The untapped professional market Essay
How Should Jones Blair Co. position themselves for future growth given that efforts need to be focused on generating new accounts in both Dallas and surrounding areas in the untapped professional market? The current sales representatives are averaging roughly 25 accounts each and are already thought to be “well liked, helpful, professional and knowledgeable, but why have they only gained 5 new accounts in the past 5 years.
The current reps need to refocus their efforts in becoming more aggressive in getting new accounts while still continuing to foster the relationships they currently have if they are going to stay in tune and grow in the untapped Professional markets of Dallas and surrounding areas. Professionals looking for product want a certain element of service and quality in paint and need to hold up a reputation that can not be tainted by poor product and poor service. Low standards are only provided in contractor, and do it your self paint. Alternatives Many of the alternatives suggested are viable, but unfortunately they are unfocused.
Proposals included, escalating presence in the Do- it- your self market, but this would entail dropping quality and price, thus hurting the professional market where Jones Blair is better suited
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The last alternative offered is that another sales representative should be hired. If Jones Blair were to not do this and focus on aggressively increasing accounts with the reps that they already have in Dallas alone by 10% there would be an increase in sales of $1,440,000 which is a gain of 40 accounts and is easily attainable. If a sales rep was added Jones Blair would just be throwing away $60,000 because he would only be 4% as effective in comparison to going after the completely untapped professional market in Dallas and surrounding counties. Recommendations
Jones Blair Company should focus their efforts on training their 8 current sales representatives to be more aggressive in gaining new accounts. People already love working with them, but the time that is spent “minding the store while the proprietor has to run an errand or two” needs to stop. There is a fine line between being everyone’s best friend and being a great sales rep. The time that is spent socializing can be put to good use attaining new accounts. The U. S. paint industry’s architectural coatings sector is currently 43% of the total industry which is $5,590,000,000.
Right now there are 600 total paint manufacturers in the United States and it is declining at roughly 3% per year which is about 120 companies that are going out of business every 10 years. Jones Blair has to become a monopoly in the professional painter market to secure a long lasting and prosperous position. Fortunately for Jones Blair Company, professionals don’t mind paying extra for high quality product which only takes one coat and is washable. Contractors and Do-it-yourselfers want cheap price which is not where Jones Blair Company falls.
The total sales in the 50 county service area of Jones Blair Company is $80,000,000(total market share) Jones Blair has total sales of $12,000,000 and a total market share of 15%. The total market for Do It Yourselfers is 78% of the $80 million which leaves 22% of the market that is professional painters equaling $17,600,000 industry that is completely untapped. When the #’s are fully broken down the answer is clear. The Dallas area has a total of $48 million of sales 70% of them who are Do It Yourselfers totaling $33,600,000.
The remaining $14,400,000 are professionals sales which can then be divided by the amount of firms that are available coming up with a grand total of 36,000/per firm of untapped money. (This process is repeated to find the same for the non Dallas market). If Jones Blair wanted to increase sales by 10% in Dallas it would be 40 firms * 36,000 thus possibly increasing total sales by $1,440,000. This is easily achieved by taking the 8 current sales reps and setting their new account goal for the year at 5 per person.
Given that there are 400 professional painting firms in the Dallas area alone this should be exceptionally easy. If Jones Blair wanted a 20% increase it would be a total of 80 firms that could generate additional sales of $2,880,000. Conclusion Jones Blair Company has a great amount of potential in the professional painters market to become a monopoly. By aggressively acquiring new accounts, sales will increase exponentially over time securing a solid niche with which to build on for years to come.