Wlci College - Integrated Project - Marketing

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INTEGRATED PROJECT – Marketing

http://www.wlcibusiness.in

http://www.wlcibusiness.in/

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Computerized Color Dispensing (CCD) machine in Indian Paints Industry

Introduction The Indian Paints Industry has experienced many revolutionary changes in

products and technologies over its evolution cycle.

One of the landmark technologies in the Decorative Paints segment was the arrival

of Computerized Color Dispensing (CCD) machines in the last decade of the 20th

Century. It changed the way paint color was chosen and it has increased the range

of colors to thousands. It has a huge impact on how Paints companies marketed

their products. It leads to complete change of marketing and distribution plans.

Problem You are the Branch Manager of a Regional Paints company. It has decided to

launch its own CCD machine brand in your area to start with.

Part A You have to recommend to the management:

1. Marketing plans for this product to the dealers in your city.

2. An Integrated Marketing Communication plan for the initial launch of the product.

3. Positioning of your product against the competitors.

4. Perceptual Mapping of existing CCD machines in the market on two parameters

technologically superior and value for money.

Part B

1. Search for the best dealers in your city, speak with them and sell the concept of

your Brand of CCD Machines. Write a broad script on your product with its USP.

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2. You are going to meet the topmost dealer of your city who has agreed to have a

discussion of your brand. Prepare a list of questions you would ask him and a list of

questions/objections you would expect to have from him.

Instructions:

1. Study CCD Brands of Asian Paints, Berger, Kansai Nerolac and ICI Paints.

2. Visit at least five dealers of area to understand the business dynamics.

3. Please do not copy material from the internet. A few visits to dealers will make you

understand and apply the concept of marketing.

The Project Report to include:

1. Executive Summary

2. Industry Study – CCD Brands

3. Competitor Analysis of CCD Brands

4. Objective of the Project

5. Facts and Findings of the Project as per the Project guidelines

6. Marketing Plan

7. Integrated Marketing Communication Plan.

8. Positioning

9. Perceptual Mapping of existing CCD Brands.

10. Selling Pitch & Objections list.

11. Recommendations & Suggestions

12. References

13. Appendix

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INTEGRATED MARKETING PROJECT

PCL –II

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TABLE OF CONTENTS

CONTENT PAGE NO.

Acknowledgement 5 Executive Summary / Current Trends 6-7 Industry Study 8-12

Competitor Analysis 13-21

Objectives 22

Facts and Findings 23-25

Marketing Plan 26-37 Integrated Marketing Communication Plan. 38-39

Positioning 40-43

Perceptual Mapping of existing CCD Brands. 44-45 SWOT 46

Selling Pitch & Objections list. 47 / 48-49

Recommendations & Suggestions 50

Questionnaire 51-52

Bibliography 53

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ACKNOWLEDGEMENT

I hereby acknowledge that this project is purely my work and information

presented is to the best of my knowledge. I would like to thank one and all who

have made this project possible.

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EXECUTIVE SUMMARY

Unlike most other industry, the paint industry was relatively free of regulations. However for a long time it was perceived to be a luxury item and was subject to high levels of sales and excise taxes. The high excise duty regime coupled with relatively low costs of investment in setting up a paint unit, made local manufacture and distribution quite attractive. This lead to the emergence of a very large number of small manufactures competing mainly in lower segment of the decorative paint market. Boom in Indian Housing Sector: Increasing urbanization, cheaper housing loans and a shift from semi-permanent to permanent housing structures have been driving growth in decorative paints segment, which constitutes 70% of the $2 billion paint industry in India. Strong Industrial growth: An average growth of about 10% in the automobile sector which provides 50% of the revenues in the industrial paints segment. Industrial paints account for 30%of the paint industry revenue in India. Heavy Infrastructure Spending: New projects in roads, ports and industrial segments increases revenues from protective coatings for civil applications and road-marking paints to all parts of the building paints sector, whether interior, exterior, waterproofing or floor coatings. Increase in manufacturing activities: Over 40% of the industrial sector takes the form of OEM finishes, which is expected to grow steadily as a result of increasing demand for consumer goods in India as well as India’s position now as a leading manufacturing hub for the supply of goods to the Southeast Asian and other world markets. Less Seasonality: About 65 per cent of the demand for decorative paints stems from repainting. Rising aspiration levels, Shift in the perception of paints as having a protective value rather than a mere decorative have diminished the impact of seasonality

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Current Trends

The Indian paint and coatings industry is riding high on the growth in the Indian

automobile industry, new construction in the housing segment and improving

infrastructure throughout the country. Thirty percent of the paint business is

comprised of new construction projects. The Indian automobile industry has been

performing remarkably well and will benefit the market leader in the segment.

GDP growth projections of 6 to 6.5% in the current year mean a growth of nine to

ten percent in Indian paint business. The growth will be 12-13% in the industrial

segment and eight to nine percent for decorative paint.

As for the future, the industry has predicted a CAGR of eight to nine percent for the

next five years compared to last year's growth levels of 27.4% for cars and 8.9%

for two wheelers. The Indian housing industry is likely to do well in the current

year as well, recording a growth rate of 35% last year. As a result of the overall

health of India's economy, it is safe to predict a nine to ten percent growth rate for

the Indian paint industry in the next five years.

Consumers can look forward to new product launches, some for application in

special areas. Companies will be increasing the value added services available to

customers by offering a variety of finishes through specialized and trained

applicators. There will be more options like ranges of colours/finishes for wood

applications through the tinting machines. Additionally, the trend towards water-

based coatings is likely to set in both for industrial and decorative applications.

While India has not yet embraced the DIY concept as cheap labour is still available,

exclusive retail chain stores sponsored and run by Indian paint companies will

become a reality.

The Indian paint industry has progressed well and moving ahead is likely to be

influenced by several factors including new technologies, new innovative products,

new associations, consolidation of industry and poor performers getting out of the

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market. Ultimately, in the years ahead there will be only four or five key players

operating in the Indian paint market.

Industry Study – CCD Brands

Indian Paint Industry is over 1000 years old. Its beginning can be traced back to

the setting up of a factory by Shalimar paints in Calcutta back in 1902. Till the

Second World War the industry consisted of small producers and two foreign

companies. After the war, the imports stopped which led to the setting up of

manufacturing facilities by local entrepreneurs. Still the foreign companies

continued to dominate the market, which in away is the current scenario as well.

The initial decades saw the complete dominance of British Paint companies such as

Goodlass Walls (now Goodlass Nerolac), ICI, British Paints (now Berger Paints),

Jenson & Nicholson and Blundell & Eomite. The Indian Paints sector is valued at Rs

6,800 crores in value terms and is very fragmented. The current demand is

estimated to be around 650,000 tonnes per annum and is seasonal in nature. The

per capita consumption of paints in India stands at 1.0-kg p.a.as compared to 1.6 kg

in China and 22 kg in the developed economies. India's share in the world paint

market is just 0.6%.

The Indian Paint industry can be divided as:

The organized sector comprising of large and medium size units

The unorganized or the small scale sector.

There are now twelve players in the organized sector with a market share of 70%.

This is in contrast to the 55% share that the sector commanded a few years back.

Major companies in this segment include Asian Paints (44% market share), Berger

Paints (17%market share), ICI (12% market share), Goodlass Nerolac (15%

market share), Jenson Nicholson (6% market share), Shalimar Paints and Rajdoot

Paints.

The organized sector has grown at a CAGR of 11.5% in the last five years. The

unorganized sector comprising of over 2000 units has a combined market share of

around 30%.

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The major players are Asian Paints, Goodlass Nerolac, Berger, ICI and Shalimar.

Recently, world leaders like Akzo Noble, PPG, Dupont and BASF have set up base in

India with product ranges such as auto refinishes powders and industrial coatings.

Kansai Paints of Japan, which entered into collaboration with Goodlass Nerolac in

1984, is now the holding company for Goodlass Nerolac with 64.52 % equity

holding. PPG has a joint venture with Asian Paints to manufacture industrial

coatings. Jenson & Nicholson and Snowcem India are no longer active players

because of dwindling sales in recent years.

In the 1990s, helped by a growing economy, the paint industry had recorded a

healthy growth of 12-13 % annually. This was mainly due to a drastic reduction in

excise from a staggering 40% to 16%. However, the growth was restricted in 2000-

03 to single digits. There was a revival in 2003-2004 with a robust growth of 13%.

The per capita consumption of paint in India is 700 grams against 19 kg in the U.S., and2.7 kg and 5.8 kg in other developing countries like China and Brazil. As the consumption goes with affordability, the low Indian figure is not a surprise. High excise duties, low technology and low capital costs for production led to the incidence of a high number of units in the small scale sector. However, since 1992 the government has been consistently lowering duties from 40.5% in 1992 to around 16%currently. This has led to lowering of price differential between the organized and unorganized sector. Moreover the paints sector was also allowed to claim MODVAT credit on petro-based products, thus lowering the excise incidence further. Products - The products of the paint industry can be classified into two major segments, decorative (architectural) paints and industrial paints. While the decorative paints are used in protecting valuable assets like buildings, the industrial paints are used for protection against corrosion and rust to steel structures, on vehicles, white goods and appliances. Decorative paints - The decorative paint segment can be classified into interior paints and exterior or cement paints. 80% of the decorative paint segment (about Rs. 3640crores in the organized sector) accounts for interior paints, which consists of premium, medium and economy categories. The premium category consists of plastic emulsions, the medium-priced category consists of synthetic enamels and the economy category consists of distempers.Fig-1The products under the

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decorative finishes can be limestone coatings, primers, distempers, cement paints, matt/lustre finishes, enamels, emulsions (first quality), and premium emulsions. Within the decorative segment, the exterior category, particularly exterior emulsions, is the fastest growing segment 20 % for the last three years. Consumption of paints is skewed towards decorative paints which account for 70% of paints sold in India. This is in a sharp contrast to the trend in developed countries, where the ratio is skewed towards the industrial segment. This segment is marked by the presence of a large number of players from the organized as well as unorganized sector.

Competition is high and margins tend to be low in this segment. Products of this segment are relatively price sensitive. Asian Paints is the market leader in this segment. Demand for decorative paints is seasonal with bulk of sales taking place during the festival seasons from September to December. Besides, sales remain slack during the monsoon months from June to August. Entry barriers in terms of technological and funds requirements are relatively lower in the paints sector. However decorative paints are marketing-savvy products and backed by large advertisement campaigns and dealership networks. These serve as high cost entry barriers for new companies in this business. The huge investments required in setting up a vast marketing and dealership network, to advertise and develop a brand over a period of time can only be afforded by companies in the organized sector. It is for this reason that smaller companies and small scale sector units are slowly losing market share to the organized sector.

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Industrial Paints: Industrial paints comprising 30% of the market include automotive paints, high performance coatings, coil coatings, powder coatings, marine paints and general industrial coatings. The automotive segment is further bifurcated into OEMs and auto refinishes. The automotive and general industrial coatings occupy top slot in terms of production. Goodlass Nerolac is the market leader in this segment.Fig-2Demand for these paints is relatively price inelastic, but is prone to business cycles and depends on industrial and economic growth. Major end user industries include shipping, capital goods, white goods and heavy industries. The industrial paints segment due to specialized technology and high capital expenditure attracts fewer players. Most Indian companies have tied up with or are in the process of tying up with international paint majors to have access to the latest technology. A tie-up with a global paint manufacturer also enables the domestic company to supply to local customers of its partner. For example, Goodlass Nerolac is a major supplier to Maruti Suzuki because of Kansai, its Japanese collaborator and Suzuki relations.

Raw Materials: The paint industry is raw material intensive. Paint involves the mixing of various raw materials in various proportions. The raw materials are of a wide variety. On an average, raw materials account for 60% of net sales (industry average). In case of small-scale units it forms up to 70% of the net sales. High cost and erratic availability of raw materials mark the Indian paint industry. Around 300-400 raw materials are required to manufacture different kinds of paints. The

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high number of raw materials and finished goods highlights the working capital intensity of the sector. Most of the raw materials are petroleum based. Thus paint companies benefit when the petrochemical industry goes into its cyclical downswing. A hike in the price of petroleum products raises input costs negating the impact of a cut in import tariffs on raw materials. Raw materials frequently run into short supply, resulting in high inventory cost. The shortage of one specific material could result in severe manufacturing problems It is estimated that 18-20% of the total raw materials used the industry are imported. Most paint companies are hit by the fact that they do not make the raw materials themselves. Asian Paints is the only paint company that manufactures PAN. The other paint companies have to import their stock. Since PAN prices generally outpace international orthoxylene prices by almost 50% paint companies end up paying a fortune when prices rise. In such a situation Asian Paints benefits by selling PAN in the open market. Raw materials are divided into three major groups, namely, pigments (titanium dioxide, zinc oxide etc.), solvents (mineral turpentine) and resins and additives.

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Competitor Analysis of CCD Brands In India, Indian Paint industry’s total market size is US$1400 million. The organized sector of the industry is 55%. The 45% unorganized sector has about 2500 units. The big players and their market share-value of the organized sector are •Asian Paints 37% •Goodlass Nerolac 15.9% •Berger Paints 13.8% •ICI 11% •Jenson & Nicholson 5.7% •Shalimar 4% •Others 12% The market segment is divided into two sectors. •Architectural 70% •Industrial 30% The total volume of the market is 600,000MT MARKET SHARE

The overall organized sector market share is shown in the following graph. Asian

Paints leads with a market share of 37 per cent; Goodlass Nerolac has 16 per cent

while Berger Paints has 14 per cent share.

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The leader in the high volume medium and mass segments of decorative paints,

Asian Paints has been consolidating its market leadership over the last six years

and now has the biggest slice of 37 per cent of the market for decorative paints in

the organized sector as shown in on the next page. Trailing behind are Goodlass

Nerolac and Berger Paints with market shares of 13 per cent and 11 per cent

respectively. Other major players from the organized sector include Jenson &

Nicholson with a low 6 per cent and ICI with 8 per cent. With the exception of

Asian Paints, the market shares of most of the major players have been stagnating

over the last few years. This was primarily due to extensive focus on urban

markets and neglecting the high-potential semi urban and rural markets.

On the other hand, one of the earliest entrants to take a lead, Goodlass Nerolac

dominates the market for industrial paints with an impressive share of 43 per cent

of the market as shown in the following graph. Though other players trail behind

Goodlass Nerolac by a wide margin, competition in industrial paints is increasing.

While Asian Paints and Berger have a market share of 14 per cent each, ICI’s share

is lower at 8 per cent.

Asian Paints,

37%

Goodlass

Nerolac, 15.9%

Berger paints,

13.8%

ICI, 11%

Jenson and

Nicholson, 5.7%

Shalimar, 4%

Others, 12%

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ASIAN PAINTS

Asian Paints is India's largest paint company and the third largest paint

company in Asia today, with a turnover of Rs 30.2 billion (around USD 680

million). The company has an enviable reputation in the corporate world

for professionalism, fast track growth, and building shareholder equity.

Asian Paints operates in 21 countries and has 29 paint manufacturing

facilities in the world servicing consumers in over 65 countries.

Asian Paints is a great marketing success in a branded consumer product

business. The company succeeded where others failed in three areas:

First, it understood the requirements of the Indian paints market better

than the MNCs which did not bother to respond to local consumer needs. It

was the first to introduce small pack sizes, a variety of shades and a wide

range of paint types (enamels, distempers, emulsions) to suit different

pockets.

Thus, in the sixties, the company came out with plaster distemper, Tractor,

to suit the needs of the mass market for a product that was much cheaper

than costly emulsions but much better than the widely used whitewash

and crude powder distempers. This opened up a huge market and today

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distemper accounts for 25% of the decoratives market in volumes and

15% in value. And as recently as in 1992, the company introduced a

synthetic distemper, branded Utsav, aimed at the same rural and low

income urban markets.

Secondly, in the highly competitive market emulsions segment, the

company introduced as many as 151 shades in its Apcolite range when the

competition was offering a maximum of 40 odd shades. The strategy paid

off and Asian Paints today commands a 40% share in this segment. It set

up an extensive national distribution network to tap demand in smaller

towns. Today it has direct dealers in 3,200 towns and 10,000 stockists.

Investments were also made in computer technology to ensure up-to-date

information interface between the marketing and production sides of the

business.

And finally, the company has displayed considerable savvy in its

advertising campaigns, dealer relations, point of sale publicity and product

demonstrations to consolidate and expand markets. In fact, the company

has played a pioneering role in expanding the Indian paints market by

identifying high demand potential areas and then tapping them to

maximum effect.

KANSAI NEROLAC (GOODLASS NEROLAC)

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It was established in 1920 as Gahagan Paints and Varnish Co. Ltd. at

Bombay. In 1930, three British companies merged to formulate Lead

Industries Group Ltd. In 1933, Lead Industries Group Ltd. acquired entire

share capital of Gahagan Paints in 1933 and thus, Goodlass Wall (India)

Ltd. was born.

Subsequently, by 1946, Goodlass Wall (India) Ltd. was known as Goodlass

Wall Pvt. Ltd. In 1957, Goodlass Wall Pvt. Ltd. grew popular as Goodlass

Nerolac Paints (Pvt.) Ltd. Also, it went public in the same year and

established itself as Goodlass Nerolac Paints Ltd. It is among the oldest

paint companies of the country and the undisputed market leader in

industrial paints, with a 43% share of this segment. It is a dominant player

in the auto paints market which accounts for around one-third of the

industrial paints segment. Goodlass Nerolac paints’ strength comes from

the higher end of the auto paints market - passenger cars and light

commercial vehicles (LCVs) account for 60% of the company’s auto paint

sales. The rest comes from heavy trucks and two wheelers.

In auto paints, the market share of Goodlass is now estimated to be around

50% with a 90% share in passenger cars, 60% in LCVs, 40% in two

wheelers and heavy trucks. Right now, the company is the only significant

producer of CED (cathodic electro-deposition) primer, with technical

know-how from its Japanese promoters, Kansai Paints. Goodlass is the

only company offering a complete automotive paint system comprising

pre-treatment chemicals, primers, anti-rust coatings, intermediate and top

coatings as well as auto refinishes. GNPL supplies 90% of the

requirements of Maruti Udyog Ltd, which produces 300 cars a day.

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The company has a tie-up with Nihon Toshuku Tokyo of Japan for

sophisticated coatings for automotive and industrial sectors. Having lost

Daewoo’s Cielo contract to Asian Paints, GNPL is pursuing business

opportunities with car majors planning to enter the country. It recently

tied-up with Dupont, USA for supplying automotive paints to DuPont’s

clients in India.

Goodlass Nerolac Paints Ltd. Changed its name to Kansai Nerolac Paints

Ltd. in 2006. The present human asset consists of over 2000 professionals

and a sales turnover of 1226 crores. It is the second largest coating

company in India with a market share of over 20% and also the leader in

powder coatings.

BERGER PAINTS

Berger Paints is the culmination of over seven-decade process of evolution

and growth that began in 1923. Its growth has been closely linked with the

business and industrial development of modern India.

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The performance of this company is anchored today in a wide variety of

Decorative and Industrial paints which continue to gain an increasing share

of the highly competitive Indian paint market. Being an ISO 9001 company

its quality products have attained instant and worldwide recognition, and

continues to meet quality requirements that are demanded today even in the

domestic market. The Country's third largest paint manufacturer, with its

Headquarters in Calcutta, Berger controls a distribution network comprising

of 66 stock points and approximately 10,000 dealers, spread across the

country.

BPIL has technical tie-ups with Herberts, a subsidiary of the German

pharmaceutical major Hoechst for automotive paints, Tendor NV of Holland

for powder coatings and Valspar Corporation, USA for heavy duty coatings.

The company is particularly active in the powder coating segment and is a

supplier to most OEMs in the white good segment. With its thrust shifting to

industrial coatings, the company is expanding its powder coating capacity

from 840 metric tons to 1,840 metric tons at its existing plant.

Recently, it introduced Color Bank, a computerized mixer tinting machine in

technical collaboration with Ital Tinto of Italy. Special software, Tintovision

installed in the Color Bank gives the customers a choice of more than 5,000

shades and can even produce the colors offered by the company’s

competitors. Another achievement of Berger is the setting up of Berger

Prolinks. Prolinks is Berger Paints' response to a market environment that is

increasingly driven by technology and calibrated by expertise. Prolinks is

aimed at placing the initiative in the hands of builders, architects and

designers to enable them to directly source innovative products and

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services. The team is entrusted with maintaining a seamless interface

between paint specifiers and Berger Paints.

The objective is to provide specifiers with a complete basis for

recommending products and processes - databases, technical services, color

consultancy, site inspection, etc. Prolinks experts ensure specific solutions to

specific problems, whether it is a particular shade that needs development,

special climatic factors to be provided for, or application factors that have to

be maintained. From know-how to legwork, the Prolinks team delivers total

support.

ICI INDIA

ICI India was the subsidiary of the $15bn British multinational company ICI

Plc. Brunner Mond & Co., one of the four Companies that combined to form

ICI in UK in 1926, opened a trading office to sell alkalis and dyes in Calcutta.

In 1923, Brunner Mond & Co. (India) was incorporated and the company's

name was subsequently changed to Imperial Chemical Industries (India)

Ltd., in 1929.

ICI (India) is ranked fourth in the paint business, after Asian Paints, Goodlass

Nerolac -17-Paints and Berger Paints. Unlike the other paint companies, ICI

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(India) was a diversified unit and paint constituted 43% of its net sales. It

identified paints as a thrust area and was aggressively moving to improve its

position. The company invested $11 million in a new decorative paints plant

near Bombay and constructed a $16.7 million plant for industrial paints near

Chandigarh in North India.

In order to increase its presence in the paints market, ICI’s growth plan is to

beef up its distribution network, widen the purview of specialty products,

access newer technologies through joint ventures and of course, targetting

the urban and semi-urban markets by introducing more products in the

lower and middle segment of the paints market. In order to be amongst the

top two players in the industry, the company is firming up plans to

aggressively market its products in the country.

The Gliddens brand is being positioned in the middle segment to supplement

Maxilite in the mass-segment and Dulux in the premium segment. In

response to Jenson & Nicholson’s Instacolor, ICI launched Color Solutions

which can be used for both exteriors and interiors. This comprises a menu

driven, user friendly touch color screen on a computer that helps consumers

visualize as many as 6,000 shades on house structures resembling their

homes.

JENSON AND NICHOLSON

Jenson & Nicholson, a leading paint company in the country today was

established in the year 1922. It has a country wide presence with 33

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branches and stock points across the country and manufacturing plants at

Naihati (near Kolkata), Sikandrabad (near Delhi) and Panvel (near Mumbai).

In 1955, it launched India’s first Plastic Emulsion paint, under the brand

name of Robbialac.

It ventured into the Powder coatings market in 1986, thus becoming the first

company in the organized sector to offer this extremely environment

friendly coating technology. Subsequently, it introduced Instacolor, in

technical collaboration with M/s Tikkurilla OY of Finland. It is the first

company in the country to introduce computerized dispensing system.

Jenson and Nicholson launched the Standox brand of products in 1996 which

offers over 45,000 colours to the Indian car owner. In the very next year, the

company in order to cater to highly specialized Marine paints sector, entered

into a 50:50 joint venture project with M/s Chugoku Marine paints of Japan.

Chugoku is the second largest supplier of marine paints in the world with

30% market share. The new company also handles heavy duty coatings.

OBJECTIVES OF THE STUDY The objective here is to get an overview of marketing a Computerized Color Dispensing machine and to know how this concept works in the Paints Industry, The various steps the companies take to improve the supply chain management and how successful are they. Primary objective:

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To understand the management followed at Paint Industry. To find out the gaps left while implementing Marketing Management in various companies under the paint industry. Secondary objective: To study the various companies in Paint Industry. How they manage and market the product. Whether they are able to get the maximum out of the Computerized Colour

Dispensing Machine and make the highest benefit of it. RESEARCH METHODOLOGY Methodology of the study will be an exploratory research. The nature of the study is such that it needs to have both the secondary research as well as the primary one. The Secondary research will help to gain more and more information about the companies and the usage of Computerized Colour Dispensing machine. The primary research will make me understand the realities of the market.

Facts and Findings of the Project

The paint industry is expected to grow at 12-13% annually over the next

five years. FY12 was a challenging year for the industry as a whole due to

subdued demand across key sectors and rising inflation.

The unorganized sector controls around 35% of the paint market, with the

organized sector accounting for the balance. In the unorganized segment,

there are about 2,000 units having small and medium sized paint

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manufacturing plants. Top organized players include Asian Paints, Kansai

Nerolac, Berger Paints and ICI.

Demand for paints comes from two broad categories:

Decoratives: Major segments in decoratives include exterior wall

paints, interior wall paints, wood finishes and enamel and ancillary

products such as primers, putties etc. Decorative paints account for

over 77.3% of the overall paint market in India. Asian Paints is the

market leader in this segment. Demand for decorative paints arises

from household painting, architectural and other display purposes.

Demand in the festive season (September-December) is significant, as

compared to other periods. This segment is price sensitive and is a

higher margin business as compared to industrial segment.

Industrial: Three main segments of the industrial sector include

automotive coatings, powder coatings and protective coatings. Kansai

Nerolac is the market leader in this segment. User industries for

industrial paints include automobiles engineering and consumer

durables. The industrial paints segment is far more technology

intensive than the decorative segment.

The paints sector is raw material intensive, with over 300 raw materials

(50% petro-based derivatives) involved in the manufacturing process.

Since most of the raw materials are petroleum based, the industry benefits

from softening crude prices.

Key Points

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.

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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 unorganized 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 pricing through product differentiation is

also followed as a competitive strategy.

All the key players are in an expansion phase. Asian Paints’ plant in

Khandala, Maharashtra is under construction and is expected to be

commissioned by 4QFY13. Kansai Nerolac’s capacity expansion plans at

Jainpur and Bawal culminated during the year. Berger Paints has also

undertaken capacity expansion for its plants located in Andhra Pradesh

(AP). The first phase of the project in AP is expected to be completed in the

middle of 2013. Further, expansion of water based plant at Rishra and Goa

is also on track.

Prospects - The market for paints in India is expected to grow at 1.5 times

to 2 times GDP in the next five years. With GDP growth expected to be

between 5-6% levels, the top three players are likely to clock above

industry growth rates in the future, considering they have a strong brand

and good reach.

Decorative paints segment is expected to witness higher growth going

forward. The fiscal incentives given by the government to the housing

sector have benefited the housing sector immensely. This will benefit key

players in the long term.

Although the demand for industrial paints is lukewarm it is expected to

increase going forward. This is on account of increasing investments in

infrastructure. Domestic and global auto majors have long term plans for

the Indian market, which augur well for automotive paint manufacturers

like Kansai Nerolac and Asian-PPG. Increased industrial paint demand,

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especially powder coatings and high performance coatings will also propel

top line growth of paint majors in the medium term.

MARKETING PLAN The following steps are considered for jolting a marketing plan -

Determine if the paint store you open will be part of a national franchise or if it will operate under a private brand. This is an important decision because it will have an impact on other business decisions you make, such as what

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wholesale supplier you will use. Sherman Williams and other national paint stores offer franchise opportunities. Becoming part of a franchise gives you more credibility, but also gives up control over some business decisions.

Write a business plan to guide you through the process of opening and running a paint store. Templates for paint store business plans can be obtained online and then filled out with the specific details that pertain to the business you will start. The plan should identify how your paint store will be managed, what the policies will be, what the advertising plan is, the staffing considerations and anything else required in order to open and operate your paint store.

Create a budget for your paint store so that you can accurately identify the capital requirements for your business. Using the information in your business plan, itemize all of the items that will be needed to run your business. Items such as rent, utilities, supplies, salaries and advertising costs should be accounted for in detail. Once the costs have been identified you will know how much money is needed to make your paint store a reality. Many people like to make a three-year budget to show the actual operating costs, since the first year will have added start up expenses that are not needed in subsequent years.

Find the starting capital to open your paint store. Once your budget is complete and you know how much money is required to start and operate the paint store, you can form a plan of how to raise that money. Personal loans and credit cards are the primary source of funding for many new businesses, but may not be enough if you want to have a large paint store. Taking on a financial partner is another popular option. It is difficult to obtain a business loan for a new paint store, so alternative financing methods will need to be available. Look at what resources are realistically available to you and determine the best way to raise the funds you require.

Find a location suitable for your paint store. Leasing the right location is an important decision for any business. Although a paint store does not require the most high-end retail location, you do still want it to be in a place that is easy for customers to find. A place that has a decent flow of existing traffic is also preferred, since it will help people notice your business who may not have otherwise been reached by your advertising efforts.

Renovate the location that you chose for your paint store. This will include installing appropriate signage outside, making sure there is ample lighting,

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applying fresh paint to the walls. Give careful planning to the layout of the isles during this phase. The layout of the shelving that stores and displays your products can either maximize or minimize the amount of available space in your store.

Establish a supply chain and obtain the starting inventory for your paint store. The supply chain is vital to the success of your business because it is how you will get the products to stock your shelves. If you elected to become part of a national franchise, then the franchise itself will be the supply chain because you will buy everything from them. If you are not part of a supply chain then you will need to locate wholesalers to buy paint and painting supplies from.

Hire the staff the will work in the paint store. Cashiers and shelf stockers make up the majority of the staffing requirements. It is beneficial to also hire a manager that has experience working in a paint store, even if you want to handle a lot of the management duties yourself. Most positions in a paint store require no experience, although prior experience operating a cash register may be helpful.

Develop an advertising strategy to announce the opening of your paint store. These businesses generally have a localized market, so local advertising in the immediate area of the paint store will yield the best results. Local newspaper and radio advertisements typically generate the best exposure for your advertising dollars. You may also wish to mail something to contractors, decorators and others who may be in a position to make large purchases frequently.

Strategy and Implementation Summary As stated before, the company will focus on greater service through better

scheduling, project management, and greater alignment of personnel by providing profit sharing.

The company is seeking to use the most up-to-date communications and scheduling technology between the project manager, foreman, suppliers, and operations personnel to insure that deadlines are met.

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Furthermore, the company will seek to create a reliable pool of individual painters to draw upon and eventually hire all the painters full time with salary and other compensation.

The company also plans to carry out an aggressive marketing plan starting in year three. This includes literature, TV, radio, billboards and strategic alliances with other large contractors that do not have their own painting services. These companies include Marble Construction, Talbot Construction and Burns & Associates.

Porters Five Force Analysis

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Bargaining Power Of Buyers – The end user can be segregated into household and industrial users. For

the housing requirements, the buyers can be customers (building contractors who buy in bulk) and end consumers (people who paint / repaint their house).Customers have higher bargaining power as they buy in bulk and are more price sensitive.

For the end consumers, a number of options are available and decisions are made based on quality, price and differentiating factors like weather protection, environment friendly paints, etc. The unorganized market also has a large chunk of the market share providing many options to the lower income segments.

The industrial segment is a low margin high revenue business and the

buyers of these segments are knowledgeable about their needs. Price

comparison is done effectively by the consumers, as this is a regular

expenditure for this segment. However, the leading industrial paint

suppliers have their expertise in their favor, which limits the bargaining

power of the buyers. Thus, bargaining power of buyers is Medium.

Bargaining Power of Suppliers –

The Paints Industry is a raw-material intensive industry with more

than 300 products going into the manufacture of the final product.

The raw materials can be divided into different categories like

pigments, additives, solvents, binders, etc. Of this, pigments constitute

about 1/3rd of total raw material costs.

Titanium dioxide is one of the key pigments used in the production of

paint and is facing a global supply shortage. Thus, suppliers of Titanium

dioxide have higher bargaining power.

The other raw materials used are crude derivatives and hence their

price is subject to fluctuations which affect the industry’s profits. Thus

bargaining power of suppliers is Medium.

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Competitive Rivalry –

About 80% of the organized market is catered to by the top four players

of the industry. The current market growth rate may provide ample

room for all the players of the industry to flourish. However,

competition may increase as the market gets saturated, although this

may take time to happen.

Also, the presence of the unorganized market does provide room for

competition. Thus, on the whole competitive rivalry for the Indian Paint

Industry is Low to Medium.

Availability of Substitutes –

The availability of substitutes for paints is very minimal. In the rural

areas, lime wash is a conventionally used substitute for paints. In the

decorative paints segment, art alternative option fir decorating walls

available today is wallpaper.

Wallpapers tend to be more conventional options and also prove to be

visually more attractive for certain set ups like small commercial

establishments. Thus, the availability of substitutes in the Paint

Industry is Low to Medium.

Threat of New Entrants –

The Paints market in India is dominated by few players, making it

difficult for anyone new entering the industry to compete. However,

established foreign players may pose a threat by virtue of the

knowledge and expertise of their established business in other

countries. Thus, threat of new entrants is Medium.

Marketing Strategy The following sections detail the marketing strategy and give the product description in detail. Product – With Detailed Description

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Computerized Color Dispensing Machine

Characteristics:

Solution Maker Agitator and Mixer Color dispenser

Solution Maker

Connected and controlled by PC computer Stand alone – can be used as a solution maker ONLY Two weighing balances with ultra high accuracy and repeatability Built in Hot water Dispensing

Agitator and Mixer

To make a homogeneous solution after the solution is made No magnets and hence no contamination Inclined Mixer constantly agitates the stock solution

Technical Specifications

Tubeless dispensing - straight from the stock solution bottle. No need for cleaning of tubes and Syringes

Two Robotic arms for dispensing

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2 rotary tables of 15 beakers each: 30 beakers can be loaded at the same time

2 Weighing balances with very high accuracy for each rotary table Unbreakable Stock solution bottles Very Quick operation of dispensing Available with 140, 100, 72 and 24 bottles for stock solution Controls through a PC computer

HOW IT WORKS -

A paint mixer matches paint almost exactly to the color that you want. Whether you use a paint card sample or bring an item from a room, paint is mixed to match. Some mixers can only go by the sample cards on display in the hardware store, and cannot take other types of color samples, but there are usually enough color samples to make a close approximation. Before this invention, basic colors were the norm and specialty paints had to be mixed by a professional with tints.

A spectrophotometer deciphers the colors and picks the one needed. A tungsten light bulb or LED light is used as the light source. White light is made up of all colors combined. This is seen when the light is refracted by a prism and causes a rainbow to be cast. A spectrophotometer works in the same way, breaking up the light into all the colors, so that the system is as accurate as possible when it analyzes the color.

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Inside the spectrophotometer are interference filters. The color sample is processed through the filter and colors that do not match are reflected off of them. This creates an accurate reading of the color. The color then goes through the filters and is collected in the fiber optics to be sent to the photo diode. The diode transfers the reading into a signal that is read by the computer, which processes the correct amount of tint to be added to the paint. The number of tints depends on the brand and type of spectrophotometer being used. Some hold 12 tints, while others hold as many as 16. Tints are held in cylinders within the machine, and work like syringes, pressing tint through tubing and into the dispenser opening. The machine pushes the tints needed out of their cylinders and pours them out of the opening into the paint can waiting below.

After the tint is added, the lid is placed on the can, and the paint is placed in a mixer. Metal clamps hold the can in place, and the machine shakes the can extremely fast for several minutes. Afterward, the person on the paint counter opens the can and checks to make sure the paint is mixed thoroughly.

Promotion Strategy

The company will be engaging in an agressive marketing program that will include mailers, phone solicitation, TV, radio, billboards and other platforms to generate service awareness, and value proposition. However, as stated elsewhere, the company's immediate goal will be to generate enough profit to pay for such expenses. The marketing plan will go into effect starting in year three. Prior to this the company will use more modest marketing tools such as mailer, promotion of word-of-mouth marketing, and ads such as in the Yellow Pages.

Pricing Strategy

The company will price each project based on time, material, and a flat 5-10% profit margin, depending on the segment. In the first year or two, depending on sales, the company will focus more on getting the contracts than on maintaining its pricing structure. Therefore, profit margin may be a little low for the first year or two.

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Sales Strategy Sales forecast is based on the existing client base of the three principal

officers of the company and their ability to generate new sales based on their contacts. By bringing together Mr. Kruger's commercial painting experience and Mr. Barnum's residential experience, the company will be able to generate sales in both areas. Furthermore, the company's growing marketing program will generate the growth the company needs to survive.

Sales Forecast

Marketing Strategy Evaluation

Undertake some marketing strategies that will help to know strengths and to realize what we are seeking to accomplish. Focus on new homes, residential work, business, apartments, and other home establishments. If possible, make a list containing some important questions that can answer your business abilities. Ask yourself if you should focus on speed, put your attention to detail, low cost, and consider good service. Can you manage small or large jobs? Do you need to get a list of satisfied customers? Remember all of these questions. Once you have already answered these, you can easily do your marketing plan. Then, make a research about local competitors’ services and its rates. As you understand and know your competitor’s service rates, you can easily understand what appropriate price you can charge to your customers.

Collaborate with Other Businesses

One way to have good and stable painting business is to build good relationship with other business owners that mainly focused on

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construction, property and house management industries. Since building any business like this is very difficult to start, establishing solid relationships with related companies is very crucial. They will help you to generate your business fast and successful. Aside from that, if they like your performance and job, they will recommend your services to other companies.

Use of Promotional Materials

There are two ways of promoting business. The first one is through print advertisement which is usually a cheap way of getting your business name out in the community. It provides concrete proof that your business is legal and stable. You can promote your business in groceries stores, local newspapers, restaurants and other places. The second one is using business cards that are typically used in any type of business. This type of advertisement includes the detailed information of your business such as your email and home address, services, and the prices.

Sales Promotion

The company has been concentrating more on sales promotion than on advertising. On analyzing the customer survey data it becomes evident that since the customer is returning to the store after an average of about three years it is better to concentrate more on the dealers who are in the business throughout the year. Keeping this in mind the company’s decision of doing more sales promotion than advertising stands justified.

Sales promotion can broadly be divided into two categories: Customer promotion –

this section includes all the sales promotion activitiesdirected towards the customers. Scratch cards that are provided with specific size of packages are examples. The company comes out with many different sales promotion schemes during the festival season, especially the durga pooja festival in Orissa and West Bengal

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There are a number of gifts and schemes on the larger packs. Coupons and free gifts are offered on packs of more than 10 kgs. The company also offers a large number of services to the customers to assist them in their buying decisions. These services are offered on the company’s website to make it accessible to a very wide range of customers.

Trade promotion – As part of the company’s policy, huge emphasis is given on trade promotion. The dealers and contractors who are a part of the distribution chain are given special attention. The company comes up with several incentive schemes for the dealers. The most popular schemes include cash discounts, foreign trips, gifts such as 22refrigerators etc for dealers who succeed in meeting or exceeding pre-determined sales targets. The company also organizes regional dealer meets regularly. Here the dealers are briefed about the company’s new products and the technical details and application procedures of these products. The company also aims at building and retaining dealer loyalty through these meetings.

Integrated Marketing Communication Plan

An integrated marketing communication plan uses the same thematic message in different types of promotions. The idea behind the message remains consistent

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whether consumers see a magazine ad or the company's web page. An integrated marketing communication plan may leverage its multiple promotion sources. A print ad might direct consumers to enter a contest or sign up for personalized savings on a web site. Product packaging could play a role in an integrated marketing communications plan as well. This is often seen with rewards programs that allow consumers to "earn points" through purchases and participation in an online community.

Use of New Media and Social Networking

Today, networking is the best way to get the best ways to make your business popular. It also helps you to meet friends and partners in the line of painting business.

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Analysis - Before you develop your message, you must determine to whom you're going to be communicating. One of the first steps in developing an integrated marketing communications plan is identifying the customer. A customer analysis determines what makes the target consumer unique. This includes demographic characteristics, such as age, education level, gender, income, and geographic location. Once you know who you're going to target, you'll also need to determine how you're going to reach your audience. An analysis identifies the media an audience is likely to use, including specific magazines, newspapers and television shows.

Identity - Once you determine who your customer is, you'll want to create a unique identity for your brand or company. The identity that you create will be more effective if it appeals to an important need or value. Creating a unique identity, or "positioning," is important, because it distinguishes your product from the competition. The message in your integrated marketing communications plan will embody this unique identity. Another way to think of positioning is to equate it with your main selling point.

Budget - Since most forms of advertising and promotion involve spending money, you'll need to determine how much. Many plans specifically state the amount that will go toward advertisements, promotional contests and online social media. Part of your budget will need to account for the unexpected. If your competition matches your efforts, you may need to adjust the frequency of your promotions. You might need to adjust your message and brand identity to counter the competition. Many budgets account for a year of promotional activity. Goals - A comprehensive integrated marketing communications plan will state specific objectives. For example, an objective of the marketing campaign might be to increase awareness by 25 percent. A second objective might be to reach the target audience twice a week during the campaign's first quarter. The plan's goals should be specific and measurable. You will want some way to determine whether the plan was effective. You might solicit feedback from members of your target audience to measure your objectives.

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POSITIONING Positioning characteristics - The goal of product positioning is to keep your product on top of your customers’ mind when they’re considering a purchase. To be successful, product positioning must achieve three objectives:

Differentiate your product from the competitions Address important customer buying criteria Articulate key product (or company) characteristics

Marketing messages and positioning have a lot in common. During the process of generating product positioning strategies, periodically review each one against the following list of characteristics. Is the product positioning strategy:

Single-minded—does it convey one primary message at a time? Meaningful—will it connect with the target audience? Differentiating—does it contrast your strengths against the

competition? Important—is it pertinent and significant to the target audience? Sustainable—will it resonate with the target audience well into the

future? Believable—will it ring true with the target audience? Credible—can you clearly substantiate your claims?

Positioning strategies The following is a list of some established product positioning strategies. The ones most fit in against the computerized color dispensing machine are taken into consideration.

Against a Competitor: Positioning your product directly against a competitor’s typically requires a specific product

Superiority claim: A memorable example is Avis Rental Cars’ We’re #2. We try harder.

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Away from a Competitor: Positioning yourself as the opposite of your competitor can help you get attention in a market

Dominated by some other product: A famous example is 7-UP calling itself the Uncola.

Benefits: This strategy focuses on a benefit your product provides to your target audience. Examples include Volvo’s

Emphasis on saving time and picking personalized colors. Product Attributes: Highlighting a specific attribute of your product can

also be compelling. Product Categories: Comparing your product to a product in a different

category can be an effective way to differentiate yourself. Usage Occasions: This kind of positioning stresses when or how your

product is used by your target audience. Users: Focusing on the unique characteristics of specific users can also be

effective. The …For Dummies series of Instruction books are attractive to people who want to learn about a topic

from a source that doesn’t assume any prior Knowledge on the reader’s part.

Market Perception & Positioning Strategy

Our marketing, advertising, and promotion strategy is to differentiate our

paint company as a premium provider. The marketing strategy incorporates

plans to educate and recruit potential homeowners and commercial prospects

through several proven channels:

Newspaper advertising targeting specific local buyers

Direct reference channels from satisfied current and previous clients

Direct sales contact with property management and municipal property

portfolio managers

Small business network community

Successful product positioning strategies should differentiate our product, address important customer buying criteria, and articulate key product attributes. To achieve all three objectives, we must have an in-depth understanding of:

How your target market makes purchasing decisions

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How your competition positions their products What your product has to offer

These three interrelated elements of the Positioning Triangle must be in balance for you to attain competitive advantage. If you only understand two of the three, you still don’t know enough. Conducting the following Positioning Triangle Analysis will help develop much more effective product positioning strategies. Step 1: Understand your target market Learn which buying criteria the target audience uses:

Which product features (i.e. size, speed…), if any, do they emphasize? Which product benefits (i.e. safety, comfort…), if any, do they

emphasize?

List their buying criteria, in order of priority; if possible, assign a quantitative weight to each criterion, do so. Target market buying criteria example (prioritized and weighted)

40% - Color selection 30% - Length of warranty 20% - Service reputation 5% - Makes me happy/feel good 5% - High tech gadgetry

Uncovering this information typically requires primary research. If gathering data directly from target audience is not feasible, consult with sales force and industry experts to generate best-guess assumptions. Step 2: Understand your competition Conduct primary and secondary research to determine how competitors are positioning themselves, the strategies they’re using, and how successful they’ve been. Step 3: Map buying criteria against competitive positioning

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Add a column to the right of the list of buying criteria to note each competitor that positions its product against that criterion.

Example - Target market buying criteria (prioritized and weighted)

Competitive positioning 40% - Color selection Company C 30% - Length of warranty Company B 20% - Service reputation 10% - Makes me happy/feel good Company A 5% - High tech gadgetry Company B and D

Through this we discover that -

Two or more competitors are battling for the same position A competitor is trying to position itself on multiple buying criteria

(thereby risking muddy product positioning) One or more buying criteria are not being addressed by any

competitor The market share leader is strongly positioned within the top priority

buying criteria Step 4: Assess product’s strengths against the buying criteria Here we add a column to the left of buying criteria list to write our product’s relative strengths. Ask customers how they rank our various strengths. Otherwise, just use the best judgment Example - Product’s strengths Target market buying criteria

Competitive positioning 40% - Color selection Company C

#2 30% - Length of warranty Company B #1 20% - Service reputation #3 10% - Makes me happy/feel good Company A

5% - High tech gadgetry Company B and D Step 5: Analyze the gaps - Review the completed Positioning Triangle analysis to determine if there are any vacant positions in the market. Does the product satisfy

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effectively? Would successfully positioning yourself there yield the returns you seek? If there are no unfilled positions (or there are but you’re not interested in any of them), then you will have to decide which competitor to battle and which position you can most effectively win.

Perceptual Mapping of existing CCD Brands The dependence on information technology has increased remarkably from

a corner room EDP operation to playing a pivotal role in the way business in transacted. While Asian Paints has invested in i2 technology, Goodlass Nerolac has backed up IBM enabled APO and has upgraded to the latest 3.1 version to improve its distribution and optimize production scheduling. Both companies are operating on an ERP (SAP R3) operating system through full connectivity across the factories and branches via V-SATS, thus virtually working on live data for sales, accounting and purchasing.

Goodlass Nerolac has moved one step further by launching its intranet-employee portal to capture knowledge sitting in the minds/desktops of individuals to a common platform, which can be accessed by all employees. It has also invested in advanced business plan performance measurement tools like balanced score cards to track, review and align performance.

Most companies in the Indian paint industry are functioning on multi-division models with individual functions controlled by business heads. Some manage their business through sub-committees. As in the case of Goodlass Nerolac there are two levels of teams managing/guiding business.

TECHNOLOGY IMPACT: BERGER Berger has a series of tie-ups for various purposes.

Joint venture with Becker Industrifag.

Berger allied with the Japanese major Nippon Paints to boost its OEM turn

over to boost its OEM turnover

Agreement with Agreement with Orica Australia Pvt. Ltd to produce new

generation protective coatings.

Tie-ups with Valspar Corp and Teodur BV for manufacturing heavy duty

and powder coatings.

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DULUX - AkzoNobel, the owner of Dulux, is to align its portfolio of paint brands

under a single "premium" global positioning, to inspire consumers to decorate their homes.

The company owns 14 paint brands, including Dulux in the UK and Asia, Coral in Brazil and Flexa in the Netherlands.

Although each brand name will be retained, they will all operate with a single visual identity and positioning based on the strapline 'Let's Colour'.

A predominantly dark blue and white logo, with a multi-coloured 'flourish', has been created by branding agency Design Bridge.

The branding has already been rolled out in a handful of markets, including Canada, South East Asia and India, with the UK and Europe to follow over the coming months.

The updated identity will appear in a further 15 markets during 2012. Sucheta Govil, global head of marketing for decorative paints at

AkzoNobel, said the company wanted consumers to alter their perceptions of its paints from products that they "need" to use to products they "want" to use.

"Generally speaking, we are not a category that consumers [approach proactively]. They tend to paint or decorate when they have to. We need to inspire people," she added.

Govil also said that AkzoNobel plans to increase its advertising investment in all markets by about 15%, in an effort to cement a "leadership position" in the paint category.

According to Govil, individual country marketing teams will be given the freedom to carry out local activity.

"I'm a firm believer in global scale and leverage, with local flexibility," she added.

In the UK, Dulux is currently promoting the 50th anniversary of its sheepdog brand mascot.

In June, AkzoNobel hired Bartle Bogle Hegarty to develop a global communications strategy for Dulux and its sister brands.

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SWOT ANALYSIS -

COMPANY Asian Paints Nerolac paints Berger paints ICI paints

Strengths

1. Market leader in overall paint market & in decorative paint market in India share 40% 2. Available in urban & rural area 3. High Quality MR & MIS 4. Pricing policy oriented to all kinds of customer

1. Well ahead leader in Industrial paint market 2. Tie-up with kansai paints provides foreign technology. 3. Main supplier in the Indian Industrial & automobile market main client Maruty Udyog

1. In the IInd position in the industrial paint sector. 2. Tie up with Herbert-Germany valspar of US & Teodor NV of Holland

1. In the refinishing business it has one of the best quality refinish paint for cars. 2. In decorative paints it performance is good 3. recently purchased 49% share of Quest Int. India limited.

Weakness

1. Industrial paint sector only 15% share 2. No tie up with foreign manufactures. Through it has units in several countries. 3. Innovation in developing new product.

1. Market share in decorative paint market is very low. 2. Market in rural area is poor. 3. Considering overall paint market Asian paint is well ahead of Nerolac.

1. Overall market position is not very impressive. 2. Asian paints & Nerolac paints capturing the market buyer for behind

1. Industrial paint market existence almost 2-3% 2. Overall market conduct is poor.

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Opportunities

1. Acquiring/ Increasing market share in Industrial paint sector. 2. Developing market in automobile industry, which accounts for 50% of Industrial paint market.

1. Improve its position in decorative paint segment. 2. Capturing whole industrial paint market

1. come up with new innovations to challenge Asian paints & Berger paints

1. Merger with Quest will provide to have an experience in foreign market, particularly in UK.

Threats

1. Domination of few foreign countries 2. Nerolac is advancing rapidly in Industrial market

1. Asian paints is coming up rapidly into the industrial paint market with its new plants & products

1. Asian Paints & Nerolac paints are well ahead & ICI paint is competing nearly

1. Berger paint & there are few new entrants in the market.

SELLING PITCH for(CCD)Computerized Colour Dispensing Machine It's amazing how a little imagination can create colors of wonders. Our company has made it possible for you to choose the color of your dreams. It is an innovative computerized color dispensing solution that allows you to choose from an astounding range of unlimited shades for interior and exterior walls so you can personalize every room according to your wish and the color of your choice.

Formulated with the highest quality ingredients, all our paints are LEAD-FREE & ECO-FRIENDLY. We use the ultimate technological breakthrough in tinting system technology that ensures high quality products with high coverage, optimum performance in terms of light, weather and solvent stability. Its accuracy to reproducibility ensures you to confirm the desired shade from time to time.

We have got unique software that helps you visualize color combinations on computer screen.

A paint mixer matches paint almost exactly to the color that you want. Whether you use a paint card sample or bring an item from a room, paint is mixed to match.

A spectrophotometer deciphers the colors and picks the one needed. A tungsten light bulb or LED light is used as the light source. White light is made up of all colors combined. This is seen when the light is

50

refracted by a prism and causes a rainbow to be cast. A spectrophotometer works in the same way, breaking up the light into all the colors, so that the system is as accurate as possible when it analyzes the color.

Inside the spectrophotometer are interference filters. The color sample is processed through the filter and colors that do not match are reflected off of them. This creates an accurate reading of the color.

Our company has one of the most compact machines now available on the market with simultaneous colorant dispensing mode.

It saves on shop space without losing performance and accuracy. As with all Clariant dispensers, it is amongst the fastest and most reliable on the market, which makes it ideal for busy retail environments

OBJECTIONS LIST – The 4 Types of Sales Objections and How to Overcome Them

Lack of Need - At the most basic level, a client has to need what you’re selling. There may be times where there is nothing you can do to help the prospect. However, more often than not, if the prospect looks right (fits within your targeting criteria and is FAINT, or qualified), but they don’t see the value in what you have to offer, you are the one at fault. Either you’re not resonating, not exploring all possible needs, or not addressing the right need. Here are 4 things to think about when exploring needs: Focus on outcomes, not process. Nobody buys a process; people buy

results. By focusing on the value, you deliver and the outcomes you will achieve, not the mechanics of how you will achieve it, you set yourself apart.

Educate yourself about the prospect’s business, industry, and competitors. With this knowledge, you can get a good sense of where you can add value, and how your services might help. By simply looking at what their competitors are doing, you gain valuable insights and ideas. And, your prospect will take note as I have never

http://www.rainsalestraining.com/blog/sales-prospecting-guidelines/

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met a prospect that was not interested in market trends and competitive insights.

Dig deep and probe with your questions based on the research you completed. Don’t give up if your initial questions don’t uncover anything meaningful. Explore different possibilities, as you might discover needs and possibilities that you initially dismissed.

Conversely, don’t go down the first rabbit hole you find. If you discover something early, don’t stop there; continue to dig deep and find the root cause of the need (the 5 Why's is a technique that works well). Discover all the possible needs to create the most value and the most robust solution.

Lack of Urgency - This one drives me crazy. You build the relationship, develop trust, have the right chemistry, know you can help, the client knows you can help, and money is not an issue. However, the prospect can’t move the project forward – they have a full plate and are waiting for the “right time.” When this happens you have not demonstrated the impact of your solution well enough. Help the prospect see the value of how you can help by focusing on these two types of impact:

Rational impact. The rational impact is all about determining the ROI and building the business case for moving forward. If you have done your needs discovery properly, you should be in a position to present numbers that clearly demonstrate the impact of your solution. The prospect must see a tangible dollar value. No ROI leads to no urgency.

Emotional impact. People buy with their hearts and justify with their heads. The emotional impact of a solution is just as important as the numbers. To uncover the emotional drivers, focus on those things the prospect wants to achieve – we call these aspirations. Aspirations go beyond the pain, those things the prospect must change, and focus on the things he would like to change and the potential rewards associated with getting this done. The reward could come in the form of a promotion, accolades, or a bonus because the division is over-performing or a new product or service line was conceived.

Paint this aspirational picture by focusing on these key questions:

http://www.rainsalestraining.com/blog/the-power-of-why/

http://www.rainsalestraining.com/blog/the-8-buyer-personas-and-how-to-sell-to-them/



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If you’re able to do this, what would happen to your financial situation?

If you were able to work on this and get this done, what would happen to your goals?

If you delay, what consequences might you face? Lack of Trust - Trust comes down to whether or not the prospect believes you can do what you say you can do. If they do, it mitigates risk and gets you closer to the sale. You build this trust the old fashion way; you earn it. Here’s how: Start with research. The more knowledge you have about the

prospect’s company and industry, the more confidence the prospect will have in your services.

Be genuine and show interest. This might sound basic, but all too many salespeople go through the motions and fail to recognize that at the most basic level, you are having an interaction with a fellow human. If that interaction fails to resonate with the prospect, all is lost because there is no relationship, no chemistry, and no trust. Relax, smile, and have a positive attitude. Ask questions that show an interest in your prospect as a person, not just a business partner. People trust people they like.

Balance inquiry and advocacy. Find the balance between asking questions and talking about your offerings. One of the best ways to advocate is by telling stories. Sharing relevant stories and examples also shows how you’ve helped similar businesses and is the best way to build credibility. Stories are an endearing and tangible way to demonstrate the intangible – just make sure to articulate outcomes and results.

Lack of Money - The money objection is common, especially in today’s business environment. Price pressure is severe. However, you can overcome any price objections, get your full fees, and avoid discounting by following these guidelines:

Listen fully and confirm money is the issue. When your prospect raises a concern about money, listen fully to the objection and start by making sure it’s a money issue. Price objections often mask non-money issues that lie under the surface. Work to uncover the real objection by asking, “If money were no object, what would be your

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ideal solution?” If you and the prospect can achieve a common vision, it will be easier to work out budget issues.

Avoid talking cost structure. Often a prospect will ask you to break down the pricing into billable hours so they can understand it better. Don’t talk cost structure; it’s a slippery slope that will have you justifying your price and not your value.

Reduce the scope to lower the price. Don’t concede and lower your price without altering deliverables. Being arbitrary creates distrust. Review the parts of your solution and ask, “What part don’t you want?” This leads to either a reduction in scope or having the prospect realize the whole package is the best solution.

Talk to the decision maker. Make sure you’re talking to the person responsible for budget decisions or someone high enough up the ladder to pull the trigger. You’ll continue to get price pushback and lose sales if you don’t speak to the person holding the purse strings.

By understanding the common types of sales objections, you can recognize the real issues sooner.

RECOMMENDATIONS & SUGGESTIONS - After analyzing the data obtained from the consumers and the dealers it was evident that Asian Paints is the market leader. It enjoys the largest customer base in the Orissa market. Our group came up with the following suggestions for improving upon the current customer base and expanding into other high potential sectors besides the decorative segment. Since the intermediaries play a very important role in the marketing of the

brand, the company should take initiatives like painter training programme with certificates. This will increase the creditability of the painters in the market and they will become brand loyal.

The inventories as a proportion of net working capital are increasing from around200 in the year 2000 to more than 800 in the year 2005. Moreover with larger product diversification inventory management becomes costlier and tedious.

Like Asian Paints we need to employ eBPO for inventory management, and take initiatives to reduce its inventory levels.

As per the feedback obtained the customers were unable to associate sub brands like Apex, Tractor, Apcolite and Utsav with the parent brand. Therefore the company needs to emphasise more on the promotion of sub-brands.

More and more women can be found perusing the shelves at paint stalls in search of the right type of paint for their homes. So the company can target

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this new set of interested customers by increased advertising in women magazines.

The services provided by the company on the website are not being used because of the low penetration of internet in India. So we recommend that these facilities should be made available at the point of purchase.

For decorative range of products it is difficult for international companies to setup shop on a standalone basis because of existing barriers like strong network of existing players, brand image and distribution logistics.

But this may not apply on the basis of industrial products in which tie-ups in home countries and their OEMcustomers, the required stock can be made and sold. In the face of cut-throat competition and new technology, we need new associations and strategic partnerships to move ahead in the industry segment which contributes to30% of the paint business.

Efficient working capital management has been the strength of the company for years. However recently towards the end of 2004-05 there has been increase in level of inventory due to VAT uncertainties and in anticipation of higher material prices. Increased working capitals lead to diversion from productive investments. The present scenario requires unifying the planning down to the plant level

Questionnaire for Asian Paints Dealer

Dealer: M/S __________________________________

1. How do you decide which brand you sell?

2. What are your thoughts on Colour Dispensing Machines and what are your

reasons?

3. What services do you provide to promote your brand?

4. What are the schemes that paint companies offer for sales?

5. What do you do to collect feedback from the customers?

6. How do consumers make their final selection?

7. According to you which company has the best marketing strategy?

8. Is dealer feedback taken into consideration while taking marketing decisions?

9. What are prerequisites for becoming our dealer?

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10. Do you supply paints in the industrial segment?

Appendix Customer Questionnaire

Name of the customer:______________________________________________

1. How often do you paint your house/ office?

a) 1 yr b) 3 yrs c) 5 yrs or more

2. When you think of paints what are the brand names that come to your mind?

List any four_____________________________________________________

3. How did you get to know about these brands?

a) Newspapers b) TV c) Hoardings d) Friends/Family e) Dealer

4. Which of these medium is most effective?

5. Which brand advertisement has the greatest appeal?

a) Asian paints b) Nerolac c) Dulux d) Shalimar e) Our Brand

6. What are your thoughts on colour dispensing machines?

7. What do you like the most about paints?

a) Durability b) Coverage c) Colour variety d)Availability

8. Whom do you consult while taking painting decisions?

a) architects b) painters c) contractors d) dealers

9. What are the services offered by paint companies that you know of?

a. Colour mixing machine b. consultancy services c. cost calculators d. online

services

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Bibliography

www.bergerpaints.com

www.dulux.com

www.jensonnicholson.com

www.asianpaints.com

www.adfags.com

www.nerolac.com

Indianpaintsindustry.com

ISI emerging markets database

CMIE database

The Hindu-Survey of Indian Industry

Marketing Management – Philip Kotler

Strategic Market Management- David Aakar

http://www.adfags.com/

Wlci College - Integrated Project - Marketing

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