Ronald Burns, the CEO of Janmar Coatings, Inc., has gathered his senior management executives in a meeting to come up with a decision on “where and how to deploy corporate marketing efforts among the various architectural paint coatings markets served by the company.”
* Analysis and Evaluation:
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.
Both DFW and non-DFW areas are important market to the company. Janmar has the opportunity to maximize their profit by doing two things at the same time. First, increase the product distribution in the DFW area because it provides more sales that the other one. Second, because of the high percentage of Janmar’s brand awareness in the non-DFW area, it is recommended to create a new lower quality product with the same brand name and distribute it to that area.