A Project Report on Segmentation, Targeting, Positioning (STP) and Strategies adopted in Customer Relationship Management (CRM).

At

Submitted By

Abhishek Jagwani

(Roll No.10)

Under the Guidance

Of

Sidharth Arya

Territory Sales Officer

Asian Paints

Submitted to

Prof: Rupali Rajesh

Vivekanand Education Society’s Institute of Management Studies & Research (VESIMSR)

INDEX

Sr No. Particulars Page No.

1. Introduction

2. Customer Relationship Management

3. Competitors Analysis

4. Customer Analysis

5. Marketing Strategy

6. Segmentation

7. Targeting

8. Positioning

9. Role of CRM in Asian Paints

10. Business Process Transformation and Value realized

11. Future Road Map

12. Learning

13. WeBliography

14.

15.

INTRODUCTION

Asian Paints is India’s largest paint company and Asia’s third largest paint company, with a

turnover of Rs 77.06 billion. The group has an enviable reputation in the corporate world for

professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 17

countries and has 23 paint manufacturing facilities in the world servicing consumers in over 65

countries. Besides Asian Paints, the group operates around the world through its subsidiaries

Berger International Limited, Apco Coatings, SCIB Paints and Taubmans. The company was

incorporated in the year 1942 in India. Asian paints have extensively computerized its operations

in India using the cutting edge solution provided by SAP & i2. Decorative paints include wall

finishes for interior and exterior use, enamels, wood finishes and ancillary products, such as

primers and putties. Industrial Coatings comprise high performance coatings, powder coatings

and auto refinish coatings. The automotive coating segments are catered to by the joint venture

Asian PPG Industries Ltd. The Company also has chemicals businesses consisting of phthalic

anhydride and pentaerythritol manufactured at Ankleshwar, Gujarat and Cuddalore, Tamil Nadu,

respectively.

It also introduced many innovative concepts in the Indian paint industry like Colour Worlds

(Dealer Tinting Systems), Home Solutions (painting solutions Service), Kids World (painting

solutions for kid’s room), Colour Next (Prediction of Colour Trends through in-depth research)

and Royale Play Special Effect Paints, just to name a few. Asian Paints has always been ahead

when it comes to providing consumer experience. It has set up a Signature Store in Mumbai

where consumers are educated on colours and how it can change their homes.

The different categories of Asian paints Ltd. are –

PAINTS

Company’s paint business in India consists of decorative, Industrial & Automotive coating. In

2005-06, these accounted for 79.1% of the group sales. It is estimated that the local market for all

paints including cement paints & other powder products manufactured by all companies big &

small would have been around Rs.95 billion in 2005-06.

1. Decorative paints

Decorative paints account covers almost 75% of the overall paint market in India. In this

segment Asian paint has been a leader for almost four decades. Decorative paints include wall

finishes, for interior & exterior uses, examples, wood finishes & ancillary products such as

primers, putties, etc.

2. Industrial coatings

Industrial coatings have a moderate growth rate than decorative coating, led by the growth in

automotive original equipment sector, powder coatings & protective coatings. Industrial coatings

are classified into automotive & non-automotive coatings are classified into automotive & non-

automotive coatings. While Asian paints Industrial coating Ltd. (APICL) services the powder

coating segment, Asian paints Ltd. caters to be remaining non-auto industrial coatings segments.

3. Automotive Coating

The actual look and feel of a vehicle undergoes a sea of change over time. The paint on a vehicle

loses gloss, is subjected to a lot of wear and tear and hence starts deteriorating. Asian Paints is

not having a very good market share in this segment.

CHEMICALS

Asian paints have chemical business consisting of Pthalic Axhydride & pentaerythritol manufactured at

Ankleswar, Gujrat & Cuddalore, Tamilnadu.

Customer Relationship Management (CRM)

It is a business strategy that aims to understand, anticipate and manage the needs of an

organisation’s current and potential customers.

The purpose of CRM

1) The focus is on creating value for the customer and the company over the longer term.

2) When customers value the customer service that they receive from suppliers, they are less

likely to look to alternative suppliers for their needs.

3) CRM enables organisations to gain ‘competitive advantage’ over competitors that supply

similar products or services.

Why is CRM important?

Today’s businesses compete with multi-product offerings created and delivered by networks,

alliances and partnerships of many kinds. Both retaining customers and building relationships

with other value-adding allies is critical to corporate performance.

Information Technology and CRM

1) Technology plays a important role in CRM.

2) Technological approaches involving the use of databases, data mining and one-to-one

marketing can assist organisations to increase customer value and their own profitability.

3) This type of technology can be used to keep a record of customers names and contact

details in addition to their history of buying products or using services.

4) This information can be used to target customers in a personalised way and offer them

services to meet their specific needs.

5) This personalised communication provides value for the customer and increases

customer’s loyalty to the provider.

Benefits of CRM

1) Reduced costs, because the right things are being done (ie., effective and efficient

operation).

2) Increased customer satisfaction, because they are getting exactly what they want (ie.

meeting and exceeding expectations) .

3) Ensuring that the focus of the organisation is external.

4) Growth in numbers of customers.

5) Maximisation of opportunities (eg. increased services, referrals, etc.)

6) Increased access to a source of market and competitor information.

7) Highlighting poor operational processes.

8) Long term profitability and sustainability.

Asian paints limited with its three business units decorative, Industrial & International business

is one of the largest paint company in India. It had a sell over 300 million liters of paint in 2009-

2010. Significantly the group has crossed the Rs.3000 Cr turnover mark-a preset mile stone for

the company.

Here we will be analyzing two situations of the company –

(i) Competitor analysis

(ii) Customer Analysis

1. Competitor Analysis

The Indian paint market is highly saturated with many paint companies with varieties of product.

Asian paints ltd, Kansai Nerolac paints Ltd. Berger paints India Ltd. ICI India Ltd. Shalimar

Paint Ltd, Snowcem India Ltd are the market leaders.

Here we are only considering the nearby competitors of Asian Paints which are Nerolac paints

Ltd, Berger paints Ltd & Indian chemical Imperial (ICI) Ltd.

SWOT analysis of Asian paints & its competitors:

COMPANY Asian Paints Nerolac paints Berger paints ICI paints

Strengths 1. Market leader in

overall paint

market & in

decorative paint

market in India

share 40%

2. Available in

urban & rural area

3. High Quality

MR & MIS

4. Pricing policy

oriented to all

kinds of customer

1. Well ahead

leader in

Industrial paint

market

2. Tie-up with

kansai paints

provides foreign

technology.

3. Main supplier

in the Indian

Industrial &

automobile

market main

client Maruty

Udyog

1. In the IInd

position in the

industrial paint

sector.

2. Tie up with

Herbert-

Germany

valspar of US

& Teodor NV

of Holland

1. In the

refinishing

business it has

one of the best

quality refinish

paint for cars.

2. In decorative

paints it

performance is

good

3. recently

purchased 49%

share of Quest

Int. India limited.

Weakness 1. Industrial paint

sector only 15%

share

2. No tie up with

foreign

manufactures.

Through it has

units in several

countries.

3.Innovation in

developing new

product.

1. Market share in

decorative paint

market is very

low.

2. Market in rural

area is poor.

3. Considering

overall paint

market Asian

paint is well

ahead of Nerolac.

1. Overall

market position

is not very

impressive.

2. Asian paints

& Nerolac

paints capturing

the market

buyer for

behind

1. Industrial paint

market existence

almost 2-3%

2. Overall market

conduct poor.

Opportunities

1. Acquiring/

Increasing market

share in Industrial

paint sector.

2. Developing

market in

automobile

industry, which

accounts for 50%

of Industrial paint

market.

1. Improve its

position in

decorative paint

segment.

2. Capturing

whole industrial

paint market

1. come up

with new

innovations to

challenge Asian

paints & Berger

paints

1. Merger with

Quest will

provide to have

an experience in

foreign market,

particularly in

UK.

Threats

1. Domination of

few foreign

countries

2. Nerolac is

advancing rapidly

1. Asian paints is

coming up

rapidly into the

industrial paint

market with its

new plants &

products

1. Asian Paints

& Nerolac

paints are well

ahead & ICI

paint is

competing

nearly

1. Berger paint &

there are few new

entrants in the

market.

in Industrial market

2. Customer analysis

Asian paint with its natural competitive advantage of size (Number 1 in India), Strong brand

equity & largest distribution Network has acquired the number one position in Decorative

segment in India.

There are few reasons due two which the customers in the decorative segment has been choosing

Asian Paint as their brand –

1. As we know brand name has its own value & Asian paint is the number one in decorative

segment, so a purchaser automatically leans in purchasing it.

For example, we have two different types of paints, namely Apolite glass Aenamel &

Apolite care Emulsion, which are from Asian Paints, Nerolac paints, Berger paints & ICI

paints. Again due to the competitive market the price is very closed for all the companies.

But due to the Branch awareness of common people they mostly tend to purchase the

products from Asian paints.

2. Company have provided with different varieties of product for different income groups.

For e.g. “UTSAV” which is a low value paint, is growing at a faster rates & penetrating

with high speed at the lower income group. This policy is helping the company to move

from metros to small towns for branded products.

3. In India frequency of painting has still not increased, which is once is 5 years only. So

consumers are normally changing over to the better quantity & branded paints.

4. In 2001, Asian Paint launched a new product “Tractor Emulson”, which pulled the

customer who used distemper to move to emulation paints.

Accessibility of Asian paints to the customers

Asian paints have started a 24 hours customer help centre at Hyderabad. It is information to

consumers to answer their needs for any query related, to their products. Through this company

is also getting a lot of data related to the customers need & appreciations of the products.

In order to provide better consumer service, company has connected all colour world

installations with Asian Paint’s main system through software & providing computes to dealers.

This is speeding up order execution, electronic banking will speed up recovery & money

transfer.

Market Share Analysis

The market share clearly shows that Asian paint is the leader in Indian paint industry. The nearest

competitors of Asian paints are Nerolac & Berger paints. Asian paints has the largest sells in Decorative

paints.

Nerolac paints being widely used in Industry it has a greater share price value. Industries like

Bajaj auto limited, Maruti Udyog & many other car manufacturing companies use Nerolac paints.

The Industrial paint are priced with premium in comparison to the decorative paint which is

mainly used in house hold decoration.

Berger paints & ICI paints are also providing a shift competition to Asian Paints in decorative

paint, but still there is no sign of threat from them.

Again in the Industrial sector Nerolac paint far ahead of all its competitor. Asian paint presently

building up a new manufacturing unit solely to produce Industrial paint.

Asian paints annually spends on an average Rs325 Cr on its selling & marketing expenses. It

givers us an idea about the effort the company put on expanding its market in all segments.

When customers buy the products of Asian paints – As the customers normally uses the products

of Asian paints on certain occasions like. Marriage ceremony, Dewali or any other special occasions,

other than normal paint in houses, customers are very choosy & brand specific. This appreciation by the

customers helped Asian paints to become the number one paint company in India

MARKETING STRATEGY OF ASAIN PAINTS

STRATEGY ALTERNATIVES

The prospect of a paint company has many dependence like weather, occasions like puja, id etc.

when we consider the decorative segments. So there is always a possibility of ups & downs in the

business. Besides this there is another very important factor i.e. the position of the competitor. Through

Asian paints is the largest paint company still under circumstances it will have to go for some strategy

alternatives.

Alternatives available

1. As Asian paints market is mainly the decorative segment so a downfall in that market will lead

the company in trouble them it immediate focus will turn to the Industrial segment.

2. Importance on water based paints may recover a poor situation created due to sustain poor

weather condition in some region.

3. As there is every possibility that conventional coatings are likely to lose some share – ecofriendly

coasting is going to be very good alternatives.

4. With all countries in southeast Asia beginning to adhere to the ASEAN free trade Area (AFTA)

that will reduce trade barriers for paints & coatings. A reduce in domestic market share of Asian

paints then will not be a constant for growth, became export of paints to the foreign countries will

contribute a lot.

5. Increasing the product package & application oriented service will make company different from

others.

6. A strong post sales service division will be an important factor in building customer loyalty.

7. Tie up with automobile sector with strong appearance will be effective.

Lastly but not the least price of oil is increasing day by day, which results to increase the price of paints.

If this can be controlled by stocking oil or directly linking up with foreign cheap refineries so as get oil at

least available price.

CUSTOMER SEGMENTATION & TARGETING

Customer segmentation is the most important part of the marketing strategy of any company. Asian

paints, the market leader in the Indian paint market segmented their products mainly in three sectors. (i)

Decorative (ii) Industrial (iii) Automotive. Their customers are all also segmented based on the usage of

these products.

CUSTOMER SEGMENTATION

Base Decorative coating Industrial coating Automotive coating

Premium Medium Popular High

performance

coating

Powder coating Quality

coating

Finished

coating

Buyer

characteristic

Up market

buyers

achiever

quality &

fashion

Secker

High

income

group &

Upper

middle class

Socially

conscious

Middle

class &

rural

market

mostly

low

income

group

Used by fertilizer

petrochemicals &

atomic energy

installations

mainly used

where to reduce

corrosion led

losses

Used by

manufacturers

of while goods

& other

industrial

products

Large &

small scale

car

industrial

mostly tied

up

companies

Old cars

are mainly

recoloured

Key

purchasing

factor

Quality

surfaces

influences

Quality

surfaces

shades

Cost Quality &

utilization power

Quality & cot Quality,

surfaced &

conting

strength

Brightness

& cost

Research &

Evaluation

Brand loyal Brand loyal

+ Cost +

variety

seeking

Cost Utility Variety seeking Brand loyal Cost+

variety

seeking

Purchase

Company’s

Authorised

dealer paints

the

customer

house

through

dealer paint

or

purchasing

paint com

of 1,2, 5,

10, litre

Packet or

paint can

Company

approaches &

points directly

sold

Other

manufactures

paints can

Tie up with

the anto

company

Old

vehicles

send to

work shops

or purchase

Post

Purchase

A warranty

period for

some years

Limited or

no warranty

No

warranty

High scale

service of

warranty

Medium or no

warranty

Service

provided

for limited

years

Service

provided

for 0-2

years.

Market

Asian paint is the market paint leader,

with more than 50% market share.

Nerolac, berger, ICI & Shalimar are

there

Nerolac is the market leader. Asian

paint have only 12% market share.

Other players – ICI

Nerolac market leader,

50% share

Asian paint penetrating

slowly

Tires 1

TARGETING

Asian paints have a unique customer targeting strategy. They used to follow V tier customer – Target

strategy.

Tire 2 Tire 4 Tire 3

Tire – 1 - In the recipient end there are strategic solution seekers. Company thinks of cost reductions,

performance & productivity improvement for client’s improving customers & share holder profitability.

Tier –2 – Here the Customers whom can be considered as the value or brand sensitive. Asian paints target

this customers with value added VDS integration customer level service.

Tires

Tier –3 – These part of the consumer are price sensitive. They least bothered about the service. These are

mainly middle or low income group people Asian paints have several brand like UTSAV – to serve them.

Tier-4 Here the company targets the small manufacturing & local companies, which can generate

revenue, company utilizes its & business & telesales technology to address & satisfy their needs.

Tier-5 – This tier is composed of specific targeted companies that although small in size, deserve special

attention because they are highly innovative in nature. Asian paints have a good prospect over here.

POSITIONING STRATEGY OF ASIAN PAINTS LIMITED

Although operating in commodity market. Asian paints have invested heavily in branding,

GATTU, the Asian paints official Mascot is a familiar icon across India. The company recently

augmented their web pressure. Their website, Asian paints.com is an exhaustive hub of ‘Painting

solutions’. The site use Maximum interactivity to enhance user experience. There are painting lips, online

shades cards, cost calculation (based on floor area and number of rooms0 dealer locator and a short of

other innovative services.

From the perceptual map we can understand that Asian paints, have wider range of products for all type

of customers consisting of different income levels. It has a product range from Royal Emulsion, Priced

250-400 which is targeted for up market buyers. Hpcolilen is a product which is targeted for high income

and upper middle class people. For lowers income group it has UTSAV, TRACTOR EMLSION which

priced vary from 40-100 Rupees. These products are mainly targeted to rural customers.

In Industrial segment companies position is relatively weak here Nerolac paints captured more

than 50% market share. In this segment Asian paints have products like Apcomin synthetic enamel which

is used for industrial coating, and Apco synthetic power which is used in automobile sector. In this

segment also Asian paints faced stiff competition from Berger and ICI Paints. Bajaj automobiles is the

main customer of Asian paints in automotive sector.

INDUSTRIAL PAINTS

PREMIUM PRICE

ROYALE

POSITIONING STRATEGY OF ASIAN PAINTS

Role of CRM in Asian Paints

Key Challenges

A Fresh Approach to the Customer Experience

In 2001 Asian Paints executives realized that the firm’s long term growth depended on their ability to

forge ever-closer ties to the end consumer. At the same time, the Asian

Paints help line had received calls from these consumers expressing a need for a more complete solution

to their home painting needs – and Asian Paints learned that they had demanding expectations when it

came to service and overall project execution. But because the company sold its products through a

network of dealers, it lacked visibility into the entire painting process and the needs of the homeowner.

This situation prompted Asian Paints Executives to explore ways to establish a more direct link to the end

customer.

Launching a Service Brand

With this in mind, Asian Paints made the decision to move from a strictly product-based manufacturing

business to a services model. With the launch of Asian Paints Home

Solutions, the firm would build a “service brand” by offering value-added services ranging from in-

person color recommendations to feng shui consultations.. The goal was to deliver an Asian Paints

“signature look” through the use of specific color combinations and themes.To achieve this goal, Asian

Paints needed a scalable customer relationship management (CRM) system that could map the major

business processes of Asian Paints Home Solutions and provide visibility into all customer interactions.

First, it required state-of-the-art call center capabilities that would include activity management for

customer calls and activity scheduling, as well as a lead management system that could prioritize and

route leads for proper handling.

Developing a customized Solution

Standardizing the sales delivery processes and establishing financial controls would necessitate

developing a custom solution. This solution required a secure Web interface enabling leads from the help

line to be forwarded to a home solutions service provider for handling. This service provider might be an

independent home painting firm or interior designer, for example, in the Asian Paints network.

The home solutions provider is responsible for using the system to perform all major tasks associated

with a job: schedule appointments, record completion of site surveys, submit job estimates, order paints

through Asian Paints dealers, record progress of jobs, invoice customers, and conduct customer

satisfaction surveys. The new solution would allow both the provider and Asian Paints Home Solutions to

view all customer interactions and financial information in real time. This same system would also

provide updates on the status of marketing rewards programs.

In addition, robust reporting functionality was required to generate a variety of sales, lead, and activity

analysis reports. This functionality would also be used to tabulate results of the customer surveys

submitted at the completion of a job.

THE CUSTOMER EXPERIENCE GETS ANEW LOOK WITH SAP CRM

When the time came to select a new system, Asian Paints studied the functionality of the most recent

release of the SAP Customer Relationship Management (SAP CRM) application very carefully. The

company was already using SAP solutions and had implemented SAP CRM in its existing call centers.

Asian paints determined that SAP CRM best met its criteria and opted to build on existing infrastructure.

The custom solution was a separate project that would require integration with the basic CRM system.

After considering other options, Asian Paints decided on the SAP NetWeaver® platform. The Web

Dynpro development environment allowed for rapid application development as well as custom

development of the user interface. And it would integrate seamlessly with SAP CRM. The architecture

called for the new solution, branded “project Tantra,” to retain the lead and opportunity management

functionality of SAP CRM. Then, all process associated with sales delivery would be implemented

through the custom solution. Integration with the SAP NetWeaver Business Intelligence (SAP NetWeaver

BI) component was also a critical factor. Data from both SAP CRM and the custom solution would be

uploaded to SAP NetWeaver BI to generate various reports.

Implementation Process

In launching its new service business, Asian Paints’s key objective was to deepen its ties

to the end consumer.As a result, the CRM system needed to offer visibility into all

customer interactions and financial transactions. At the same time, this system would

standardize business processes at each stage of a painting job. Thanks to the

implementation of SAP CRM and the custom solution, processes were optimized in the

following areas

1) Financial controls

There is now greater transparency into all financial transactions from billing and collections to

contractor–dealer payments.

2) Sales delivery

Asian Paints standardized the sales delivery processes to be followed by each provider. Since the

sales delivery process can be lengthy, the system allows Asian Paints to monitor the quality of

service its customers receive from the start of a project to its completion.

3) Customer data management

Asian Paints now has one centralized system for managing all customer data, which provides

greater visibility into customer needs and is now available for use in campaign management and

in the development of predictability models, among other activities. And because this data is

available in real time, reports can be generated instantaneously.

Lead Details SOA, and so on Reports

Web-Based System

Via Internet

SAP NetWeaver Platform

SAP CRM SAP NetWeaver BI

Customer Interaction

Center

Asian Paints Home Solutions Business Team

Close collaboration between Asian Paints and SAP resulted in adherence to tight schedules. The SAP

Customer Competence Center location in Singapore developed prototype scenarios specific to Asian

Paints, and SAP Labs made valuable contributions to the design and configuration of the custom solution.

Business Process Transformation and Value Realized

Moving Asian Paints closer to Customers

Asian Paints has made clear gains in achieving its long-term goals, as follows.

Faster customer acquisition The new online system for forwarding and following up on leads improved overall response times and

reduced the time required to acquire new customers.

Revenue In the four years since the implementation went live, 17,500 persons registered for Asian Paints Home

Solutions consultations, and of these, 5,000 signed up for painting jobs. Targeted revenue for the period

2006 –2007 is US$8 million to $10 million, and the company crossed the 30,000 mark in cumulative

number of customers.

Optimized visibility into customer needsThe new solution gives Asian Paints greater visibility into all customer interactions. As a result, the

company has gained a deeper understanding of the needs of its end customers and has tailored its service

business to meet these needs.

Scalability This new solution can accommodate Asian Paints continued growth well into the future. In fact, Asian

Paints doubled the number of cities covered without modifications to the CRM system.

Relationship Associate

Applicator Sales Associate

Optimizing Crtical Processes

The implementation of SAP CRM enabled Asian Paints to establish a direct link to its end customers and

to meet customers’ need for a home painting service. The following table illustrates the processes that

changed as a result of this implementation and the impact of these changes.

Processes Area Problems After SAP Software

Impact

Financial Controls

Inability to monitor financial transactions between providers and customersor between providers andcontractors

Ordering and accounting system used by allproviders

Visibility into all financial transactions betweenproviders and customers,and between providers andcontractors

Accounting transparency Optimized financial process controls Improved data transparency.

Sales delivery Lack of consistent salesdelivery processes fromlead and opportunitymanagement to jobestimating and schedulingLack of visibility intocustomer interactions

The same sales deliveryprocesses used by allprovidersImproved visibility into allcustomer interactions

Improved customersatisfactionReduced time required toservice customersCreated a direct channel tocustomerIncreased employeeProductivity

Customer data management

Inability to collect andmanage customer dataInability to identify changingcustomer needs

Centralized datamanagement capabilitiesImproved visibility intocustomer needsAbility to profile customers

Improved customer serviceImproved customeracquisition and retention

Future Road Map

. Asian paints is growing rapidly throughout the world. In international market company is planning to

introduce new & attractive products through its subsidiaries, like Berger, Apco coating etc. In domestic

market company will concentrate on development of new products/ product systems. With improved

supply chain management. Through its implementation of SAP CRM, Asian Paints has established a

direct link to its end customers, and put in place processes to ensure that their high expectations will be

met. In an effort to realize an even greater return on its IT investment, Asian Paints used its SAP CRM

infrastructure to develop an e-recruitment platform. This platform allows employment agencies to review

openings and upload job candidate information, reducing the time required to fill open positions.

In the future, Asian Paints plans to leverage its SAP CRM investment in the following areas:

Campaign management

With improved customer intelligence, Asian Paints now plans targeted campaigns to its customers.

New market segments

Asian Paints plans to extend its CRM initiative to indirect customer influencers such as architects and

interior designers.

Complaint-handling system

Asian Paints plans to develop a formal complaint-handling system to tackle customer problems with both

service and paint. By having selected a scalable system such as SAP CRM, Asian Paints has laid the

foundation for its long-term growth.

Learning

Asian paints have increased the capacity by setting up a plant in Rohtak Haryana. No other company has

planned to increase its capacity; this has given Asian paints a competitive advantage in terms of pricing. It

has widest product range in terms of products, shades , pack sizes and their pricing strategy is oriented to

middle and lower end consumers. Asian Paints is a market leader with more than 50% market share.

SAP CRM enabled Asian Paints to build a service brand through Asian Paints Home Solutions. With its

scalable CRM infrastructure, Asian Paints is poised to continue its expansion into the services market.

WEBILOGRAPHY

1)http://www.asianpaints.com

2)http://www.sdn.sap.com