Executive Summary: Jones-Blair needs to increase their sales while keeping their margins consistent with limited resources on advertising and sales promotion.
With the four different alternatives present, the chosen alternative is to hire another sales representative rather than cut prices by 20%, increase advertising to $350,000, or keeping everything the same. WIth the additional sales force, JB should set forth their focus on the non-DFW household market.
Currently in the high-end of the trade market, Jones-Blair specializes in higher quality paint products that target the do-it-yourself consumers as well as the professional painters that want high quality products with great …show more content…
Price can be adjusted to optimize profit. The last alternative is to do nothing. If Jones-Blair is already profitable, why would they start changing things? JB is trying to increase their market share and brand presence while increasing sales with consistent margins.
Plan Development: The alternative that is chosen is to hire an additional sales rep into the force. This can benefit in many ways. First, the increase in sales that JB has to accumulate is only $171,428, significantly less than the 1M and 16M increase in sales for alternatives 1 and 2, alternative 4 would not have to increase sales, but would be losing market share in non-DFW areas. Second, if put into the right territory, the additional sales can significantly help out the company. Also, as mentioned earlier, the high quality and high service can benefit the client to customer relationship, resulting in referrals and higher volumes of sales and branding. Our product is our high quality paint coupled with our high quality service. This will attract consumers that enjoy these business traits, for example, non-DFW (non-metropolitan) DIY household owners as well as the professionals that enjoy high quality paint.
Our price will stay the same, or it can be raised since the value comes from the client-consumer interaction which was enabled through the hiring of another salesperson. Also, since we are not decreasing our prices, or