Janmar Coatings

2297 Words Aug 11th, 2013 10 Pages
Janmar Coatings, Inc.

I. Summary of Facts A) Market – Paint coatings industry 1) Three broad segments a) Architectural coatings: general-purpose paints, varnishes, and lacquers used on residential, commercial, and institutional structures. Purchased by do-it-yourselfers and is commonly called shelf goods. Accounts for 43 percent of industry market. b) Original equipment manufacturing (OEM) coatings: formulated to industrial buyer specifications and applied to original equipment during manufacturing. Used for automobiles, trucks transportation equipment, appliances, furniture and fixtures, metal containers and building products and industrial machinery and equipment. Represents 35% of the total industry market.
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4) Direct costs of a sales rep is $60,000 plus a 1 percent commission on sales. 5) Elasticity – elastic; as price changes, acceptable price is a key criterion when consumers decide on a product. D) Promotion 1) Sales reps are responsible for monitoring inventories of Janmar paint and sundry items at each retail outlet, as well as for order taking, assisting in store display, and coordinating cooperative advertising programs. 2) Company spends 3 percent of net sales on advertising and sales promotion efforts. 55 percent of advertising and sales promotion dollars are allocated to cooperative advertising programs with retail accounts. Janmar pays for a portion of an account’s media costs based on the dollar amount of paint purchased from Janmar. Remainder of advertising and sales promotion budget is spent on in-store displays, corporate brand advertising, outdoor signs, regional magazines, premiums and advertising production costs. E) Place 1) Janmar Coatings markets its paint and sundry items in over 50 counties in Texas, Oklahoma, New Mexico, and Louisiana from its plant and headquarters in Dallas, Texas. The 11-county Dallas-Fort Worth (DFW) is a major business and financial center in the company’s service area. The company distributes its products through 200 independent paint stores, lumberyards, and hardware outlets within the Dallas Fort-Worth area with sales distributed evenly between DFW