MARKETING MANAGEMENT II

STAGE 1 PROJECT REPORT

Company: Asian Paints Ltd.

Submitted To:
PROF. NEENA SONDHI Submitted By:
GROUP- 6
Avik Paul 17PGDM012
Divya Gupta 17PGDM019
Manisha Jain 17PGDM030
Pranav Soni 17PGDM035
Shashwat Suryavanshi 17PGDM049
Somrit Basu 17PGDM053
Table of Contents
Executive Summary................................................................................................................................. 3
Industry Overview - Indian Paint Industry .............................................................................................. 3
Overview of the company - Asian Paints ................................................................................................ 3
Situation Analysis .................................................................................................................................... 4
SWOT Analysis..................................................................................................................................... 4
Company Analysis ............................................................................................................................... 5
Competitor Analysis: ........................................................................................................................... 6
Customer Analysis ............................................................................................................................... 7
Marketing Objectives .............................................................................................................................. 7
Short term objectives.......................................................................................................................... 7
Long term objectives........................................................................................................................... 7
Segmentation, Targeting and Positioning ............................................................................................... 7
References .............................................................................................................................................. 9
Executive Summary
This report consists of the detailed study of the company Asian Paints Ltd and the industrial and
environmental factors it operates in.

This report covers the industry and the company overview, situational analysis, STP and the
marketing objectives of the company.

This report attempts to understand the marketing concepts with respect to the company.

Industry Overview - Indian Paint Industry

Indian Paint Industry is expected to reach Rs. 70,875 crores by 2019-20 from around Rs. 40,300
crores in 2014-15 and is very fragmented.

The industry consists of two main segments-

Decorative Segment This includes exterior wall paints, interior wall paints, wood finishes
and enamel and ancillary products such as primers, putties etc. Decorative segment
accounts for 75% of the overall paint market of India. It is price sensitive and is a higher
margin business as compared to industrial segment.

Industrial Segment This segment mainly includes automotive coatings, powder coatings
and protective coatings. Industrial segment accounts for 25% of the overall paint market of
India. This segment is more technology intensive than the decorative segment.

The paint sector is raw material intensive since it involves over 300 raw materials in its
manufacturing process. Since most of the products are petroleum based, the industry gains when
the crude prices come down.

Asian Paints is the overall market leader due to leadership in Decorative segment followed by Kansai
Nerolac which is the market leader in the Industry segment.

Supply exceeds demand in both the segments.

The industry had grown at a CAGR of 12.9%. The decorative segment is expected to witness CAGR of
12.7% and the industrial paint market CAGR of 9.5%, according to Indian Paint Association (IPA).

Overview of the company - Asian Paints

Asian Paints Ltd. was formed by the partnership of four friends in 1942 and currently is Indias
largest paint company and Asias fourth largest paint company. It has the market share of 54.1% in
the Indian paint industry with the turnover of US$2.5 billion The company has an excellent
reputation in the corporate world for professionalism, fast track growth, and building shareholder
equity.

The company has witnessed CAGR 22% (last 5 years) which is more than the industry CAGR.

Asian Paints gets the major portion of its revenue from the Decorative segment. Over the years it
has outperformed its peers in every aspect by wide margins due to its competitive advantage which
lies in its strong Brand equity and an extensive distribution network.
Asian Paints positions itself as the one stop paint shop with all the colours one could want.

The Company has the following vision: " We want to be an innovative, agile, and responsive world
class research and technology organization thats aligned to future customer needs and catalyses the
growth of the company across existing and future businesses."

Situation Analysis
SWOT Analysis
Strengths:

1. Market Leader: In the decorative paints segment Asian Paints is clearly the market leader while in
the industrial segment Kansai Nerolac leads. However, it must be borne in mind that the decorative
segment accounts for more than 75% of the paints category. Also in the organized sector, Asian
Paints remains the market leader.

2. Frequent Capacity Expansions: Asian Paints has strong financials. It thus puts its financial muscles
to good use by undertaking frequent capacity expansions.

3. Manufacturing Phthalic Anhydride (PAN) by itself: Most paint companies do not produce their
raw materials themselves. PAN is an important component of paint manufacturing process along
with Titanium Dioxide. PAN is manufactured by Asian Paints itself- it is the only company to do so.
Thus, it earns additional revenue by selling PAN in the open market while other companies pay a
fortune to procure it.

4. International Presence: Asian Paints has 24 manufacturing plants in 16 countries and caters to
customers in 65 countries. Along with 8 plants in India its other 16 plants are located in Sri Lanka,
Nepal, Bangladesh, Indonesia, Singapore, Tonga, Fiji, Ethiopia etc.

5. Product Range: It has a wide range of products for almost every segment. It launched Asian Paints
Royale in the decorative segment to cater to the needs of its premium customers.

6. Strong Supply Chain and Distributors Network: Asian Paints has a strong distribution network all
over India. Also, it is a technologically driven company that focuses on integrating Supply Chain
Management (SCM) and Enterprise Resource Planning (ERP) from SAP.

Weaknesses:

1. Low Market Share in Industrial and Auto Paints: When compared to competitors like Nerolac and
AkzoNobel Asian Paints has a relatively low market share in the industrial and auto paints segment.

2. Inventory Management: The raw material prices of paints are highly volatile- so companies have
to stock them in increased quantities to ensure smooth production. Thus, high inventory costs are
entailed. In addition to that there is frequent change in tastes and preferences of customers
regarding paints- leading to problems in inventory management.

Opportunities:

1. Industrial Sector: Asian Paints has ample opportunities to grow in the industrial paints, especially
in the automobile paints sector.

2. Real Estate Sector Reforms: Opportunities are present in the form of potential growth in demand
for real estate due to demonetization (majority of the business was done in black money leading to
increased costs), RERA (Real Estates Regulation Act aimed at controlling real estate prices and bring
in a transparent regime) and lastly GST (GST rate on under construction projects to be only 12% as
there will be abatement of land cost).

3. Adapting to Customer Tastes: Asian Paints, being the market leader, also has to adapt to
customer psyche. Proactive adaptation to customer tastes and preferences also presents huge
growth opportunity.

4. Scope for growth abroad: Asian Paints has not yet fully utilized its position as a global brand.
There are opportunities for Asian Paints to increase its operations as well as market share in the
Emerging Economies of the World.

Threats:

1. GST: GST has not brought in much joy for the paint industry as a whole. Their volumes and
operating margin could be hurt due to temporary disruptions at vendor and dealer levels. Also the
effective tax on paints has risen to 28% from 24.27% paid by them earlier in form of excise duties,
VAT and entry cess.

2. Rising Raw Material Costs: Titanium dioxide (TiO2) is a key ingredient to manufacture paints as it
provides opacity and whiteness to the final products. Most of the manufacturers are based out of
China. But owing to environmental concerns, China has shut down a lot of these plants tightening
supplies This coupled with a weak domestic demand for TiO2 has led to increased costs for TiO2.

3. Rules and Regulations: Stringent Government rules and regulations regarding quality of the
products and manufacturing facilities owing to environmental pressures are also acting as a threat.

Company Analysis
BCG Matrix
4Ps of Asian Paints

Competitor Analysis:
Berger Paints:
It is headquartered in Kolkata and has 13 manufacturing plants. It has country wide distribution
network of over 25000. The Company has a unique customer-centric approach- its website provides
colour balancing options from the Berger pallet. Its famous products Weathercoat All Guard, Berger
Home Shield range of construction chemicals etc. In response to Asian Paints Royale, Berger has
launched Berger Silk Glamor.

Kansai Nerolac:
It is a subsidiary of Kansai Paint of Japan and the third largest player in the Indian Paint Industry. It is
the largest player in the Indian industrial paint industry. In the industrial paints sector it has a market
share of over 40%. It has five manufacturing plants.

Akzo Nobel:
Akzo Nobel India has businesses in Coatings and Specialty chemicals. In the decorative paints
segment the company manufactures under the famous Dulux brand of paints of interior and exterior
decoration. It has six production facilities and 8500 retailers spread across India.

Shalimar Paints:
It is India's oldest paint company. It has four manufacturing facilities. It has a network of more than
8000 dealer and serves in nearly 2000 towns. It became more consumer centric after strategic
transformation in 2013. Under its tinting brand "Color Space", it offers more than 1000 shades
across all product lines.
Customer Analysis
We surveyed 30 customers to assess that which brand is the most reliable in consumers perception!
65% people said that they get their home painted every 3 years, and 81% said that they have heard
the name of Asian paints the most in Paint industry. 78% said that their preference is Asian Paints
whenever they get their home painted. The reason they stated was Durability, which was chosen by
81% people, Vivid color quality and variety was chosen by 36% participants each. Therefore, we
inferred that the durability of the paints was one of the biggest reasons of the consumer preference.

Marketing Objectives
Short term objectives:
Asian Paints desires to become one of the top five Decorative coatings companies world-
wide by capitalising its core competency in the higher growth markets
It wishes to expand in both rural areas and urban areas. The company believes that rural
markets has a lot of potential and wishes to extract maximum out of them and is therefore
launching products such as such as Utsav that targets every customer of all income level
The company desires to invest heavily in branding and on ad campaigns

Long term objectives:

The company primarily plans to consolidate its dominant position in India by launching series
of new products over the years with the market developments in both decorative paint as
well as industrial coating segments.
Introducing water based Paints, broadening of distribution network, adding more choices for
shades and effects, enhancing quality are some broad aspects that the company wishes to
achieve in the long run
Asian Paints wishes to capitalise on capacity building both in India and overseas and is
incurring Capital Expenditure towards expanding its manufacturing capacities.

Segmentation, Targeting and Positioning

Segmentation: Bases on utility of the products, Asian paints has segmented its market mainly in 3
parts -

(i) Decorative Coating: The Decorative Paints sector encompasses a wide variety of
interior as well as exterior paints, households, corporate offices, buildings, and
interior designers are the main customers of this segment. It mainly focuses on
individuals and households, therefore, it becomes necessary to focus on the beauty
of the product they provide.
(ii) Industrial Coating: The 2nd sector, Industrial Paints, it targets mainly industries and
factories. The paints are used in roads, and the company has tie ups with
governments to get the roads painted by its products. There are several other uses
also, but the focus here is not individuals, or homes, buildings and corporate offices.
(iii) Automotive Paint: Automotive Sector is one of the fastest growing markets for
paints with products such as Aluminium Paint and Fibre Paint available in different
colours for painting vehicles and their spare parts. Therefore, the company focuses
on this segment separately.
Targeting: Exterior paints target mainly real estate market, builders demand durability of the paint,
and not smoothness, because such products are cheaper. Interior paints target mainly home owners
and individuals by offering smooth paints, but they are costly. For industrial segment, the company
mainly offers cheap products that are extremely durable, but in Automotive sector, smoothness as
well as durability of the product becomes extremely important to the customer. Therefore, for each
segment, the company offers a different type of product.

Positioning: After a strategic change in 1999, the company is emerged as customer oriented. It
clearly relates paints with emotions, because the trend of painting homes was becoming less
frequent, and people were refraining from getting their houses repainted even in seasons.
References
https://en.wikipedia.org/wiki/Asian_Paints_Ltd

https://www.equitymaster.com/research-it/sector-info/paint/Paints-Sector-Analysis-Report.asp

https://www.slideshare.net/sagarkeshri/the-indian-paint-industry

http://www.business-standard.com/company/asian-paints-34/information/company-history

https://en.wikipedia.org/wiki/Berger_Paints

https://www.bergerpaints.com/

https://en.wikipedia.org/wiki/Kansai_Nerolac_Paints

https://in.akzonobel.com/aboutus/history/index.html

https://en.wikipedia.org/wiki/Shalimar_Paints

https://www.shalimarpaints.com/manufacturing-facilities.php

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