Marketing Analysis of Sherwin-Williams
Founded in 1866 by Henry Sherwin and Edward Williams with $2,000, Sherwin-Williams began as a partnership selling paints and varnishes. For more than 140 years, the company has built great pride in its continuous efforts of innovation and industry leadership. The company services several different market segments and is a leader in establishing standards for environmental sustainability.
Sherwin-Williams offers a variety of products and services, all of which are customized to serve various market segments. Primarily, Sherwin-Williams sells paints, stains, varnishes, industrial and marine coatings, commercial floor coverings, window and wall coverings, spray equipment, and sundries. Sundries include items such as paint brushes, rollers, painting accessories, etc. In addition to the tangible products, the company offers several services to its customers as well. These services include custom color mixing, color matching, delivery service, representative support for consulting and technical issues, decorative product specialists, and superior technical knowledge.
The three major operating segments for the company are the global group, consumer brands group, and the paint stores group. The company has an international presence with locations and operations spanning from South America to China. The consumer brands division markets products that are owned by, but not sold directly under the Sherwin-Williams name such as Minwax wood finishes, Krylon spray paint, Purdy paint brushes, Thompson’s WaterSeal, and Dutch Boy paint. The paint stores group consists of more than 3,000 individual store locations positioned throughout the country. The remainder of this market analysis will focus on the operations of the paint stores group.
Specifically, the paint stores group is positioned to serve the following specialized market segments: commercial, new residential, residential repaint, industrial and marine, property management, and homeowners (Who Is Sherwin-Williams, 2009). The first five market segments trend more toward business consumers such as contractors and property management groups. The last segment targets homeowners who are commonly termed as do-it-yourself (DIY) customers. In this segment, Sherwin-Williams targets adults ages 25-54 who are homeowners with household incomes of $75k or greater, and customers who are part of the “life experience” target audience (Financial Community Presentation, 2009).
The paint stores group provides several different brands of products for consumers. A large group of products, primarily paint, stains, and varnished are marketed directly under the Sherwin-Williams name. The product line varies depending on the customer’s needs and task definition. For example, a homeowner looking to repaint a living room might choose Sherwin-Williams brand paints like Duration Home, SuperPaint, or Harmony paint. A contactor, on the other hand, would likely purchase the Promar or Builders Solutions interior and exterior Sherwin-Williams paint products. In addition to the company branded products, items marketed under the consumer brands, or diversified brands, such as Krylon or Minwax are also sold in the retail stores. Further, some outside vendor products are also available in stores including products by 3M, Graco, Titan/SprayTech, and Werner. Such products include various tapes, adhesives, spray equipment, ladders, and accessories.
With respect to brand positioning, the Sherwin-Williams brand is backed by over 140 years of quality and innovation. The brand is represented to consumers as a reliable, high quality, durable product that is supported by knowledgeable sales associates and representatives.
External Situation Analysis
There are two major segments to consider when conducting an external situation analysis. These categories include other paint manufacturers or retailers and possible substitute competitors. There are a myriad of additional paint brands available on the market. The figure below lists examples of some alternative paint brands that are available.
It is important to consider the retailers that provide paint products to customers. There are several channels of distribution for paint products, and the channels accessed vary by customer segment groups. For instance, 65% of the most recent DIY purchases were made from home centers, followed by 17% of purchases from paint stores. In great contrast, 92.4% of contractor paint purchases were made through paint stores, with only 4.8% of purchases coming from home centers (Financial Community Presentation, 2009). The two charts below provide additional data on the various channels and individual channel share for these products.
Aside from direct competition from other paint products, there are possible substitute products available to consumers who may not want to use paint for their décor choices. Possible substitutes include wall coverings ranging from wall paper, cork, fabric, and wall appliqués. It is important to note that Sherwin-Williams does offer a wide variety of wall coverings for its customers to choose from, so there is some potential to service customers looking for wall coverings outside of the paint products.
In conjunction with competition from other paint brands and retailers, there are multiple marketing trends that have an impact on the company. Three major trends currently affecting the company are the economic, technological, and environmental marketing environments. The economy as a whole has been hit hard by recent market downturns, rising unemployment, and the downfall of the credit sector. There is of course a trickle-down effect for businesses when consumers spend less money. The impact of these economic forces can be seen in following charts depicting a sharp decline in the U.S. construction markets in recent years.
On a more positive note, the age of mobile technology has reached the paint industry. In June, Sherwin-Williams launched a phone application that allows a person to take a picture with their camera phone and relate that color to a swatch from the Sherwin-Williams color palette. The application will also help customers located the nearest retail location to purchase the paint. (SherwinWilliams.com). It is increasingly important for companies to keep up with technology in order to stay in touch with customer’s needs and desires. The technology applications also benefit the company by creating additional communication channels with its customer base.
Another current market trend affecting the paint industry is the emphasis on environmentally friendly products. Sherwin-Williams has made great progress in this area as discussed in subsequent paragraphs of this analysis. Companies who fail to meet new government and industry standards to remove chemicals and solvents from their products will likely face declining sales and potential penalties from government and legal agencies. The issue of environmental sustainability is not only a social issue, but a legal one as well.
Sherwin-Williams approaches the topic of promotion and advertising from several angles. Specific promotion and marketing techniques include the Preferred Customer program that provides a 10% discount on non-sale items and keeps an in-store record of purchases for the customer’s convenience. The company also prepares periodic sales promotions with discounts on particular products and participates in direct marketing through traditional mail and email. The company advertises nationally on television and radio, and uses product placement in several television shows hosted on cable networks such as HGTV. Annually, the company sponsors the HGTV Dream Home, featuring an additional Green Home for 2009. Targeting the business customers, the Pro-Show event provides contractors the opportunity to meet with various vendors and take advantage of show discounts. Sherwin-Williams also provides case studies on specific products and industry topics.
As discussed previously, Sherwin-Williams takes advantage of several distribution channels including retail locations and its consumers brands that are sold in multiple retail locations outside of the Sherwin-William paint stores.
Pricing is an important part of the marketing mix for the company. Sherwin-Williams positions its brands as high in quality which is reflected in the price. It is not the lowest-priced brand of paint, but the company does focus on staying competitive with other paint brands of comparable quality. There are also price incentives available for high quantity purchases and contractors. As outlined above, the company does sponsor regular sales promotions that offer reduced prices on specific items which might attract additional customers. The company strives to attain a price that indicates quality while remaining competitive in the market.
Sherwin-Williams has long been a leader in the market place for using technology and innovation to create more environmentally friendly products. For instance, it was the first company to introduce a water-based paint, as opposed to oil-based paints. The figure below lists some facts about the company’s green innovation over time.
In July 2008, the company launched a program called EcoVision that challenges employees to look for and implement ways to reduce the company’s impact on the environment (Corporate Responsibility Report, 2009). The company is focusing on four primary business practices to aid in this effort: use and discover sustainable raw materials, eliminate waste discharge, reduce energy consumption, and use recycled materials (Green Construction, 2009). Several examples of these ideals in practices are the use of bio-diesel fuel in many of its delivery trucks, using computer-optimized engines, and auxiliary power units. The company has also developed the GreenSure label for products that meet GS-11 criteria for LEED certification which includes low odor, low VOC products with excellent durability. (Green Construction, 2009). Beyond marketing products that are safe for the environment, the company has also implemented several programs addressing packaging and carbon footprints. The company has initiated a “Plastic Five-Gallon Pail Recycling Program” encouraging contractors to minimize their waste by which customers receive 25 cents for every bucket returned. Additionally, the company is now packaging its paint colorant in PET bottles made from recycled materials that are more durable, less expensive, and can be recycled after use. From this bottle change alone, the company has “reduced disposal costs by 70% and reduced annual waste by 1.3 million pounds” (Corporate Responsibility Report, 2009). Another very successful environmental program has been the “Lighting Retrofit Project.” This project replaces lighting fixtures with efficient fluorescent fixtures that results in annual saving of more than $1.8 million in direct costs and 23 million kilowatt hours per year, thereby reducing the carbon footprint of the company (Corporate Responsibility Report, 2009). Sherwin-Williams is continuing to work on additional ways to improve the environment by adjusting company policies and procedures as well as developing advanced products.
While the company strives toward developing sustainable processes and products while protecting the environment, there may be other programs they can implement. I would suggest that they work to increase not just the contractor’s awareness of recycling paint buckets, but also inform consumers of the appropriate ways to dispose of old paint and chemicals. While each store has information available if a customer asks for it, the company has not made this a primary focus. It would also be appropriate to extend programs such as the lighting retrofit campaign to directly to the retail locations as well.
As this analysis has shown, Sherwin-Williams has a history of innovation and industry leadership. It will be necessary to continually grow these strengths in order to remain successful and competitive in today’s marketing environment. For now, the company is making great strides to serve its customers well and protect the environment.
“Corporate Social Responsibility Report-Issue One.” (2009) [Online Presentation]. Sherwin-Williams Company. Retrieved from: http://www.sherwin-williams.com/pdf/CorporateSustainability.pdf
“Financial Community Presentation.” (24 June 2009) [Online Presentation]. Sherwin-Williams Company. Retrieved from: http://www.sherwin-williams.com/about/investor-relations/company-presentations/financial-community-presentation/index.jsp
“Green Construction.” (2009) [PowerPoint Presentation]. Sherwin-Williams Company.
SherwinWilliams.com (2009). http://www.sherwin-williams.com/
“Top 8 Specialty Paint Lines.” About.com. Retrieved from: http://interiordec.about.com/od/paintmfgrs/a/specialtypaint.htm
“Top-Rated Interior and Exterior Paints.” (June 2009). ConsumerReports.org. Retrieved from: http://web.consumerreports.org/test/Paint/index.htm?EXTKEY=SG72H00&CMP=KNC-CROHOMEGARDG&HBX_OU=50&HBX_PK=interior_paint
“Who Is Sherwin-Williams.” (2009) [PowerPoint Presentation]. Sherwin-Williams Company.
Our Service Charter
Excellent Quality / 100% Plagiarism-FreeWe employ a number of measures to ensure top quality essays. The papers go through a system of quality control prior to delivery. We run plagiarism checks on each paper to ensure that they will be 100% plagiarism-free. So, only clean copies hit customers’ emails. We also never resell the papers completed by our writers. So, once it is checked using a plagiarism checker, the paper will be unique. Speaking of the academic writing standards, we will stick to the assignment brief given by the customer and assign the perfect writer. By saying “the perfect writer” we mean the one having an academic degree in the customer’s study field and positive feedback from other customers.
Free RevisionsWe keep the quality bar of all papers high. But in case you need some extra brilliance to the paper, here’s what to do. First of all, you can choose a top writer. It means that we will assign an expert with a degree in your subject. And secondly, you can rely on our editing services. Our editors will revise your papers, checking whether or not they comply with high standards of academic writing. In addition, editing entails adjusting content if it’s off the topic, adding more sources, refining the language style, and making sure the referencing style is followed.
Confidentiality / 100% No DisclosureWe make sure that clients’ personal data remains confidential and is not exploited for any purposes beyond those related to our services. We only ask you to provide us with the information that is required to produce the paper according to your writing needs. Please note that the payment info is protected as well. Feel free to refer to the support team for more information about our payment methods. The fact that you used our service is kept secret due to the advanced security standards. So, you can be sure that no one will find out that you got a paper from our writing service.
Money Back GuaranteeIf the writer doesn’t address all the questions on your assignment brief or the delivered paper appears to be off the topic, you can ask for a refund. Or, if it is applicable, you can opt in for free revision within 14-30 days, depending on your paper’s length. The revision or refund request should be sent within 14 days after delivery. The customer gets 100% money-back in case they haven't downloaded the paper. All approved refunds will be returned to the customer’s credit card or Bonus Balance in a form of store credit. Take a note that we will send an extra compensation if the customers goes with a store credit.
24/7 Customer SupportWe have a support team working 24/7 ready to give your issue concerning the order their immediate attention. If you have any questions about the ordering process, communication with the writer, payment options, feel free to join live chat. Be sure to get a fast response. They can also give you the exact price quote, taking into account the timing, desired academic level of the paper, and the number of pages.