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Jones Blair Case

Autor:   •  May 28, 2012  •  Essay  •  538 Words (3 Pages)  •  1,487 Views

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Jones Blair Case

The US paint industry sales is considered to be a maturing industry. Industry sales in 2004 were estimated to be slightly over $16 billion. The US paint market is divided into three segments: architectural coatings (43%), original equipment manufacturing coatings (35%), and special purpose coatings (22%). In 2004, the U.S. sales of architectural paint coatings and sundries were estimated to be over $12 billion. The sales growth rate of the architectural coatings industry is slow because it is a mature market, and a slow growth rate is its main characteristic. Some other reasons of its slow growth are competition from alternative materials such as aluminum and plastic, and the increasing quality of paints. The demand for paint sundries, however, is predicted to increase because of the popularity of do-it-yourself painting. 50% of architectural coatings dollar sales are accounted for by do-it yourself painters and professional painter purchases account for 25% of dollar sales. The rest goes to the government, exportation, and commercial uses. There are three types of architectural coatings distributors: mass merchandisers and home improvement centers (50%), special paint stores (36%), and hardware store and lumberyards (14%).

Jones Blair market can be divided into two geographic areas: DFW and non-DFW. And each segment can be divided into two sub-segments: do-it- yourselfers and professional painters. The estimated dollar volume of architectural paint and allied products sold in Jones Blair’s 50 countries service area in 2004 was $80 millions. DFW was estimated to account for 60% of market. Do-it-yourself household buyers account for 70% in DFW and 90% in other areas. Exhibit 1 shows the facts addressed above.

Exhibit 1 Architectural Paint and Sundry Sales Volume of Paint Industry in Jones Blair 50-County Service Area in 2004

$80 million

Net Sales Professional DIY

DFW

$48,000,000

60% 18%

$14,400,000

30% 42%

$33,600,000

70%

Non-DFW

$32,000,000

40% 4%

$3,200,000

10% 36%

$28,800,000

90%

To calculate market segments in percentage and in value, we know the facts as follows: 1). Jones Blair sales volume in 2004 was $80 million.

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