SMM Marketing Mix

Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001

Comments on: [email protected]

MARKETING MIX

A COMPARATIVE STUDY

ASIAN PAINTS INDIA LTD (ROYAL)

&

TOTAL (ELF)

PREPARED BY:

ABHIK TUSHAR DAS

EXE-MBA-10

ROLL NO: 20104001



TABLE OF CONTENTS:

PAGE NO’S

S NO. TOPIC APIL

(ROYAL)

TOTAL

(ELF)

1 NAME OF ORGANIZATION 3 12

2 AREA OF BUSINESS 3 12

3 VISION, SYNOPSIS, INDUSTRY PROFILING,

HISTORY

3-4 12

4 MARKETING STRATEGIES, PRODUCT NEED,

COMPOSITION

4,5 13

5 PRODUCT MIX 5 14

6 SITUATION ANALYSIS

1. INTERNAL

2. CUSTOMER

3. EXTERNAL

6-7 14

7 SWOT ANALYSIS 7-8 15

8 MARKETING GOALS & OBJECTIVES 8 16

9 MARKETING STRATEGY (S-T-P) 8-9 17

10 PRODUCT STRATEGY 9 17

11 PRICING STRATEGY 10 18

12 DISTRIBUTION & SUPPLY-CHAIN STRATEGY 10 18

13 CONCLUSIONS 11 19

14 COMPARISON MATRIX 20

INFERENCES 21

References:

1. www.asianpaints.com

2. www.total.co.in

3. www.en.wikipedia.org

4. www.google.co.in

5. Strategic Marketing – Ferrell and Hartline

http://www.asianpaints.com/

http://www.total.co.in/

http://www.en.wikipedia.org/

http://www.google.co.in/



PROJECT: MARKETING STRATEGY

Name of the organization: Asian Paints India Ltd (APIL)

Area of business: Paints (Decorative and refinish)

Vision: To become one of the top-5 paint companies in the world by leveraging its

expertise in the higher growth emerging markets. Simultaneously the company

intends to build long term value in the industrial coating business through

alliances with established global partners.

Synopsis: Asian Paints is the largest paint company in India in terms of market share

(30%) and turnover (INR 66.80 billion). It has operations in 17 countries in the

world with 23 manufacturing facilities to complement its volume of sales. Through

strategic mergers and acquisitions, it has subsidiaries like Berger International,

SCIB Paints – Egypt, Asian Paints, Apco Coatings and Taubmans.

The Paint industry: The market size of the Indian paint industry is approximately INR 210

billion (0.32% of India GDP of 1.31 trillion USD); growing at approximately 15%

annually. The per-capita consumption (0.6%) of paints in India is a mere 0.5 kg as

compared to 1.6kg in China, 4.0kg in South-East Asia and 22kg in developed

economies around the world. The growth in the Indian real-estate (housing) sector

has been a significant 35% annually and the Indian automobile sector grew by 15-

20% annually being the major end-users of the Paint Industry (decorative and

refinish). Decorative paints constitute a staggering 75% of the paint market;

hence the growth potential is enormous.

History of the company:

Promoters: Shri. C H Choksi, Shri. C N Choksi, Shri. S C Dani, Shri. A R

Vakil

Started as “The Asian Oil and Paint Company” in 1942.

The Asian Paint mascot – GATTU created in 1954.



Transformed from a family based business to a professionally managed

group in 1957.

Emerges as India’s leading Paint Company in 1967.

Marketing strategies adopted:

“Go where the customer is”.

“Asian Paints colour world”.

“Asian Paints Toll-free Helpline”. – A customer care helpline to connect

customers and painters.

“Asian Paints Home Solutions” – A painting service in select cities.

“Asian Paints Colour-Next”. – A rich collection of shades.

“Kids World” – A customised painting design for kid’s room walls.

“Do-it-yourself”. – An online paint selector to help you visualize your walls.

“Surprise-your-spouse”. – A makeover of your walls by expert painters in one

day.

Why do we need to paint?

Houses consist of walls which are made up of Steel reinforcements, bricks

and cement.

The very nature of our walls is porous in nature, thus allowing air and water

to seep inside and come in contact with the reinforced steel structure.

Cement is alkaline in nature and it reacts with carbon-di-oxide in the air in the

presence of moisture to form calcium carbonate which is more porous. This

magnifies the intensity of the seepage and the ferrous content in the Mild

Steel is slowly oxidized, a phenomenon commonly called as rusting. The

rusted structure expands inside the cement layer resulting in flaking of the

outside layer of the paint film.

Paint film also prevents biocide and fungicide attacks.

Paint also improves the aesthetics of a wall.



Composition of Paints:

Pigment

Binders

Additives

Stabilizers

Solvent

Product mix in Decorative segment:

Ancillaries:

Wall primer (Deco-prime)

Wall putty

Wood primer

Wood finish:

Clear finish (PU / Melamyne)

Opaque finish (PU / Melamyne – Palette)

Enamels (Premium / Apcolite / Utsav)

Metal surface:

Premium semi-gloss enamel

Apcolite

Utsav

Exterior paints:

Apex

Apex stretch (water-resistant)

Dura-cast (textured)

Interior paints:

Distempers (Tractor / Utsav)

Emulsions (Royale / Premium / Tractor)



Situation Analysis:

a) Analysis of the internal environment:

Market leader (30% market-share)

Strong distribution network

Manufacturing facilities across the country

High visibility in the television and print media.

Product ranges from low cost distempers to premium emulsions.

Brand ambassador (Saif Ali Khan) to promote the premium brands as an

extension to his personality. This is to convey the customer that painting

of your house is not a necessity driven job rather it is an extension to your

style quotient. The advertisement campaigns have also shifted focus from

being purely benefit-driven to self-expression driven models.

b) Analysis of the customer environment:

Target market classified into;

1. New construction buildings where dealer discounts used for

promotion as a B2B marketing strategy.

2. Repainting of existing homes involves easy availability and high

visibility.

3. Target marketing for children involves the concept of “Kids World”.

4. House wives are in-charge of managing affairs at home have been

targeted in the recently launched “Surprise-your-spouse” tagline.

Research and development has yielded in different variants in paints, the

latest being textured versions where aesthetics has an edge over

protection.

Socially in India, houses are only painted around the auspicious festival of

Diwali; hence the peak sales are achieved only in the months of August -

September-October-November. The months for lean sales constitute of

April-May-June-July.

With disposable incomes on the rise and a house becoming a mark of

one’s affluence, people are willing to spend. It isn’t about home

rejuvenation anymore, paint has moved into the sacred domain of

emotional rejuvenation.



c) Analysis of the external environment:

The organized paint market in India consists of players like Goodlass

Nerolac, Berger Paints, ICI Dulux, Shalimar Paints and Jenson and

Nicholson.

Asian Paints, Goodlass Nerolac, Berger Paints and ICI Dulux focus on the

upper income level market segment.

Shalimar Paints, Jenson & Nicholson and Snowcem India target the

middle income level market segment.

The un-organized sector with a 35% market share taps the bottom income

level of the customer pyramid.

SWOT Analysis:

Strengths:

a) Market leader

b) Strong distribution channel

c) High visibility

d) Wide range of SKU’s

Weaknesses:

a) No foreign partner to bank upon on technology transfers / R&D

initiatives.

Opportunities:

a) As the paint market is fragmented in the un-organized sector with

a market-share of 35%, there exists huge potential for strong

players like Asian Paints to capture the bottom end of the

customer pyramid by mergers and acquisitions where volume of

sales are high but profit margins are low.

b) The nearest competitor for Asian Paints in terms of market share

captures only 20% of the market. This provides AIPL with an

opportunity to be aggressive in marketing without bothering about

the competition.



Threats:

a) World’s leading paint manufacturing company Akzo-Nobel recent

takeover of ICI Paints which has an established brand known as

Dulux, is a cause of concern for AIPL.

b) Kansai (Japanese Paint Company) has entered into a JV with

Nerolac Paints to form Kansai Nerolac Paints (KNPL). The entry of

foreign players is seen as a threat to the AIPL market share.

Marketing goals and objectives:

To grow the emulsion based volumes which have high profitability

per litre of paint sold, Royal brand of emulsion.

To achieve competitiveness in price differentials with competitors

through smaller SKU based approach and aggressive supply chain

tightening.

To reach the upper segment in Indian village and Tier-2/3 cities tap

the emotional quotient of the customer especially his/her desire to project

one’s house as a style statement. It is noteworthy that the in Tier -2/3 cities

people live in their own houses than flats which are predominant in the

cities, and hence the ownership quotient in the rural market is significantly

higher.

To promote the product as a means to change the emotional appeal

of the house and develop the concept similar to the one like “Neighbors-

Envy-Owners-Pride”.

Marketing Strategy for Royal emulsions:

Segmentation:

The market for the premium royal is the urban population living in

metro/ Tier-1 cities. The product is to be expanded to the niche

markets like Tier-2/3 cities and villages.

Targeting:

Women are comparably more aesthetic oriented than males; hence

to target a product at women can help form opinion leaders within

the family.



In the rural market, the Sarpanch or a large farmer has a grand

house. By targeting those through promotions display model homes

can be created in villages which would influence the purchase of

other farmers who build new pucca-houses as their disposable

incomes rise.

In tier-2/3 cities, a tie up with reputed builders to offer display flats/

buildings which have been painted by Royal paint can significantly

influence those planning to buy new homes and even those who

own a flat for investments and would use the brand to paint their

existing homes.

Position:

The premium product has to be positioned in the mind of the

customer as a tool to enhance their style quotient rather than as one

to protect your wall.

The product also has to have an ownership appeal, a pride for the

buyer to be associated in being a member of the Royal family.

The product need not be durable to perform over years together as

taste of the buyer changes quite often and the urge to repaint the

wall though the existing coat of paint is adequate for protection of

the walls.

Product Strategy:

Taking the concept of paint as an emotional rejuvenation tool

further, the concept of turning one of the walls into a display walls

with high quality textured paint turning it into a painting masterpiece

is on the rise.

Customers can be provided with high quality artistic painters who

would turn their wall into a painting on display. This will give a

psychological uplift for the middle and lower middle class homes,

who cannot afford to buy paintings through auctions to put on

display, rather help achieve the same aesthetics by application of

the relatively inexpensive paint.



Pricing strategy:

Although a premium product cannot be priced competitively with a

non-premium version, the product can be made available in smaller

SKU’s to use the Nano-concept to position the product competitively

in the rural market and in Tier-2/3 cities.

As most paint containers go waste after the application of paint, the

company can promote the concept of discounts on returnable

packages which are returned to the franchisee/ distributor in a clean

state, like the one used by Cola (beverage) companies in case if

glass bottles. This would reduce the input cost and also project the

brand as a eco-friendly product with recycle ability concept.

Distribution/ Supply chain strategy:

A distribution alliance can be made with the Indian Railways to

reach the nook and corner of the demography. Specialized

containers can be loaded in factories and loaded on rail wagons to

be transported to depots far and wide. In exchange the painting

contract for the railways can be negotiated, thus giving a medium to

display ads not only in passenger trains but also goods trains.

Titanium di-oxide, the major raw material for paint production is

mostly imported, hence it forms the significant part of the cost

structure. A strategic tie-up/ take-over of vendors will go a long way

in reducing import costs.

To reach the rural villages the distribution network to be equipped

with mobile paint dispensing vans which will reduce the distribution

cost.



Conclusions:

The paint market is fast growing with a major contribution from the

infrastructure/ real estate sector.

The per-capita paint consumption in India is low coupled with a high

share from the unorganized sector. Hence a huge potential exists

for growth in terms of volumes.

Consumption of paints in India follows time cycles according to

festive calendar.

Painting is been projected as an item of one’s style quotient rather

than the usual perception as a protector of walls.

Low logistics and distribution costs can help to achieve competitive

pricing and market penetration for premium products.



PROJECT: MARKETING STRATEGY

Name of the Company: Total

Business: Oil, gas, chemicals, lubricating oils.

Vision:

Meet growing energy needs on a long-term basis by deploying a sustainable growth model

combining the acceptability of activities with a sustained program of profitable investments.

Synopsis:

Total is a leading multinational energy company with operations in more than 130 countries.

Together with its subsidiaries and affiliates, Total is the fifth largest publicly-traded

integrated international oil and gas company in the world.

Total engages in all aspects of the petroleum industry

a) Upstream operations (oil and gas exploration, development and production, LNG).

b) Downstream operations (refining, marketing and the trading and shipp ing of crude oil

and petroleum products).

c) Chemicals (base and specialty chemicals).

The Oil n Gas industry:

Total; a French company has an upstream production capacity of 2.28 million barrels of oil

equivalent per day across more than 40 countries in the world. It has a downstream refining

capacity of 2.6 million barrels per day with a sale of 3.6 million barrels per day across 16300

service stations across the globe. It is also the world’s largest integrated chemical producers

in fertilizers, petrochemicals and specialities. Headquartered at Courbevoie, France with

Christophe de Margerie as its Chairman and CEO, has operations in India with



manufacturing facilities at Mahape, Navi Mumbai. The brand name for its lubricating

business is “Elf” competes with other foreign brands like Shell, Mobil, Caltex, Castrol,

Penzzoil and Indian brands like Servo, Mak, and HP Milcy in the India markets which is the

6th

largest in the world. Compared to the average World consumption of 35 Million tonnes

per annum & Asia-Pacific region consumption of 7.5million tonnes, the Indian lube industry

with annual demand of 1 million tonnes is just behind Japan and China in Asia having a

demand growth rate of 4% compared to the World growth rate ranging 0% to 2% after the

Government had reduced import duties on base-oils from 85% to 30%.

Other companies in the Indian lube business include Tide Water Oil Co (India) Ltd, Balmer

Lawrie & Co Ltd, Apar Industries Ltd, IPOL lubricants, Savita group, Valvoline Cummins Ltd

(VCL), FuchsLubricants (India) Pvt Ltd, Gulf Oil Corporation Ltd, and The Andrew Yule

Group

History of the company:

TOTAL started its operations from Iraq in the 1920’s as Petrofina and gradually diversified to

an oil and gas major. The brand TOTAL was conceptualised in 1954 and was rechristened to

its present form in 2003 after undergoing 5 cosmetic changes. The Petro-FINA brand was

launched in 1924 and ELF brand was started in 1965 to give a visual identity to the brand

TOTAL. Both TOTAL and Petro-FINA merged in 1999 to form TotalFina and subsequently

merged with ELF to form TotalfinaElf in 2000 the worlds 4th

ranked oil major. It is also into

LPG business in India with the brand name as “TOATAGAZ” under Total Oil India Ltd.

Marketing Strategies adopted:

Strategic tie-ups with Formula-1 car racing and developing solutions for engines to

perform at high temperatures through R&D.

Partnerships with auto majors like General Motors and Renault.

ELF-Moto for 2-wheelers associates itself with Kawasaki in MotoGP bike racing.

“Bike oil for winners” was the tagline launched in 2008.

'Raasta mudh sakta hai, hausla nahi' – tagline launched with Shahid Kapoor as the Brand ambassador.



Why do we need lubricants?

The engines consist of piston and cylinder.

The volumetric expansion inside the cylinder due to combustion of fuel is converted

in to mechanical energy by the piston which is then transferred to its wheels through

gears.

This movement of the piston against the length of the cylinder causes friction which

could damage the engine and gears in the long run.

To minimise this friction, the engine and the gears are submerged in lubricating oil .

Engine oils also act as a cooling agent for the engine to prevent any hot -spots.

Product range:

Grease: Multis-3, Lex3 and Wheel Bearing grease.

Gear Oils: AutotransFluid, GEARELF

Brake Oil: Heavy duty brake oil

Engine Oil (2-wheelers): ELFMOTO – Gold, XT, Pro, Fuel, Champ.

Engine Oil (4-wheelers): Quartz – 3000/ 5000/ 7000/ 9000

Commercial vehicles: (truck/ bus): Transmission TM, Rubia, GLACELF Supra

(coolant)

Situation Analysis for the TotalfinaELF:

a) Analysis of the internal environment;

TotalfinaElf has a market share of 9%; the 3rd

largest lubricant brand in India.

Size of the lubricant market in India is about INR 17000crores, the 5th

largest

in the world with an annual growth rate of 5%.

The per-capita consumption in India is a meagre 1.1kg as against the global

average of 5.6kg.

The total lube oil market constitutes 1.6billion litres with automobile

lubricants constituting 950million litres.



b) Analysis of the Customer market;

The customer in the market can be classified into two categories;

a) New vehicles rolling out from the manufacturing line.

b) Existing vehicles servicing.

With the growth in the economy particularly in the automobile sector posting

record growth of 31%, the lube oil market catering the new vehicles at the

factory has a huge potential to grow.

Simultaneously the servicing volumes are also bound to grow at a similar

pace resulting into high volume of sales.

c) Analysis of the external environment;

Indian lubricating oil market constitutes of 44players, dominated by the

PSU’s with a 50% combined market share.

Servo brand owned by IOCL is the market leader with a 42% market share

followed by Castrol (owned by BP) is the market leader with 27% market

share.

Other major players are Shell, Gulf Oil, Tide Water and Oil Company

(Veedol) and Exxon Mobil.

PSU companies have an upper hand in distribution due to wide reach of fuel

pumps used as points of sale.

Other companies have to rely on tie-ups with service stations of auto

companies and local garages.

SWOT Analysis:

a) Strengths:

Global brand presence.

Strong R&D support.

Tie-ups with Original Equipment Manufacturers (OEM’s) like GM, Volvo, Tata,

Mahindra, Punjab tractors, Maruti Suzuki, Mahindra Renault, PEUGUOT,

DaimlerChrysler.

Tie-ups with Reliance for using their petrol pumps as point of sale for lubes.



b) Weaknesses:

Low retail space for products as number of Reliance fuel pumps is miniscule.

Have to depend upon service stations/ local garage for advising customers

into purchasing the product (opinion leader).

Not a very well known brand among the masses especially Tier-2/3 cities.

Low visibility in the media.

c) Opportunities:

Educating customers regarding the ill-effects of not changing engine oil can

help in brand identification and association.

Brand ambassador “Shahid Kapoor” can infuse a lot of youthfulness to the

brand and help to associate men in the age group of 15-44 with the brand.

Can bank upon the global image of the brand and the trust it commands

across the globe.

With the exit of Chevron (Caltex) from the Indian markets, ELF can siege the

opportunity to gain its market share.

d) Threats:

Market domination by rival brands like Servo and Castrol.

Emergence of brands like SAVSOL.

Adoption of environmental friendly technologies like Bio-lubricants by IOCL.

Marketing goals and objectives:

To double its market share by aggressive marketing.

OEM tie-ups to ensure brand loyalty through B2B marketing.

To strengthen the brand base by advertising campaigns.

To reach rural India using efficient distribution.

To achieve technological upgrade of products to make them environmental friendly.



Marketing Strategy for TotalfinaElf lubricant:

Segmentation:

Being a premium brand of lubricating oil, the product needs to cater the mid-level

and luxury vehicles in the cities.

Bike riders in the Tier-2/3 cities.

Rural market characterised by bikes, trucks, buses and tractors.

Targeting:

Men in the age bracket of 15 to 45years fit in as the target audience as number of

women drivers is insignificant.

The Gen-X forma a majority of bike riders, hence need to be targeted specifically.

Truck owners/ drivers need to be educated about the brand effectiveness in

delivering mileage.

Positioning:

For the average city driver, the brand needs to be projected with its effectiveness in

increasing the longevity of the engine life.

The bike rider may be more interested in low maintenance budget and a high fuel

mileage.

The bus/ truck driver has to be convinced of good mileage delivery for a successful

purchase.

Product Strategy:

Associate the product with the youth to build a long lasting relationship with the

brand.

Leverage its global brand value to capture the mind of the customer in terms of faith

in quality of products.

Actively promote the product as a “Money Saver” tool for the truck/ bus drivers and

owners.

Tie-ups with Urban transport system like JNNURM, BRTS, and State-Transports to

utilize their fleet service requirements.

Tie-ups with fleet managers like private intercity/ inter-state bus operators, cab

operators, truck/ taxi unions to build opinion leaders for bulk purchases.

Providing warranty on engine performance on using the same brand over the

warranty period.



Alliances with insurance companies to offer discounted premiums on using ELF

brand lube oil in vehicles can be implemented.

Through extensive R&D, biodegradable lubricating oils can be seen as a viable

option.

Pricing Strategy:

The price for lubricating oil depends upon the base oil prices which ultimately

depend upon the crude oil prices.

Being into the premium segment the brand commands a premium price over other

Indian brands like Servo, HP Milcy, Mak, Savsol etc.

Total needs to push its premium products where it has tie-ups with OEM’s. For other

markets like local garages/ service stations, the product pricing needs to be

competitive so as to survive on the shelves of auto ancillary dealers.

Distribution and Supply chain strategy:

Procurement of base oil at the cheapest rates with the minimum cost of freight would

help reduce the input cost and offset the cross-subsidised low cost of the PSU

brands.

A strategic tie-up with auto components and spares manufacturing vendors will

ensure low cost of distribution of products as the destination market for both

industries is the same.

Lube oils are a major source of pollution as the disposal of used oil is not proper. A

systematic method for collection and reprocessing of used oi l will not only reduce

input cost but would help the brand in demonstrating an environmental concern to its

customers.



Conclusion:

The growth in the lubricating oil market is linked to the growth in the automobile

industry.

Awareness among customers that health of their vehicle engine is linked to the

quality and frequency of change of lubricating oil is needed and the target audience

need to be educated through media campaigns.

Brand identity to be established among customers by positioning it as a youthful

brand. The brand promotions by mass media campaigns supplemented by brand

ambassadors.

Competitive pricing of 2-wheeler products and tie-ups with OEM’s can push

revenues.

An initiative to become environmental friendly is going to push the brand in the future.



Marketing strategies; a Comparison Matrix:

Strategies Asian Paints (Royal) Total (Elf)

Segmentation Premium brand Premium brand

Targeting Women, families,

builders

Men (15-45years),

OEM’s

Positioning Style/ fashion

statement, emotional

quotient

High quality, better

durability engine

protector

Product Visual appeal,

aesthetics, emotional

rejuvenation

Reduces engine

breakdown, high

mileage, money-

saver

Price Premium pricing, small

packs as low cost units,

customers sensitive

over price differentials

Premium pricing,

customers insensitive

to price over

protection

Place Local hardware stores,

exclusive paint shops

(colour-worlds)

Local garages,

Reliance fuel pumps,

OEM manufacturing

sites, service centres

Promotion Extensive; brand

ambassadors add value

by their style statements

Moderate; brand

ambassadors builds

a relationship of trust

and creates

awareness



Inference:

We infer from the above study that businesses need to segment the

market by its product mix and specifically target and position the

product in the minds of the customer by maintaining high quality

standards, capturing the needs of the customer both tangibly and

intangibly by building brands which can edge out the competition to be

the market leader. Businesses also need to create demand/ need

where there is any scope for product diversification by continuously

educating the customers about the positive impacts that the product

can make on their lives. They should be able to provide the best goods/

services to the customers at competitive prices and innovative

technologies. The trust a brand creates with its customer base goes a

long way in customer retention which has to be reinforced time and

again through promotions. The availability of the product at service

points also plays a vital role in delivering value to the customer. Lastly,

the brand has to create a sense of pride in ownership for the customer

by consistent product performance and brand building exercises.

SMM Marketing Mix

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