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Janmar

In: Business and Management

Submitted By maninderk
Words 639
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Background The United States paint industry has three segments: architectural coatings, original equipment manufacturing coatings (OEM), and special purpose coatings. Architectural coatings are used for commercial, institutional structures and residential purposes; it is sold through both wholesalers and retailers. The majority of all sales are made to do-it-yourself consumers and are called shelf goods and this accounts for 43% of total industry sales. OEM coatings are used for durable goods, automobiles, trucks and transportation equipment and are applied directly to original equipment during manufacturing. OEM accounts for 35% of total industry sales. Special purpose coatings are for special applications or environmental conditions. For example they are used for automobile refinishing and maintenance. It accounts for 22% of industry sales. Architectural paint coatings have two factors that affect its demand. This area is facing competition from alternative materials such as vinyl siding, wood paneling, and wall coverings. Also, companies have ben producing higher quality products that require less reapplication. In addition, paint manufacturers are under pressure to reduce VOCs in their paints. Many companies have had to merge with others in order to stay in business. The number of paint companies is declining.
The organization Janmar Coatings Inc. is a corporation that produces and advertises architectural paint under the brand name Janmar. They market their own paint and sundry items in over 50 counties. The headquarters is in Dallas, Texas. Dallas-Fort Worth is the major business and financial center in the company’s southwestern service area. They sell sundries such as brushes, rollers and thinners under the brand name Janmar as well. any of these items are not manufactured by the company itself. Janmar Coatings have been able to distribute their products successfully; however, they are facing more competition. They are a privately own company that markets architectural paint under the Janmar brand. They also sell paint sundries and operates a large OEM coatings division selling worldwide.
Key Problem Janmar Coatings is facing more competition with other paint suppliers and needs to come up with a plan of action to remain competitive. One of the problems is that they are currently the highest priced paint in their service area. In the DFW retailers that they are located in, there are 2-3 other paint brands available with Janmar being the highest priced paint brand. This is causing a decrease in the sales of their paint. However, in the non-DFW area, there has been an increase in sales. This has stabilized sales. In addition, there is additional competition from Sears and Kmart in the DFW area. Also, the allocation of advertising funds is a problem. Janmar is currently located in 200 retailers, 80 of these retailers are located in the Dallas Fort Worth (DFQ) area while 120 of the retailers are located in the surrounding area. Sales, however, are even between both areas. This shows, that despite being in 60% of the retailers outside of DFW, they are making the same profits in both areas. Therefore, this should be a concern and they should consider reallocating their promotions.

Solution/Recommendation There are a few recommendations that can result an increase in their sales and satisfy there customers. The customers who purchase paint will respond very well to the 20 percent price decrease because they will be able to save money on the product and they will be loyal to the company. If the company decides to increase their expenses on advertisements to $350,000 this will cause competitors to want to do the same because now people will see more of Janmar and less of their products. Each action that Janmar takes will satisfy the buyer, trade companies, and organization because everyone will be satisfied with the portion they get, whether the price is lower, whether if there is a increase a profit, or better consumer response.

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