Janmar Coatings

Janmar needs to focus all their current energies on the DIY consumers and professional painters. Hiring a new sales representative would be the smartest decision right now because they will know every detail of the products and have the ability to market that properly to each of those consumer segments.However, I have also considered the Vice President of Advertising’s suggestion that they should increase advertising expense by $350,000. While initially, increasing advertising expenses sounds like a good thing to do, this decision would almost double the current advertising expenditure. Janmar is spending around 3% of revene on advertising and sales promotions efforts; which comes out to nearly $360,000. And while it may By increasing advertising expenses by $350,000, an additional $1,000,000 in sales will need to be recovered to make up for this expenditure. Mr. Burns makes a valid point by saying that 75% of the audience advertised too is not buying paint. With 25% of your audience only looking to buy paint, it would not be worth the risk of not increasing sales by $1,000,000, to implement the extra advertising expense.Also, I considered the Vice President of Operations proposal for a 20% price cut on all Janmar Coatings, Inc products. Price cuts are always something that needs to be entered into with extreme caution. Even the slightest 1-2% drop in price

Price elasticity of demand is a Theory of the relationship between a change in the quantity demanded of a

Elasticity of demand is the relationship between the demands for a product with respect to its price. Generally, when the demand for a product is high, the price of the product decreases. When demand decreases, prices tend to climb. Products that exhibit the characteristics of elasticity of demand are usually cars, appliances and other luxury items. Items such as clothing, medicine and food are considered to be necessities. Essential items usually possess inelasticity of demand. When this occurs prices do not change significantly.

Total Sales Dollars (for covering each incremental dollar of advertising) = Absolute increase in dollar sales / Advertising expense = $500,000 / $150,000 = $3.33

Elasticity : rising or falling price lead changes in quantity of demand, and the quantity of supply and this so-called elasticity

Metal structures require a certain level of preventive care, which can easily be obtained through the benefits of powder coating. Powder Vision, Inc. is a full-service powder coating business located in Issaquah, WA. Offering convenient pickup and delivery throughout the state of Washington, they offer the industrial and residential powder coating services necessary to keep your metal equipment and other possessions well-protected.

Beside suggestions stated by the senior executives and the president of Janmar Coatings, Inc., there are three ways to deploy Janmar products (Paints and sun-dries). First, since 60% ($80 million) of Janmar’s architectural coatings products were sold in DFW area, the company should distribute more of its products to that area in order to maximize sales. Regarding the non-DFW area, the majority (90%) of that area deals with “do-it-yourself” method to paint their houses or rooms, and usually the decision effected by the price of the product. Therefore, Janmar has two options for the non-DFW area, either to cut the prices of their products, or to develop a new lower quality category that has the same brand name but cheaper than the premium category. The competition in Architectural coating segment are increasing. Companies seeking growth and a higher sales base to support increasing costs are making acquisition. Major products of paint for the architectural coatings segment include Sherwin-Williams, Benjamin Moore, the Glidden unit of Imperial Chemicals, PPG Industries, Valspar Corporation, Grow group and Pratt & Lambert. These producers account upward for 60% of

each channel and the deliveries to each channel. You find that the retail channel accounts for 70%

They are a leading retailer of home and garden improvement products and a major supplier of building materials to trade.

Spends 3% of net sales on advertising and sales promotion efforts. 55% of advertising and sales promotion dollars are allocated to cooperative advertising programs with retail accounts.

This case is about an organization doing business on paint coatings market served by company in the southwestern United States. The organization has some challenges on how to deploy marketing efforts among the various architectural paint coatings markets served in the southwestern United States.

1- the architectural coatings are general-purpose paints, varnishes, and lacquers used on residential, commercial, and institutional structures. They are sold through wholesalers and retailers.

In 1999 the U.S. paint industry sales were projected to be more than $13 billion. The industry has slow sales growth and is constantly changing due to government regulations. In 1999, Jones∙Blair had sales volume of $12 million with an annual growth rate of 4%. Jones∙Blair produces and sells architectural coatings, OEM coatings and paint sundries. However, the President, Alexander Barrett and the senior management executives know that there are some areas that they need to improve on.

& Maintenance salaries + Administration salaries + Sales salaries + Sales promotion expenses + Corporate services

One of the main features being evaluated by the customers before buying any commodity is its price. Though customers evaluate other features also but the price conscious customers see the price of that product first before making any decision for buying it. All the commodities that are being bought by the customer fall in one of the three categories of elasticity of demand. They can have elastic demand, inelastic demand or unit elastic demand. Elasticity of demand is defined as a percentage change in demand of a product due to percentage change in its price (Cowell, F. A. 2006). If the 1 unit change in price of a good leads to more than one unit change in quantity demanded that product is called to have elastic demand. If the 1 unit change in price of the good lead to less than 1 unit change in quantity demanded of that good, it is called to have inelastic demand. If one unit change in price of good cause 1 unit change in quantity demanded of that good it is called to have unit elastic demand. In reality very few or almost none good possess the unit elastic demand. The price of good is very