WlCI Courses in Marketing

7/27/2019 WlCI Courses in Marketing

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INTEGRATED PROJECTMarketing

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Computerized Color Dispensing (CCD) machine in Indian Paints Industry

EXECUTIVE SUMMARY

Foundation for paint was laid in the year 1902 with the setting up of Shalimar Paints in Calcutta.It was during the and after the World War II that large number of paint manufacturing units wereset up in India. Since then the Indian paint industry has made substantial progress. The paintindustry has come to the recognition as an important sector in the national economy in producing

industrial coating and decorative paints. Decorative paints available in wide range ofcombinations account for 70% of the total production. While industrial paints share the balanceof 30%. This rate is diametrically opposite to the trend in the industrialized countries whereindustrial paints account for 70% and Decorative paints for the balance of 30%. The Indian paintindustry is at the crossroads. All most all-major paint companies have expanded or are expandingits capacity substantially. With demand rising slowly competition is becoming increasinglyintense. The decreasing growth rate has made the paint companies to woo customersaggressively. The customer is being offered 10% rebate in most products, unheard in the industryso far. Most companies have increased their discounts to their dealers to unimaginable level.Dealers are offered higher credit levels, flexibility in payment, foreign trips for selling even lowvalue products and the like. The increasing competition to offer solutions through technology has

made all the paint make a large number of shades through computerized colour dispensingsystem.

IMPORTANCEGenerally paints and coatings are applied to products to protect them from

Environmental Corrosion.

Protection of Food and Beverages in metal cans.

Improve aesthetic appeal.

CATEGORIESPaints are classified into two broad categories.

Decorative or Architectural finish paints.

Industrial Paints.

Decorative or Architectural finish paints:This market can be further segmented on the basis of the following


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Customer types: Institutional / retail or domestic use

Product features / categories: Distempers, Enamels, emulsions etc.

Price: Premium, Medium, Economy etc.,


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DEVELOPMENTS IN VARIOUS SEGMENTSTwo significant developments took place in the last three years in the decorative paints segment.

Advent of Computerized Colour Dispenser

Sudden increase of Exterior Market.

Computerised Colour Dispenser (CCD):Traditionally companies used to supply pre-mixed shades to dealers who in turn offered it totheir customers. Asian Paints brought in the manual colour dispensing concept in 1998 andoffered 151 shades through it. This was the first salvo in offering in variety of shades. Thisconcept took off and Asian Paints went about establishing 2000 colour corners which wouldstock the 151 shades. Additional shading requirements were catered by providing colours as perthe demand after mixing the bases with strainers through colour dispenser. Other companiesfollowed it. Soon Nerolac introduced 301 shades under the same concept. In 1995 Jenson andNicholson, the 5th ranking company in the industry, pioneered the concept of CCD. They startedinstalling them at dealer shops with the support of TIKKURILA of Finland. The concept issimilar to that of the manual colour dispenser except that the dispensing is automatic by pre-decided formulas registered in the computer and the shades are offered instantly in the shops tocustomers. Then Berger Paints was the 2nd company to enter this system offering 5000 shades, aclear indication of the increasing trend. The year 1997-98 saw the introduction of the concept bythe two giants, Asian Paints and Nerolac.

Today, in around 1000 dealer shops CCDs are installed. The concept of CCD or as it is nowcalled, the AUTO COLOUR DISPENSER has helped the dealers to reduce their inventoriesand offer a large variety of shades instantly, consistently and accurately. Consumers have alsobenefited by this concept as the shopping environment has changed dramatically with the adventof CCD.

FACTORS BEHIND SUCCESS OF PAINTSThe paint industry was fiercely competitive. Two marketing breakthroughs propelled thecompanies to leap into the decorative segment.

The first was the introduction of smaller sized cans into a market where the paint wassold mostly in bulk.

The second was a dealer expansion thrust to reach out to end customers and offeringthem quality paints which were either unavailable to them or available to them in theurban areas only.

These two steps meant going beyond selling paints and, in particular, responding to thecustomers unmet needs.

This report is assigned to examine market overview, competitive overview, product overview,goals and objectives, strategies, action plan and implementation schedule and evaluationmethods to launch the in house colour dispensing machines.


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Launch of various innovative product offerings Increased thrust on brand creation and distribution Water based paints substituting lower end paints Tinting systems are a trend now

The industry size is estimated at US$ 5.29 billion by 2020. With the increase urbanisation, easyavailability of credit, and a concurrent growth in construction, automobile and consumer durable

segments, the domestic paint industry is poised to grow steadily in the coming years.

The paint industry is expected to grow at 12-13% annually over the five years. The unorganized sector

controls around 35% of the market. Top organizations include Asian Paints, Kensai Nerolac, Berger

paints and ICL. The paints sector is raw material incentive, with over 300 raw materials involved in

manufacturing process. Since most of the raw materials are petroleum based, the industry benefits from

softening crude prices.

MARKETING STRATEGIESPlanning ProcessThe sales function planning is as follows:

Phase I: Market AssessmentIt consists of assessment of market and market share for total and major products, growthassessment segment wise for this purpose retail audit is conducted. All the sale representativescollect data from each retailer.

Phase II: Objective FixationBased on the above analysis all units should set objective of achievement of total sales volume /

sales growth. Volume sales strategically important products like emulsions auto refinishes, woodfinishes and collection efficiency.

Phase III:In this phase plan for meeting the budget shown is drawn up. These plans involving product /segment focus, town focus, dealer focus would form the basis of the planning document.

Phase IV: Resource PlanningIt consists of

A. Man Power PlanningB. Input PlansC. Sales Promotion Plans

CUSTOMER AWARENESSCustomers are informed and reminded about the products and are requested and persuaded topurchase their products. Such communication may be made along with the product or well inadvance of the introduction of product into the market. Such communication becomes necessarywhen a new product or service is introduced in the market or an old product is improved or it issimply to increase the sales of the products.


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Awareness compasses all the tools in the marketing mix whose major role is persuasive

communications.- PHILLIP KOTLER

The main features of awareness are:1. Customers are informed about the product or services of the company. Either at the time

of introduction of a new product into the market or when any change is made in theexisting product.

2. Customers are reminded of the products and services of the company.3. Customers are requested or persuaded to purchase the product and services of the

company.4. Awareness includes, advertising, personal selling and other sale promotion techniques.

Consumers must have awareness about the new products and their usage. Such activitiesare performed by the manufacturer. It is the responsibility of the producer to getinformation about the consumers and prospective consumers so that the necessaryproduct may be served to meet their demands. Subject matter companies must do morethan make good products they must inform consumers about the product benefits and

carefully position products in customers mind. To do this must skill fully use the masspromotion tools like advertising, sales promotion and public relations, personal selling,publicity.

ADVERTISINGAdvertising is defined as any paid form of non-personal presentation and promotion of an idea,goods or services by an identified sponsor.

The best advertising is done by satisfied customers.-- PHILLIP KOTLER

Advertising can be traced back to the beginning of the recorded history. Archaeologists workingin the countries around Mediterranean Sea have dug up signs announcing various events andoffers. The roman painted walls to announce Gladiator fights, and the Phoenician paintedpictures promoting their waves and large locks along parade routes. In 1993 advertisers ran up ofbill of more than $ 138 billion through advertising is used mostly by business firms it is also by awide range of nonprofit organization professionals social agencies that advertiser target tovarious target publics.

SALES PROMOTIONIt includes activities other than advertising, personal selling, publicity and public relations whichare used in promoting sales of the product or in persuading the customer to purchase the product.

Distribution of samples, premium coupon, point of purchase display, off-spring etc., are theexamples of sales promotion techniques.

Another major promotion tool is public relations building good relations with the companiescustomer base by obtaining favourable publicity, building up a good Corporate Image andhandling off unfavourable rumours, stores and events. The old name for marketing publicrelations was publicity, which was seen simply as activities to promote a company or its productsby planting news about it in the media & not paid for by the sponsor. Public relations are much


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broader concept that includes publicity as well as many other activities. Public relationsdepartment may perform following functions.

a) Press RelationsCreating and placing news worthy information in the media to attack attention to a

person, product or service.b) Produce Publicity

Publicizing specific products.

c) Public AffairsBuilding and maintaining national or local community relations.

d) LobbyingBuilding and maintaining national or local community relations.

e) Investor RelationsMaintaining relationship with shareholders and others in the financial community.

f) Development Public relations with donors or members of non-profit organization to gain financial or

volunteer support.


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PERSONAL SELLINGSelling is one of the oldest professions in the world. The people who do selling go by manynames. Sales people, sales representatives, Account executives, Sales consultants, Salesengineers, Agent District managers, and Marketing representatives to name just a few.

A sales person is an individual acting for a company by performing one or more of the followingactivities:

Prospecting Communicating Servicing Information Gathering

PUBLICITYPublicity is a non-personal, not paid, stimulation of demand of the products or services orbusiness units by planting commercially significant news or editorial comment in the print or

electronic media or by obtaining a favourable presentation of it upon radio, television or stage.

Key Points:

Supply Supply exceeds demand in both the decorative as well as the industrial paints segments.

Industry is fragmented.

Demand Demand for decorative paints depends on the housing sector and good monsoons. Industrial

paint demand is linked to user industries like auto, engineering and consumer durables.

Bargaining power of suppliers Price increase constrained with the presence of the unorganized sector

for the decorative segment. It is therefore that the margins are better in the decorative segment.

Bargaining power of customers High due to availability of wide choice.

Competition In both categories, companies in the organised sector focus on brand building. Higher

pricing through differentiation is also followed as a competitive strategy.

Scope of the above report:

Emerging trends in the industry Demand supply scenario encompassing domestic production and import numbers andprojections Factors driving growth. Issues and challenges Government regulations and initiatives in the Indian market Forecasts


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Prospects

The market of paints in India is expected to grow at 1.5 times to 2 times GDP in the next fiveyears. With GDP growth expected to be between 5-6% levels, the top three players are likely to

clock above industry growth rates in the future, considering they have a strong brand and good

reach.

Decorative paints segment is expected witness higher growth going forward. Although the demand for industrial paints is lukewarm it is expected to increase going forward.

This is on account of increasing investments in infrastructure. Domestic and global auto majors

have long term plans for the Indian market, which augur well for automotive paint

manufacturers like Kensai Nerolac and Asian Paints.

Paints marketing plan for the Colour Decoder

Persistently marching in todays competitive market, Glorious Paints are well known manufacturers and

suppliers of paints so with a bit of advertising we could reach the goal.

The Colour Decoder is well appreciated by the vendors and retailers for its durability and easy

installation, the entire range of colour mixing machine is manufactured using best quality components

and raw materials. It is renowned for its impeccable performance and longevity. Our entire range of

machines is stringently checked by the quality auditors before the delivery of the consignment at clients

end.

Images of Colour Decoders

Marketing Goals

What we do for achieving goals is always inspired by the company vision and mission. Any how thecompany wants to expand its products. The team of our company is establishing an aesthetic creativity

for making us unique from the durability and the quality. :Quality Standard is the company buzzword

among the company teams. Not only that but also the company determination is to be eco-friendly and

facilitator for the community for the development of public health and educational standards


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Demand Drivers

When the clients are selecting the desired product, they would care for the following aspect of

production:

1. Quality-durability. Final finish2. Price-affordability3. Colour range4. Hassle free application5. Distribution availability6. Service including after sale service7. Quality value perception is the utmost factor driving the demand for a particular brand.

Seasonal demand is the critical demand driver for the industry as a whole.

Technological environment

The technological advancement of the company relates to the quality and the productivity and from the

beginning to the end the quality of the production should be assured. Technology is not something static

but forward moving. Therefore, it is necessary to keep in touch with the new technological trends in

order to minimize wastage and maximize quality and profits. Technological factors look at elements such

as R & D activity, automation, technology incentives and the rate of technological change. The R & D is

the essential process to identify the gap between the actual performance and the expected

performance and evaluate the necessity of technology.

SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within the company anddescribes the opportunities facing Glorious Paints Company.

STRENGTHS

Strong relationships with vendors. Unique, cost effective manufacturing processes. Strategic alliances with many distributors. State-of-art technology. Dedicated workforce.

Weaknesses

A lack of brand equity, a result of being a relatively new brand. The struggle to maintain the unique manufacturing process as a trade secret. Significant research and development costs. Lack of working capital.


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Opportunities

Participation within a growing industry. Increased sales opportunities with the perfection of new colour dispensers or more cost

effective manufacturing techniques.

New markets in northern and eastern provinces.Threats

A slump in the national/world economy. Unforeseen governmental regulatory actions. Rigid taxation. New entrants and substitute paint production in small scale.

Marketing Strategies

i) Market Segmentation

Geographical Basis based on hardware density

Based on income / buying power

1. Top-tier high income earners who generates revenue of 40%.2. Mid-tier middle level income earners who accounts for highest volume & 40%revenue.3. Low-tier low income earners who generates 20% revenue.

ii) Target MarketHouse owners

Other building owners

Architects

Building contractors

Professional/non=professional painters

Engineers

iii) Porters 5 Forces Analysis

1) Threat of new entrants low

Dominated by strong international & local players Strong distribution network Specialized technology & labor Unutilized capacity (40%) of existing players Brand name strength


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2) Threat of substitutes low

Low availability of substitutes. Potential substitutes are expensive e.g.: cladding & glass curtain

3) Bargaining power of customer low

High switching cost to customer Due to similar price levels of key player.4) Bargaining power of suppliers -low

Low switching cost5) Rivalry high

Very high competition among existing players Overall attractiveness of the industry -moderate Growth potential

We can support strategy by using both push & pull strategies are extensively. Push strategiesare aimed

at authorized dealers and hardware shops.Quantity discounts

Foreign trips

Annual parties

Pull strategies are aimed at attracting customers.

TV commercials

Colorful hoardings

These strategies will become crucial when the season falls

Introducing innovative products and features.eg: Water proofing products, Washable paints,

Anti-bacterial protection, Space &Light a perfect solution for small dark rooms. free paint

mixing facilities. Water proof paint.

Brand variety

Strategies to change the customer perception.

Strategies to win social attraction.

iv) Marketing Communications

The following areas of the marketing communications mix will be implemented to for this marketing

plan.


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Advertisingany paid form of non-personal presentation and promotion of ideas, goods, or services by

an identified sponsor.

Personal sellingPersonal presentation by the firms sales force for the purpose of

Making sales and building customer relationships.

Sales promotionShort -term incentives to induce the purchase or sale of a product or service.

Public relationsBuilding good relationships with the companys various publics by obtaining favorable

publicity, building up a good "corporate image", and handling or heading off unfavorable rumors,

stories, and events

Direct marketingDirect communications with carefully targeted individual consumers to obtain an

immediate response and cultivate lasting customer relationships.

Advertising Forms: following methods are supposed to be implemented to bring

our products and make potential customer about products. Following media methods would be used for

bringing our image.

Media List

Print Full Page Magazine Half Page Magazine Posters Outdoor Billboards Transit Shelters Telephone Pole Ambient Bus Wrap Stairs Point of Purchase Floor Decals Shelving Ads Promotional (corresponding materials) Community Clean Up Video Competition Web Banners Promotional Pages

WlCI Courses in Marketing

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