CASE STUDY MARKETING MANAGEMENT

Case Study Marketing Management

Case Study Marketing Management

Part I: Marketing Audit Aspects & SWOT

Aspects of Marketing Audit

ICI Dulux competes in a mature market, where sales have steadily increased at the rate of inflation. ICI Dulux faces a major problem in that they must maintain their growth and profit margins. Therefore, senior management executives seek to identify certain aspects of marking audit which will result in gain in ICI's sales and maintain profit margin.

Recent research indicated that do-it-yourself painters do not care much about the brand and, consequently, about the quality of the paint (brand reputation was the 4th key criteria mentioned by the buyers to choose a covering) and it has become a commodity for this kind of consumers. CEO admits that ICI Dulux is the highest-priced paint in the service area. Only professional painters will pay more for higher quality. In other words, they are more price-insensitive and major ICI Dulux's consumers because ICI Dulux maintains highest price policy.

The market for do-it-yourself consumers is forecasted to reach US$ 5.74 billion by the year 2003 and it seems to be the best segment for Jones Blair to focus its resources on, since it represents 90 percent of non-contractor-related volume outside DFW area and 70 percent.

Areas outside DFW have potential. ICI Dulux's most important market is Dallas-Fort Worth, which reaches 60-67 percent of total sales in USD within the years 1992-1996. Nevertheless, this percentage has been declining throughout the years, on a decreasing average basis of 1.43 percent per year (Appendix 1). However, the market in DFW is getting more competitive and has been a decline in gallon volume. Furthermore, non-DFW outlets historically have grown in gallon volume sales, which mean that consumers in DFW area seem to be more price sensitive than outside this area.

Develop more dealers to distribute ICI Dulux's product: ICI Dulux will need to play up strength on distribution. This also means that they could expand their business into other areas. It is likely to be more profitable and successful to the company to sell to consumers located outside DFW area in this case. As the Vice President of Sales figured, it will cost $60,000 per year plus commission to the additional sales representative.

The company needs to segment their market and focus more on its most important segment of do-it-yourself consumers and work or its premium positioning through promotion efforts regarding ICI Dulux's best cost-benefit for paints. Therefore, in this market, ICI Dulux will need to increase its sales in volume, but may lower profit margin a little bit to increase inventory turnover.

S.W.O.T Analysis

Strengths

- Competitive prices of its products.

- Steady growth in its market.

- The company's reputation had been built on its fast service; it frequently supplied paint to contractors within 24 hours.

Weaknesses

- Customers view ICI Dulux as a company that negotiates on price and payment out of desperation.

- His plant manager's only experience has been that of a painter.

- Operating without management controls or financial controls.

- Inability to pay suppliers on time

- Poor condition of ...