Landers Paints Ltd have for many years produced paints and varnishes specifically for industrial use. These products have been sold both directly to the customer and through builders’ merchants. Larger firms tend to buy directly from Landers, whereas smaller customers, such as builders and decorators, use the latter.
The products are sold in large quantities in basic packaging at low prices. This enables Landers to keep costs to a minimum and prices at a competitive level. The most popular products are basic items, for instance, white and magnolia emulsion paint.
However, the recent increase in the popularity of DIY has resulted in a small fall in sales at Landers. Keen to reverse this decrease, the Managing Director, John Smith, is considering whether to launch a range of paints for home decorating. At a recent board meeting, he put forward this proposal.
‘I think that Landers should launch a range of paints and varnishes for the domestic market. Given our expertise and production facilities, the new products will hardly disrupt things around here and should lead to a significant increase in sales.’
The Marketing Manager, Shirley Thomas, reacted with caution.
‘I’m not so sure because there are substantial differences between marketing products made for industrial markets and those for consumer markets. I think it may be a lot harder than you think.’
‘Obviously, there are differences’, replied John, ‘but I really don’t think that some new packaging and a bit of advertising is enough of a reason to miss out on such a good opportunity.’
1. Explain why the recent increase in popularity of DIY has caused sales at Landers Paints Ltd to decrease. (4 marks)
2 a) Identify the key differences between an industrial market and a consumer market. (3 marks)
b) Analyse the difficulties that may be experienced by Landers Paints Ltd if they move into the consumer market. (8 marks)
3. Landers Paints Ltd decide to launch a range of products for the consumer market. Recommend a marketing mix for the new products. (10 marks)