Janmar Coatings Case
Pasha Ghaemi
MKTG 4850-001
Practice Case: Janmar Coatings, Inc.
21:03:38
I. Central Problem: Fundamentally, Janmar Coatings, Inc. faces two concurrent issues that pose threats to their current and future sales. The main issues that must be addressed by Janmar Coatings are how to maintain and/or increase sales in an estimated maturing market while also facing a highly saturated market of competition. Furthermore, Janmar Coatings products are being sold to respectively, two differentiated customer bases with different buying behaviors [“do it yourselfers” and professional painters].
II. Issues: Specifically, Janmar Coatings must address several issues that attribute to the central problem.
a. First, the market condition. Industry sources have estimated the overall market for Architectural Coatings to have matured and have projected long-term growth not to exceed 2 percent per year. These figures are relevant because Janmar Coatings can not target high growth in what appears to be a stagnate market.
b. Second, the saturation of the market. While figures essentially indicate a decline in competition by actually companies in the market [2% decrease in number of companies], this is due to larger firms acquiring smaller firms. These acquisitions provide regional boosts for these firms in specific regions and geographic presence. Furthermore, competition at the retail level and shelf space has likewise accelerated in recent years. Another figure worth relevance to Janmar Coatings sales is the increase of competition at the paint manufacturing level as well.
c. Third, the price sensitivity of do-it-yourselfer. Proximately 50 percent of the architectural coatings sales are accounted by do-it-yourselfers. Figures show that this market segment is growing. Critically though, these consumers are extremely price sensitive and Janmar Coatings products are priced in the premium category segment. This poses a serious issue towards growth within this segment when
MKTG 4850-001
Practice Case: Janmar Coatings, Inc.
21:03:38
I. Central Problem: Fundamentally, Janmar Coatings, Inc. faces two concurrent issues that pose threats to their current and future sales. The main issues that must be addressed by Janmar Coatings are how to maintain and/or increase sales in an estimated maturing market while also facing a highly saturated market of competition. Furthermore, Janmar Coatings products are being sold to respectively, two differentiated customer bases with different buying behaviors [“do it yourselfers” and professional painters].
II. Issues: Specifically, Janmar Coatings must address several issues that attribute to the central problem.
a. First, the market condition. Industry sources have estimated the overall market for Architectural Coatings to have matured and have projected long-term growth not to exceed 2 percent per year. These figures are relevant because Janmar Coatings can not target high growth in what appears to be a stagnate market.
b. Second, the saturation of the market. While figures essentially indicate a decline in competition by actually companies in the market [2% decrease in number of companies], this is due to larger firms acquiring smaller firms. These acquisitions provide regional boosts for these firms in specific regions and geographic presence. Furthermore, competition at the retail level and shelf space has likewise accelerated in recent years. Another figure worth relevance to Janmar Coatings sales is the increase of competition at the paint manufacturing level as well.
c. Third, the price sensitivity of do-it-yourselfer. Proximately 50 percent of the architectural coatings sales are accounted by do-it-yourselfers. Figures show that this market segment is growing. Critically though, these consumers are extremely price sensitive and Janmar Coatings products are priced in the premium category segment. This poses a serious issue towards growth within this segment when