Table of Content
•Company’s Situation
•Industry Background
•Company Background
•Major Competitors
•Company Competitive Position
•Segmentation of Company Market Area
•Strategic Plan and Recommendation
Interoffice Memo
Date:7/2/2013
To:Ronald Burns
From: 001-78-2434
Subject: JanMar’s Coatings, Inc. Recommendation
Company’s Situation
The problem that we discussed in our last board meeting dealt withdeciding where and
how to execute corporate marketing effortsfor the year 2005 among the various
architectural paint coatings market in the southwestern United States.
Industry Background
The architectural coatings industry is a mature market that estimates to be a $12billion
dollar industry with 1 to 2 percent annual growth rate which accounts for 43 percent of the
total industry dollar sales. About 50 percent of architectural coatingsdollar sales are
brought in by do-it-yourself (DIY) painters’ purchases. Professional painters’ purchases are
accounted for about 25 percent of the dollar sales. The rest comes from the government,
export, and contractor sales. Furthermore, there are three main types of distributors: mass
merchandisers and home improvement centers (50%), special paint stores (36%), and
hardware stores and lumberyards (14%).
Company Background
Our company markets to over 50 counties in Texas, Oklahoma, New Mexico, and
Louisiana from its headquarters in Dallas, Texas. The major service area is in the 11
county Dallas-Fort Worth (DFW) metropolitan area. Our company is made up of two
market segment areas, Dallas Fort Worth and Non-Dallas Fort Worth. The sales volume of
architectural paint and products sold in our company’s 50 county service areas was $80
million in 2004 and DFW made up about 60 percent, which was $48 million of those
sales¹. The non-DFW areas made up the remainder $32 million of those sales, the other 40
percent. The company’s sales are distributed evenly, 70 percent of sales through DFW
dealers go to the professional painter and the 70 percent of sales through non-DFW dealers
go to DIY. DIY household buyers account for70 percent of non-contractor related volume
in DFW and 90 percent for non-contractor related volume in other areas.
Major Competitors
Our company’s major competitors in the architectural coatings segment for the DFW
outlets are Sears, Kmart, Sherwin-Williams, and Home Depot. Competition for retail
selling space in paint stores has increased as well. Company research has shown that 1,000
of these outlets are now operating in the 50 county area and DFW houses 450 of them.
Another competitor market is found at the paint manufacturing level and it is increasing
tremendously due to the change in their competitive behavior that focuses on selling to
contractors serving the home construction industry.
