Executive Summary

This report gives introduction of ICI Dulux paint Pakistan limited Lahore, Brief information
about marketing channel of ICI Dulux paint of Lahore. Company operates into two channels
Direct and Indirect, whereas Distributors of Dulux Company are 66 in Lahore region. In direct
marketing channel, company sales force transfers the products to customer. In indirect marketing
channel of ICI Dulux Company, there are four Members, Company, Distributor, Retailer and
consumer. Dulux Company Target customers are those people who like and inspired beautiful
colors. To analyze the gap, we made questionnaire and then filled them from target market of
Dulux Company. As Service Output Demand required by customers are Bulk Breaking, Spatial
Convenience, Waiting time, and Information provision, Variety and Assortment and Customer
Service. And Company is providing all Service Output Demands to its target market but some
problems exist in channels about promotion activities, information provision, waiting time and
sales return mechanism. Company uses reward and coercive power on its members if they did
not perform their tasks. Company solves these problems through different ways such as:
Company should check their promotion activities. Company should do effective communication
with downstream members, to avoid problems and conflicts.
 INTRODUCTION

Imperial Chemical Industries (ICI):

ICI is a British Chemical subsidiary of a Dutch conglomerate and one of the largest chemical
producers in the world. It is based in Slough, UK. It produces paints and specialty products
(including ingredients for foods, specialty polymers, electronic materials, fragrances and
flavors). It employs around 29,000 people and had a turnover of just over 4.8 billion in 2006.
The Company was once a constituent of the FTSE 100 Index but since January 2008 it has been
a subsidiary of Dutch, chemicals group Akzo Nobel, which is in the process of fully integrating
the two companies.

In the early days of its existence, decorators and their suppliers were the main customers for
Dulux, with Say Dulux to your decorator used as an advertising slogan in the 1950s. By 1953,
Dulux was available in the retail market and ten years later the famous Old English sheepdog
was used in advertisements, to the point where "Dulux dog" has become a common nickname for
the breed. In Australia and New Zealand, Dulux has been involved with the manufacture and
marketing of paint and related systems in since 1918, and is the largest manufacturer of paint
products in Australia. Dulux Australia was a key player in the ICI Paints World Group, until in
1997 ICI PLC informed ICI Australia of its intention to sell its concern. This decision led ICI
Australia to be renamed on February 2, 1998 to Orica Australia Limited. In Australia and New
Zealan Dulux is now wholly owned by Orica. Scottish band Fairground Attraction’s song
"Perfect" was used for an advertisement on TV.

The current TV advertisements feature the Dulux Dog and several hundred other Old English
Sheepdogs racing around collecting cricket stumps, drum sticks, wooden spoons and sticks and
other items to stir a newly opened pot of Dulux Wash and Wear.
Dulux Paint Brands:

 Glidden.

 Dulux.

 Sinclair

 Devoe.

Vision:

Our Vision is to become a world class organization. The hallmark of this vision has to be total customer
satisfaction. This can be achieved only by offering products of consistent quality at a competitive price,
meeting delivery schedules and commitments.

Mission:
Our mission is to bring visual delight and lasting care to surroundings as if they are our own with
quality, trust and social responsibility.
 Detail description of members

In indirect marketing channel of ICI Dulux paint Company, there are four members.
They are: company, Distributor, Retailer and consumer. Supplier provide raw material to
company, then company manufactures into product and then finished goods/product transfer to
distributors, distributors delivers the products to all the outlets of retailer. At the end products
provided to end user/consumer.
Suppliers:

Company suppliers include those business partners who supply company system with materials
including ingredients, packaging, and machinery, as well as goods and services.

Company

Company manufactures products, and then delivers products to distributor and customers.
Company gives margins and incentives to distributor.

Distributors:
Distribution of Dulux Company products are 66 in Lahore. The responsibilities of distributors
are to cover the area designated to them. Distributor participate in promotion twice in a month,
promotions like in stickers, display bunties, hoardings etc company is giving commission to
distributor 10% if company will purchase 200,000 Rs products , and 14% on 10,000 products.
Retailers:
There are approximately 200 retailers under one distributor. Mostly retailers get the products
from distributor two or three days. But it varies from retailer to retailer. Responsibility of retailer
is that the tours and incentives given by the company to them it should carry only dulux products
not other company’s product. Retailer give proper display to company’s product. The margin of
retailer incentive is 2% annual. Retailer makes the payment in cash to distributor.
Customers:

All people, no age group, no specific gender all consumers use paints they are company’s
customer. Customer gets all the Dulux products easily from retailer outlets. Dulux company
customers also include large, international chains of retailers and as well as small, independent
businesses. Whether customers are large or small, Company work with them to create mutual
benefit. Helping them to grow their businesses helps to grow ours, too. Company provides their
customers all services like transportation services.

ALLOCATION OF CHANNEL FUNCTIONS AND FLOWS

 Physical Possession Flow

 Ownership / Title Flow
 Promotion Flow
 Negotiation Flow
 Financing Flow
 Risking Flow
 Ordering Flow
 Payment Flow

PHYSICAL POSSESSION FLOW

Company is supplying product methods:

i. Direct method
ii. Indirect method
Direct method:
Supplier supply the material to the company, then company transfer the products directly to the
retailers by the company own vehicles.

Indirect method:
Supplier transfers the material to manufacturer by their own vehicles. From manufacturer
products/finished goods transfer to distributors by the own vehicles. Distributor transfers the
products to retailers by their own transport retailer send the products direct to customers.

OWNERSHIP/TITLE FLOW
Manufacturer give title of products to distributors, distributor give title of products to
retailers, retailers then shift title of ownership of products to end customers.

PROMOTION FLOW
Promotion flow runs forward from manufacturer to customer. Company do promotion
through advertising agencies, advertising agency do promotion through TVC’s, Newspaper,
Radio and Billboards, and other way of doing promotion are doing through retailer and
distributor.

NEGOTIATION FLOW

Negotiation flows from suppliers to manufactures, manufacturer to distributor and distributor

to retailer. Negation is done in two ways between channel members. Negotiation is of these
kinds between channel members.

Order delivery
Time of delivery
Settlements of payments
FINANCING FLOW

Financing is done between channel members in two ways. Financing in cash terms and terms of
conditions of sales.

RISKING FLOW

Risking happens in two ways. Company having risk is that business partners of company can be
lost due to different reasons and customers can be switch to other products/brands. Distributor
risk is that company can terminate its distributors and company could stop supplying of products
to distributors.
ORDERING FLOW

Ordering flow runs backward from customers to manufacturers. Ordering system happens that
distributors have only order no contract with the company and it gets the delivery through its
order. Retailers get the delivery day two or three days.

PAYMENT FLOW

Payment does from customers to company. Payment is done on cash.

Ability to meet target customer segments demands for service outputs

Dulux Company Target customers are those people who use paints all are their customers.
Service Output Demand required by customers are Bulk Breaking, Spatial Convenience, Waiting
time, Information provision, Variety and Assortment and Customer Service. Company is
providing all Service Output Demands, they are as follows:
Bulk breaking
Company is providing bulk breaking; provide products in small packs.

Spatial Convenience
Company is providing these products at each and every store so that customer has to bear low
cost and low searching cost to have company’s products.

Waiting Time
There is no waiting time, at the end of customer, whenever customer requires and they get the
product.

Information Provision
Company is providing information provision to customer through billboards, TVC’s Newspaper,
Radio, Print ads different festivals like Marriage and birthday seasons etc.

Variety and Assortment

Company is providing all their brands and wants them available to customer on every outlet.

Customer Service

Company provides transportation services and incentive to their customers

Gap Analysis

To analyze the gap, we made questionnaire and then filled them from target market of a Dulux
Company then put answers of customers that they have given in questionnaires and also filled
the questionnaires from distributors and retailers of Dulux Company. Following are the gaps
found in the company.
Information Provision
Customers have not proper information, about all products of Dulux Company. Customer only
knows those products which are told to them by the company. E.g. Billboards, TVC’s and Print
ads etc
Mostly customer knows about the products of Dulux, but they don’t have knowledge about new
products which company launch without advertisement.

Promotion Gap
Distributor is saying promotion is done twice in a month on the other hand, Retailer is saying
that when company launches a new product they just do promotions otherwise they don’t.
(Supply side gap)

Waiting time
Company and distributor said that retailer get the product on daily bases. Where retailer
disagrees with the statement, retailer said that they receive the order delivery two or three Due to
inventory found every where in channel flow. SOS < SOD.

Physical Possession
Channel bears high cost. It is based on physical possession, and running backward from
customer to manufacturer.

Power & Conflict Characteristics

Disagreement between two parties there are two types of conflict exist in channel member
1. Goal conflict
2. Domain conflict
Goal conflict is the difference between goals and objectives of company wants high coverage,
but distributor and retailer wants more sales, another conflict is Domain, domain conflict is the
 disagreement over the range of action and responsibility of the channel members. Distributors
and retailers think it is the responsibility of company to provide order delivery on time and also
provide merchandising on every outlet.

Handling of conflict

Company handle all type of conflict through table talk and communication, if distributor have
any conflict with company they complaint in marketing development officer but if the retailer
have any conflict from distributor they also tell company

Channel Power

Power is the ability of one channel member to get another channel member to do something if
otherwise would not have done. Dulux Company use reward power on its downstream members.
Company gives incentives in the form of commissions, tours, and different schemes such as
discount and trade offer.
Dulux company also use coercive power as there is an agreement exist between company and
distributor, if distributor does not fulfill all the conditions of agreement then company use
coercive power and terminate the distributors from its distribution.

The Service Output Demand (SOD) template for ICI Paints

Segment Bulk Spatial Delivery/ Assortment/ Customer Information
Name/ Breaking convenience Waiting variety service Provision
Descriptor Time
Home 19 16 11 5 16 16
Users
Contractor 11 11 11 11 11 11
s

Note:
Total Questionnaire is 30 under which 19 questionnaires are filled by home user and other 11
questionnaires are filled by contractors. Contractor service output demands are high that are 11
and home users service output demands are high in bulk breaking and spatial convenience,
customer service and information provision.

Suggestions for improvement of the channel design and management of channel

 Company should check their promotion activities either they are performing accurately or
not and should perform their promotion activities effectively and efficiently at
distributors and retail level.

 Company should ensure their order delivery time to avoid any trouble and crisis.

 Company should give information of their existing and new products properly to
customers with the help of their appropriate promotion.

 Company should do effective communication with downstream members, to avoid and

conflicts.

 Make product according to the demand and target market of country in mind.
 REFERENCE:

www.goole.com.

Ittefaq Paints (Manufacturer and Traders).

Madina Paint House (Whole sale Dealer).
 Questionnaire For Channel Members:

1. Do you have the distribution of ICI Dulux product or you are distributing any other product?
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2. What is your distribution territory and how many retailers are there in your territory?
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3. How you participate in promotion campaign?
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4. What are your responsibilities?
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5. How much time is acquired for order delivery?
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6. What are the strategies you are using to deal with retailers?
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7. Do you have recovery mechanism? Sales return from retailers.
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8. How you handled conflict with retailer?
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9. Which type of power you are using for resolving conflict?
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10. Which benefit company provides you?
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11. What benefit you are giving to retailer?
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12. What type of risk you face from retailer & company?
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13. Your take order payment in cash or credit?
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14. What type of Incentive Company provides you?
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15. What are the challenges you are facing right now?
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16. How frequent company comes to you & do its promotion & in what ways? E.g stickers,
display.
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17. How much Incentive Company gives you?
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18. How much commission company is giving you?
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19. What company policies are applicable to you?
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20. What customer services you are providing to your customer? (Benefit).
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