asian+paints marketing plan

8/2/2019 ASIAN+PAINTS Marketing Plan

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COMPANYS 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.30.2

billion (USD 680 million). It was formed as a partnership firm by fourfriends in 1942. The company has an enviable reputation in the corporate

world for professionalism, fast track growth, and building shareholder

equity.

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 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. Asian Paints

has 30 paint manufacturing facilities in 22 countries with a combined total

manufacturing capacity of around 370 million liters 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.

A talent pool of over 4700 employees employed across twenty-three

countries brings in a unique blend of mindsets and skills. The Group'sprincipal activities are to manufacture and market paints.

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PRODUCT MIX

Asian Paints produces a wide range of paints for decorative and industrial

use. It also manufactures intermediate products like Phthalic Anhydride and

Pentaerythritol. The chemicals business which contributes 5% to overall

sales of the group is managed for value. APIL's product range includes Wall

paints, Metal paints, Wood Finishes, Primers and others.

Apart from offering the customers a wide range of decorative and industrial

paints, it even custom-creates products to meet specific needs.

Following are few of the famous products of Asian Paints.

Apex Weatherproof Exterior Emulsion is a water-based 100%

acrylic, exterior wall finish. A high performance, long-lasting

exterior paint specially formulated to withstand extreme tropical

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conditions of high rainfall, humidity and heat, Apex provides

excellent resistance against the growth of algae and fungi on the

walls. It offers excellent protection against alkali and UV

degradation too.

Premium Emulsion provides a rich and matt finish to interior walls

due to its super-acrylic quality. Its composition imparts excellent

durability to the paint film, giving your walls that just painted. It

washable and most stains can be removed easily by sponging with a

mild soap solution. The paint film is also fungus and mildew

resistant.

Apcolite Premium Satin Enamelis a solvent-based finish. Low glossenamel with the gentle, soothing sheen of Satin fabric, it is just as

tough and durable as premium high gloss enamels and gives a long

lasting washable finish. It can be used on interior and exterior

surfaces.

Utsav

Royal

Tractor emulsion

MARKETS

The countries that Asian Paints has presence are as follows:

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South Asia

Bangladesh, Nepal, India and Sri Lanka.

South East Asia

China, Malaysia, Myanmar, Singapore and Thailand.

Africa

Egypt

Caribbean Islands

Barbados, Jamaica, Trinidad and Tobago.

Middle East

Bahrain, Dubai and Oman.

South Pacific

Australia, Fiji, Solomon Islands, Tonga, Vanuatu and Samoa Islands.

SALES REVENUE IN THE YEAR 2005

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RAW MATERIAL AND SOURCES OF AVAIBILITY

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.

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H1-FY 2005

Middle

East

34.9%

South

Asia

11.1%

South

Pacific

13.4%

S.E. Asia

15.6%

Caribbea

n

25.0%


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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.

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.

Solvents are volatile organic compounds (VOC) used to dissolve, suspend or

change the physical properties of other materials. They are generally used tobring 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.

Around 600 raw materials are required by the industry and all raw materials

are not directly related to crude oil. The basket of raw materials is quite

exhaustive. Raw materials, which constitutes around 60 per cent of total cost

for the paints industry is an important factor for maintaining operating

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margins. The industry imports around 25 per cent of raw materials. But the

most important raw material is titanium dioxide, which accounts for around

25-30 per cent of raw material costs.

LOGISTICS

As demand in India is dispersed and spread over a wide geographical area,

Asian Paints strategy to focus on building an extensive distribution (nearly

15,000 retail outlets) and logistics management network has paid it rich

dividends. As a result of its wider reach and better logistics management, it

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has been able to market brands aggressively, thereby outperforming the

industry year after year

In this rapidly changing Business Environment, what gives companies like

Asian Paints the Competitive Advantage...The answer is LOGISTICS. We

can actually compare logistics to the most precious element on this planet

WATER. Its the ability of water to reach and occupy all available space and

quench thirst, similarly its the ability of logistics to reach wherever the

consumer demand exists.

Logistics is a process of planning, implementing and controlling efficient

and cost-effective flow of materials and information from point of origin to

point of consumption. Hence, Logistics is nothing but the process of

strategically managing the movement and storage of materials, parts, and

finished inventory from suppliers, between enterprise facilities andcustomers.

Typically 10-15% of a companies turnover is spent on logistics, depending

on the nature of product and the distribution pattern adopted.

Having exhausted all options in the areas of product differentiation, pricing,

promotional strategies and advertising warfare, corporations are increasingly

turning to logistics. Hence efficient management of logistics is critical for

the profitability of any company. To gain a competitive advantage over its

competitors, a company needs to be flexible and adaptable to the marketdemand. In this changing scenario the following are the needs of the hour:

The company needs to reach the customer at the right time ensuring the

availability of the product on shop shelves

This calls for reduction in lead time, operating costs and inventory levels

And Improved asset productivity to leverage core competency

Modern business concepts advocate "let experts do the job". A paradigmshift could be towards partnering with the professional in the field, which

will positively impact the bottom-line. This can definitely be achieved

through Outsourcing.

Outsourcing logistics is the new weapon in the corporate arsenal. It is an

easy access to World-Class Logistics capabilities and better control over the

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distribution system through an external agency offering specified services,

which could be constantly improved upon.

SOME LOGISTIC FUNCTION OF ASIAN PAINTS

(a)Order processing:

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.

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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.

(b)Transportation Management

The company has outsource its transport management to Dynamic Logistic

Pvt. Ltd.

(c)Inventory Management

The company prefers to maintain low inventory levels due to having large

no. of suppliers at bay. The company has 350 raw material and intermediate

and goods suppliers.

(d)Warehousing

The company has 72 warehouses scattered all over the India.

(f)Packaging

The company has 140 packing material vendors.

(g)Acquisition

The acquisition gives Asian Paints a foothold in an emerging market andalso opens the possibility of exporting to neighbouring countries. Asian

Paints has already made its presence felt in the emerging markets after its

acquisitions in Singapore (Berger International) and Egypt (SCIB Chemicals

SAE).These acquisitions immediately give access to both emerging marketsand those in which Berger International has a strong presence. In the

industrial coating segment, the company acquired Hawcoplast Chemicals in

November 2001 for Rs 22 crore, which provided it with a presence in the

growing powder coating segment.

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MARKETING AND SALES

Product: Asian Paints Colour World is the brand name for the one-stopcolour shop of Asian Paints, which are unique paint shops where shades are

generated with the help of a computer with software to choose and select

1,511 shade combinations, designed to reach consumers in a direct `dil se'

style.

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Advertising Objective: Position Asian Paints Colour World as the one stop

paint shop with all the colours one could want. The advertising should

create enough interest in potential consumers to ensure that they come to the

Asian Paints Colour World outlet or at least call the Asian Paints helpline.

Target Customers Demographics

Region: India, urban population

Occupation: Service/working professional/self-employed

Gender: Male

Religion: Insignificant

Social class: Upper Middle and upwards

SEC: B and upwards

Family life cycle: Middle aged

CUSTOMERS

According to the company customer is most important thing. The customer

is not dependent on company but the company is dependent on the company.

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The company does not favor the customer by serving him but the customer

is doing them a favor by giving them an opportunity to do so.

SEGMENTS

Segment Information

Asian Paints (India) Limited has identified two segments in line with the

Accounting Standards on Segment Reporting (AS-17). These are Paints and

Others. Others include the Chemicals business of the company viz. the

manufacturing of Phthalic Anhydride & Pentaerythritol.

Paint sales for the company recorded growth of 11.4 % at Rs. 14590.3

million compared to Rs. 13096.7 million in the previous financial year.Segment results of the paints business increased by 17.9% to Rs. 2579.9

million from Rs. 2188.4 million in 01-02. Sales from the Chemicals business

registered growth of 32.2% at Rs. 1147.56 million compared to Rs. 868.19

million in 01-02. It is for the first time that the Chemical business has

recorded sales of over Rs. 1000 million. Segment results of the chemical

business increased by 190.8% to Rs. 182.9 million from Rs. 62.9 million in

01-02.

The companys decorative business is the largest contributor to the revenueof the company. In the decorative business, Asian Paints is the leader in all

segments. All product categories of the Decorative business registered good

growth with exterior finishes sales increasing by over 30%. The total

number of Colour World installed by the company across the country is

3200 as on Mar 31, 2003.

The company products are broadly divided into two segments

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

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(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.

MARKET STANDING

Asian paints is the market leader in Indias paint industry with a

commanding market share of about 39% in the organized segment. It is

among the top 10 players in decorative segment in the world. The

unorganized sector is a strong force and controls almost 35 per cent of the

industry involving estimated 2,500-3,000 players. A decade earlier, the

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unorganised segment used to have a much higher share of the market but this

is slowly changing. Today's consumer is evolving and has become quality

and brand conscious. In addition, the reduction of excise duties from a high

of 40 per cent to 16 per cent in the last decade has reduced the advantage of

the unorganized segment. Increase in raw material costs will equally affect

both the organized and the unorganized sector. Asian Paints has been the

market leader in the Indian paint industry for over three decades. Today the

company has a very high market share. The nearest competitor is half of

there size. Yet, despite the dominant position in the market, Asian Paints has

been able to consistently record an increase in market share. The company's

market share hasincreased over 3 per cent in the past seven years.

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46.9%

17.3%

20.3%

0.4%11.1%

3.9%

Asian Paints Nerolac Berger

ICI J & N Shalimar


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Comments

1. The ware housing facilities are well maintained.

2. The company specially looks after the environmental aspects and

tries to avoid pollution and pollutants by adapting eco friendly

production methods.

3. The company keeps low inventories in off seasons, and high

inventory in festival seasons.

4. The company has huge base of raw material suppliers, giving

company bargaining power resulting in higher profit margins then

competitors.

5. The company has succeeded in establishing themselves in rural

parts of India by large distribution network, retail outlets etc.

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Suggestions

1. As seen above the companys raw material price is directly

related to crude oil prices, keeping this in mind the company should

try to keep optimum level of raw material to avoid breakdownns in

production function.

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BIBLOGRAPHY

Our primary source of data is Asian paints

Our secondary source of data is www.google.com,

www.asianpaints.com

Thank you.

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http://www.google.com/http://www.asianpaints.com/http://www.google.com/http://www.asianpaints.com/

asian+paints marketing plan

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