Presentation on Marketing Mix of Asian Paints (2)
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Transcript of Presentation on Marketing Mix of Asian Paints (2)
“Presentation on the marketing strategy and marketing mix of ASIAN
PAINTS”at
Raj laxmi paints
Presented by – Swaraj Thahriani
IndexoCompany profileoProblems and objectivesoMethodologyoAnalysis and findingsoConclusionoRecommendationsoLearning outcomes
• History• Profile of products• Marketing Mix• BCG & ANSOFF Matrix• Problem identification• Strategies & Recommendations
Overview
HISTORY
o In the 1940’s it was largely multinational Companies such as British paint &Jenson &Nicholson that dominant the Indian paint market
o In order to increase revenue ,AP concentrated on the rural market ignored by multinationals.
• In 1942,Four Young Mumbaikars –Champaklal Choksey,Chimanlal Choksi,Suryakant Dani and Arvind Vakil.
• Started With a strategy “ Going to where Consumer is”.
• The R & D upgraded to International Quality in producing Phenolic & resins on its Coating.
• Driven by Customer Focus and Innovative Spirit.• Mass Appeal By Gattu• Won the Prestigious Economic times-Harvard Business
School twice
• In 1954,APasked the famous cartoonist R.K Laxman to create a mascot for the company & from his pen was born –’Gattu’.
Brand Leadershipa)1942-1967 Evolution Phase
b)1967-1982 Extension and Consolidation Phase
c)1982-1986 The years of Excellence
d)1987-1997 Moving Closer to the Consumer
e)1997-1999 Changing rules of the game
f)1999- The new Asian Paints
The Evolution phase• Stiff competition from MNC’s• Product innovations• Reaching rural• Seeding relationships• Quality Products• Ensuring service to network
All this leading to leadership status in 1967
Brand Leadershipa)1942-1967 Evolution Phase
b)1967-1982 Extension and Consolidation Phase
c)1982-1986 The years of Excellence
d)1987-1997 Moving Closer to the Consumer
e)1997-1999 Changing rules of the game
f)1999- The new Asian Paints
Extension and consolidation
• Extension of the brand across borders. International presence
• Consolidation of gains/leadership status• Product Innovation in new categories• The core value getting strengthened by a
series of investment into systems to ensure better product delivery
Brand Leadershipa)1942-1967 Evolution Phase
b)1967-1982 Extension and Consolidation Phase
c)1982-1986 The years of Excellence
d)1987-1997 Moving Closer to the Consumer
e)1997-1999 Changing rules of the game
f)1999- The new Asian Paints
The Excellence Years
• Launch of New technology in terms of tinting which gave a huge fillip to shade selling
• Product innovation• Connectivity with the sales set up
The Excellence Years• Despite leadership over a decade Asian Paints,
mindshare was perceived to be far lesser
• It was the largest manufacturer of paints in Asia and the sixth largest in the world. However, this was not perceived by the consumer
• Asian Paints also seen to be a company that made paints such as distemper, ordinary enamel and emulsion paints, for the masses.
The Excellence Years• In 1983, the first corporate communcation
Objectives • (i) establishing Asian Paints as the leader in the
paint category • (ii) presenting it as a manufacturer of premium
paints • (iii) establishing high salience for Asian Paints in
what was inherently a low interest category
The Excellence Years
• Launched a campaign ‘Spectrum Of Excellence’ – a series of Press Advertisements talking of
excellence in AP products
The Excellence Years
• The campaign increased saliency of the AP Brand
• In an otherwise quiet scenario, the increase in saliency itself resulted in higher intention to purchase
Brand Leadershipa)1942-1967 Evolution Phase
b)1967-1982 Extension and Consolidation Phase
c)1982-1986 The years of Excellence
d)1987-1997 Moving Closer to the Consumer
e)1997-1999 Changing rules of the game
f)1999- The new Asian Paints
Moving Closer
• The excellence campaigns didn’t increase consumer feelings towards the brand
• Consumer research showed“Paints are seen to rejuvenate and brighten up a gloomy place, and give a room a more spacious look. Painting signifies festivity, life and plenitude”
Moving Closer– Celebrate with Asian Paints - thus evolved.
– It ventured to help people think of the joy that follows painting rather than the tedium of the process.
Moving Closer
– It established Asian Paints as a paint for all surfaces, a paint that delivers “lasting beauty” through its durability and good quality
– It also created advertising that related to specific festive occasions in each part of the country delivering regional empathy• Asian Paints associated with festive events across
the country
Moving Closer– By the end of this period,the brand ‘Asian
Paints’ achieved very high salience as well as a highly favourable disposition
– Asian Paints also seen as a manufacturer of premium paints.
– Above , there was a warmth which people felt for Asian Paints• Established Asian Paints top of mind with a huge
competitive edge.
Moving Closer· During this phase the process of product
innovation continued· Two launches one in rural and the other in
Exteriors gave a fillip to the overall image of the brand
· A series of brand building efforts were undertaken in lower market share geographies
· A lot of excitement was created by investing into communication for other brands
Brand Leadershipa)1942-1967 Evolution Phase
b)1967-1982 Extension and Consolidation Phase
c)1982-1986 The years of Excellence
d)1987-1997 Moving Closer to the Consumer
e)1997-1999 Changing rules of the game
f)1999- The new Asian Paints
1997-99 Changing rules of the game
• There was a revamp of various Management processes through a re-structuring exercise
• This helped in bringing more focus to the corporate brand and aided the process of innovation in products and services
• A series of initiatives launched bringing the brand more closer to the user
1997-99 Changing rules of the game
The initiatives included:• Launch of a Asian Paints Helpline,a service to fulfill the
information needs of any person planning to paint
• Launch of retail shops offering a series of decision making tools and shade options along with a communication campaign to create the excitement
• Investing in technology to improve supply chain efficiencies and giving a platform to enter into some CRM initiatives
Brand Leadershipa)1942-1967 Evolution Phase
b)1967-1982 Extension and Consolidation Phase
c)1982-1986 The years of Excellence
d)1987-1997 Moving Closer to the Consumer
e)1997-1999 Changing rules of the game
f)1999- The new Asian Paints
1999- The new APThreats
• Aggression from existing players.• The external environment saw an entry of
a lot of multinationals trying to attack us on various segments.
Market Shares of five major players
Company
o
10
20
30
40
Decorative &Industrial
AP GN BP ICI P Sh
AP-Asian paintGN-Goodlass NerolacBP-Berger PaintICI P-ICI PaintSH-Shalimar
(Market Share %)
DecorativeIndustrial
Market Shares of five major players
AP-Asian paintGN-Goodlass NerolacBP-Berger Paint ICI P-ICI PaintSH-Shalimar
Overall
Company
10
20
30
40
AP GN BP ICI P SH
(M S %)
33
18
9 97
Asian Paint –Sales Performance:1998-2001
9111033
12211373
1998 1999 2000 2001
Sales Value (crore)
Brands
• Apex• Tractor• Apcolite• Royale• TouchWood
Profile of products
• Wall Paints– Apcolite Royale Emulsion, Tractor Washable ,Apex
Exterior, Apcolite Finishes(interior).• Metal Paints
– Apcolite Synthetic Enamel paints,• Wood Finishes
– Apcolite Wood Varnish, Wood Finishing (Matt & Glossy), Touchwood Finishes
• Automotive paints– Apca NC Automotive,Krilo Acrylic Paint
Promotion
• APIL Emulsion brand Royale Competed with ICI Dulux Velvet touch in Discounting the products(3-10 Rs per litre on Emulsion Paints).
• APIL offered 1151 Different Shades.• Advertising Budget Increased Annually.• Urban Customers-Light Colours• Rural Customers- Dark Colurs• Touch Screen Facilities in shops to see the Colour
Texture
Contd• Mascot Gattu
– Indentified as Brand Icon of Asian Paints.• Uses IT systems in its operation to
improve inventory levels and Delivery Schedule.
• Shifting Advertising Theme – Mera Wala Concept to Mera Wala Rang to
MeraGhar Concept( According To Festive Seasons)
Place-Plant & Facilities
• It has 52 Sales offices and 14000 Distribution Channels.• Main Plant location
– Bhandup, Maharastra– Ankleshwar,Gujarat– Patancheru,Andhra pradesh– Kasna,Uttar pradesh
• Brand Equity makes APIL to increase Market Share by 1%.
APIL Ventures & Technology• APIL has Joint Ventures abroad in
– FIJI,Tongo,Solomon Islands– Vanuata, Queensland in Australia
• Technological Collaboration with Japan Nippon Co Ltd.,
• Asian Paints Research & Development Has acquired the Reputation of being Finest in South Asia.
Market Share: Decorative paints
34%
19%13%
12%
6%
5%
8% 3%
Asian PaintsNerolacBergerICIJ&KShalimarOthersRajdoot
Market Share: APIL
Market Share: Industrial Paints
16%
40%14%
9%
8%
8%5%
Asian Paints
Nerolac
Berger
ICI
J&K
Shalimar
Others
Market Share: APIL
BCG • Cash Cows
– Wall Paints (Interior & Exterior Paints)– Decorative paints
• Stars– Metal/Industrial paints– Wood Finishes(Varnish , Polish)
• Question Marks– APIL products launched in Abroad thro’ Joint Ventures
in Fiji ,Nepal , Solomon Islands, Australia.• Dogs
– Marine Paints,Automotive paints and others( Black board paints)
Existing Products New Products
ExistingMarkets
Market Penetration Product Development
NewMarkets
Market Development Diversification
ANSOFF Matrix
Ansoff Matrix• Market Penetration
– Wood Finishes & Metal paints• Product Development
– Wall paints( New Washable & acrylic Emulsion paints E.g. Tractor & Emulsion acrylic paints)
• Diversification– Marine Paints(Heavy Duty) ,Automotive paints( TVS
Collaboration)• Market Development
– Venturing APIL Products abroad
Market Segmentation• Divided into two segments• Decorative paints-70 % of total paint
market• Industrial paints• Synthetic enamels -47 % share• 34 % of market share• Interior paints and exterior paints• Automotive paints- 50 %
APIL Problems• Less exports in 1998-99 due to absence of third party exports. • 65% of Cost of Production is accounted for the Raw Materials.• 40-60% of the raw materials are imported.• Due to Imports APIL Faced with more Customs Duties• Excise Duties On Coating increased • Excise Duty was levied on MRP rather than on Manufacturing Cost.• Main Raw Materials
– Pthalic Anhydride, Resins– Titanium Dioxide,glycerine
• Due to increasing Duties the Prices of Products had to increase.• Decline in Sales Volume during Monsoon seasons
Solutions & Recommendations• Vendor Development
– Promote Vendors in supplying the raw Materials Rather than Importing.
– Develop suppliers in supplying basic ingredients for paints(pthalic anhydride, Resins)
• During Monsoon Seasons– Increase Exports to More countries (Already Captured exporting
to 22 markets-Asia Pacific,Middle East,Africa)• Pricing Strategy-Due to more Excise duties
– Penetration pricing– Destroyer pricing– Target Pricing
Contd• Here in reworking Pricing strategy
– Offer Seasonal Products E.g. Diwali in North,Pongal in south & Christmas.
– Increase promotional activities with regard to Regional festivals.
• Achieve the target using the target pricing during seasonal products.
• Offer other variety of products ( Wood Polishes) at a discounted rate during sale of Decorative paints-predator pricing
Contd.,• Industrial paints
– tie up with Business units for longer periods.– Take over of small companies– In India there are 25 organized companies and 2000
unorganized companies.– Take over of Small companies to increase their
market Share.– Refinishing old Capital equipments/metals with paints
for industries @ low rates to prevent Corrosion.• Automotive paints
– Increase tie up with Automotives (Already with TVS)
Contd.,• Increase the Per Capita
Consumption in kgs( for india it is 0.3 kgs)
• Increase Production during Festive seasons
Per capita consumption of paint in kgs
23%
19%
17%15%
13%
13% 0%USGermanySwedenFranceUKJapanIndia
RURAL MARKETING
• Only paid company with an organised rural network(higher product visibility)
• First one to introduce SMALL PACK sizes for a wide variety of paints.
• Choice of Darker Shades like green and red suiting the rural markets.
LATEST SCENARIO
SALES BREAK UP
The 5 Themes for Colour Next 09
• Indigene: - Consisting of earthy tone and shades, they represent the colours that best describe India.
Consisting of earthy tone and shades, they represent the colours that best describe India.
• Earth Song:- It resonates softer colours that have a soothing effect, think environmental friendliness.
It resonates softer colours that have a soothing effect, think environmental friendliness.
• Multiplicity: - A melting pot of colours. It makes way for contrasting shades, subdued tones and everything in between.
A melting pot of colours. It makes way for contrasting shades, subdued tones and everything in between.
• Homepage: - Colours that dominate the virtual world and cyber space. Of the digital era, the theme is inspired by the Gen - Y.
Colours that dominate the virtual world and cyber space. Of the digital era, the theme is inspired by the Gen - Y.
• Metropolis: - These are dominating colours that speak the bold language of the urban individual.
These are dominating colours that speak the bold language of the urban individual.
Results for the FY ended March 09
• “Demand conditions for decorative business improved in the fourth quarter. Our objective will be to secure growth through a host of retailing and customer centric initiatives. The industrial coatings business (including automotive paints) was impacted by the general demand slowdown. Our international operations performed well on the back of good growth in Middle East and South Asia regions.” said PM Murty, Managing Director & CEO, Asian Paints Limited.
PAINTS
• The unorganised sector controls around 35% of the paint market, with the organised sector accounting for the balance.
• Top organised players include Asian Paints (30% market share), Kansai Nerolac (20% market share), Berger Paints (19% market share) and ICI (12% market share).
PORTER’s MODEL• Supply : Supply exceeds demand in both the decorative as well
as the industrial paints segments. Industry is fragmented.
• Demand : Demand for decorative paints depends on the housing sector and good monsoons. Industrial paint demand is linked to user industries like auto, engineering and consumer durables.
• Barriers to entry: Brand, distribution network, working capital efficiency and technology play a crucial role.
• Bargaining power of suppliers : Price increase constrained with the presence of the unorganised sector for the decorative segment. Sophisticated buyers of industrial paints also limit the bargaining power of suppliers. It is therefore that margins are better in the decorative segment.
• Bargaining power of customers : High due to availability of wide choice.
• Competition : In both categories, companies in the organised sector focus on brand building. Higher prices through product differentiation are also followed as a competitive strategy.
THANK YOU