BACKGROUND OF PAINT INDUSTRY
The paint market can be divided in :
- TRADE SALES : product sold to households, contractors and professional painter;
- INDUSTRIALS SALES : product for original application by manufacturers.
TRADE SALES :
1. 1984 : $ 5.1 billion
2. 1986 : $ 5.8 billion
AVARAGE ANNUAL GROWTH reduced during 1980s:
1. usage of new material;
2. more durable products;
3. better paint quality;
4. "war" cost/price;
5. increasing cost of raw materials;
6. increasing competition.
COMPOSITION OF TRADE SALES :
1. 45%: households;
2. 35%: contractors and professional painters;
3. 20%: others.
BACKGRAOUND OF JBC
- Privately held corporation involved in trade paint sales;
- Sales volume= $ 4.67 million
- The four largest paint producers accounted for about 30% of the total U.S. market.
- About 50% of trade paint sales were private brands.
SALES VOLUME distributed evenly between DFW and rural accounts
- $4.67 million/2=$2.335 million:
RURL AREAS accounts for 60% of sales volume :
70%: households;
30%:professional painters.
URBAN AREAS accounts for 40 % of sales volume:
30% : households;
70%: professional painters.
SALES DISTRIBUTION IN JBC:
Urban areas:
50% of $4.67 million = $ 2.335 million
households:
30% of $ 2.335 million = $ 700.500
professional painters:
70% of £ 2.335 million = $ 1.634.500
Rural areas:
50% of $4.67 million = $ 2.335 million
households:
70% of $ 2.335 million = $ 1.634.500
professional painters :
30% of $ 2.335 million = $ 700.500
SALES DISTRIBUTION IN PAINT MKT:
Urban areas :
60% of 55 million = $ 33 million
households:
70% of $ 33 million = $ 23.1
professional painters:
30% of $ 33 million = $ 9.9