Jones Blair Paint Company

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Memorandum From: 601745 To: Raquel Wilhelm Date: February 5, 2013 Re: Jones Blair Company Recommendation: Jones Blair Company (JBC) should add another sales representative to focus on new accounts, while pushing their current sales representatives into being more aggressive to gain new accounts. Problem Statement: Should Jones Blair Company, a manufacturer of architectural paints, advertise more to Do-it-yourself consumers in the DFW area or non-DFW area? Facts: JBC Positives: In 2004, sales volume for JBC reached $12 million. JBC’s dollar sales also increased at an average annual rate of 4% each year over the past decade. JBC has been very successful in maintaining their price margins, even with increased research and development as well as material and labor costs. JBC’s 50-county service area accounts for $80 million (excluding contractor sales). Sixty percent of this sales number is dedicated to the Dallas Fort Worth area. Forty percent of JBC outlets are located in the DFW area. The remaining outlets are still in the JBC service area (non-DFW). Alexander Barrett, President of Jones Blair Company, stated, “Our experience to date shows that in our DFW outlets, the effect of multiple lines has been to cause a decline in gallonage volume. The non-DFW outlets, by comparison, have grown in gallonage volume. When you combine the two, you have stable gallonage volume.” Advertising: JBC only spends 3% of their net sales on advertising and sales promotion efforts. Fifty five percent of advertising and sales promotion dollars are allocated to cooperative advertising programs with retail accounts. Jones Blair brand accounted for about 25% of the DFW population that was aware of paint brands and purchased paint in the last 12 months. JBC was second to last on this percentage list. However, 75% of JBC audience is not buying paint. The

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