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Jones Blair Case Analysis Essay

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SNIGDHA GINNA
JONES BLAIR CASE ANALYSIS

STRENGTHS
1. According to me the biggest strength for Jones Blair is their high quality of products, as they have been in the industry for a very long time and have invested a decent amount into research and development work. This coupled with knowledgeable and experienced sales representatives who are helpful and well liked by the customer’s adds to be their strength. They also sell their products to both Professional painters and DIY markets.

WEAKNESS
One of the biggest weaknesses for Jones Blair in the market is that they are not competitively priced in comparison to their competitors. Jones Blair is in fact the highest prized paints in the market. This could be a big disadvantage …show more content…

So it has a very limited opportunity to grow in that segment.

3.
Suggestion 1.To spend a 300,000 TV brand image advertising campaign split between DFW and non DFW areas.
Current Contribution Margin: 35% or 0.35
The amount of extra sales that would be required to cover this cost of 300,000 would be
$300,000/0.35=$8571428.57

Jones Blair will have to increase its market share significantly to compensate for this additional cost.

Suggestion 2

20% price cut
Contribution Margin: 35%
20% price cut will reduce the contribution margin to 15% or 0.35
Calculation
Currently Gross margin is 12m*0.35=4.2m
In order to maintain this Gross margin,
(12m+x)*0.15=4.2m
X=16
Therefore required sales is $28 million.

Suggestion 3:
To invest $300,000 in in store advertising, merchandising and sales support.
Calculation:
Current Contribution Margin: 35% or 0.35
The amount of extra sales that would be required to cover this cost of 300,000 would be
$300,000/0.35=$8571428.57
I would suggest the third option to increase their in store advertising ,merchandising and sales support because a 20% price cut would require an additional sales on 28 million to maintain the $4.2 million. This strategy would be rather difficult for the company as they spend a lot of money on research and fine quality of products.
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