MKT750

CASE STUDY ANALYSIS

JANMAR COATINGS INC. PREPARED FOR:
PM NORUDIN BIN HJ MANSOR
PM DR SITI HARYATI SHAIKH ALI
PREPARED BY:
IRSYADDUDDIN BIN
WAN NOORMAZIDAH BINTI WAN YACOB

INTRODUCTION
US PAINT COATINGS INDUSTRY
BROAD SEGMENT, %
Architectural coatings
Original Equipment Manufacturing (OEM)
Special purpose coatings

22%
43%
35%
Estimated 2004- Over $16 billion in total industry sales
Considered a mature market

ARCHITECTURAL PAINT COATINGS AND SUNDRIES

In 2004, sales = $12 billion plus

Projected long-term sales growth of 1% - 2% per
year.
The demand for architectural coatings and sundries
reflects :
Level of house redecorating, maintenance and
repair
Sales of existing homes
Faced competition from alternative materials
Developed higher-quality products
Increasing demand for paint sundries due to a trend
toward do-it-yourself painting
Compliance with EPA regulations

MARKET SEGMENT, %

14%
50%
36%

Private Name
Controlled by
Major
Corporation
Specialty Stores
Hardware
Stores and
Lumberyard

JANMAR COATINGS INC

Product lines

produces and markets

architectural paint under the
Janmar brand name, sells paint
sundries under the Janmar name
but not manufactured by the
company.

Location

Markets its paint

and sundry items
in over 50
countries in Texas,
Oklahoma, New
Mexico and
Louisiana.

Major business and

financial center is
located in 11
country DFW
metropolitan area.

Headquarters in
Dallas, Texas

Financial

In 2004, $12
million in sales,
$1,140,000 in
net profit before
taxes.

Over past
decade, average
4% dollar sales
increase per
year.

In 2004, 60% of
net sales = cost
of goods sold +
freight expenses

Distribution

Distributes its
products through
200 independent
paint stores,
lumberyards and
hardware outlets.

80 stores located
in DFW area

120 stores located

in non-DFW area

Promotional Efforts

3% of net
sales on
advertising
and sales
promotion
efforts.

55% of
advertising and
sales promotion
dollars
Cooperative
advertising
programs

45% of
advertising and
sales promotion
dollars In-store
displays,
corporate brand
advertising,
outdoor signs,
regional
magazines,
premiums and
advertising
production
costs.

PROBLEM
DEFINITION
where and how to deploy corporate
marketing efforts among the various
architectural paint coatings markets
served by the company.

SWOT ANALYSIS
Internal Factors
Strengths

Weaknesses

Paint companies had developed higher-quality

products that reduced the amount of paint
necessary per application and the frequency of
repainting.

Produces and markets architectural coatings

paint under the Janmar brand name, low brand
awareness

Diverse distribution, 200 independent paint

stores, lumberyards and hardware outlets.

Highest-price paint in service area.

Of Janmars competitors, do-it-yourselfers shop at

mass improvement centers most frequently, and
professional painters shop at specialty paint
stores and lumberyards most often
merchandisers and home
Distribution reaching 25% awareness in DFW

Highest of paint cost-of-goods sold, including

freight expenses, were 60% of net sales.

External Factors
Opportunities

Threats

Increasing demand for paint sundries due to a

trend toward do-it-yourself painting by household
consumers.

The architectural coatings segment faced

competition from alternative materials.

Excellent customer relationship, the sales

representatives were well liked, helpful,
professional and knowledgeable about paint.

The purchase of small companies by larger firms

to boost their specific market or geographic
presence.

Readily available technology and difference in

paint formulations associated with regional
climatic needs.

Compliance with EPA regulation eroded

historically low profit margins in the paint
industry.