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mortgage levels also had some impact on total sales. When the house market slowed
down, people tended to spend more on DIY activity to improve the attractiveness of their
houses, with an inevitable effect on the level of paint sales. For the branded product range,
alterations in colour demand meant that sales volumes needed to be continually
monitored. The trends in demand are in Table 4D.
The current branded product range had ten colours produced in two tin sizes, one and two
litres. Sales varied considerably within the range with the best selling line over the past 5
years varying between brilliant white, Table 4D. Five year branded sales history by type -
000's litres, with year 5 most recent.
Year
1
2
3
4
5
Brilliant white
400
425
500
600
750
Magnolia
325
400
420
400
425
Oyster
200
220
250
275
325
Sand gold
260
280
280
270
260
Black
225
380
380
400
550
Lime green
160
120
200
160
125
Clear blue
450
400
450
550
650
Aluminium
500
200
350
440
640
Bitumen
200
300
450
700
600
Textured white
300
300
300
500
450
Total branded
3020
3025 3610 4795 4775
aluminium, and bitumen. Homecolour had a reputation in the trade, and among the more
knowledgeable customers, for producing higher quality exterior paint than the competition,
and it was in this sector of the market that the company achieved its highest sales. Market
surveys suggested that the company had around a 5 per cent quality advantage over the
competition. The own label production was much more varied in colour and tin size - the
company, over the past 2 years, had produced around 50 different colours in up to 5
different tin sizes. Currently there were considerable variations in the type of packaging
that was provided in the own label and branded sectors. The company had yet to
standardise on a single branded theme and the level of instructions on the packaging
varied considerably throughout the product range. Each pack had the Homecolour logo,
and limited instructions.
As the recession worsened, there was a steady increase in the number of consumers
turning to DIY for their decorating. A considerable number of consumers without
experience of decorating were now buying paint. A survey had revealed that an increasing
number of customers were finding paint quality dissatisfying because of their failure to
properly prepare surfaces. This survey revealed that 46 per cent of current customers
failed to remove current paint from surfaces; and over 50 per cent expected that one coat
of paint would be sufficient to cover all previous paint or wallpaper products. In order to
remain competitive, against the two major companies in the market, Homecolour had to
ensure that a high level of stocks were maintained in the major outlets. The pressures on
selling space within most retail outlets were becoming intense, and shortage of stock had
in several cases ended in the company being de-listed by three regional DIY chains. The
current sales pattern had shown that the company was experiencing major problems in
certain of the outlets with sales significantly below plan. Own brand sales were 20 per cent
down on plan - which had envisaged a 5 per cent increase in volume; while branded
products were within 2 per cent of plan - based on an 8 per cent volume increase over
the previous year.
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