and the non-DFW country. Of the two the DFW country has been proven to be the most successful country for the company.

In 1999 the company made 80 million in gross revenues and 60 % of this was contributed by the DFW country. There are two sections within the company’s chief gross revenues properties and these are between the bash it yourself market and the professional market.

With respects to the professional market in the DFW country this accounted for 70 % of gross revenues In the non-DFW country 70 % of gross revenues were made through the do-it-yourself market.

During a meeting the company discussed the job of where and how to transport out selling attempts. They were left with four options:

1 ) Cut the monetary value by 20 % .
2 ) Hire one extra gross revenues rep.
3 ) Spend extra $ 350. 000 on advertisement.
4 ) Stay the same.

A elaborate expression into each option.

1 ) Cut the monetary value by 20 % .

The shopper research programme indicated that traders will endorse off the trade name when the client appears monetary value medium. By cutting the monetary value by 20 % this will let the company to be on par with national trade names. The current part border for the company is 35 % if the monetary value was to be cut by 20 % so the new part border would be reduced to: 35 % – 20 % = 15 %

with the current sale volume being $ 12 million and a monetary value cut of 20 % the gross revenues would hold to increase significantly for the monetary value cut to be effectual. Harmonizing to Barrett “we are now the highest monetary value pigment in our service area” the fact that the company still has increasing gross revenues despite being the highest cost trade name of all the rivals this shows that the company is being perceived as giving high quality goods where people don’t head about paying excess for their trade name. If the company was to cut the monetary value by 20 % this may go forth uncertainties in peoples heads about whether or non the trade name is really every bit high quality as they had thought. The fact that they can acquire off with bear downing a higher monetary value for their trade name they should lodge with it.

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2 ) Hire one extra gross revenues rep.

Presently the company has 8 gross revenues reps which are responsible for the undermentioned undertakings:
Monitoring stock lists.
Taking orders.
Helping in shop show.
Organizing concerted advertisement programmes.

A study indicated that the gross revenues reps were really good liked. helpful. professional and knowing with respects to paint. These reps are paid a wage and besides a 1 % committee. The cost of engaging an extra gross revenues rep would be $ 60. 000 a twelvemonth. this is excepting committee. The frailty president feels that the current gross revenues reps aren’t aggressive plenty and the fact that merely 5 new histories were made in the last 5 old ages something needs to be done. Merely 16 % of the histories come from the non-DFW country so possibly a focal point needs to be placed onto this country. If this was to be done. an extra gross revenues rep be assigned to the non-DFW country this could take to a important addition in gross revenues.

3 ) Spend extra $ 350. 000 on advertisement.

The frailty president of advertisement believes that there is a demand for an awareness degree of 30 % among do-it-yourselfers to impact their gross revenues. An accent on telecasting coverage will make non-DFW consumers in 15 states. Research shows that ads affect the purchasing procedure Since most consumers consider the shop before the existent trade name possibly the advertisement should be focused more-so on corporate ads instead than trade name ads. The company spends 3 % of its net gross revenues on advertisement therefore the current cost of advertisement is: 3 % of 12 million = 360000

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with an extra spend of $ 350000 on publicizing the entire cost of advertisement would be: 360000+ 350000= $ 710. 000. This would about duplicate the cost of advertisement and since there’s an accent on telecasting this could turn out to be a hazardous option. particularly since trade name consciousness isn’t the chief ascription to purchaser behavior. Another factor to see is the fact that 75 % of the audience of the advert aren’t purchasing pigment.

4 ) Stay the same.

The concluding option for the company would be to maintain everything the same which is advised by the frailty president of finance. Since the company is go oning to do net income he feels that if you were to take the other options that there would hold to be a important addition in the gross revenues volume which may non be a consequence.

Although most of the options offer different benefits and of class different drawbacks we don’t believe there is an straight-out option to take. With respects to the cut in monetary value of 20 % we don’t believe this option should be chosen. The fact that the company is allowed to bear down the higher monetary value and is perceived as being a high quality trade name why should they put on the line losing all of this by accepting the monetary value cut.

The following option with respects to engaging an extra gross revenues rep we feel that the fact that they have 8 gross revenues reps already would the add-on of another truly do a important impact on gross revenues. Rather than concentrating on engaging a new one we believe that if they focused more-so and perchance retraining their current gross revenues reps this could turn out to be more effectual. The fact that the gross revenues reps are already considered extremely by the clients is a fillip. If more attempt was put into them and how they could better efficiency so this could be worthwhile to the company. The company could split up the gross revenues reps into the necessary markets and perchance by offering them inducements this could increase their public presentation. By engaging an extra gross revenues rep doesn’t needfully assure a alteration in gross revenues.

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With respects to an addition of publicizing disbursement of $ 350. 000 we wouldn’t urge this option. As the company wants to set an accent on telecasting and the fact that 75 % of the audience don’t purchase pigment. the 25 % of the audience that do doesn’t look like a large adequate market coverage to put such a batch of money into. Alternatively we feel they should look into other selling options. The fact that with respects to purchaser behavior that clients choose the shop foremost before the trade name possibly the company should look into advertisement within the existent shops. They could look into what shops are proven to be more popular and concentrate advertisement attending on these.

With the last option as remaining the same although the company is go oning to do net incomes we feel like this could be the easy option. Rather than merely being content with what is presently go oning with the concern they should concentrate on bettering the concern. The fact is that more and more rivals may come in the market or even people may alter their purchasing behavior but finally the company should seek and ever be a trade name considered.