Introduction

The BERGER name has been associated with paint manufacturing for almost two

centuries. The BERGER group has worldwide affiliations, with companies operating in 46

counties. In Pakistan, the history of BERGER is as old as the history of organized paint

manufacturing. The first company to introduce premium quality paints in the country. The

BERGER started its operations in 1950. Initially the paints were imported from the United

Kingdom. It was in 1955 that a local manufacturing facility was established at Karachi.

Ever since, the Company has met the growing demand through regular extensions in its

products range, which has continued to attract a healthy market share and has maintained

a high reputation for consistent quality.

BERGER PAINTS PAKISTAN became a public limited company in 1974, when 49.38% of

the shares were acquired by Pakistani investors with the remaining 50.2% being held by

the U.K. parent company, Jenson & Nicholson Limited. Soon afterwards, Jenson &

Nicholson Limited was taken over by Hoechst, one of the world's major manufacturers of

chemicals and allied products.

Slotrapid Limited, a. U.K. based company with diversified business interests, acquired the

management of BERGER PAINTS PAKISTAN in 1991.

An associated undertaking, J&N Pakistan Limited, was established at Mirpur in Azad

Kashmir early in 1993 to supplement the existing production capacity of the main factory

at Karachi.

Also in 1993, BERGER entered into a technical collaboration agreement with Nippon Paint

Company of Japan. Nippon is acknowledged as one of the most sophisticated paint

manufacturers in the world, and ranks among the leaders of the paint industry. This

collaboration has enabled BERGER to develop automotive and industrial paints

conforming to exacting international standards.

BERGER Paints has also built up technical collaboration for decorative paints with

BERGER Crown of Akzo Nobel UK.

Misson Statement

The company's employees are constantly encouraged to pursue the fulfillment of the

Corporate Mission Statement.

We will stay in the forefront of innovation and technological development in the paint

industry.

We will achieve corporate success through an unwavering commitment to provide our

customers high quality products to their ultimate satisfaction.

We will vigorously promote and safeguard the interests of our employees, our

shareholders, our suppliers and all our others business associates.

Divisional Structure

1. Decorative Devision

The Decorative Division brings BERGER in close contact with a large number of

people for whom top of the line brands like Robbialac VIP Emulsion, Robbialac VIP

Super Gloss Enamel and Robbialac VIP Allrounder have become household names.

BERGER's concern extends beyond the commercial or even the aesthetic aspects.

The Company remains aware of the Environmental and health impact of its products.

BERGER became the first company in Pakistan to modify its formulations to ensure

that all its decorative paints are LEAD-FREE.

BERGER decorative also includes exclusive products such as Aquasafe for water

tanks, Roof shield and Tartaruga.

2. General Industry

The General Industrial Division markets a wide range of products, many of which are

custom-made to meet the exact specifications of individual industrial buyers. These

products are designed and offered in light of specifications and demands of each

customer based on their products and market. Besides offering painting solution,

BERGER also provides technical back-up & support when & where needed. By virtue of

this customized service & close technical relationship, many leading customer goods are

now consider as leading brands including transformers, sewing machines fans, washing

machines, gas appliances, light fixtures, fans, bulbs, canes, tubes, auto parts and crown

caps.

3. Protection

The Protecton Division makes heavy duty protective coatings and anti corrosion paints

for specialized structures such as barrages, dams, bridges, pipelines, boilers, and a

wide range of metal fabrications which are exposed to the hostile environmental

elements.

Protective Coating serves the dual purpose of protecting surfaces from chemical

reactions as well as improving the visual appeal. These protective paints conform to

international standards of quality and are designed to resist the severity of extreme

environmental as well as corrosive effects of atmosphere, oil and other decaying

agents.

BERGER also formulates sophisticated and high technology protective systems for

ships and offshore installations where corrosion is endemic.

4. Vehical Refinish

Vehicle Refinishes Division caters to touch-up or complete repainting of automobiles. For

such types of coatings, conformance with original color is essential and BERGER's

technical experts ensure this in our laboratories.

BERGER offers three different systems for refinishes designed to enable application

without heat treatment. These finishes are high glossed, durable, quick drying and exactly

matched with OEM colors. Along with finishes, ancillaries are also included in refinishes

range such as primer, putty, all kinds of thinners and COB Lacquer. This makes

BERGER's products a complete repainting system for vehicles, which is highly demanded

across the nation.

DECORATIVE: (Household Paints)

Dominant presence in all parts of the country.

AUTOMOTIVE PAINTS:

Honda.

Toyota.

Chevrolet Joy.

Revo.

COMMERCIAL VEHICLES:

Zabardast, Truck.

Master Truck.

Star Truck.

Kalash Pick-up.

Hino Buses.

MOTORCYCLES:

Honda.

Yamaha.

Suzuki.

25 Chinese brands.

TRACTORS:

Fiat Tractors.

Universal Tractors.

GENERAL INDUSTRIAL PAINTS:

Singer.

Philips.

Siemens.

Pak Fan.

PSO.

PBS.

Caltex.

KSB Pumps.

PROTECTON: (Heavy Duty Coatings)

Keamari Tank Terminal.

National Refinery.

Pak Arab Refinery.

Karachi Fish Harbour.

White Oil pipeline project.

Telecommunication Towers of Ufone, Telenor, Mobilink, Paktel and Al Warid.

All Fertilizer plants.

POWDER PAINTS:

Appliances of PEL, Waves, Philips.

VEHICLE REFINISH PAINTS PACKAGE:

Repainting products for all vehicles.

TIMBERCOAT RANGE OF PAINTS:

Complete range for wooden surfaces and furniture industry.

ADHESIVES (BERLITH):

Furniture and Sports goods industry.

BERGER ROAD SAFETY. Paints for road and runway markings:

Islamabad – all CDA roads.

Motorway.

Kohat Tunnel.

DHA, Karachi.

Karachi – Hyderabad Highway.

Mai Kolachi Road.

Shahbaz Airfield.

Bahria Town.

Lahore -Sheikhupura Expressway.

DEFENCE MARINE PAINTS:

Specialized paints for Army, Navy, Air Force, Shipyard and Fish Harbour.

Berger paints uses following advertising strategies

Informative • to inform customers aboutnew products

Reminder

• to remind customers ofexisting products

Persuasive • to convince

customers to buy existing products

1- Increasing market shareBERGER paint should try to capture the urban as well as remote area

market. To get more market share it needs qualitative products with

innovation styles and aggressive market activities to create awareness

among public regarding their products (focusing on Total Quality

Management).BERGER Paint has to provide more values to its consumers

and more facilities to their customers at their doorstep by increasing their

dealers. One way of increasing dealers is to give out more licenses or by

opening up more Company Operated Outlets. Another way of effectively

increasing market share is to identify NICHE Markets (markets not yet

catered for) and then selling goods in those markets. One way of going at it

can be by launching new brands also can be an effective tool here. Increased

market share means more sales and revenue.

2- Promotion

“Promotion means an activity that communicates the merits of the product

and persuades target customers to buy it”. Good Promotion always plays an

important role in the success of any product. A good product can fail if not

properly promoted. Differentiation strategy can be used, in that strategy the

company makes its products or services differ to the other companies. This

creates Brand Loyalty so that customers keep buying BERGER’s products.

One way of promoting the product is in the moral way is Corporate Social

Responsibility (CSR).This can improve the company’s image and increase

its sale at the same time. Promotion makes the demand for the product

Price Inelastic which will allow BERGER to increase its price without losing

many customers. The Increase in revenue is more than enough to outset any

decrease resulting from few loss in customer numbers. This leads to more

profits then before

Marketing Systems“A distribution channel structure in which products, wholesaler, and retailers act

as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate”.

BERGER paint is also using vertical marketing system in the placement if its products. Here comes the old concept of dealership. That means, giving right to a third party to sell the product on their behalf. BERGER Paints, like other competitors, supplies the paint products through the appointed dealers in various regions and areas. The current number of BERGER Paints appointed dealers all over Pakistan is more than 2200. Dealers’ margin is around 5-10% depending upon their performance in terms of volume sale. The Company also extends credit facility to the dealers. The limit of the credit available to a dealer is also dependent upon his past sale performance.BERGER Paints, like 2 to 3 other major paint manufacturers spends considerable funds on the advertisement of their products. Both the electronic and print media is employed for the sale promotion. In addition the paint manufacturers offer various types of incentives/gift schemes to the high performer dealers and even to the paint contractors. For example, BERGER Paints and Berger every year, take their high performer dealers abroad on Company expenses for tourism visits to various nearby countries. Nearly all paint manufacturing companies offer various types of material gifts to the high performing dealers and even to the painting contractors.Unlike BERGER Paints, all other manufacturers also run a cash token incentive scheme. Tokens of various monitory values are put in the paint boxes. Since the paint boxes are normally opened either by the painters or the paint contractors and the customers are generally not aware of such schemes, therefore the benefBergeraries are invariably the painters or the paint contractors.This aspect therefore becomes a strong motivating force for them to recommend such specific brands of paint.

Promotion

“Promotion means an activity that communicates the merits of the product

and persuades target customers to buy it”.

Good Promotion always plays an important role in the success of any product. A

good product can be fail if not properly promoted. Nippon is taking big steps to

promote it’s product by maintaining good relationship with the community of

ADVERTISING

PROMOTION

SALES PROMOTION

EVENTS & EXPERIENC

ES

PUBLIC RELATIONS

DIRECT MARKETING

PERSONAL SELLING

PROMOTION

Pakistan. The basic aim at the behind of these steps is to promote their own

product through a moral way.

Elements Of Promotion

Before getting a product into the market, BERGER’s culture is to invite its business partners (dealers/distributors) to give them orientation regarding new product what BERGER is going to launch, with what features and how it will work.After this first step when product is introduced to the business partner’s second step is its promotion how the promotion is done. T.V Advertisement on different channels Radio Advertisement , F.M 100 Bill boards almost in every big city Posters / Banners Small gifts for dealers/distributors to push new product sale Small gifts for painters / contractors who are labor force who apply

paint

Painters party to introduce them new product T – Shirts printed with product logo on them Caps Key chains

The sales team is assigned a target the placement of the new product on every counter. With the help of direct marketing, BERGER employees gives orientation to the customers and Painters that what the new product is and what features it has.

Strategies under BCG matrix:

The various strategies available to improve the market position of a brand are as

below:

Differentiation Strategy:

Differentiation strategy is that the company differentiates its products or

services to those of other companies.

Cost Leadership Strategy:

Under this strategy the product or service is provided at the lowest possible

cost so that it higher margins may be earned by the company.

Focus Strategy:

This strategy gives importance to focus on the customer/ target market;

identifying and serving them better.

CREDIT TERMS

PAYMENT PERIOD

ALLOWANCES

DISCOUNTS

LIST PRICE

PRICE

Price

“Amount of money needed to purchase something”.

Elements Of Price

As far as the pricing is concerned it is the most difficult decision because keeping all the things on one side price matters. Berger Paints is promoting different brands on different prices according to the market segmentation. Weather shield is the most expensive brand in the market. The reason is that the best raw material and components are used in the manufacturing of the Weather shield. Second reason is that Weather shield target market is upper tier. And to some extend upper tier of middle tier. But paying more for Weather shield , customer feels value .

If we compare the price of Weather shield with other local brands , it’s the fact that price difference is not more than 20-100 rupees. As far as quality is concerned , by paying more customer is not worried about the quality .For the market which is middle tier, Berger’s brands Paintex Emulsion and Glidden are the brands with low price and optimum quality within the tier. If we go into the comparison of Paintex and Glidden their price is lower than the other paint brands selling in the market. Glidden is purely priced to cover the buying power of middle tier.The price of the products in which Berger is having technological edge over competitors is comparatively high. The reason is that Berger is enjoying state of monopoly for that product. There is no product in the market to encounter them.The price of Weather shield Weathersheild Fresh is Rs. 1050/-, others companies brands offered in the market are 300-400 Rs less than Weathersheild Fresh.Same is the case with Weather shield Gloss Finish and Weather shield Matt Enamel Odourless Range. The price is Rs. 300-400 more as compared to other brands. So pricing factor vary from brands to brands and target market.

Placement / Distribution

“Place includes company activities that make the product available to target

consumers.”

Placement is the process in which the final good or service is made available to

the end customer. The channels used for this purpose are known as “Marketing

Channels”.

Marketing channels are defined as “set of independent organization involved in

the process of making a product or service available for the use or consumption

by the consumer or business user”.

TRANSPORT

INVENTORY

LOCATION

ASSORTMENTS

COVERAGE

CHANNELS

PLACEMENT

Elements Of Placement

The overall Berger Paints products are manufactured in Berger Paints Lahore.

For all Pakistan stocks dispatch is carried out from factory warehouse.

There are further 5 warehouses in the country.

Lahore

Islamabad

Multan

Karachi

Quetta

The distribution channel includes Distributors and Dealers/ retailers. The

Pakistan is divided into 4 Regions.

Upper

Lower Punjab

Center Punjab

Lower

Every region is headed with Regional Sales Manager and in every Region there

are further Area/ Territories. The supply activities are carried out with keeping the

region and areas. One region cannot carry out supply in others region same in

the case with areas/ territories.

The product is only delivered to the company approved dealer or distributor.

Distributor can sale to the customer which is not approved dealers of the

company. Main consumption of paint is on dealer/retailers counter. The delivery

is made through 2 modes

Distribution Vehicles

Freight On Road ( goods transportation service)

By these 2 means ICI manage the distribution and placement of their products to

be available for their customers and consumers.

Marketing Systems

“A distribution channel structure in which products, wholesaler, and

retailers act as a unified system. One channel member owns the others, has

contracts with them, or has so much power that they all cooperate”.

ICI paint is also using vertical marketing system in the placement if its products.

Here come the old concept of dealership. That means, giving right to a third party

to sell the product on their behalf.

ICI Paints, like other competitors, supplies the paint products through the

appointed dealers in various regions and areas. The current number of ICI Paints

appointed dealers all over Pakistan is more than 2200. Dealers’ margin is around

5-10% depending upon their performance in terms of volume sale. The Company

also extends credit facility to the dealers. The limit of the credit available to a

dealer is also dependent upon his past sale performance.

ICI Paints, like 2 to 3 other major paint manufacturers spends considerable funds

on the advertisement of their products. Both the electronic and print media is

employed for the sale promotion. In addition the paint manufacturers offer

various types of incentives/gift schemes to the high performer dealers and even

to the paint contractors. For example, Berger Paints and Berger every year, take

their high performer dealers abroad on Company expenses for tourism visits to

various nearby countries. Nearly all paint manufacturing companies offer various

types of material gifts to the high performing dealers and even to the painting

contractors.

Unlike Berger Paints, all other manufacturers also run a cash token incentive

scheme. Tokens of various monitory values are put in the paint boxes. Since the

paint boxes are normally opened either by the painters or the paint contractors

and the customers are generally not aware of such schemes, therefore the

beneficiaries are invariably the painters or the paint contractors.

This aspect therefore becomes a strong motivating force for them to recommend

such specific brands of paint.

Term Report

By: Mohammad Kaleem

Date: 12/9/10

GR:262010

To: Sir Gayaz Ahmed