Dutch Boy Paints Marketing Plan for Puerto Rico

Founded in 1907, Dutch Boy continues to be an industry leader in delivering innovative and high-quality products and packaging solutions, and is one of the most recognizable brands in the market. Dutch Boy is one of the leading brands of Sherwin-Williams Company architectural coating product. The goal of this marketing plan is to outline the strategies, tactics, and programs that will make the sales goals outlined in the Dutch Boy Paint business plan a reality in October 2007. Dutch Boy, unlike a typical paint, provides a unique and convenient package made of plastic to easy work with it. Dutch Boy Paints is the answer to an increasing demand in Do-It-Yourself customers, most of them women, young couples and new homeowners, and starting business owners.

The public wants: (1) easy to handle and storage product for less time consuming in painting and (2) a quality products, people buy painted walls not only the paint. Marketing will play a vital role in the success of Dutch Boy Paints. Dutch Boy must build a brand around the products it offers by heavily promoting itself through local television, events promotions, and print advertising. The product launch event will be a key to success since it will have massive press and news coverage. Marketing efforts are just beginning by the time a potential customer tries the products for the first time. A strong emphasis will be put on keeping customers and building brand loyalty through programs focused on staffing, experience, and customer satisfaction.

For this year we expect to implement Dutch Boy products in the Puerto Rico market distributing through Sherwin-Williams already established stores and in the Wal-Mart mega stores. For this strategy we forecast a total of $1,858,251.00 of expenses and a projected net income of $1,611,933.30 during the first year of launch.

II.Marketing Plan

A.Situation AnalysisAbout 1906, a consortium of white lead manufacturers, newly combined under the name of The National Lead Company, were looking for a symbol to unite them. As the finest white lead manufacturers, using what was called the “Dutch method” of processing, and also because the people of Holland had a worldwide reputation for keeping their homes immaculately white-washed, they decided upon a little Dutch boy. Artist Rudolf Yook, an illustrator of Dutch ancestry, came up with the initial sketches of a little boy dressed in overalls and carrying a paint bucket and brush.

The finishing touches to the character came when the company commissioned noted artist Lawrence Carmichael Earle to paint an oil portrait of the Dutch boy. Earle used as his model a little Irish boy from his own neighborhood. He was nine years old and played ball in the street outside the home of the artist. That little boy grew up to become Michael E. Brady, a well-known political cartoon artist. Founded in 1907 and celebrating its 100th anniversary, Dutch Boy continues to be an industry leader in delivering innovative and high-quality products and packaging solutions, and is one of the most recognizable brands in the market. Since 1907, Dutch Boy Paint has been one of the most recognizable and trusted paint brands in the United States. The Dutch Boy® icon was originally created to symbolize a superior method forcreating paint products known as the “Dutch Process”.

The “Dutch Process” originated with two chemists in 16th century Holland and set the standard of paint quality and beauty for centuries to come. That legacy lives on with Dutch Boy® Paint.

The Dutch boy is the most recognized paint icon. The paint is based on a 16th century ‘Dutch Process.’ His likeness is based on Rembrandt’s style. Since 1907, the Dutch Boy logo has changed seven different times.

As a result, we understand that Sherwin-Williams their target market with this product is a niche of middle class men are women, ages 25 to 55, of medium and high-income, who prefer customized paintings (flat, sating, high gloss/ interior or exterior/ ceiling, walls, floors, trim) within the US. Specially focusing on the Do it yourself market (DIY), of which 60% are women, and on new home owners.

This market segmentation covers the customers that would like, and are willing to pay, for a Dutch Boy Paint. This includes the generations Baby Boomers, Generation X and Y that are living in an owned house or have an own business, that likes to keep the property well painted internal and externally, and has the resources to do so. The paints are used on occasions, with an increase in the demand on the last trimester of the year due to Christmas season.

There are environmental factors like the economy crisis that may affect negatively our target market purchasing patterns. Since painting is not a need but a luxury, customers may rather prefer to spend their money is other critical needs than in a luxury.

We perform a survey of the population in Puerto Rico that knows the product and the brand, and none of the interviewed knows the product. However 100% of the prospective customers know the matrix company of Sherwin-Williams.

The Sherwin-Williams Company (Sherwin-Williams) is engaged in the manufacture, distribution and sale of paint, coatings and related products to professional, Industrial, commercial and retail customers primarily in North and South America. Effective January 1, 2006, the Company changed its operating segments to Paint Stores Group, Consumer Group and Global Group. In April 2007, the Company announced its entry into the Indian paint market with its acquisition of the business of Nitco Paints, a manufacturer and distributor of exterior specialty paints and coatings used in the construction of office buildings, high rise apartments, shopping malls, hospitals and schools.

Paint Stores Group

The Paint Stores Group consisted of 3,046 Company-operated specialty paint stores in the United States, Canada, Virgin Islands, Puerto Rico and Mexico as of December 31, 2006. Each division of the segment is engaged in the related business activity of selling paint, coatings and related products to end-use customers. The Paint Stores Group markets and sells Sherwin-Williams branded architectural paint and coatings, industrial and marine products, original equipment manufacturer (OEM) product finishes and related items throughout North America and the Caribbean. These products are produced by manufacturing facilities and those in Consumer and Global Groups.

Consumer Group

The Consumer Segment develops, manufactures and distributes a variety of paint, coatings and related products to third-party customers and the Paint Stores Group primarily in the United States and Canada. The products distributed through third-party customers are for resale to the ultimate end-user of the product.

Global Group

The Global Group develops, licenses, manufactures, distributes and sells avariety of architectural paint and coatings, industrial and marine products, automotive finishes and refinish products, OEM coatings and related products in North and South America, Jamaica, the United Kingdom, Europe and China. As of December 31, 2006, this Group included consolidated operations in the United States, 14 foreign countries, three foreign joint ventures and income from licensing agreements in 14 foreign countries.

Administrative Segment

The Administrative Segment included interest expense, which was unrelated to retail real estate leasing activities, investment income, certain foreign currency transaction losses related to dollar-denominated debt and foreign currency option and forward contracts, certain expenses related to closed facilities and environmental-related matters, and other expenses. Also included in the Administrative Segment was a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company, and disposal of idle facilities.

As part of Sherwin-Williams, Dutch Boy Paints manufacture a range of household paints for interior and exterior applications. They provide a variety of paint types as flat, satin and high gloss for walls, ceilings, floors and trim. Features a product gallery, inspiration center, and store locations. Net sales in the Paint Stores Group in 2006 increased from $ 4,352,357 million in 2005 to $ 4,844,596 in 2006. The increase was due primarily to strong domestic architectural paint sales to contractors in the first half of 2006 and improved industrial maintenance product sales. Net sales from stores open for more than twelve calendar months increased 9.1 percent for the full year. During 2006, the Paint Stores Group opened 117 net new stores, increasing the total number of stores in operation at December 31, 2006 to 3,046 in the United States, Canada, Puerto Rico and the Virgin Islands. The Paint Stores Group’s objective is to expand its store base an average of three percent each year, primarily through internal growth.

B.Environmental AnalysisThe SWOT analysis provides us with an opportunity to examine the internal strengths and weaknesses Dutch Boy Paint must address. It also allows us to examine the opportunities presented to Dutch Boy Paint as well as potential threats. Dutch Boy Paint has a valuable inventory of strengths that will help it succeed. These strengths include: a value added to its products, Do-It-Yourself target market, and a competitive price among the market. Strengths are valuable, but it is also important to realize the weaknesses Dutch Boy Paint must address. These weaknesses include: a health problem issue and the Consumer Report test of fading. Dutch Boy Paint’s strengths will help it capitalize on emerging opportunities. These opportunities include, but are not limited to, a establish market of paining in Puerto Rico, and the Sherwin-Williams as an established company in this market. Threats that Dutch Boy Paint should be aware of include, the competitors already established and the consumer preferences, and the political and economical situation.