Asain Paints

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Foreword

The title of the project is “Data Analysis & Management of Demand Generation and Competitor Market Potential “.

Demands are wants for specific products that are backed by the ability and willingness to buy them. Demand for a product can be either by the end user or its intermediaries. In the paint market the network is as follows:

This simple network of Asian Paints shows that there can be either a pull or a push strategy. If the company adopts a push strategy it will not be successful in the long run if there is no end demand, i.e. by the end customers.

A pull is created when demand is created in the market and is the most beneficial. To implement such a strategy we have to first assess the needs of the market, judging the perception of customers and contractors and finding out new locations and convert them into new dealers so that there is more availability of the product in the market.

Asian Paints India Limited Summer Project Report’05/MBA2004061

Asian Paints India Limited

Retailer

Dealer

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Opportunity analysis can be done by analyzing the construction sites to generate demand for the product by making the concerned aware of the benefits and wide range of products available for all possible segments.

Assessing competitor market and developing a strategy to kill or overcome competition is the second part of the report. The way to increase market share is by making sure that your product is available whenever and wherever needed. Opening new dealers in the market will take care of this. Expanding the dealer network helps in market penetration.

All the effort will be a waste if there is no demand from the end consumer of goods. The end customer is influenced by painters, contractors, advertisements, friends and family. So the main demand is generated by the end customer. The perception of the end customer is judged in the third part of the report. This shows the acceptance level of Asian Paints in the market.

The report finally gives recommendations to the company for future so as to improve its operations in the region as well on a whole.


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Statement of Objectives

The entire report is prepared keeping in mind the following objectives:

1. To determine how Asian Paints can increase their sales in the Allahabad region.

2. Assess the perception of the consumer, the real source of demand generation.

3. Recommend a strategy to the company to improve its operations viz-a-viz its competitors—GNP & Berger.


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Company Profile

Asian Paints is India's largest paint company and ranks among the top ten decorative coatings companies in the world today, with a turnover of Rs.25.6 billion (around USD 585 million). The company has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 22 countries and has 29 paint manufacturing facilities in the world servicing consumers in over 65 countries. Besides Asian Paints, the group operates around the world through its subsidiaries Berger International Limited, Apco Coatings and SCIB Chemicals.

Forbes Global magazine USA ranked Asian Paints among the 200 Best Small Companies in the World for 2002 and 2003 and presented the 'Best under a Billion' award, to the company. Asian Paints is the only paint company in the world to receive this recognition. One of the country's leading business magazine 'Business Today' in Feb 2001 ranked Asian Paints as the Ninth Best Employer in India. A survey carried out by 'Economic Times' in January 2000, ranked Asian Paints as the Fourth most admired company across industries in India.

The company has come a long way since its small beginnings in 1942. Four friends who were willing to take on the world's biggest, most famous paint companies operating in India at that time set it up as a partnership firm. Over the course of 25 years Asian Paints became a corporate force and India's leading paints company. Driven by its strong consumer-focus and innovative spirit, the company has been the market leader in paints since 1968. Today it is double the size of any other paint company in India. Asian Paints manufactures a wide range of paints for Decorative and Industrial use. Vertical integration has seen it diversify into products such as Phthalic Anhydride and Pentaerythritol. To keep abreast of world technology and to protect its competitive edge, Asian Paints has a 50:50 joint venture with Pittsburgh Paints and Glass Industries (PPG) of USA, the world leader in automotive coatings, to meet the increasing demand of the Indian automotive industry - www.asianppg.com. Another wholly owned subsidiary, Asian Paints Industrial Coatings Limited has been set up to cater to the powder coatings market which is one of the fastest growing segments in the industrial coatings market. This wholly owned subsidiary of Asian Paints has entered into a tie-up with Canada-based Protech Chemicals which is one of the top ten powder coatings companies in the world for technological know-how for powder coatings and service customers with a wider coatings in this segment.


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INTERNATIONAL OPERATIONS

Asian Paints operates in 22 countries across the world. It has manufacturing facilities in each of these countries and is the largest paint company in nine overseas markets. Asian Paints operates in five regions across the world viz. South Asia, South East Asia, South Pacific, Middle East and Caribbean region through the four corporate brands viz. Asian Paints, Berger International, SCIB Paints and Apco Coatings. In 10 markets it operates through its subsidiary, Berger International Limited and in Egypt through SCIB Chemical SAE.

The countries that Asian Paints has presence are as follows:

South AsiaBangladesh, Nepal, India and Sri Lanka

South East AsiaChina, Malaysia, Myanmar, Singapore and Thailand

Africa Egypt

Caribbean IslandsBarbados, Jamaica, Trinidad and Tobago

Middle EastBahrain, Dubai and Oman

South PacificAustralia, Fiji, Solomon Islands, Tonga, Vanuatu and Samoa

Islands.

MANUFACTURING FACILITIES

Asian Paints has 29 paint manufacturing facilities in 22 countries with a combined total manufacturing capacity of around 370 million litres per annum. The company operates in 10 markets through Berger International Limited and in five markets in the South Pacific through Apco Coatings. In Australia it also owns the Pacific Paints brand, in Fiji & Samoa Islands it also operates through Taubmans, and in 6 countries through Asian Paints.


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SUPPLY CHAIN

Asian Paints has harnessed the powers of state-of-the-art supply chain system using cutting edge technology to integrate all its plants, regional distribution centres, outside processing centres and branches in India. Four of the company's paints plants in India, two chemical plants, 18 processing centres, 350 raw material and intermediate goods suppliers, 140 packing material vendors, 6 regional distribution centres, 72 depots are integrated.

The supply chain runs through a wide spectrum of functions right from materials planning to procurement to primary distribution. It has played a pivotal role in improving operational efficiencies and creating agile procurement, production and delivery systems. It has also enhanced the flexibility of operations, lowered output time and reduced delivery costs, while improving customer-servicing levels and profitability.

The Supply Chain Management is backed by IT efforts that help the company in demand forecasting, deriving optimal plant, depot and SKU combinations, streamlining vendor relationships, reducing procurement costs, and scheduling production processes for individual factories.

HUMAN RESOURCE

Asian Paints believes that people are its strongest assets. For a company can go only as high as its people aim. It is people who innovate and invent, and who engineer the efficiencies that make a business succeed. It is they who drive our growth and lead us to greater heights. At Asian Paints, our human resources systems are designed to create a vision focus performance oriented, and agile company. A talent pool of over 4700 employees employed across twenty-three countries brings in a unique blend of mindsets and skills.

An open and interactive work culture brings out the best in our people. A sense of ownership and freedom to experiment at their workplace brings out the creativity and innovation in every individual. Excellent training is provided to develop leaders and re-strengthen competencies from within the organization. Besides encouraging achievers from within the organisation, we employ from some of best management and technology institutes in the country.

We hire people who are best suited for the job and whose personal goals are in alignment with our corporate purpose. Thus, the task is cut out for every individual within the framework of result-orientation, market insight, customer perspective, trust, respect and problem solving. The commitment of our people


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and their sense of discipline and ownership will continue to drive growth for our company.

ENVIRONMENT SAFETY

Asian Paints approaches the environment issue from the perspective of waste minimisation and conservation of resources. Thus, the continued attempt is to reuse, recycle and eliminate waste, which results in less and less waste being generated. Accordingly material losses in manufacturing have been reduced substantially over the last few years. Further, the company's four paint plants and the two chemical plants in India have the ISO 14001 certification for environment management standards.

In 2002-03, Asian Paints instituted its own safety standards across all plants in India, which is based on the standards prescribed by the British Safety Council (BSC). This year, the four paint plants in India merited a Five-Star rating by the BSC. More significantly, three of our plants - Bhandup, Ankleshwar and Patancheru - were awarded the BSC's much sought after "Sword of Honour", which is considered as the pinnacle of achievement in safety across the world. The Sword of Honour is given to only 40 plants in the world each year and is designed to reward the best practices in this field. To have three of the company' s paint plants ranked among the top 40 in the first year of audit emphasises our steadfast commitment to safety.

Further due to various initiatives undertaken by the company at all its manufacturing facilities, Asian Paints was the recipient of the prestigious 'Golden Peacock National Quality award' for 2003. This is the most coveted quality award in the country.

All our paint plants have achieved 'zero industrial discharge' capability. This has been achieved by the installation of upgraded effluent treatment facilities and installation of reverse osmosis plants in conjunction with appropriate recycling & reuse schemes. Our emulsion manufacturing facility has also achieved 'zero waste' status.

We have adapted the principles of "green productivity". Some of our innovative schemes, which enhance green productivity are

Colour World dealer tinting system - allows for greater choice at the customer end thus reducing the number of shades produced in the factories. This has resulted in larger batch sizes and lesser number of changeovers leading to effluent reduction.


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Upgradation of material handling and storage facilities - such as the new bulk storage facility for monomers to reduce material losses and eliminate effluent generation arising out of barrel cleaning.

Upgradation of process technology- has resulted in increased yield and therefore lesser pollution. For instance, the improved filtration process has resulted in higher filtration rates and lower losses.

Use of natural gas as fuel - instead of furnace oil or diesel has not only improved fuel efficiency but also reduced sulphur dioxide emissions by 77%.

Solvent recovery plants - set up with an investment of Rs.1.8 million, these plants have resulted in almost zero solvent disposal and have already yielded a direct benefit of Rs.10.4 million.

Improved incinerating systems - have resulted in over 72 % reduction in waste after incineration. The remaining waste is also being re-used. For instance, we have eliminated the need for disposal of incinerator ash by manufacturing bricks. These bricks are used for internal construction purposes.

Reverse osmosis - helps us re-use treated effluents in our cooling towers. This has reduced fresh water consumption by 50 kilolitres per day.

Rainwater harvesting - scheme developed by us has become the benchmark for industries. Rainwater harvesting has resulted in around 14.5 million litres being harvested in 2003-04 and used at our plants.

As a result of implementing various water recycling, reuse and conservation measures in our plants, our average water consumption has reduced by 45 % inspite of production volumes of water based products doubling in the last five years. Asian Paints is committed to operate its plants and facilities in a manner to ensure continual improvement towards achieving 'CLEAN ENVIRONMENT'.

RETAIL INITIATIVES

Customers - the very core of all our business activities. From the beginning, Asian Paints has fostered a customer-centric approach to business. A simple but unbeatable concept of "going where the customer is" drives all our retail strategies.

In the early 90s, for the first time in the paint industry Asian Paints offered the consumer over one hundred and fifty shades. The concept was extended to the


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dealer shops through Colour World in the mid-90s, where Asian Paints began offering over one thousand shades. The introduction of Colour World provided a new direction for the paint industry into the age of retailing by providing the consumer - a service interface. With only a limited set of bases and colourants, manufactured and transported throughout the supply chain, Asian Paints provided a choice of innumerable shades to the customer through a technology of tinting at the last retail store.

With the introduction of Colour World, almost all wall-finishes from Asian Paints offer a wide range and choice in colours be it for interior or exterior application. It has been our endeavour to reach out to our customers not only with our products but also with value-added services and initiatives.

The Asian Paints Helpline introduced few years ago is a toll free service where consumers call and ask queries related to painting. The company has now extended this service to ASIAN PAINTS HOME SOLUTIONS, which offers painting services in addition to the paint.

This year, the company entered into a new foray of prediction of colour trends in India. Intensive research was carried out with interior designers, architects and the fashion community to arrive at trend movements in colour. This study will help consumers get an insight into the latest trends in colour. This exercise will go a long way in also helping various industries decide their colour combinations for a range of products ranging from furnishings, floorings to home accessories.

Another important area was the offer of painting solutions for children with the launch of Kids World. A foray into Kids' World marks yet another milestone wherein the company offers painting designs for Kids Rooms as well as Kids Corners. For the first time, an attempt has been made to invite the customer to get into a Do-It-Yourself mode with these designs.

Asian Paints efforts are continuously on to engage the consumer in the painting process and fulfill all the requirements related to the world of painting.

INFORMATION TECHNOLOGY

Information technology (IT) plays a key role in enabling the company to grow and generate profits. Asian Paints is the only company in India to have integrated Supply Chain Management (SCM) Solution from i2 Technologies, and Enterprise Resource Planning (ERP) solution from SAP. With these IT tools firmly in place and with the backing of an extensive communication platform, we are an internally enabled enterprise. The road ahead is to integrate all our stakeholders including suppliers, employees and customers and create an extended enterprise.


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Asian Paints has launched a supplier portal that includes an automated digital document exchange facility that will improve the efficiency and effectiveness of interaction with suppliers. An employee portal has also been set up. Customer Relations Management (CRM) tools are being used in Asian Paints Helpline and Home Solutions initiatives.

The successful deployment of ERP, CRM, Business Intelligence and Portal software from leading solution providers and integrated SCM systems has helped improve efficiency in the business as well as increase the transparency and accuracy of information across the company. In order to affect 24x7 availability of our IT infrastructure, we are setting up a disaster recovery site in South India.

To match the pace of growth of our International business, we are focusing on improving transaction systems and messaging platforms. Implementing of a portal platform for improved collaboration and sharing of information across all geographies is already underway.

R&D

At Asian Paints, Research and Development (R&D) plays an important role in developing new products and innovations, and reducing costs by value re-engineering of formulations. Its 140 strong team consisting of 7 doctorates and around 115 qualified scientists, has always backed the company’s business plan and demands of the market place. Right from the company’s inception, all its decorative products for the Indian market and also in the overseas market have been developed in-house. In the last few years, our R&D efforts have been focused on developing new exterior finishes, economy emulsions and distempers. High-end exterior finishes and wood finishes were being imported into the country. Asian Paints company’s R&D team has successfully managed to develop these products in-house and are currently marketed under Asian Paints Elastomeric Hi-Stretch Exterior paint and Asian Paints PU wood finish respectively. Besides they also provide technological support and develop customised products for Asian Paints’ international operations. For instance, paint application practices in Bangladesh are different from those in India. Therefore, new type of paints suited for that country have been developed. Cost reduction is another crucial area where Asian Paints focuses its R&D efforts.


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Indian Paint Sector

Overview

The Indian paint industry has come a long way from the days when paints were considered a luxury item. Today the awareness level on preventing corrosion through paints is relatively high, a development that should be a huge boost to the paint industry.

The Indian paints industry offers lucrative scope for stable revenue streams to manufacturers of both decorative and industrial paints.

The Indian Paints sector is valued at Rs 66 bn 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 0.5-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 typical characteristics of the Indian paints industry include raw material intensiveness, working capital intensiveness, seasonality of demand, price elasticity of demand and low entry barriers with respect to technology and funds.

Crucial parameters that make India a favorable proposition include the low per capita consumption of paints (1.0 kilogram), growth in construction sector (it is being offered industry status) and growth in the auto/white goods market respectively spurring demand for decorative and industrial paints. The industry has also witnessed increased activity in the industrial variety of paints with the entry of MNCs in auto, consumer durables etc, which has been gaining steadily over decorative paints in the last one decade.


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Structure of the Industry

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.

The organized sector has a market share of 70%. This is in contrast to the 55% share that the sector commanded a few years back. There are around 25 units in this segment. Major companies in this segment include Asian Paints, Goodlass Nerolac, Berger Paints, Shalimar Paints, and Rajdoot Paints. The unorganized sector comprises of around 2,000 units with a combined market share of around 30%.

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.

The organized sector accounts for about 70% of the business while the unorganized players accounts for the remaining. In unorganized segment there are about 2,000 units having small and medium sized paints manufacturing plants. Top organized players include Asian Paints (44% market share), Goodlass Nerolac (20% market share), Berger paints (17% market share) and ICI (12% market share). The organized sector has grown at a CAGR of 11.5% in the last five years.


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Indian Paint Industry : Organised Sector

Asian Paints44%

Nerolac20%

Berger17%

ICI12%

Others7%

Demand for paints comes from two broad categories:

Decoratives: Major segments in the decorative include exterior wall paints, interior wall paints, wood finishes and enamel. Decorative paint's market size stands at around Rs 32.5 bn. 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 segment of the industrial sector include automotive coatings, powder coatings and protective coatings. Industrial paint's market size stands at around Rs 9.5 bn. Goodlass 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 (30% petro-based derivatives) involved in the manufacturing process. Since most of the raw materials are petroleum based (ex: Titanium Dioxide), the industry benefits from softening crude prices.


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Paints – Key Inputs

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 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 resu lt 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. For example, phthalic anhydride (PAN) is manufactured from orthoxylene and which goes into the production of paints along with titanium dioxide. 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.

Pigments are finely ground solids of different shades to give colour, durability, consistency and other properties to paint. It is also one of the major raw materials, accounting for one-third of the total raw materials cost.


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Amongst the vital pigments used in the process of paint manufacture is Titanium dioxide (TiO2) and the industry consumes around 60% of TiO2. This pigment is available in two grades: anatase and rutile, of which anatase is exclusively used in interiors while rutile is preferred in exteriors. India has abundant raw materials for the manufacture of TiO2, especially ilmenite of which it has 12% of the world’s deposits. It is ironical that the paint industry presently imports TiO2 in excess of Rs.1 bn - a figure that may touch Rs 2 bn by the turn of the century. TiO2 is responsible for the demand-supply gap. If the strong demand growth boosts domestic production of TiO2, there will be an increased usage in various sectors. If the raw materials are properly utilized, India has the potential to emerge as a net exporter of TiO2 in the next five years.

Solvents are volatile organic compounds (VOC) used to dissolve, suspend or change the physical properties of other materials. They are generally used to bring down the viscosity of paints to the desired level, which also reduces the cost of paint formation. They constitute 70%-75% of the paint liquid and ultimate escapes into the atmosphere when the fluid dries. Solvents such as ethylene glycols and alcohols are finding wider use as co- solvents in new water-borne formulations.

Binders are generally oils, resins and plasticisers that give paints its protective property. Most resin manufacturers make alkyds, polyesters, emulsion polymers, epoxy resins, amino resins, powder coating resins etc.

Additives are added in small proportion to the paint to improve its performance characteristics in various ways. Skinning inhibitors, fungicides, wetting agents, driers are included in this category.


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The Decorative Paint Segment

The decorative paint segment can be classified into interior paints and exterior or cement paints. 80% of the decorative paints account 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.

The products under the decorative finishes can be limestone coatings, primers, distempers, cement paints, matt/lustre finishes, enamels, emulsions (first quality), and premium emulsions.

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.


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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.

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 term of technological and funds requirements are relatively lower in the paints sector. It is estimated that a plant of 1 m tpa will cost around Rs 120 m. 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.

Market competition

The top three paint majors are Asian Paints, Goodlass Nerolac and Berger Paints.

While it is a commonly known fact that the paint sector has been clocking around 8% to 9% growth per annum over the last five years, if one were to compare the financial performance of the the top rung companies in the sector, there is a marked difference. The second (Goodlass Nerolac) and the third largest (Berger Paints) paint manufacturers have caught up with the market leader, Asian Paints.

Asian Paints Asian paints is the market leader in India`s paint industry with a commanding market share of about 39% in the organized segment. It is the among the top 10 players in decorative segment in the world. Apart from the domestic market, the company has expanded its presence in the international arena through acquisitions in the recent past (operates in about 22 countries). On a consolidated basis, 73% of revenues comes from domestic paints markets, 21% comes from international business and remaining 7% from chemicals business.


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While the topline for FY05 registered a 14% YoY growth, margins were under pressure due to rising raw material and packing material costs. Bottomline grew by 18% due to significant reduction in the interest costs and rise in other income. For 4QFY05, topline and bottomline grew by 9% YoY and 34% YoY respectively.

Goodlass Nerolac LimitedGoodlass Nerolac Limited is the second largest paint company in India with an estimated market share of 17% in the organised segment. The company is the market leader as the OEM paint supplier to the likes of Maruti, Mitsubishi and Telco (40% share). To reduce the dependency on automotive paint, Goodlass has being making a concerted effort to increase contribution from the decorative paint market. It is estimated that the industrial-decorative contribution of the company at the current juncture is at 50:50. Kansai Paints, the Japanese paint major, holds 64.5% stake in the company. India ranks among the top three international markets for Kansai Paints, apart from Japan and the US (Goodlass contributes to 7.1% of Kansai's net sales)

In terms of topline growth, the company posted 23% growth in net sales during the quarter, helped by higher other income, net profit grew at a much faster pace.

Berger Paints Limited Berger Paints is the third largest paint manufacturer in India with an overall market share of 13.0%. It is India’s second largest decorative paint manufacturer (market share of 11.1%) and also the third largest industrial paint manufacturer (13.9%). Over two-thirds of its turnover comes from decorative paints and the balance from industrial paints. It benefits from a strong product mix, brand popularity and a strong distribution network.

On the back of new product launches and expansion of network, the topline grew by 23% YoY in FY05. While operating margins were marginally lower on a YoY basis, net profit grew by 18%. But for the extraordinary expenses, net profit actually grew by over 30% in FY05.


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Comparative Study of the 3 majors in the Paint market

Dealer Networks

Asian Paints has the largest reach in terms of the dealer network of 14,500 outlets, almost a-third more than that of Goodlass Nerolac, the second biggest company in the industry. While Berger Paints has a dealer network of around 5,500 outlets, ICI India has 4,500.

Efforts to reach out to the customer directly by installing colour vending machines has begun yielding results. Proof is Asian Paints witnessing much higher growth rates wherever these machines have been installed. On this count too Asian Paints is the leader, with 848 installations compared to Goodlass Nerolac's 550. Both Berger Paints and ICI India have fewer installations.

While the installation of the colour vending machines has enhanced significantly the availability of shades, both Asian Paints and Goodlass Nerolac have been targetting actively the lower end of the product profile, looking for higher volumes. The fact that the companies are finding it increasingly difficult to pass on price increases on to the consumers is a pointer to the fact that decorative paints segment is becoming more of a commodity business. And in a commodity business, volumes matter more than value. Both the companies have offered low-value exterior paints as an better alternative to cement paints.

While these initiatives could help generate volumes, companies could face cost pressures with the firming up of raw material prices. Since raw materials (solvents, resins, pigments, and additives) account for around 50 per cent of the total cost of production, this could have a significant impact on margins and, consequently, on the bottomline. The depreciation of the rupee could aggravate matters.

IT Implementation


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In this situation, companies with better cost-management systems could come out winners. All the top four companies have initiated IT-related measures as part of their cost-reduction strategies. Asian Paints spent Rs. 12 crores on IT initiatives in 1999-2000 and plans further investments of Rs. 28 crores this fiscal. It has put in place a supply-chain management system. It also plans to upgrade its communications infrastructure through VSATs, leased and ISDN lines across the country. The company's ERP solution from SAP is scheduled to be implemented in 2001. Goodlass Nerolac has allocated Rs. 40 crores for implementing an ERP programme and to integrate its 60-odd depots around the country.

Given Asian Paints' track record in cost reduction and its early-mover advantage, there is a greater chance of the company improving tayits operating profit margins compared to other companies. Though the proportion of raw materials for one rupee of sales has been coming down over the last five years, Asian Paints has managed to achieve the highest reduction, followed by ICI India and Goodlass Nerolac.

An Added Advantage –PAN

Asian Paints also has the advantage of having its own phthalic anhydride plant whose capacity is to be raised from 22,000 tonnes to 24,000 tonnes this fiscal. As the company sells nearly 65-70 per cent of the total production in the open market, the current firm trends in PAN prices could boost the operating profit margins. The company also has captive pentaerythritol and resins plants. Though Goodlass Nerolac also expects lot of savings from its IT initiatives to compensate for the increase in raw material costs, it could be some time before the company actually derives the benefits.

Production Capacity & JVs

With the recent increase in capacity from 57,500 tonnes to 1.01 lakh tonnes (with the commissioning of the Lote factory), Goodlass Nerolac would have no capacity constraints. This was one of the important factors which had earlier forced the company to concentrate less on decoratives. The company has also introduced quite a few new products at both the ends of the value spectrum. With the support of Kansai Paints, which now holds 64.52 per cent stake, Goodlass Nerolac plans to introduce new niche premium products. With its increased concentration on water-based emulsions and distempers, where the demand growth rates have been high, the company hopes to have a strong second place in the decorative paints market and at the same time increase the gap between itself and Berger Paints.


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Though industrial paints growth rate could get affected by the slowdown in the automobile industry, it still would contribute significantly to the margins of all the companies. In this segment, Goodlass Nerolac has the leadership position with a 45 per cent share of the market. Apart from Kansai Paints, the company also has tie-ups with DuPont, Nihon Parkerising (for pre-treatment chemicals), Nihon Tokushu Toryo (for sealants and underbody coatings), Valspar Corporation (for powder coatings), Ameron Coatings (for high-performance coatings) and Drew Chemicals (for water treatments chemicals).

While Goodlass Nerolac, Berger Paints and ICI India have industrial paints as one of their divisions, Asian Paints has hived off its automotive coatings business into a joint-venture (JV) with PPG, US, the fourth largest company in the world. The JV has helped Asian Paints in many ways. While the main business would benefit from the revenue flows (through dividends) from the JV, it would at the same time help the company to shield the main business from the adverse effects of a fluctuating demand for automotive paints. Since a separate JV offers PPG the necessary protection for its technology, it would be more comfortable in introducing latest products.

Moreover, PPG's global acquisition of ICI's refinish and industrial coatings business would add further strength to the Asian Paints' JV with the company in India. It could at the same time have an adverse impact on ICI India's growth prospects in industrial paints. After the sale of its refinishes to PPG, ICI Plc has been a big loser, as it plunged from the top spot to number five position at the global level.

Berger Paints has presence in all the segments of industrial paints through its tie-ups with Herberts of Germany (which was taken over by DuPont last year) and Nippon Paints of Japan. But it is strongly placed in powder coatings where it has a tie-up with Teodur NV of Holland.

Thus, while Goodlass Nerolac has a leadership position in industrial paints, Asian Paints would come next in the relative ranking before Berger Paints. ICI India could suffer from the lack of access to the latest technology in industrial paints and so has to scout for technology partners.

Advertisements

For a business which is increasingly becoming commoditised, it appears that the ad-spend would be one of the important differentiating factors which would enhance `brand recall'. And in the paints industry `brand recall' is more important than individual product recall. Here again, Asian Paints again has done the homework to enhance its `brand recall'. This is followed by ICI India and Goodlass Nerolac.


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Thus, overall, Asian Paints would stay on top in the decorative business. There is, however, close competition between Goodlass Nerolac and Berger Paints. Berger Paints has increased its market share after its merger with Rajdoot Paints. Though it has a better reach through its manufacturing facilities in the four regions (Goodlass Nerolac's four plants are spread around in Maharashtra and UP), it capacities are far lower compared to that for Goodlass Nerolac. But with the recent refocus in decoratives to take advantage on its brand value, Goodlass Nerolac's hold on the decoratives market to take a leap in the future. The company's ad-spend is slated to double this fiscal.


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Asian Paints: Product Portfolio

Asian Paints has a wide range of products ranging from paints for homes & primers to enamels and wood finishes. A list of the products and their coverage, cost and life is given below:

PRODUCT COST (RS.) COVERAGE (2 COATS)

LIFE (YRS)

Wall Finishes:

Exterior:Elastomeric Paint 300 / ltr 70-80 sq ft/ltr 8 – 10 yrsApex Exterior Emulsion

210 / ltr3500 / drum (20 kg)

70 sq ft/ltr 6 yrs

Ace (water thinnable) 120 / ltr2000 / drum

60 sq ft/ltr 3-4yrs

Gattu Cem 700 / 25kg 30 sq ft / kg 2yrsExterior Sealer 2000 / drumExterior Wall Primer 1600 / drum

Interiors: Royale Luxury Emulsion

270 / ltr 160 sq ft / ltr

Asian Paints Premium Emulsion


Tractor Emulsion 110 / ltr 150 sq ft / ltrAsian Paints Interior Wall Finish/Lusture



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FinishAsian Paints Interior Wall Finish/Matte Finish


Distempers:

Tractor Acrylic Distemper

950 / drum (20 kgs) 110 sq ft / kg

Tractor Synthetic Distemper

750 / drum 100 sq ft / kg

Utsav Acrylic Distemper

650 / drum 80 sq ft / kg

Utsav Synthetic Distemper

30 / kg 65 sq f / kg

Enamels: Wall,Wood,Metals:

Aqualite Synthetic Enamel

180 / ltr 110 sq ft/ ltr

Aqualite Premium Satin Enamel


Gattu Synthetic Enamel


Utsav Enamel 90-95/ltr 85-90 sq ft / ltr

Aqualite Knifing Paste Filler

60 sq ft / ltr

PRIMER CATEGORIES:

PRODUCT COST (RS.) COVERAGE

Surfacer:Asian Paint Aqualite Primer Surfacer

1650 / drum (20 litre) 150 sq ft / ltr

Utsav Surfacer 1200 / drum 140 sq ft / ltr


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Cement Primer:Solvent Thinnable 1500 / drum 150 sq ft / ltrWater Thinnable 1500 / drum 210 sq ft / ltr

Metal Primer:Asian Paints Red Oxide Metal Primer

70 – 75 / ltr 200 sq ft / ltr

Tractor Red Oxide Primer 85 / ltr 200 sq ft / ltrUtsav Red Oxide 70 / ltr

Wood Primer:White Primer 75 / ltr 200 sq ft / ltrPink Primer 75 / ltr 200 sq ft / ltr

Stainers:Aqualite Universal Stainer

Rs. 16 for 50ml

Utsav Stainer Rs. 12 for 50 ml

Wood Finishes:PU Finish 200 / ltrMelamine 130 / ltrTouch Wood 90 / ltr

New Products Ranges of Asian Paints

New Products being launched shortly are in the exterior category. These are as follows:

1. Apex Ultima : product features range between those of Elastomeric and Apex Exterior Paints.

2. Ace Supreme: product features range between those of Apex and Ace Exterior Paints

3. Utsav Cement Paint4. Asian Paints Exterior Putty

Application Procedure :1. Use Emory paper to sand the previous paint.2. Surface is then rubbed with cloth to remove loose particles.3. Apply primer .(solvent or water thinnable)


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4. Use interior putty to fill cracks and pores to get a smooth wall.5. Again use Emory paper to make surface smooth.6. Clean the surface with cloth.7. Apply one coat of cement primer8. Apply two coats of finished material.

DEFECTS:

There can be defects on walls and otherwise which may cause the painted surface to look dull and uneven. Causes of such defects and remedies of the same are given below:

DEFECT CAUSE PREVENTION REMEDY

Microbial Painting over a surface affected with microbial growth.

Seepage or dampness in buildings.

Contamination of paint by materials used in putty preparation.

Before painting, area should be cleaned with 5-10 % bleach solution.

Use clear water for thinning and putty preparation.

Keep doors and windows open during and after painting.

Clean with bleach solution and repaint.

Patchiness Application of finish coat over spot puttied surfaces.

High alkalinity of surface (evident in new walls).

Incomplete drying of putty.

Allow new walls to get cured for at least 3months.

Apply thin coats of putty.

Always apply a primer coat after applying spot putty.

Scrape the surface and repaint adopting the right surface preparation.


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Application of thick coat of putty. Always sandwich

coats of putty with primer.

Cracks in plaster should be filled with cement sand mixture.

DEFECT CAUSE PREVENTION REMEDY

Yellowness Paint Film is deprived of natural sunlight. (Esp. in case of Enamels)

Paint film subjected to too much sunlight.

Use paints like Royale, Premium Emulsion

Improved daylight and ventilation for inside work.

Surface should be cleaned and repainted.

Use recommended system

Poor Adhesion

Application of paint over oily, greasy or very smooth surface.

Application over loose particles like dust or rust

Not sanding previous coat of gloss paint

Application over partially dried coat.

Ensure proper surface preparation.

Surface should be repainted

Low Coverage

Improper thinning and application.

Highly absorbent surface.

Rough texture of plaster.

Top coat application

Please read instructions on shade card or product packaging or refer to “Features and Application” section.

Follow

Cracking of plaster.

Application of matt finish over glossy undercoat finish

Apply finish coat before drying of


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directly over putty without application of primer

recommended instructions on application procedures and thinning.

the under coat.

Applying quick hard dry coats over a soft one.

Checking and Chalking

Cracking of plaster.

Application of matt finish over glossy undercoat finish

Application of finish coat before drying of the under coat.

Applying quick hard dry coats over a soft one.

Undercoat and top coat of paint should have identical physical properties.

Allow drying time between two coats.

Entire coat must be completely removed.

Exposed base should be then rubbed down to a smooth face and primed before repainting.

Sags and Runs

Application of excessive thick coat.

Use of a wrong thinner.

Apply finish coat using recommended thinner.

Do not apply thick coats.

Sand surface to smooth the sagged areas and repaint.

Orange Peel

Application of top coat paint in highly viscous form.

Use of improper thinner.

Sufficient drying time between coats.

Use recommended painting system

Scrape out Orange peel and repaint.

Chalking Application of paint over oily, greasy or very smooth surface.

Application over loose particles like dust or rust.

Not sanding previous

Ensure proper surface preparation.

Surface should be repainted


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coat of gloss paint.

Application over partially dried coat.

Brush Marks

Applying paint using poor quality brushes.

Highly viscous paint. Careless Application.

Use proper brushes and thin paint to desired proportion.

Sand surface to a smooth finish and apply paint (after thinning to desired proportion ).

Use good quality brushes.

Cissing Small impurities in paint (oil, grease), visible in centre of hole.

Clean surfaces prior to sanding and remove all sanding dust.

Remove paint completely from affected areas and repaint.

Blistering Caused by trapped moisture or gases in paint film (More likely in enamels).

Follow the specified recoating time interval.

Top coat application should not result in too thick a film at a time.

Smooth sand the surface and then repaint it.

Dampness Treatment:For treating walls with dampness problem you can use the following products:

1. Choksi chemical Polymer coating, Rs. 200/ltr :use a mixture of polymer and cement in the ratio of 1:2 (polymer:cement)

2. Epoxy Coating by Pidilite can also be used, Rs. 325/ltr.


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Color your World:Asian Paints Color world

Asian Paints Color World is a machine that is used for tinting paints in the desired colors. These machines are provided to the dealers of Asian Paints.

Color world machine comes in two kinds:1. Manual Color Dispenser (MCD)2. Automatic Color Dispenser (ACD)

Each product has 5 to 7 bases and 15 colorants are used to make each shade. For example, Royale uses RB2, RB10, RB11, etc. colorants and has 7 bases that are used for the various colors.

Automatic Color Dispenser Machine :

OPTION 1:

Cost : 2.61 lacs

Components included are as follows:1. ACD2. CPU3. Monitor


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4. Printer5. Gyro shaker6. UPS7. Cap Sealing Machine8. Misc. items like Glow shine Board.

The machine is financed by CitiBank @13% rate of interest.The dealer fills the load document with CitiBank and a Service Agreement with the companyfor 5 yrs.APIL would get the machine serviced for this tenure. APIL is liable to collect the entire amount whereas CitiBank offers just the financial package.

Free servicing for 5 years. Thereafter till 9 years APIL collects Rs. 10,000 p.a. from the dealer, in April each year, for servicing. Servicing of monitor and CPU is done by Wipro & HCL. Color Machine and UPS is service by Corob.

Financial Package Details:1. One time down payment of Rs. 50,000 as DD/cheque.(DD for up-country /

cheque for local)2. Rest is financed by CitiBank @13.37 %p.a. 3. Additional interest payable is 2% by way of liquidated damages.4. Installments are paid before 5th of each month.

Monthly Installment StructureYear 1 : Rs. 3800 p.mYear 2 : Rs. 3800 p.mYear 3 : Rs. 4850 p.mYear 4 : Rs. 5900 p.mYear 5 : Rs. 6900 p.mTotal cost: Rs. 353,600

Documents needed for Service Agreement between APIL and the prospective dealer:

1. PAN No. proof / photocopy of PAN Card.2. Shop registration proof / UPTT OR CST NO.3. Current A/C in any natioalised bank.4. Shop address proof.5. One passport size photograph.


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OPTION 2: ACD Without CPU, Printer, Monitor

Cost :2.22 Lacs

Components included are as follows:

1. ACD2. Gyro shaker3. UPS4. Cap Sealing Machine5. Misc. items like Glow shine Board.

Duration of agreement is 5 years. Dealer purchases CPU, Monitor, Printer.Free servicing for 5 years. Thereafter till 9 years APIL collects Rs. 10,000 p.a. from the dealer, in April each year, for servicing.



Monthly Installment Structure:

Year 1 : Rs. 3800 p.mYear 2 : Rs. 3800 p.mYear 3 : Rs. 4400 p.mYear 4 : Rs. 5000 p.mYear 5 : Rs. 5700 p.m


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Total cost: Rs. 302,400

OPTION 3: Outright sale option of ACD without CPU, Printer, Monitor

Cost :2.12 Lacs


1. ACD2. Gyro shaker3. UPS4. Cap Sealing Machine5. Misc. items like Glow shine Board.

Dealer purchases CPU, Monitor, Printer on his own. Service Charges due in April each year:

0 – 5 years Rs. 7000 p.a.6 – 9 years Rs. 10,000 p.a.

Payment Details:1. Rs. 2.12 Lacs as DD/cheque.(DD for up-country / cheque for local)

Manual Color Dispenser Machine:

OPTION 1:

Cost : 1.60 Lacs

Duration of agreement : 4 years


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Components included are as follows:1. MCD2. CPU3. Monitor4. Printer5. Gyro shaker6. UPS7. Cap Sealing Machine8. Misc. items like Glow shine Board.




Year 1 : Rs. 2625 p.mYear 2 : Rs. 3675p.mYear 3 : Rs. 4200 p.mYear 4 : Rs. 4275 p.mTotal cost: Rs. 202,300

Service charges are nil for the first four years. Charges for the next five years are Rs.4000 p.a. payable in April each year. Servicing of all components is done by APIL.

OPTION 2: MCD without CPU, Printer, Monitor

Cost : 1.20 Lacs.

Duration of agreement: 4 years.



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1. MCD2. Gyro shaker3. UPS4. Cap Sealing Machine5. Misc. items like Glow shine Board.




Year 1 : Rs. 2625 p.mYear 2 : Rs. 2625 p.mYear 3 : Rs. 3175 p.mYear 4 : Rs. 3175 p.mTotal cost: Rs. 157,200

Service charges are nil for the first four years. Charges for the next five years are Rs.4000 p.a. payable in April each year. Servicing of all components is done by APIL.

OPTION 3: Outright sale option of ACD without CPU, Printer, Monitor

Cost : 1.20 Lacs


1. MCD2. Gyro shaker 3. UPS4. Cap Sealing Machine5. Misc. items like Glow shine Board.

Dealer purchases CPU, Monitor, Printer on his own.

Service Charges due in April each year:


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0 – 4 years Rs. 4000 p.a.4th year onwards Rs. 4,000 p.a.

Payment Details:1. Rs. 1.20 Lacs as DD/cheque.(DD for up-country / cheque for local).

Segmentation:Market and Product segmentation of Asian Paints

Market segmentation represents an effort to increase a company’s targeting precision.

All businesses operate in “markets”.

A market is the set of all actual and potential buyers of a product or service.

This definition suggests that a market is the total value and/or volume of products that satisfy the same customer need.

In defining a market, it is important not to focus only on products/services that currently meet the customer need. Thinking about customer needs first – and then identifying the products that meet those needs – is the best way to define a market.

However, it is also important not to define a market too broadly. For example, it is not particularly helpful for a marketing manager to define his or her market as the “food market” or the “transport market”. The purpose of market definition is to provide a meaningful framework for analysis and decision-making.


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Bases of segmentation

It is widely thought in marketing that than segmentation is an art, not a science.

The key task is to find the variable, or variables that split the market into actionable segments. There are two types of segmentation variables:

(1) Needs(2) Profilers

The basic criteria for segmenting a market are customer needs. To find the needs of customers in a market, it is necessary to undertake market research.

Profilers are the descriptive, measurable customer characteristics (such as location, age, nationality, gender, income) that can be used to inform a segmentation exercise.

The most common profilers used in customer segmentation include the following:

Geographic• Region of the country• Urban or rural

Demographic• Age, sex, family size• Income, occupation, education• Religion, race, nationality

Psychographic• Social class• Lifestyle type• Personality type

Behavioural• Product usage - e.g. light, medium ,heavy users• Brand loyalty: none, medium, high • Type of user (e.g. with meals, special occasions)


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Demographic segmentationDemographic segmentation consists of dividing the market into groups based on variables such as age, gender family size, income, occupation, education, religion, race and nationality.

Customer wants are closely linked to variables such as income and age. While conducting the survey for Asian Paints various questions relating to the income level, occupation were asked so that the preferences for a certain kind of paint could be judged. Moreover the qualities desired in paint by consumers were also evaluated.

The main demographic segmentation variables used in this are summarised below:

IncomeAsian paints targets affluent consumers with luxury goods and convenience services like the Asian Paints Helpline introduced few years ago a toll free service where consumers call and ask queries related to painting. The company has now extended this service to ASIAN PAINTS HOME SOLUTIONS, which offers painting services in addition to the paint. Focus on marketing products that appeal directly to consumers with relatively low incomesis also there by having a product portfolio catering to their needs. Utsav range of paints was introduced for the economy section of the population.

Social classMany Marketers believe that a consumers "perceived" social class influences their preferences for cars, clothes, home furnishings, leisure activities and other products & services. There is a clear link here with income-based segmentation.

Age & LifestyleAnother important area was the offer of painting solutions for children with the launch of Kids World. The company offers painting designs for Kids Rooms as well as Kids Corners. For the first time, an attempt has been made to invite the customer to get into a Do-It-Yourself mode with these designs.

Marketers are increasingly interested in the effect of consumer "lifestyles" on demand. There are many different lifestyle categorisation systems, many of them designed by advertising and marketing agencies as a way of winning new marketing clients and campaigns!

Behavioral segmentationBehavioural segmentation divides customers into groups based on the way they respond to, use or know of a product.Behavioural segments can group consumers in terms of:


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OccasionsWhen a product is consumed or purchased. Asian Paints launches new products near the festive seasons and promotions during those times relate to the festivals giving a slice of life touch.

UsageSome markets can be segmented into light, medium and heavy user groups.

LoyaltyLoyal consumers - those who buy one brand all or most of the time - are valuable customers. Many companies try to segment their markets into those where loyal customers can be found and retained compared with segments where customers rarely display any product loyalty.

Importance of Segmentation:

There are several important reasons why businesses should attempt to segment their markets carefully. These are summarised below

Better matching of customer needsCustomer needs differ. Creating separate offers for each segment makes sense and provides customers with a better solution

Enhanced profits for businessCustomers have different disposable income. They are, therefore, different in how sensitive they are to price. By segmenting markets, businesses can raise average prices and subsequently enhance profits. Product segmentation of Asian Paints has enabled each segment of the society to relate to a product within the income range.

Better opportunities for growthMarket segmentation can build sales. For example, customers can be encouraged to "trade-up" after being introduced to a particular product with an introductory, lower-priced product.

Retain more customersCustomer circumstances change, for example they grow older, form families, change jobs or get promoted, change their buying patterns. By marketing products that appeal to customers at different stages of their life ("life-cycle"), a business can retain customers who might otherwise switch to competing products and brands.

Target marketing communications


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Businesses need to deliver their marketing message to a relevant customer audience. If the target market is too broad, there is a strong risk that (1) the key customers are missed and (2) the cost of communicating to customers becomes too high / unprofitable. By segmenting markets, the target customer can be reached more often and at lower cost. Advertisements relating to different paints of Asian Paints are on air each signifying a different target market, a different aspect of life.

Gain share of the market segmentAsia Paints is the market leader in the decorative market and gains due to economies of scale. Through careful segmentation and targeting, businesses can often achieve competitive production and marketing costs and become the preferred choice of customers and distributors.

Asian Paints has segmented the market and developed products catering to all segments. In products it has its premium brands, 2nd quality, 3rd quality and economy range to cater each market segment. A list of its products segmented w.r.t. the market is follows:

CATEGORY PRODUCT

ENAMELS:Satin AP Premium Satin EnamelPremium 1st Quality AP Apcolite Premium Gloss Enamel2nd Quality 3Mangoes Syn

Enamel3rd Quality Gattu General Purpose Syn EnamelEconomy Utsav Enamel

WALL FINISHES:

INTERIOR:Luxury Emulsions AP Royale Luxury EmulsionPremium Emulsion AP Premium Emulsion2nd Quality Super Decoplast Plastic Emulsion Economy Emulsion AP Tractor EmulsionLusture Finish AP Interior Wall Finish LustureMatte Finish AP Interior Wall Finish MatteAcrylic Distemper AP Tractor Acrylic DistemperSynthetic Distemper AP Tractor Synthetic DistemperEconomy Distemper Utsav Acrylic Distemper


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Pouch Distemper Utsav Synthetic Distemper

WALL FINISHES:

EXTERIOR:

Elastomeric Elastomeric HiPerformance Premium Smooth Emulsion Apex Weatherproof Exterior EmulsionPremium Texture Finish Apex Textured Exterior EmulsionEconomy Smooth Emulsion Asian Paints Ace Cement Paint Gattu Cem

WOOD FINISHES:

Premium Asian Paints PU Finish1st Quality Asian Paints Melamine FinishEconomy Finish Asian Paints Touchwood

PRIMERS:

Exterior AP Exterior PrimerMetal Primers:1st Quality Tractor red Oxide Oil Primer2nd Quality AP Metal PrimerEconomy Utsav Red Oxide Primer

Wood Primer Asian Paint Wood PrimerCement Primer: Solvent Thinnable AP Deco Prime Wall Primer Solvent ThinnableCement Primer : Water Thinnable AP Deco Prime Wall Primer Water Thinnable

Varnish Apcolite Clear Synthetic VarnishBlack Board Paint 3Mangoes Blackboard PaintFurniture Enamel 3Mangoes Steel Furniture EnamelPrimer Surfacer & Brushing Filler Apcolite Syn. Primer Surfacer & Brushing FillerKnife Pasting Filler AP Apcolite KPFInterior Wall Putty AP Acrylic Wall PuttyStainers Apcolite Universal StainerEconomy Stainers Utsav StainerAluminum Paint 3 Mangoes Aluminum PaintHammer Tone Finish Apcolite Hammer Tone Finish


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Competitor Product Information

ASIAN PAINTS

BERGER GOODLASS NEROLAC

ICI SHALIMAR J & N

PRODUCT

ENAMELS:

Satin AP Premium Satin Enamel

---Nerolac Satin Enamel

Dulux Satin Finish

Superlac Satin Soft Finish Sheen Enamel

---

Premium 1st Quality

AP Apcolite Premium Gloss Enamel

Luxol High Gloss Syn Enamel

Nerolac Full Gloss Hard Drying Syn. Enamel

Dulux Gloss Synthetic Enamel

Superlac High Gloss Enamel

Brolac PU Enamel

2nd Quality 3Mangoes SynEnamel

--- --- --- --- ---

3rd Quality Gattu Butterfly Goody Maxilite Diamond Umbrella


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General Purpose Syn Enamel

General Purpose Syn Enamel

Synthetic Enamel

Synthetic Enamel

Synthetic Enamel

Synthetic Enamel

Economy Utsav Enamel

Jaadu Enamel

--- --- --- ---

WALL FINISHES:

INTERIOR:Luxury Emulsions

AP Royale Luxury Emulsion

Luxol Silk Luxury Premium Emulsion

Nerolac Allscapes 24Carat Emulsion

Dulux Velvet Touch Emulsion

Hussain’s Collection Premium Acrylic Emulsion

Special Effects

PRODUCT ASIAN PAINTS


ICI SHALIMAR J & N

Premium Emulsion

AP Premium Emulsion

Rangoli Super Acrylic Enamel

Nerolac Acrylic Premium Emulsion

Dulux Acrylic Emulsion

Superlac Acrylic Emulsion

Robiolac Acrylic Plastic Emulsion

2nd Quality Super Decoplast Plastic Emulsion

--- --- --- --- ---

Economy Emulsion

AP Tractor Emulsion

Bison Super Emulsion

Nerolac Plastic Emulsion

--- No.1 Silk Emulsion

---

Lusture Finish

AP Interior Wall Finish Lusture

Luxol Lusture Finish

Nerolac Pearls Lusture Finish

Dulux Lusture Finish

--- ---

Matte Finish

AP Interior Wall Finish Matte

BP Synthetic Interior Flat

---Dulux Flat Oil Paint

Synthetic Flat Paint ---

WALL FINISHES: INTERIOR

Acrylic AP Tractor Bison Nerolac Maxilite No.1 J & N


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Distemper Acrylic Distemper

Acrylic Distemper

Premium Distemper

Acrylic Distemper

Premium Acrylic Distemper

Acrylic Washable Distemper

Synthetic Distemper

AP Tractor Synthetic Distemper

---Nerolac Washable OBD

Maxilite Synthetic Distemper

--- ---

Economy Distemper

Utsav Acrylic Distemper

Jaadu Acrylic Distemper

Nerolac Acrylic Distemper

--- Mela Acrylic Distemper

---

Pouch Distemper

Utsav Synthetic Distemper

Castle Dry Distemper

Goody Synthetic Distemper

Farco Economy Distemper

---Bahaar Distemper

PRODUCT ASIAN PAINTS


ICI SHALIMAR J & N

WALL FINISHES:

EXTERIOR

Elastomeric Elastomeric HiPerformance

Weather Coat Extraa

--- --- --- ---

Premium Smooth Emulsion

Apex Weatherproof Exterior Emulsion

Weather Coat Smooth

Nerolac Excel

Dulux Weather Shield

Xtra Xterior Emulsion

Special Effects Exterior Acrylic

Premium Texture Finish

Apex Textured Exterior Emulsion

Weather Coat Texture Exterior Finish

Nerolac Mette Decorative & Protective Exterior

--- --- ---

Economy Smooth Emulsion

Asian Paints Ace

Wall Masta Surakshaa SuperCoat

Shaktimaan Exterior Acrylic Emulsion

Armour Quartz

Cement Paint

Gattu Cem Duro Cem Nero Cem Farco Cem Waterproof

Maha Cem Coat

RobiaCem Super Cement Paint


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Cement Paint

WOOD FINISHES:

Premium Asian Paints PU Finish

Woodkeeeper Legend

Nerolac PU Finish

Bell Co. --- ---

1st Quality Asian Paints Melamine Finish

Woodkeeper Melamine Finish

Wonder Wood Melamanised Wood Finish

Dulux Timbertone Melamine Finish

Care Wood Melamine Wood Finish

---

Economy Finish

Asian Paints Touchwood

Woodkeeper

Wonder Wood

--- Care Wood Wood Glow

PRIMERS:

Exterior AP Exterior Primer

--- --- --- --- ---

Metal Primers:1st Quality Tractor red

Oxide Oil Primer

--- Nerolac Oil Primer

--- --- ---

2nd Quality AP Metal Primer

Butterfly Red Oxide Primer

Nerolac Red Oxide Metal Primer

ICI Red Oxide Metal Primer

Shalimar Red Oxide Metal Primer

J&N Red Oxide Primer

Economy Utsav Red Oxide Primer

Berger Red Oxide Primer

--- --- --- ---

Wood Primer

Asian Paint Wood Primer

Berger Wood Primer

Nerolac Wood Primer

ICI Wood Primer

Pink / Gery Primer for Wood

---

Cement Primer: Solvent Thinnable

AP Deco Prime Wall Primer Solvent Thinnable

BP Cement Primer Solvent Thinnable

Nerolac Cement Primer Solvent Thinnable

ICI Cement Primer Solvent Thinnable

--- Jensolen Cement Primer

Cement Primer : Water Thinnable

AP Deco Prime Wall Primer Water

BP Cement Primer Water

Nerolac Cement Primer Water

Water Thinnable Cement Primer

J&N Alkali Resistant Water Thinnable


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Thinnable Thinnable Thinnable

Research Methodology

Research Design:

The market research done was descriptive in nature. Research was done using quantitative methods to describe phenomena as they exist. Aim was to not manipulate or control but to ascertain how many in magnitude were:

1. Interested in dealing with Asian Paints2. Interested in using Asian Paints for the construction sites and

residence.

The research is divided into 3 sections:1. Analyzing market potential for new dealerships2. Analyzing and generating demand for Asian Paints on construction sites3. Analyzing customer perception of Asian Paints vis-à-vis its competitors.


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Survey research approach:

A survey research pattern was followed. Here the survey was done in form of questionnaires for the end small to medium consumers and a personal interview was used for the dealers and contractors.This helped in knowing about the beliefs, preferences, satisfaction of the dealers, retailers, contractors and the general public.

Market Research

To undertake marketing effectively, businesses need information. Information about customer wants, market demand, competitors, distribution channels etc.

Marketers often complain that they lack enough marketing information or the right kind, or have too much of the wrong kind. The solution is an effective marketing information system.

The information needed by marketing managers comes from three main sources:

(1) Internal company information

E.g. sales, orders, customer profiles, stocks, customer service reports etc)

(2) Marketing intelligence

This can be information gathered from many sources, including suppliers, customers, distributors. Marketing intelligence is a catch-all term to include all the everyday information about developments in the market that helps a business prepare and adjust its marketing plans. It is possible to buy intelligence information from outside suppliers (e.g. Mintel, Dun & Bradstreet, Mori) who set


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up data gathering systems to support commercial intelligence products that can be profitably sold to all players in a market.

(3) Market research

Management cannot always wait for information to arrive in bits and pieces from internal sources. Also, sources of market intelligence cannot always be relied upon to provide relevant or up-to-date information (particularly for smaller or niche market segments). In such circumstances, businesses often need to undertake specific studies to support their marketing strategy - this is market research.

Need for Market Research

A wide variety of information used to support marketing decisions can be obtained from market research. A selection of such uses are summarized below for Asian Paints:

Information about the market

• Analysis of the market potential for existing products (e.g. market size, growth, changing sales trends)• Forecasting future demand for existing products• Assessing the potential for new products• Study of market trends• Analysis of competitor behaviour and performance• Analysis of market shares

Information about Products

• Likely customer acceptance (or rejection) of new products• Comparison of existing products in the market (e.g. price, features, costs, distribution)• Forecasting new uses for existing products• Technologies that may threaten existing products• New product development

Information about Pricing in the Market


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• Estimates and testing of price elasticity• Analysis of revenues, margins and profits• Customer perceptions of “just or fair” pricing• Competitor pricing strategies

Information about Promotion in the Market

• Effectiveness of advertising• Effectiveness of sales force (personal selling)• Extent and effectiveness of sales promotional activities• Competitor promotional strategies

Information about Distribution in the Market

• Use and effectiveness of distribution channels• Opportunities to sell direct• Cost of transporting and warehousing products• Level and quality of after-sales service

Types of Market Research

The main distinction between the different types of market research is between "ad-hoc" and "continuous" research:

Ad-hoc Market Research

Ad-hoc research studies focus on specific marketing problems. They collect data at one point in time from one sample of respondents. Good examples of ad-hoc studies include:

• Product usage survey• New product concept tests (where consumers are asked to trial new brands, product prototypes etc)

• Advertising development (how does the sample of consumers respond to a specific advertising campaign? Most TV adverts are researched in this way)• Corporate image surveys (often quite enlightening)• Customer satisfaction surveys (these can often turn into continuous research)

This was the kind of research that was used for the project in Asian Paints.

Continuous Research


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Continuous studies interview the same sample of people, repeatedly. The major types of continuous research are:

Consumer panels Retail Audits Television Viewer ship / Radio Listening Panels

In terms of data capture and analysis there are two main types of market research:

• Qualitative Research• Quantitative Research

Qualitative Research

Qualitative Research is about investigating the features of a market through in-depth research that explores the background and context for decision making.

There are two main qualitative methods - depth interviews and focus groups.

Depth Interviewing

Company Depth interviews are the main form of qualitative research in most business markets. Here an interviewer spends time in a one-on-one interview finding out about the customer's particular circumstances and their individual opinions.

While interacting with dealers and contractors at the construction sites interviews helped us recognize the culture followed by the dealers in the paint market and the practices which a company should follow that enable a company to be popular among the dealers in the market. Feedback was taken about Asian Paints was given through many repeated interactions between the dealers and the company.

Quantitative Research

Quantitative research is about measuring a market and quantifying that measurement with data. Most often the data required relates to market size, market share, penetration, installed base and market growth rates.


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However, quantitative research for Asian Paints was used to measure customer attitudes, satisfaction, commitment and a range of other useful market data that can tracked over time. By way of questionnaires customer awareness and attitudes to different paint manufacturers and their overall buying behavior was judged which applies to the market as a whole.

The kind of market research used in this project was an ad-hoc research study focusing on specific marketing arenas like brand recall, awareness and perception of consumers, preference for Asian Paints by dealers, engineers and contractors. A qualitative kind of data capture technique was taken wherein a personal detailed interview was conducted with the dealers of other companies and contractors and engineers on the various construction sites. A questionnaire was constructed and a survey was done to check the perception of end consumers. This survey was done to know the brand recall, perception & awareness of Asian Paints in the market. This quantitative research was used to measure customer attitudes, satisfaction, commitment and a range of other useful market data that can tracked over time.

Data Collection Techniques:

Data collected and used can be of two kinds:1. Primary data2. Secondary data

Primary data are those which are collected afresh and for the first time and thus happen to be original in character. There are several methods of collecting primary data. Few of these are:

1. Through observation2. Personal interviews3. Through questionnaires4. Schedules5. Warranty cards6. Audits


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The primary data collected in this research is through the following ways:

1. Observation: This is the most common method used by which we can judge the liking or preference of the paints by just observing the paint containers lying on site and on display in the dealers shops.

2. Interview:Interviews are among the most challenging and rewarding forms of measurement. They require a personal sensitivity and adaptability as well as the ability to stay within the bounds of the designed protocol.

This involves presentation of oral – verbal responses. Personal interview requires that the interviewer asks questions generally face to face.

Dealers were asked about their dealerships and their annual turnover of different company paints they kept. Then they were asked about the reason for buying Asian Paints products indirectly. Furthermore they also were asked if they were interested in dealing with the company. All the data was noted down and some of it memorized to be written down later.

Similarly contractors were approached and asked about the paints that would be used in the near future. Convincing was done later if Asian Paints products were not to be used. Even if the company paints were used a better quality was being referred to for use.

3. Questionnaires:A questionnaire consists of a number of typed questions. The questionnaire was handed over to the people and their remarks and responses were tasken at that instance. This questionnaire was used to find the perception and preference for the company in the end user segment.


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Sampling

Market research involves the collection of data to obtain insight and knowledge into the needs and wants of customers and the structure and dynamics of a market. In nearly all cases, it would be very costly and time-consuming to collect data from the entire population of a market. Accordingly, in market research, extensive use is made of sampling from which, through careful design and analysis, Marketers can draw information about the market.

Sampling is the process of selecting units from a population of interest so that by studying the sample you can fairly generalize your results to the population from which the units were chosen.

Validity refers to the approximate truth of propositions, inferences or conclusions. External validity is related to generalizing. It refers to the approximate truth of conclusions that involve generalizations. The threats to this can be the mistakes


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done in generalizations which could be due to wrong places, wrong people or wrong times

Sample Design

Sample design covers the method of selection, the sample structure and plans for analysing and interpreting the results. Sample designs can vary from simple to complex and depend on the type of information required and the way the sample is selected.

Sample design affects the size of the sample and the way in which analysis is carried out. In simple terms the more precision the market researcher requires, the more complex will be the design and the larger the sample size.

The sample design may make use of the characteristics of the overall market population, but it does not have to be proportionally representative. It may be necessary to draw a larger sample than would be expected from some parts of the population; for example, to select more from a minority grouping to ensure that sufficient data is obtained for analysis on such groups.

Many sample designs are built around the concept of random selection. This permits justifiable inference from the sample to the population, at quantified levels of precision. Random selection also helps guard against sample bias in a way that selecting by judgement or convenience cannot.

Defining the Population

The group you want to generalize is called the population in your study. This is the group you would like to sample from because this is the group you want to generalize to.

The first step in good sample design is to ensure that the specification of the target population is as clear and complete as possible to ensure that all elements within the population are represented. The target population is sampled using a sampling frame. Often the units in the population can be identified by existing information; for example, pay-rolls, company lists, government registers etc. A sampling frame could also be geographical; for example postcodes have become a well-used means of selecting a sample.

Here in this research, the population is made up :


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1. Paint dealers of companies other than Asian Paints2. Construction sites in and around Allahabad3. Residents of Allahabad who get their house painted using company paints.

Sample Size

For any sample design deciding upon the appropriate sample size will depend on several key factors

(1) No estimate taken from a sample is expected to be exact: Any assumptions about the overall population based on the results of a sample will have an attached margin of error.

(2) To lower the margin of error usually requires a larger sample size. The amount of variability in the population (i.e. the range of values or opinions) will also affect accuracy and therefore the size of sample.

(3) The confidence level is the likelihood that the results obtained from the sample lie within a required precision. The higher the confidence level, that is the more certain you wish to be that the results are not atypical. Statisticians often use a 95 per cent confidence level to provide strong conclusions.

(4) Population size does not normally affect sample size. In fact the larger the population size the lower the proportion of that population that needs to be sampled to be representative. It is only when the proposed sample size is more than 5 per cent of the population that the population size becomes part of the formulae to calculate the sample size.

Here the sample size for the dealers, construction sites and customers are taken as follows:

Dealers : 112Construction sites: 55End Customers: 50

Types of Sampling Techniques:

The various kinds of sampling methods are summarized below:


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Sampling Method

Definition Uses Limitations

Cluster Sampling

Units in the population can often be found in certain geographic groups or "clusters" (e.g. primary school children in Derbyshire. A random sample of clusters is taken, then all units within the cluster are examined

Quick & easy; does not require complete population information; good for face-to-face surveys

Expensive if the clusters are large; greater risk of sampling error

Convenience Sampling

Uses those who are willing to volunteer

Readily available; large amount of information can be gathered quickly

Cannot extrapolate from sample to infer about the population; prone to volunteer bias

Judgement Sampling

A deliberate choice of a sample - the opposite of random

Good for providing illustrative examples or case studies

Very prone to bias; samples often small; cannot extrapolate from sample

Quota Sampling

Aim is to obtain a sample that is "representative" of the overall population; the population is divided ("stratified") by the most important variables (e.g. income,. age, location) and a required quota sample is drawn from each stratum

Quick & easy way of obtaining a sample

Not random, so still some risk of bias; need to understand the population to be able to identify the basis of stratification

Simply Random Sampling

Ensures that every member of the population has an equal chance of selection

Simply to design and interpret; can calculate estimate of the population and the sampling error

Need a complete and accurate population listing; may not be practical if the sample requires lots of small visits all over the country

Systematic After randomly Easier to extract the Can be costly and


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Sampling selecting a starting point from the population, between 1 and "n", every nth unit is selected, where n equals the population size divided by the sample size

sample than via simple random; ensures sample is spread across the population

time-consuming if the sample is not conveniently located

There are many different types of sampling technique. The one used in this research is a mix of simple random sampling and convienence sampling. This is due to the fact that it is the easiest way of gathering information.

Simple random sampling & convenience sampling was followed in market potential analysis. A list of dealers of Asian Paints was given and all except them became the population for the dealer survey.

For the construction sites convenience sampling was undertaken. The survey was done on the basis of areas each day. Each area was covered and all available construction sites were taken as in the sample.

For the consumer perception survey convenience sampling was followed by approaching shops and people in various localities of the city.


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Survey

Surveys can be divided into two broad categories: the questionnaire and the interview. Questionnaires are usually paper-and-pencil instruments that the respondent completes. Interviews are completed by the interviewer based on the respondent says. Some people think that questionnaires always ask short closed-ended questions while interviews always ask broad open-ended ones. But you will see questionnaires with open-ended questions (although they do tend to be shorter than in interviews) and there will often be a series of closed-ended questions asked in an interview.

Questionnaires

When most people think of questionnaires, they think of the mail survey.


http://www.socialresearchmethods.net/kb/intrview.htm

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A second type is the group administered questionnaire. A sample of respondents is brought together and asked to respond to a structured sequence of questions. In the group administered questionnaire, each respondent is handed an instrument and asked to complete it while in the room. Each respondent completes an instrument.

A less familiar type of questionnaire is the household drop-off survey. In this approach, a researcher goes to the respondent's home or business and hands the respondent the instrument. In some cases, the respondent is asked to mail it back or the interview returns to pick it up. This approach attempts to blend the advantages of the mail survey and the group administered questionnaire.

The kind of survey done in this project was a mix of household drop-off and group survey. People were sampled randomly and asked to fill the questionnaire. They were approached at restaurants, their homes or shops.

Interviews

Interviews are a far more personal form of research than questionnaires. In the personal interview, the interviewer works directly with the respondent. In this the interviewer has the opportunity to probe or ask follow-up questions. And, interviews are generally easier for the respondent, especially if what is sought is opinions or impressions. Interviews can be very time consuming and they are resource intensive.

The kind of survey methods used are Personal Interview and interaction with contractors on site, and the dealers in various locations. The questionnaire was used to check the preference of paint by end customers. Primary data was hence collected and used for the analysis.


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Hypothesis

A hypothesis is a tentative explanation based on theory to predict a causal relationship between variables

The hypothesis for this report is encompasses all the three levels from where demand for paint is created—dealers , painters or contractors at construction sites and end customers.

The hypothesis is as follows:

“Asian Paints has more brand awareness and is considered as a better business opportunity by dealers, better quality paint by contractors and the best paint for homes by the end customers”


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Findings and Analysis

The findings and analysis is shown in three parts:

1. Market Potential for new Dealers.2. Demand Generation at potential Construction sites.3. End Customer Perception & Demand


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Findings and Analysis of Market Potential for New Dealers of Asian Paints

Scanning the market:

The market potential was judged by the indirect purchase of Asian Paints products by the retailers and dealers of other companies. Dakhni Prasad Makhan Lal and Durga Paint House were the dealers where most indirect purchase of Asian Paints products took place.


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The findings and analysis is done on the basis of the compiled data of indirect purchases from various Asian Paints dealers given in the appendix, exhibit 1.

The four main dealers of Asian Paints—Durga Paint House, Dakhni Prasad Makhan Lal, Dakhni Prasad Anand Bihari Lal, Vikas Paint House ; do a lot of business just by indirect purchases of Asian Paints products by the various retail outlets and dealers of other companies.

Indirect Purchase Of Asian Paints in Allahabad Region From Dakhni Prasad Makhan Lal

Other Company Paint Sale

80%

IDP of Asian Paints by other

company dealers

20%

About 20% of Dakhni Prasad Makhan Lal’s sale is through indirect purchase of Asian Paints products. It satisfies the demands in Chowk, Kareli, RajRoopPur, Naini, Phaphamau to name a few. A total of about Rs.3179000 is collected through indirect purchases of Asian Paints by other dealers and retailers. This shows that there is demand for Asian Paints and more dealers can be made to further increase the demand.


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Indirect Purchase Of Asian Paints in Allahabad Region From Dakhni Prasad Anand Bihari Lal

Other Company Paint Sale

77%


company dealers

23%

Dakhni Prasad Anand Bihari Lal, though not an exclusive dealer of Asian Paints, also contributes to the demand fulfillment with 23% of its turnover. It satisfies the regions of Allahpur, Katra, Dhoomanganj and collects about a total of Rs. 1234000 from indirect purchases of Asian Paints by other dealers and retailers.

Indirect Purchase Of Asian Paints in Allahabad Region From Durga Paints

Other Company Paints Sale

80%


company dealers

20%


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Durga Paint House is the largest Dealer of Asian Paints in the Allahabad region and 20% of its annual turnover is through indirect purchase of Asian Paints by other dealers and retailers in the areas of Rajapur, RajRoopPur,Allahapur, Naini,Salori; collecting over Rs.2257000 in this manner.

Indirect Purchase Of Asian Paints in Allahabad Region From Vikas Paint House

Other Company Paints91%


company dealers

9%

Vikas Paint House has about a 9% i.e. Rs. 1095000 of its turnover from indirect purchases by the various retailers and dealers. It serves the retailers and dealers of Bahadurganj, Reva Road, Naini, Kota Parcha.

From the above charts of indirect purchases of Asian Paints we analyze that the market is ready to be tapped and is ready for absorbing more dealers of Asian Paints. This scanning has helped us find out a definite market for the new dealers in Allahabad region.


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Definite Scope for New Dealers

Total Market Potential

84%

AP IDP:Definite Ready Market

for Asian Paints16%

This chart shows that 16% of the potential market is ready for getting into dealership with the company, Asian Paints India Limited.

So now a personal interview was conducted with most possible non-dealers and retailers so as to judge their capacity and whether they would prove to be beneficial dealers for the network or not.

* analysis is done on the data given in exhibit 1

Market penetration: New dealerships

After visiting and interacting with about 112 dealers and retailers in the region, about 47 locations were judged to be the potential counters for Asian Paints. Among the many factors taken were the turnover of the retailer/dealer, his credit


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worthiness in the market, etc. care was taken that no new machine was installed near any existing dealer with a machine.

The potential dealers for Asian Paints in the market can be depicted as follows:

Potential Dealers in total market

68%

Potential Dealers

32%

Out of the total the market for potential dealers for Asian Paints was about 61%.

Potential Dealers in the market w.r.t. Dealers of GNP & Berger

GNP Dealers

24%

Berger Dealers

15%

Potential Asian Paints

Dealers61%

Among the 61% of potential dealers , 39% were those that were dealers of some other companies already. 61 % were first time dealers.


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Breakup of new dealers and existing dealers of other companies

GNP/Berger existing Dealers

1439%

New Dealership22

61%

Interpretation:

A total of three new dealers were opened for Asian Paints in a period of 2 months. this implies that 8% market potential was tapped in the months of June—July.


Conversion pie of potential dealers into Asian Paints dealers

Dealers Converted

38%

Potential Dealers for

Asian Paints

3692%

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In the paint sector the demand is almost constant apart from the seasonal fluctuations when demand falls in the rainy season and grows in the festive season.

Even though the paint demand is not at its peak due to the start of monsoons, new dealerships have been opened. This signifies a good image of the company in the eyes of the dealers and also proves that Asian Paints is a better company which would give it benefits even in the off season.

The conversion of three potential dealers into Asian Paints Dealers in just two months was a tedious job as two of them were new to the paint market and dealerships whereas one was a profitable and big dealer of a rival company.

* analysis is done on the basis of data in exhibit 3.

Findings and Analysis of Demand Generation at Potential Construction Sites

Scanning the market:


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There were about 77 sites in the city where construction was going on at various locations in the city. The total number of sites that were using Asian Paints or were to use Asian Paints were 17.

Potential sites for Asian Paints in the Market

.38

69%

Potential AP sites

1731%

The rest of the sites were either ongoing construction or were using GNP or Berger for painting. Most painting was scheduled to be in August after rains.

So the potential construction sites for Asian Paints constituted about 31% of the total market.

Creating New Demand:

Demand generation is a tedious job of creating new demand for your product in the market, by meeting the contractors at the construction sites, giving demo of your paint by patching the walls to be painted and convincing the contractor concerned to recommend and use your product.

After all this we were able to convert three sites i.e. 15% of the total for Asian Paints. There is a demand for paints in the decorative segment as the real estate


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sector is growing. The presence of Asian Paints products being used was a fair symbol of the good perception in the eyes of the contractors.

Potential Construction Sites converted for Asian Paints

Potential AP sites

1785%

Converted3

15%

Two of the three large area sites that were converted agreed upon using Utsav Acrylic Distemper for interiors and Gattu Cement Paint for exteriors. The third site was that of a hospital and fixed on using our premium product; Apex and Royale for Exterior and Interior respectively.

Converting sites in the monsoon was a tedious task and gives a clear indication of the preference and belief in the quality, life and service of Asian Paints.

* the analysis is done on the basis of the data given in exhibit 4

Findings and Analysis of Survey: End Customers Segment


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The questionnaire was designed with a motive to find out the perception of Asian Paints in the mind of the customers, i.e. the customers who use the paint for getting their house painted. They were asked to answer a few questions which would judge their preference towards a company and also find out features necessary for a paint to be successful in the market.

The questionnaire consisted of a set of 21 questions and also their personal data including their name and residential address.

The following are the question wise findings and analysis of the same. The analysis and charts are based on the questionnaire in exhibit 5.

Q1. Occupation:

Occupation: Service/Business

service58%

business24%

other18%

The first question was relating the occupation—business ,service or any other profession. About 58% of the sample was belonging to the service class , 24% business and rest 18% was pursuing other professions like medicine or law. This depicted the preference mainly of the service sector.

Q2. Annual Income:


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Annual income

below 5000021%

50000 - 1 L12%

1L - 2L26%

2L - 4L29%

4L - 6L5%

above 6L7%

The Annual income of the sample was mainly lying in between 1Lac to 4Lac, was chosen as an essential input as it signifies the purchasing power of the customer. Here the customer segment is middle class segment and mostly in the service sector. The income is a major factor in deciding the popularity of any product in the market. Too costly a product will not go in such a market. Various kinds of products segmented according to the income segments are a must for any company to prosper and gain a bigger market share.

Here mainly the service middle class is considered where budgets are constrained to some extent and they cannot use an extremely good product even if they want to, due to their financial constraints.

Q3. Residing in a rented or a self-owned house:


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Residence : Owned / rented

self owned house63%

rented house37%

As seen from the pie chart, 63% of the sample population resided in their own house whereas the rest in a rented house. This was fairly a good distribution as the findings are not skewed towards the self owned houses where people mostly decide upon to use the best paint for their house.

The reason for keeping this question was to get a fair idea between the kinds of paint a household uses if it is their own house and if it is rented. People tend to use better quality paints for their own house and a little inferior quality paint for a rented house where they are not staying for a long time.

Q4. Area of House measured by number of rooms:


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Number of Rooms/Approx Area

4-6 rooms74%

7-9 rooms14%

10 above12%

The number of rooms gave a fair idea of the area of the house to be painted. About 74% of the sample was residing in a 4 – 6 room house, 14% in 7—9 room houses and 12% in bigger houses having 10 or more rooms. This tells us about the amount of paint that would be used for getting the house painted and hence the amount to be spent on purchasing paints.

Q5. Frequency of Painting

Frequency of Painting

once a yr14%

once in 2yrs48%

once in 5yrs24%

during festivals

14%


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Most of the sample population, 48%, got their house painted once in two years. It is a practice in India to get homes painted during festivals like Deepawali, which is clearly seen from the chart,depicting 14% for during festivals and 14% for once a year; making a total of 28% which gets their painting done atleast once a year. This shows a good trend towards growth of paint market as there is more demand for paints and consumers have become more and more aware of the qualities of products which give the walls a beautiful smooth look.

Q6. Painting done in parts or full house

Painting In-Parts/Total

whole house68%

in parts/few rooms32%

Painting can be done as a whole house or in parts getting a few rooms painted as and when required. About 68% of the population answered to it as getting the house painted in totality whereas the rest 32% gets the house done as and when required.

Q7. Painting Interiors and/or Exteriors:


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Painting Interiors/Exteriors or Both

intr / extr52%

both intr &etxr48%

Most answers to this question were interiors only. 52% of the answers were in favour of interiors/exteriors only in which about 60% were interiors only. This shows a tendency to leave the exteriors and paint the interiors more frequently. Exteriors were generally left out in case of rented houses. When asked the reason for not painting the exteriors most replied as job of the landlord or due to exterior paints getting worn out too soon.


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Q8. Paints used for Houses interiors and exteriors.

Materials used for painting

chunna16%

local paints6%

company paints78%

About 78% of the sample uses company paints for painting the exteriors and interiors, 6% used locally manufactured paints and 16% used chunna on walls. The exteriors were the area where chunna was used and this was so because of the cost ,climate and monsoon factors.

Chunna is still being used as a substitute for exterior paints. The market can be expanded by giving more information and promoting the exterior paints so as to capture that segment of the market as well.

Locally manufactured paints are also contenders in the race due to their good local presence and ease of availability. The price factor comes into play where a person who wants to use a company paint buys a local paint due to differences in pricing. Products should be segmented so as to cater to the needs of each income segment. This will increase the market share of the company and help penetrate more in such segments.


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Q9. Paint last used for your house:

Paint preffered for house

nerolac35%

berger15%

asian paints43%

ICI2%

shalimar3%

J&N2%

This chart shows the paints used by the sample population when they last got their house painted. 43% used Asian Paints, 35% used Nerolac for their houses and 15% preferred Berger over the rest.

This shows that in the Eastern U.P. Area, i.e., Allahabad and the adjoining areas Nerolac and Berger together have a larger market share than Asian Paints which is alarming as Asian Paints is the market leader in the decorative paint sector. 50% of the sample prefers Nerolac or Berger over Asian Paints. This may be due to the price factor or ease of availability.

Even though Asian Paints has acquired quite a lot of share in the concerned market over the last three years and has been able to break into Nerolac’s share it still has scope for expansion.


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Q10. Amount of Paint used.

Quantity of Paints Required by Households

small qty27%

medium qty57%

large qty16%

This shows that 57% of households required and hence purchased medium quantity of paints, 27% required small quantities of paint and 16% require paint in large quantities. This was a question to cross check the respondent about the authenticity and validity of the responses given in the earlier question of area of house / number of rooms. This chart showed a similar trend as in the earlier chart and hence we can conclude that the responses were valid to an extent.

Q11. Qualities that appeal most while selecting paint:


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Qualities that appeal most while selecting paints

price33%

color/shade47%

packs available

7%

advertisements

13%

Colors or shade available was the most appealing feature while selecting paint for a house. It constituted 47% of the responses. Next to this came the pricing of paints with a total of 33% responses. This is a deciding factor as there are so many products claiming to be similar to the market leader’s product but costing far less than the original. Local paints offer great prices but inferior qualities and less color range. Company paints offer a wide range of colors and good quality with a higher price tag than the local paints. Asian Paints offers the maximum range of products and colors available ranging from light pastel shades to dark gloss and matte shades. Nerolac offers products similar to the market leader at competitive prices, having a smaller range of colors when compared with Asian Paints.

Advertisements also play an important part when it comes to selecting paints for homes. The brand recall helps in choosing paints as product awareness is essential for it to be successful. Ads comprised of 13% of the responses.

Easy packs available scored 7% responses. This includes small packs for smaller houses and bigger drums for larger houses. This ensures the penetration of the product into segments where there are very small areas to be painted. Ease of buying the paint in smaller packs also gives rise to trying to paint your house on your own in various color combinations, not just one color for the entire house, when smaller packs were not available.


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Q12. Advertisements : necessary or not?

Influenced by Advertisement

yes,a lot31%

someimes40%

not at all29%

As clearly seen advertisements is a vital factor in promoting a brand. Asian Paints spends a percentage of their income on advertisements which mainly comprise of T.V. commercials designed by O&M. 31% respondents agree that ads influence their buying behaviour a lot, 40% say it influences them to an extent whereas 29% are not influenced at all.

This makes a total of 71% respondents agreeing to the influence on buying behaviour by ads.

When asked about any ad they like or remember about paints the most common reply was that of an ad of Asian paints Apex Exterior Emulsion,Saif Ali Khan’s advertisement for Asian Paints Royale Luxury Emulsion and Mr. Amitabh Bachhan’s advertisements for Nerolac paints. Nerolac has spent a great deal on a 3year contract with Mr. Amitabh Bachhan for Brand Ambassador for Nerolac. This has boosted the sales of the then shrinking Nerolac.


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Q12. Most Popular Paint Company: Brand Recall

Most popular company

nerolac40%

berger5%

asian paints53%

ICI2%

Asian Paints was voted as the most popular company with 53% responses. This is possible due to the advertisements, and the quality and service of Asian Paints—for which it is well known.

Nerolac was not far behind with 40% responses in its favour. Ads of Nerolac have made Nerolac boost its sales manifold.

Berger was voted by 5% and ICI by 2% of the respondents.

Asian Paints has to look into its promotions as Nerolac is catching up with it in this segment and could prove to be a threat if overlooked. Nerolac’s market was very strong three years from now but still it has a foothold and Asian Paints has more areas to explore in this region to increase its sales and market share.

Q13. Place of Purchase:


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Place of purchase of Paints

direct from dealer20%

big retail shop28%

any shop nearby52%

Place of purchase is important for a company’s sales. Most respondents had chosen any retail shop near their house for purchasing paint. This means that if a paint is very good in quality and has a strong brand recall but is not available to the end user at his connivance then he will readily switch to another company paint available. There should be availability of paint in most shops ,that means the number of counters or dealers should be increased so as to penetrate deeper in the markets and be available to each potential customer.

About 20% of the sample buy directly from the dealer so as to get the discounts which the dealers can give due to the margins available with him. 28% buy from big retail shops whish give them discounts too and are associated with reliability and quick service


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Q14. Essential qualities paints should possess:

Essential Qualities for a Paint

color17%

economical price27%durability

37%

easily available19%

The most essential quality is the durability or long life of paints. 37% respondents looked for durability that the paint offered while 27% took price to be the most important factor. Whereas color/ shade available was the most appealing while choosing a paint the color factor was overtaken by durability and price respectively. 17% chose color to be the most important factor whereas 19% opted ease of availability to be the deciding factor for them to choose paint.

Asian Paints is known for its durability and colors where Nerolac is known for its competitive prices and wider penetration. So taking a total of the two respective features Nerolac is not very far behind in the run, with a 46% preference, when compared with the 54% preference for Asian Paints.

This is shown in the previous chart as well where Nerolac was voted most famous company with 40% and Asian Paints took the lead again by 13%.,having a total of 53% responses in its favour.


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Q15. Which company according to you has a good image in the market?

Individual Ranking of Company Products

Asian Paints49%

Nerolac29%

Berger15%

Shalimar7%

This was a ranking question where the respondent had to rank the various companies according to their own discretion. Most respondents ranked Asian Paints as Number1 and Nerolac as Number2 rank. The question had weighted answers and in total Asian Paints was ranked as first by 49% respondents, Nerolac second by 29% , Berger stood third with 15% responses and Shalimar fourth with 7% responses.

This ranking was the last question to be filled and the questionnaire guided the respondent to make a valid decision when he came to this last question. This was depicted in the final ranking as the ranks coincided with the previous choices made. Hence the questionnaire followed a logical sequence of questions which lead to a reasonable response.


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Main interpretations:

Drivers of Brand Acceptance

Of the many drivers of brand acceptance the three that emerge from the market analysis done in this case are as under:

- Advertisement

- Benefits

- Business Rationale


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The dealers driven by advertisement can be largely said to be seeking and relying on marketing support. In their view, and rightly so, the quick turn toward paint industry requires high visibility and brand recall.

The second segment driven by the Product focuses on the functional attributed of the offering - quality, range, ease of payment, and a manufacturer that makes it easy to push the product.

The segment driven by business rationale tends to tackle the question of "Why this brand of paint?"; exceptional quality of the product or a manufacturer famed for quality products and ease of payment or terms of credit drive the acceptance of a brand and increase its dealership network also.

Painter Influence on Consumer

1. Most consumers attach immense or moderate importance to the dealer view.

2. This can be attributed to the special nature of painting execution work and respect for experience. At dealer shops under observation it was witnessed that when the painters accompanied the consumers, his approval was of immense importance and remarks similar to "Only if you approve shall we take it, ultimately you have to use it" were made.

Motivators of Brand Favor

1. Though the quantitative data was skewed towards consumer want when it came to what makes painter favor a particular brand, the greater truth was revealed during interviews and observation - the painter is largely motivated by schemes and incentives - and this is what guides his brand favor.

2. Of course, he must be assured of a reasonably good functional attribute - high square feet coverage, glaze, brushability, color etc - before a manufacturer tries to push brand consideration with the painters.

Product Knowledge


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1. Owing to low level of knowledge and involvement in the paint selection, the customers demonstrated stark inability to differentiate between any two brands confidently on various attributes like Quality, Coverage and Reputation.

2. High level of loyalty rather, stickiness was observed as each respondent was seen to rate a chosen brand the highest on all attributes with responses like, "Good Paint in all aspects", “Used last time also”. Consumers were unable to name any brand for coverage, further underlining low involvement and easily influenced nature of paint purchase.

3. Due to the said attributes displayed by the data collected, the only conclusion that can be reached is that high levels of commitment is seen across groups and once chosen, the same is identified as the "ideal" brand. Asian Paints, followed by Nerolac and Berger have emerged as Best, Good and Average respectively.

4. Interestingly, the responses have brought forth the fact that Tractor, Royale, Apex, 24Carat, Dulux and Bison have grown as brands outshining their manufacturers - Asian Paints, Nerolac , ICI and Berger.

Brand Recall

1. Asian Paints depicted the highest Brand Recall (53%) followed by Nerolac (40%) Berger (5%) and ICI (2%)

2. This is in agreement with the proposition sighted above that the stickiness factor comes into play when the Decorative Paints Segment is considered. Also, the high spends of Asian paints and its extension into services - Home Solutions, Gattu - the icon and an all-encompassing range - with the enamel paints in orange cans dominating the shelves at retail outlets and thus affecting visibility, are the reasons for high brand recall of Asian Paints.


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Product Mix

1. The Product Mix of Asian Paints is mammoth in all respects - width, length and depth. Expansion of the product portfolio is going on so as to cater to all segments.

2. New product launches are in the pipeline and the company is trying to venture into the exterior and interior wall putty areas for gaining a larger market share.

Acceptance of hypothesis:

The hypothesis :

“Asian Paints has more brand awareness and is considered as a better business opportunity by dealers, better quality paint by contractors and the best paint for homes by the end customers”

is accepted due to the following:

I. Competitor Market Potential:


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Market potential for Asian Paints was judged by the amount of Indirect Purchases made from four of the company’s big dealers at various locations. The analysis and interpretation for acceptance of hypothesis is as follows:

1. About 20% of Dakhni Prasad Makhan Lal’s sale is through indirect purchase of Asian Paints products. It satisfies the demands in Chowk, Kareli, RajRoopPur, Naini, Phaphamau to name a few. A total of about Rs.3179000 is collected through indirect purchases of Asian Paints by other dealers and retailers. This shows that there is demand for Asian Paints and more dealers can be made to further increase the demand.

2. Dakhni Prasad Anand Bihari Lal, though not an exclusive dealer of Asian Paints, also contributes to the demand fulfillment with 23% of its turnover. It satisfies the regions of Allahpur, Katra, Dhoomanganj and collects about a total of Rs. 1234000 from indirect purchases of Asian Paints by other dealers and retailers.

3. Durga Paint House is the largest Dealer of Asian Paints in the Allahabad region and 20% of its annual turnover is through indirect purchase of Asian Paints by other dealers and retailers in the areas of Rajapur, RajRoopPur,Allahapur, Naini,Salori; collecting over Rs.2257000 in this manner.

4. Vikas Paint House has about a 9% i.e. Rs. 1095000 of its turnover from indirect purchases by the various retailers and dealers. It serves the retailers and dealers of Bahadurganj, Reva Road, Naini, Kota Parcha.

5. From the above indirect purchases of Asian Paints we analyze that the market is ready to be tapped and is ready for absorbing more dealers of Asian Paints.

6. This scanning has helped us find out a definite market for the new dealers in Allahabad region. It shows that 16% of the potential market is ready for getting into dealership with the company, Asian Paints India Limited. Showing that the hypothesis is correct and APIL is considered to be a good business for the dealers.

Beneficial Output for the company: New Dealerships


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1. Out of the total the market for potential dealers for Asian Paints was about 61%.

2. Among the 61% of potential dealers , 39% were those that were dealers of some other companies already. 61 % were first time dealers.

3. A total of three new dealers were opened for Asian Paints in a period of 2 months. this implies that 8% market potential was tapped in the months of June—July.

4. About five potential dealers are to be included in the Asian Paints dealer network in the month of August—September.

5. The conversion of three potential dealers into Asian Paints Dealers in just two months was a tedious job as two of them were new to the paint market and dealerships whereas one was a profitable and big dealer of a rival company.

Conversion pie of potential dealers into Asian Paints dealers

Dealers Converted

38%

Potential Dealers for

Asian Paints

3692%

this conversion of competitive dealers into APIL’s dealers is a sign of better business than other companies and hence the hypothesis for thedealers is accepted.


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II. Demand Generation at Construction sites

The second part of the report was to find out the demand of Asian Paints on the construction sites. The analysis and interpretation is given below:

1. About 31% of the total market was in favor of using Asian Paints as their preferred brand.


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Potential sites for Asian Paints in the Market

.38

69%

Potential AP sites

1731%

2. Demand generation is a tedious job of creating new demand for your product in the market, by meeting the contractors at the construction sites, giving demo of your paint by patching the walls to be painted and convincing the contractor concerned to recommend and use your product.

3. There is a demand for paints in the decorative segment as the real estate sector is growing. The presence of Asian Paints products being used was a fair symbol of the good perception in the eyes of the contractors.

4. Due to the monsoons the demand for paints has been postponed till

after rains.

5. There was use of local paints for a lot of government sites and many people were not aware of the new range of products available and their qualities in terms of durability, brushability and coverage.

Beneficial output for the company: construction sites contracts for using Asian Paints.

1. A total of three sites ere converted for Asian Paints.

2. Two of the three large area sites that were converted agreed upon using Utsav Acrylic Distemper for interiors and Gattu Cement Paint for exteriors.


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The third site was that of a hospital and fixed on using our premium product; Apex and Royale for Exterior and Interior respectively.

3. Converting sites in the monsoon was a tedious task and gives a clear indication of the preference and belief in the quality, life and service of Asian Paints.

4. Due to the monsoons painting was postponed to August end in many sites, where Asian Paints was again preferred

Potential Construction Sites converted for Asian Paints

Potential AP sites

1785%

Converted3

15%

This shows a good image of the company in terms of durability and service. The contractors were ready to take APIL’s products even during the monsoon shows the good image in the market. Hence due to the above analysis the hypothesis is accepted.

End Customer segment : Survey

The end customer segment was given a questionnaire and the results were used to analyse the perception of asian Paints in that segment of the market. The interpretations were as follows:


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1. Asian Paints has a good response when it comes to quality, colors and durability. Most preferred paint for residence purpose was th\at of Asian Paints.

Paint preffered for house

nerolac35%

berger15%

asian paints43%

ICI2%

shalimar3%

J&N2%

2. The ranking for the most popular company was fairly in accordance with all the charts previously sketched and analyzed.


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Most popular company

nerolac40%

berger5%

asian paints53%

ICI2%

3. Asian Paints , though market leader, is not in a very safe position in the East zone of U.P.—Allahabad & adjoining areas. Asian Paints has to follow a strategy of penetration by opening more dealer counters in areas where Nerolac or Berger is being sold.

4. This would take care of the non availability of the products in those areas. Schemes could be introduced during festivals on new products so as to increase their market.

5. The place of purchase is an important factor for convenience of the end user so more dealers should be opened. This questionnaire took into account the middle class service sector of the total population.

6. Product segmentation is available in Asian Paints but awareness has to be increased through ads picturing real life situations of each segment, so as to relate to the product.

7. Awareness is not just enough. The products launched should be made available for the customers. Hence the delivery of products to the dealers should be timely and time lag be decreased.

The hypothesis—Asian Paints has more brand awareness and is perceived as best in quality, is accepted. Asian Paints in East U.P.has shown an increase in customer base in the past three years. Asian Paints has been on top and still is but needs to revise its strategy and follow a penetration strategy.


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Hurdles faced by Asian Paints in the Market

The various hurdles faced for Asian Paints demand are at three levels—dealer level, painter level and customer level. The hurdles are caused due to the following reasons:

Hurdles at dealer-level:

Minimal Marketing Support to Dealers in the absence of advertisements of certain paint

High Level of Ignorance among Customers and Painters resulting in lack of Demand Product Quality

Limited Range Grievances (shade, SKUs, categories)

Predetermined Sales Targets from other "Reputed" companies enjoying First Mover Advantage

Lack of Schemes to Painters and Painter Meets

Hurdles at painter-level:

Lack of Demand from consumer and minimal brand consideration therein High Level of Ignorance among Consumers as well as Painters

Product Quality

Limited Range Grievances as in case of dealers

Hurdles at consumer-level:

High Level of Ignorance: Never heard/ seen and seldom recommended by dealers or painters

Existence of "Better" Brands: More of psychological barrier than a functional one


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Recommendations & Conclusion

The market for APIL is available and waiting to be tapped before any other competing company does so. So an expansion strategy is recommended. Furthermore Asian Paints was not available at all retail counters whereas Nerolac was found in almost all counters even though in small quantities. So market penetration is strategy is advised.

The short term strategy to penetrate is proposed to be four-fold: SWAP

Simulated Demand

Workshops and Painter Meets

Awareness Drive

Purchase-linked Painter Schemes.

Simulated Demand

In this situation the dealer pushes a product that is in high demand and once visible at the dealer location and pushed by the shopkeeper, the product creates its own demand, Simulated Demand is recommended.

A group of painters should be employed temporarily in order to enquire about the various APIL products at dealer outlets.

Once continued for a period of 30 days or so, it is strongly perceived that the dealers would stock the product.

Once this objective starts seeing fulfillment, the number of painters hired should be gradually reduced and the dealers shall be found to be themselves pushing the product owing to the recent enquiries and a growth in demand shall be noticed.


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Workshops and Painter Meets

Given the important role the painter plays and the bearing he may have on deciding the brand, he must be made aware of the product from APIL Umbrella and how they are superior to those in the similar.

The less skilled painters may be trained of application skills in Distemper and Emulsions. This shall go a long way in 'owning' the painters and creating brand loyalty in the said group.

Painter Meets should be held at least every 6-months in order to ensure continuum.

The following activities may be taken up during the Meetings:

o Updates on offerings from APIL and their superior features

o Training with respect to product application and usage

o Feedback from the painters on the products to explore revision of composition of product Rewarding of "Most Loyal Painter" giving maximum business in six months in the area

Awareness Drive

APIL has a good Brand recall but care has to be taken that the advertisements focus on all segments of the market so as to make them relate to the situation as well as the product.

Having mastered advertising on the national media APIL should create a power-communication programme inclusive of the following elements:

o Advertisement on local cable channels—a cost-effective medium to hit the towns where local paint is still being used.

o In-shop Demonstrations to influence, apart from making aware, the customers at the point of purchase.

o Wall Painting in interior areas


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o Glow Signboards at dealer outlets, which are presently being supplied , to serve dual purpose: create awareness and increase dealer satisfaction.

Purchase-linked Painter Schemes

As per the revelations of the observations at the dealer outlets, the painters are primarily guided by benefits to self, after being assured of product quality when it comes to brand-advice or choice.

This need for gratification should be answered in the form of Purchase-linked Painter Schemes wherein gifts, tapping the aspirations of the respective socio-economic segment should be offered.

As a token of appreciation and reverence, "Most Loyal Painter Award" could be institutionalized. The evaluation criteria shall remain purchase or sales generated but the recognition awarded among peers shall drive painters to use APIL range of distempers and emulsions.

"Loyalty Pays" tokens may be handed out by dealers on purchases made by the painters and the same may be used to reward gifts and identify the "Most Loyal Painter".

IDEA: The long Term Strategy

The long term strategy, catering primarily to the consumers, shall consist of

Increasing Consumer

Demand generation

Effective communication

Awareness by advertisements

Increasing Consumer

Consumers are not only the end customers but also the contractors and painters who are very much involved in buying decisions.


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The stickiness can be taken as an advantage by using it in our favor. First time users can be given gifts and then a point system can be used to judge the “Most loyal customer” and appreciations can be given as discounts in next purchases of Asian Paints products.

Demand generation

Demand generation is to be carried out on a regular basis. Sales in charge of each territory should survey the territory and keep in touch with the contractors. Real estate is growing and is to do so in the near future also. Paint market is directly related to the real estate.

Effective communication

Effective communications with dealers is of utmost importance. dealers in this region complained of lack of communication by the company and few of them had left dealing with the company due to this reason. Communication regarding discount schemes and new products should be timely communicated.

Awareness by Advertisements

Investment in advertisements is seen to benefit long term but continuous ads are the winning point. Ads relating to real life situations like Asian Paints has already aired helps the customer rel;ate it to his own life.Area where asain Paints advertising campaign lacks is in segmented advertising. The products even though segmented, are not known by most due to lack of ads of the category. Care should be taken to air ads of products on local cable to increase awareness.


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Limitations

Even the most advances and well planned research has limitations. It may be due to time, money, information, etc.

Market research does not forecast what will happen in future but does give an idea of the prevailing market conditions and the possibilities of occurrences in the near future or gives us the reasons for the difference between what is supposed to happen and what actually is happening in the market.

The limitations faced in this project are as follows:

1. The research was of two months in which all aspects could not be covered in detail

2. The dealers that were convinced and applied for dealerships were also few due to time. New dealers will be established in due course after the completion of the designated time.

3. Contractors who were ready for using Asian Paints for their sites postponed their schedule due to the monsoons.

4. While conducting survey for end customer , many respondents left questions unmarked

5. Lack of Cooperation was also a limitation as information could not be gathered from them

6. Sample consisted of people in Allahabad city so this exact values of market share cannot be applied elsewhere in any city though the generalizations may be correct


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Bibliography

Books referred:

1. Marketing Planning Guide – Robert Stevons, David Loudon2. marketing management –Philip Kotler3. Research Methods – William M. K. Trochim4. Research Methodology -- Chabbra

Web sites:

1. http://www.jcaho.org/pms/core+measures/8_sampling.pdf2. www.asianpaints.com


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3. www.quickmba.com4. http://sociology.camden.rutgers.edu/main.htm5. www.equitymaster.com6. www.indiainfoline.com7. www.blonet.com

Appendix:Exhibit 1:

INDIRECT PURCHASE OF ASIAN PAINTS

DAKHNI PRASAD MAKHAN LAL

DEALER AREA AP IDP TURNOVERShiv H/W & Paints RajRoopPur 200000 1000000Kamla Traders RajRoopPur 30000 700000Rainbow Paints Kareli 100000 970000New Sona Traders Kareli 400000 1025000Maharani Paints Jayantipur 300000 3600000Puroshottam Paints Rajapur 400000 2250000Mishra Paint House Alopi Bagh 200000 950000Raj Paint Stores Bai Ka Bagh, Bairana 200000 1500000Shiv Bhole Traders Manori 20000 950000Ganga Paint House Zero Road 600000 750000

TOTAL 2450000 13695000

Prem Sanitary Bahadurganj 100000 300000Prakash Trading Co. Mandori Colony 50000 50000


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Santosh Paints Phaphamau 125000 225000Jai Shakti Phaphamau 30000 30000Kesarwani Paints Manori 5000 55000Kesarwani Traders Manori 4000 20000Pooja Paints Mundera 80000 200000Maa Shakti Enterprises Alopi Bagh 25000 100000Jai Maa Traders Rajapur 100000 250000Decora Paints Naini 5000 14000Mawinwashali Paints Naini 10000 50000National Paints Kareli 80000 180000Indian Paints Kareli 10000 50000Raja Paints Kareli 30000 170000Allahabad Paint House Kareli 50000 250000Modern Paints Karbala 25000 100000Decora Paints 100000TOTAL 729000 2144000 GRAND TOTAL 3179000 15839000

DURGA PAINTS

DEALER AREA AP IDP TURNOVERShiv H/W & Paints RajRoopPur 200000 1000000National Paints RajRoopPur 400000 600000Shrishti Paints Naini 150000 450000Paint Palace Rajapur 200000 3500000Jaiswal Cement & Saria Rajapur 100000 600000Patel Paints & Sanitary Rajapur 150000 500000Mohan Paints Stanley Road 200000 1600000Raj Cement Agency New Bairana 250000 700000Raj Paint Stores Bai Ka Bagh,Bairana 300000 1500000

TOTAL 1950000 10450000

Jawaharlal & Sons Satrahapur 25000 275000Shukla & Bros. Salori 30000 125000Shubham Building Materials Govindpur,Salori 2000 7000Jaiswal Building Materials Gayatri Nagar,Salori 15000 35000Das Traders Railway Crossing,Naini 50000 135000


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Ajay Paint House Railway Crossing,Naini 50000 70000Sharma H/W & Paint Stores Allahapur 80000 80000Jai Shakti Paint & H/W Allahapur 50000 50000Manoj Traders Allahapur 5000 5000TOTAL 307000 782000

GRAND TOTAL 2257000 11232000

DAKHNI PRASAD ANAND BIHARI LAL

DEALER AREA AP IDP TURNOVERNational Paints RajRoopPur 200000 600000Rakesh Enterprises Dhoomanganj 400000 400000Rang Mahal Katra 50000 700000Standard Paints & Pipe Fittings Naini 100000 2600000

TOTAL 750000 4300000

Gupta Jee Traders Ghoorpur 4000 254000Kumar Paints Mundera 20000 100000Jai Maa Paints Rajapur 100000 250000Indian Paints Kareli 10000 50000Kesarwani Stores Allahpur 250000 250000Sahu Paints Allahpur 100000 250000TOTAL 484000 1154000

GRAND TOTAL 1234000 5454000

VIKAS PAINT HOUSE


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DEALER AREA AP IDP TURNOVERPrem Sanitary Bahadurganj 50000 300000Siddhart Traders Phaphamau 20000 50000Amit Traders Reva Road 5000 25000Prayag Sanitary & Paints Mahiwa, Reva Road 10000 160000Shukla & Bros. Salori 10000 125000Shyam & Co. Motilal Nehru Road 500000 10000Neeraj Paints Kota Parcha 200000 4500000Yamuna Traders Rajapur 20000 6500000Jaiswal H/W Naini 40000 75000Shiv Traders & H/W Naini 40000 80000Shrishti Paints Naini 100000 450000Kesarwani Marble Chlps Allahpur 100000 140000

GRAND TOTAL 1095000 12415000

Exhibit 2

Asian Paints Dealers in Allahabad

SNo. AREA DEALERS

1. RajRoopPur 1. Pooja Paint House2. R K Tent House3. Vinod Paint House4. Vijay Bros.

2. Kareli Road 1. Shine Paints2. Bharat Paints3. City Paints4. Lucky Paints & H/W Stores

3. ChowkThatheri Bazaar

1. HemRaj & Sons.2. Dakhni Prasad Makhan Lal3. Dakhni Prasad Anand Bihari Lal4. Harsh Paints5. Sita Ram Om Prakash6. Sita Ram Shiv Prakash7. Sharda Prasad Thakur Prasad & Sons /

GS Commercials8. Raj Paints9. Mahadev Prasad Bhagwan Das10.Ravi Prakash & Sons


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4. Zero Road

MuthiGanj

1. Ram Prasad Tiwari & Co.2. Praveen Cement Agency3. Vikas Paint House4. Durga Paint House / Kavita Paint Stores

5. KydGanj 1. Gayatri Paints & Sanitary2. Gopal Stores3. Ganga Sanitary4. Sulakshna Marketing

6. BalSen Chowraha 1. Kesarwani Paints & H/W / Kesarwani Cement Agency

2. Goswami Paints

SNo. AREA DEALERS

7. Katra 1. Kesarwani Bros.2. Dakhni Lal Santosh Kumar3. Puneet Paint Agencies4. Shivam Paints

8. Rajapur 1. Ravi Enterprises2. Raj Paints3. Rama Traders

9. Mumfordganj 1. Ganesh Prasad Santosh Kumar

10. Salori 1. Manish Building Materials

11. Allahpur 1. Maharani Building Materials2. Saurabh H/W & Paint Stores3. New Janta Stores / Bandhu Paints & H/W

Wala4. Prayag Cement Agencies

12. Civil Lines 1. General Trading Co.2. Prem Co.


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13. Naini 1. Raja Ram Paints2. Ramesh Paints3. LuvKush Paints

Exhibit 3:

The following is a list of dealers of various competitors and those who were interested in joining the Asian Paints Dealer Network.

DEALER AREAGNP

DEALERBERGER DEALER POTENTIAL AP DEALER

Ganga paint house zero road

laxman paints Jensenganj

mohan paints civil lines

rahul traders Chakiya

prayag traders Rajrooppur

jaiswal hardware Tilharganj

sahai sales Tilharganj

GHANSHYAM DAS manori bazaar

jawaharlal & sons Satrahapur

shiv bole traders begam bazaar

vijay enterprises Jasra

chandan traders Mundera


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POOJA PAINTS Mundera jawaharlal rajesh kr. transport nagar

mishra paint house alopi bagh

neeraj paint house ram bhawan

raj cement agency new bairana

raj paint house bai ka bagh

krishna paints bai ka bagh

raj paints Bahadurganj

dinesh traders Naini

standard paints Naini sanjeev kr. Sanjay kr. Mumfordganj

mohan paints stanley rd

kc chaubey zero road

puroshottam paints Rajapur

paint palace Rajapur jaiswal cement store Rajapur

shivam traders Rajapur

chandra traders Rajapur

rang mahal Katra brij kishore raj kishore Naini

shrishti enterprises Naini

maharani paints Jayntipur

kamala traders Rajrooppur

bhawan hardware Rajrooppur

new oriental paints nurula rd

rainbow paints Kareli

national paints Kalindipuram Triveni cement agency Allahpur

kesarwani stores kidwai nagar

sahu paints shiv nagar

alld paint house nurula rd

promod jaiswal thornhill rd

kesarwani cement thornhill rd

TOTAL 14 9 36


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Exhibit 4:

Construction sites in Allahabad

SITE LOCATION PRODUCT PAINTING TIME

IIIT-A boys hostel JhalwaAsian Paint, Cem Paint august

raman pradhan site Jhalwa not decided n.a.ramanujan public school Asian Paints n.a.

railway class A Asian Paints august

railway colony classC Asian Paints augustawaas vikas colony uthaan AP, Berger in usepolice modern school bahmrauli not decided n.a.HIG LIG flats bahmraulivivekanand choraha site civil lines

construction in progress

savitri construction civil lines rajdoot

shakti constructions civil linesAsian Paints Apex september

flat enclave ashok nagarAsian Paints Apex in use

amit goyal house ashok nagar GNP augustoffices kanpur rd royale, apex augustAhuja LIC building not decided in progress


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bros.constructionrajeev agarwal house civil lines Apex in progressagri university hostel Naini Asian Paints in progressagri uni guest house Naini not decided n.a.engineering block Naini not decided n.a.international boys hostel Naini asian paints n.a.sanjay sharma house civil lines asian paints augustsita kuwar hotel pani ki tanki not decided n.a.

prabhu nath flats pani ki tanki not decidedongoing construction

atlantis complex civil lines not decidedongoing construction

mustaq ahmad complex pani ki tanki not decided

ongoing construction

st.jones academy civil lines nidco, snowcem in progressprasad constructions LIC building GNP augustapartments high court GNP august

vatsalya clinic

near prayag samiti asian paints mid july

bishop george school civil lines not decided n.a.

MES tilharganj not decidedongoing construction

complex ashok nagar not decidedongoing construction

state bank of india ashok nagar not decidedongoing construction

career coachingnear prayag samiti

local primer,snowcem in progress

career fourum civil linesAsian Paints Apex in progress

multi storey building dhobhi ghat not decidedongoing construction

trimurti construction algen road not decided n.a.dr. trivedi clinic stanley road Apex august

complexnera police headquart not decided n.a.

office complex dhobhi ghat not decidedongoing construction

city nursing homethornhill road not decided


housethornhill road not decided


guru govind hospital thornhill not decided ongoing


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road constructiongautam sanget darpan muthiganj asian paints in progresshouse muthiganj not decided august

Apex institute george townroyale asian paints august

rajesh yadav george town chunna in progress

shopping complex george town not decidedongoing construction

tulsiani complex george town chunna in progressgautam villa george town Apex august

housepannalal road not decided n.a.

ideal flats bhagwatiram mandir road not decided n.a.

skun constructionsram mandir road not decided


LIC flats civil linesasian paints/GNP august

nathaini hospital civil lines not decided n.a.

TOTAL 55 SITESPotential AP sites 17 SITESConverted sites 3 SITES


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Exhibit 5:

Questionnaire for survey:

Name : ________________________________________________________________

Occupation : Service Business other_____________

Annual Income:

Below 50000 50,000 – 100,000 100,000 – 200,000

200,000 – 400,000 400,000 – 600,000 Above 600,000

Address : ________________________________________________________________

________________________________________________________________


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________________________________________________________________

1. Do you live in a rented or a self owned house?

Self owned house Rented House

2. How many rooms are there in your house?

4-6 rooms 7-9 rooms 10 or more rooms

3. How often do you get your house painted?

Once a year Once in 2 years Once in 5 years

During festivals/occasions

4. How do you get your house painted?

Whole house In Parts / Few rooms

5. Do you get the interiors and exteriors painted at the same time?

Interiors / Exteriors only Both Interiors & Exteriors painted

6. What do you get to get your house painted?

Interiors: Chunna Locally Manufactured Paints Company Paints

Exteriors: Chunna Locally Manufactured Paints Company Paints

7. Which Company Paints do you prefer?

Nerolac Berger Asian Paints

ICI J & N Shalimar Paints


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Other pl specify:____________________

8. Why do you prefer this paint?________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

9. How much paint do you buy?

Small Quantity Medium Quantity Large quantity

10. When was the last time you got your house painted?___________________________

11. Which paint did you use for getting your house painted?_______________________

12. What appeals to you most when selecting a paint for your house?

Price Color / Shades

Sizes / Packs Available Advertisements

13. According to you which is the most popular brand of paints?


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Shalimar Paints Nerolac Berger

Asian Paints Nidco Shakti Trading Co.

ICI Rajdoot

14. Which Advertisement of paints do you remember / like the most ?________________________________________________________________________________________________________________________________________________________________________________________________________________________

15. Are you influenced by TV Commercials / Print Ads while selecting a paint?

Yes, a lot A little / Sometimes No, not at all

16. From where do you purchase paints?

Direct from dealer Big Retail Shop Any retail shop near your locality Direct from company

17. What qualities according to you, paint should possess most? Rank from 1-4(1=most needed). Color Availability Economical price

Durability / Long life Easy Availability

18. Which company , according to you, has a good image in the paint market? Rank 1-10 (1 = Best image)

Nerolac Shalimar Paints Asian Paints


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ICI Rajdoot Berger J & N Shakti Trading Company Nidco Any Other, pl specify:________________________________
