Mode of Advertising Effectiveness in rural market with contract to Paint Industry

“Submitted in the Partial Fulfillment for the Requirement of PostGraduate Diploma in Management”

(PGDM)

Guided by: Submitted by:

Mr. Rajesh Sharma Rubisha Mittal

(Deputy Manager) 36 , 2013-15

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

KALKAJI, DELHI

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STUDENT DECLARATION

This project titled “Mode of advertising effectiveness in rural market with contract to paint industry” being submitted by me in the partial

fulfillment if requirements for the award of master of business

administration degree from Jims kalkaji, New Delhi.

I have not submitted this work anywhere else for another degree or

diploma.

All sources of information and help are authentic and have been acknowledged in the report.

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Certificate from GuideThis is to certify that the minor project titled

“Mode of advertising effectiveness in rural market with contract to paint industry”

It is an academic work done by Rubisha Mittal submitted in partial fulfillment of the requirement for the diploma management at JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL Delhi under my guidance and direction. To the best of my knowledge and belief the data and information presented by her in the project has not been submitted earlier.

Mr. Rajesh SharmaDeputy Manager

TABLE OF CONTENT Student Declaration Certificate from guide

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Acknowledgment Executive summary Introduction

Industry origin and growth Industry Structure History

Company Profile Highlights

Government Rules and Regulation SWOT Analysis Industry present and future trend Major firm in industry Firms or company strategies Comparative analysis of advertisement

Methodology Secondary data

Objectives Scope Recommendation Bibliography

Acknowledgement

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Though my words are not enough to express our indebtness and gratitude

to all those who helped me directly or indirectly in conducting this project.

I would like to take an opportunity to thank them collecting necessary

information and making of the report. I am grateful to all of them for their

time, energy and wisdom.

Getting a project ready requires the work and effort of many people. I would

like all those who have contributed in completing this project. First of all, I

would like to send my sincere thanks to MS. (AHUTI BHARGAV) her

helpful hand in the completion of my project.

Executive summary

About Shalimar paints:-

Shalimar Paints is one of the leading paints manufacturing companies of India. Shalimar has three manufacturing units and more than 54 branches and depots all across the country. The Company has a wide product range in Decorative / Architectural and Industrial segments. The Architectural

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Coatings cover both Interior and Exterior segments. The Company also has tinting systems under the brand name "Color Space" where the Company offers more than 9000 shades across all product lines to its customers.

Vision:Shalimar's vision is to become one of the leading paint manufacturing companies of the country, a leader in product innovation and customer satisfaction. Shalimar intends to build long term value relationships with all its suppliers and customers

Mission:The Company's mission is to maximize returns of each stakeholder in the Company be it customers, shareholders, suppliers or employees and become a socially responsible global Corporate Citizen.

Environment policyShalimar shall comply with all applicable environmental legislation and regulations. Shalimar shall Endeavour to operate all the plants and facilities in a manner to ensure a clean and healthy environment. Shalimar shall strive to achieve reduction of wastage and ensure optimize resource utilization through source reduction, recycle or reuse of waste. Shalimar shall impart training and education to all employees to work in a manner which maximizes protection of the environment.

Social welfareThe Company runs a high School at Howrah where it imparts free education to boys and girls from Class 1 to Class X. Besides this it also organizes various cultural activities for its staff all across the country. Company appreciates success of merits student of employees and awards them scholarship to encourage their spirit of education. Shalimar takes care educational development of workers children, company distribute free books to the children of workers. Shalimar conducts Annual Medical Health Check-Up Program for all employees.

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INTRODUCTION

Industry origin and growthThe earliest paint factory in India dates back to 1902, when Shalimar Paints Color and Varnish Company, A Pinching Johnson unit, was established at Calcutta. Growing industrialization expansion of the railways and introduction of electric power a couple of years earlier had all kept business confidence soaring high. However this did not provide a ready and expanding market for the nascent paint industry then. Imports from Britain continued to swarm the market and raw material were not easy to come by.

The industry still consisting of one lone unit went through a rather prolonged period of infancy till the World War II brought in dramatic opportunities. With the stoppage of imports owing to war conditions, the domestic market at last became almost the exclusive reserve of the domestic industry. European

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manufacturers hitherto exporting to India readily saw the advantages of setting up manufacturing facilities here. The period between the wars thus saw the greatest ever influx of foreign paint companies into India Good lass wall 1918 Elephant Oil Mills 1917 in Bombay and British paints Jenson Nicholson and Mac far lances was brought over by the plodders and become a completely Indian company while the other three i.e. Shalimar paints British paint and Jenson Nicholson continued as British operated units.

While talking about the post independent development of the Paint industry in India, mention must be made of Asian Paints, a completely Indian unit which started on a very small scale, grew so big and so beyond recognition over the years that it is today not only the largest unit in India but way ahead of the 2nd largest, Kansai (Good lass) Nerolac Paints Ltd., formerly a unit of Good lass Wall (UK).

Besides Asian Paints, numerous factories, wholly Indian in ownership and with rare exceptions in technology as well was set up in Calcutta, Kanpur & Bombay. The British units, though a few in number, were technically strong and financially sound and, with the active support and patronage of the Government, controlled a vastly higher share of the market. The post-independence period witnessed a steady growth in the paint industry. From a mere Rs.200 million turnover in 1950 the paint industry crossed the Rs.14000 million marks in 1990-91.

But even in this period, paints were considered a luxury item. Only people with high incomes were expected to decorate their houses with the use of paints. Paints, as a protective element were totally unheard of. The industrial segment which was traditionally a low user of paints, vis-à-vis its counter parts in the decorative segment too contributed to this notion in line with this misconceived notion the government drastically increased duties on paints in the early nineties with an aim to bolster exchequer revenues. The result was obvious. This inevitably brought about a downturn in the fortunes of the industry.

The product which is highly price elastic saw a negative growth rate of 20% in 1991-92. The next year was also not good registering a growth of only 2% bringing it back to the 1990-91 level thus corroborating the fact that the industry needed lower excise level to grow. The industrial slowdown during that period also did not help matters. In the line with the liberalized policies & realization that paints is not necessarily a luxury items duties were progressively reduced from1993-94.

This squared growth as most companies passed on duty reductions. Further the entry of world majors in the automobile and white goods market in India

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since1993 helped the market to expand. Demand for auto paints shot up suddenly. Form a modest 8% growth rate in 1993-94 paint demand touched 12% in 1995-96.

Rapid industrialization and improvements in the infrastructure such as transport energy and communication during the last decade gave a further fillip to the growth of the paint industry Aided by government liberal policy of technology import the automotive and consumer durable segment expanded phenomenally with a flurry of foreign collaboration. Increased demand for decorative protective and functional coatings was natural fall out which brought in its stride a host of indigenous developments as well as the injection of new technology.

The Indian paint industry estimated to be Rs.21000 cr.Industry has been growing at a rate of above 15%for the past few years. The organized players of the industry cater to about 65%of the overall demand whereas the unorganized player takes care of the remaining 35 %in value terms. The unorganized players mainly dominate the distemper segment. The industry consists of two segment namely Decorative segment cater to the housing sector and Industrial segment consists of powder coatings, floor coatings and other protective coating catering to the automobile marine and other industries.

In the domestic market decorative segment account for 70%of the total demand for paints whereas the industrial segment account for remaining 30%.Globally the demand for paint is almost equally distributed where both the segments account for close to 50% of demand. The paint industry volume in India has been growing at 15%p.a for quite some years now. As far as the future growth prospects are concerned the industry is expected to grow at 12-13% annually over the next five years. FY11 was challenging year for the industry as whole due to subdued demand across key sectors and rising inflation.

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Industry Structure Indian Paint Industry is over 1000 years old. Its beginning can be traced back to the setting up of a factory by Shalimar paints in Calcutta back in 1902. Till the Second World War the industry consisted of small producers and two foreign companies. After the war, the imports stopped which led to the setting up of manufacturing facilities by local entrepreneurs. Still the foreign companies continued to dominate the market, which in a way is the current scenario as well.

The initial decades saw the complete dominance of British Paint companies such as good lass Walls (now good lass Nerolac), ICI, British

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Paints (now Berger paints), Jenson &Nicholson and Blundell & Eomite. The Indian Paints sector is valued at Rs. 6,800 cores in value terms and is very fragmented. The current demand is estimated to be around 650,000 tons per annum and is seasonal in nature. The per capita consumption of paints in India stands at 1.0-kgp.a. As compared to 1.6 kg in China and 22 kg in the developed economies. India share in the world paint market is just 0.6%. The Indian Paint industry can be divided as: The organized sector comprising of large and medium size units. The unorganized and the small scale sector. There are now twelve players in the organized sector with a market share of 70%.

This is in contrast to the 55% share that the sector commanded a few years back. Major companies in this segment include Asian Paints (44% market share), Berger Paints- 17% market share, ICI -12% market share, good lass Nerolac 15% market share, Jenson Nicholson 6% market share, Shalimar Paints and Rajkot Paints. The organized sector has grown at a CAGR of 11.5%in the last five years. The unorganized sector comprising of over 2000 units has a combined market share of around 30%. The major players are Asian Paints, good lass Nerolac, Berger, ICI and Shalimar. Recently, world leaders like PPG, DuPont and BASF have set up base in India with product ranges such as auto refinishes powders and industrial coatings. Kansai Paints of Japan, which entered into collaboration with Good lass Nerolac in 1984, is now the holding company for good lass Nerolac with 64.52 % equity holding. PPG has a joint venture with Asian Paints to manufacture industrial coatings. Jenson & Nicholson are no longer active players because of dwindling sales in recent years. In the 1990s, helped by a growing economy, the paint industry had recorded a healthy growth of12-13 % annually.

This was mainly due to a drastic reduction in excise from a staggering 40% to16%. However the growth was restricted in 2000-03 to single digits. There was a revival in2003-2004 with a robust growth of 13%.8.The per capita consumption of paint in India is 700grams against 19 kg in the U.S., and 2.7 kg and 5.8 kg in other developing countries like China and Brazil. As the consumption goes with affordability, the low Indian figure is not a surprise .High excise duties, low technology and low capital costs for

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production led to the incidence of a high number of units in the small scale sector. However, since 1992 the government has been consistently lowering duties from 40.5% in 1992 to around 16% currently. This has led to lowering of price differential between the organized and unorganized sector. Moreover the paints sector was also allowed to claim MODVAT credit on petro-based products thus lowering the excise incidence further.

HistoryShalimar Paints incorporated in 1902, is one of the leading paints manufacturing companies in India. The company has a color bank of 9000 shades.

The Company has a wide product range in both Architectural and Industrial sectors.  It has network of 54 branches and depots spread across India. The Company also has tinting systems under the brand name 'Color Space. It has network of 6000 dealers.

Manufacturing facilitiesThe company has three manufacturing facilities located Howrah, Nasik and Sikandrabad. These units have ISO 9000 accreditation for its quality management. Its Howrah plant, is the first large scale paint manufacturing plant located in South East Asia. It has installed capacity of 14204 MT per year. This plant also has in-house research and development laboratory that is recognized by Dept. of Scientific and Industrial Research, Govt. of

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India. Its Sikandrabad unit was set up in technical collaboration with Sherwin Williams of USA.

Product Decorative- The Company manufactures wide range of decorative

paints used for interior or exterior, every surface - concrete, plaster, metal or wood. Under this it has created brand like Extra, Superlac, Shakti man, Superlac Hi-Gloss and Husain Collection.

Industrial- Under this the company has association with companies like Pinching Johnson Co. and International Paints PLC of the U.K. It manufactures and markets industrial coatings, aviation coatings, marine paints and coatings for metal decoration and food can lacquers.

Outlook With the Indian economy continuing its buoyant growth and massive investments forthcoming in infrastructure and housing, there is considerable potential for growth of the paints industry.

COMPANY PROFILEEstablished in 1902 Shalimar paint limited bears the distinction of being one of the oldest paint companies of the world and is currently the fifth largest paint company of India .It is jointed promoted by Mr. Girish Jhunjhnwala and Mr.Ratan Jindal. It has a diversified revenue mix with presence in both decorative and industrial paints and a wide product range across both segment and across all price points. For industrial segments it service marquee clients in the following industries-a)Oil and Gas, b)Petrochemical ,c)Fertilizer, d)Power ,e)Steel, f)Engineering ,g)Shipping, h)Auto ancillaries etc.

It has strong research and development capabilities with a proven history of developing indigenous products for both the decorative and industrial segments.

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Product range- Its range of decorative paints includes exterior wall ,Emulsions and cement paints, interior wall Emulsion and distemper Paints, metal wood and floor surfaces , paint under coats , where as its industrial range includes protective coating , product finish , meta decorative coating and marine paints.

Manufacturing plants and research & development centers-It has three manufacturing plant across the country with a capacity of 66000 tones p.a. A fourth plant in Chennai, Tamil Nadu is expected to start operation in FY 15. Howrah and Nasik plant also have resin manufacturing facilities which help Shalimar paints limited operate effectively in industrial paints. It has two research and development centers one at Howrah, west Bengal and one at Nasik, Maharashtra set up in 2009 spread over 10000 sq. ft. Both of them are recognized by department of scientific and industrial research (DSIR). Research and development center at Howrah was the first in house R&D unit to be recognized by DSIR in 1979.

Distribution Reach-It has a national wide distribution network with three regional distribution centers (RDCs) more than 54 branches and depots and 7000 dealers .It also have dedicated sales and marketing teams for decorative and industrial paints .It also has tinting systems under the brand name Color space where it offers more than 10000 shades across all product lines to its customers.

Highlights The Indian paint industry is Rs. 49 billion sector.

The demand for paints is relatively price-elastic but is linked to the Industrial and economic growth.

The per capita consumption of paints in India is very low at 0.5 kgPer annum if compared with 4 kg in the South East Asian nations and 22 kg in developed countries. The global average per capita consumption is 15 kg

In India the organized sector controls 70 percent of the total market with

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The remaining 30percent being in the hands of nearly 2000 small-scale units.

In most developed countries the ratio of decorative paints visa-A- via industrial paints around 50:50

In India the industrial paint segment accounts for 30 percent of the paint market while the decorative paint segment accounts for 70 per cent of paints sold in India.

All the industry majors have a vast dealership network and are required to maintain high inventory level.

Most of the paint leaders have technical tie-ups with global paint leaders.

Government rules and regulationsGovernment take steps to resolve paint industry crisis December 11, 2008 (India)Government has announced several relief measures to support the paint industry from time to time, which has been representing that paint exports have been affected by the global recession.

1. The Technology Up gradation Fund Scheme (TUFS) was launched to facilitate the modernization and up gradation of the paint industry both in the organized and unorganized sector. The Scheme has been further fine-tuned to promote the rapid investments in the targeted sub-sectors of the paint industry. The cost of machinery has been further brought down by reducing the customs duty on imports.

2.To provide the paint industry with world-class facilities for setting up their paints units, meeting international environmental and social standards, a Public-Private Partnership (PPP) based Scheme known as the “Scheme for Integrated paint (SIP)” has been introduced in August 2005.

3. in 2004-05 Budget, the entire paint sector, except for man-made and filament yarn was provided optional exemption from excise duty. In 2005-06 Budgets, Central Value-added Tax (CENVAT) on Polyester Filament Yarn has been reduced from 24% to 16%. These modifications in fiscal levies aim at attracting more investments for modernization of textile sector.

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4. To facilitate import of state of the art machinery to make our products internationally competitive in post quota regime, in 2005-06 Budget, the customs duty paint machinery has been brought down to 10% except for 23 machinery appearing in List 49, which attracts Basic Customs Duty (BCD) of 15%. The concessional duty of 5% continues to be at 5% on most of the machinery items.

5. Government has launched the Debt Restructuring Scheme in. Sept 2003 with the principal objective to permit banks to lend to the paint sector at 8-9% rate of interest. 6. Government has allowed 100% Foreign Direct Investment in the paint sector under automatic route.

7. Government has de-reserved the readymade garments, hosiery and knitwear from SSI sector so that large-scale investments may be encouraged in these sectors.

8. National Institute of Fashion Technology (NIFT) has been set up to provide the leadership role in sensitizing the Industry to the concept of value addition by inducting trained professionals to manage the industry. This has resulted in an increased demand for trained professionals in various sectors servicing the industry.

9. A series of relief measures to paint exporters such as enhanced DEPB & Duty drawback rates, reduced ECGC premium, subvention on credit rates, refund of service tax paid by exporters on various services etc.

10. Apparel Export Promotion Council (AEPC) has established Apparel Training Design Centers (ATDCs) throughout the country to cope with the requirement of skilled / semi-skilled manpower for the paint industry.

SWOT ANALYSIS Strength

1. Shalimar Paints was first large-scale paint manufacturing unit in

South-Asia, hence has vast experience in this industry.

2. Shalimar Paints offers wide range of decorative products both in

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interior and exterior categories and it offers paints at all price bands

thus catering to customers in all segments.

3. Introduction of tinting systems at dealer locations has helped

customers a wide choice of 9000+ shades.

4. They are pioneers in industrial paints category as they have

association with Pin chin Johnson Co. & International paints.

5. With products in marine coating, High performance Coating,

packaging and General Industrial, they are 3rd largest in the industrial

paints category.

6. Currently 3 manufacturing facilities strategically located at Howrah,

Sikandrabad and Nasik which jointly have capacity of 57000 tones

p.a.

7. Company has good Pan-India presence with well-established Sales & Distribution Network.

Weakness

In spite of having the first mover’s advantage in the paints industry it lags behind Asian Paints, Berger Paints, and Alzo Nobel in many segments.

Customer tastes and perceptions change very fast and products may become obsolete with change in trends, hence production planning and inventory problem.

Opportunity

1. Shalimar is introducing a Self-Clean Paint: paint with a new technology that doesn’t allow water to stay on walls, it turns water into tiny balls that roll down the wall taking dirt away. 2. New Facility at Chennai is under construction stage would increase the capacity by 18,000 tones p.a. and would cater to South India.

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3. Current Mfg. facilities stands only approx. 1/3rd of the land available, hence there is a great opportunity of expansion if desired.

4. Continuous R&D provides scope of reduction of VOC and HAP; develop more eco-friendly products which have high potential growth.

5. Tremendous growth opportunities in Rural India

Threat

1. Stringent Government rules and regulations regarding the quality of products and manufacturing facilities as Environment policies are given more emphasis2.Raw material scarcity and volatility in prices.3. Competition from national and international brands as they target India owing to its large market.

Industry present & future trendsThe Indian paint and coatings industry is riding high on the growth in the Indian automobile industry, new construction in the housing segment and improving infrastructure throughout the country. Thirty percent of the paint business is comprised of new construction projects. GDP growth projections of six to 6.5% in the current year mean a growth of nine to ten percent in Indian paint business. The growth will be 12-13% in the industrial segment and eight to nine percent for decorative paint.

The Indian automobile industry has been performing remarkably well and will benefit the market leader in the segment Good lass Nicolas. As for the future, the industry has predicted a CAGR of eight to nine percent for the next five years compared to last year’s growth levels of 27.4% for cars and 8.9% for two wheelers. The Indian housing industry is likely to do well in the current year as well, recording a growth rate of 35% last year. As a result of the overall health of India’s economy, it is safe to predict a nine to ten percent growth rate for the Indian paint industry in the next five years .Consumers can look forward to new product launches, some for application in special areas.

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Companies will be increasing the value added services available to customers by offering a variety of finishes through specialized and trained applicators. There will be more options like ranges of colors/finishes for wood applications through the tinting machines. Additionally, the trend towards water-based coatings is likely to set in both for industrial and decorative applications. While India has not yet embraced the DIY concept as cheap labor is still available, exclusive retail chain stores sponsored and run by Indian paint companies will become a reality. The Indian paint industry has progressed well and moving ahead is likely to be influenced by several factors including new technologies, new innovative products, new associations, consolidation of industry and poor performers getting out of the market. Ultimately, in the years ahead there will be only four or five key players operating in the Indian paint market.

Major firms in an industry The Indian Paint IndustryIn India, Indian Paint industry’s total market size is US$1400 million. The organized sector of the industry is 55%. The 45% unorganized sector has about 2500 units. The big players and their market share-value of the organized sector are

Asian Paints 37% Good lass Nerolac 15.9% Berger Paints 13.8% ICI 11% Jenson & Nicholson 5.7% Shalimar 4% Others 12%

The market segment is divided into two sectors. Architectural 70% Industrial 30%

The total volume of the market is 600,000Mt.

Firms or company strategies

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MARKET SHAREThe overall organized sector market share is shown in the following graph. Asian Paints -37 % Good lass Nerolac -16 % Berger Paints - 14 %

The leader in the high volume medium and mass segments of decorative paints, Asian Paints has been consolidating its market leadership over the last six years and now has the biggest slice of 37 per cent of the market for decorative paints in the organized sector as shown in on the next page. Trailing behind are Good lass Nerolac and Berger Paints with market shares of 16per cent and 14 per cent respectively. Other major players from the organized sector include Jenson & Nicholson with a low 6 per cent and ICI with 8 per cent. With the exception of Asian Paints, the market shares of most of the major players have been stagnating over the last few years. This was primarily due to extensive focus on urban markets and neglecting the high-potential semi urban and rural markets. On the other hand, one of the earliest entrants to take a lead good lass Nerolac dominates the market for industrial paints with an impressive share of 43 per cent of the market as shown in the following graph. Though other players trail behind Good lass Nerolac by a wide margin, competition in industrial paints is increasing. While Asian Paints and Berger have a market share of 14 per cent each, ICI’s share is lower at 8 percent.

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Comparative analysis of advertisement1. Interior Paint

Berger’s Paint Product Name- Berger Rangoli Easy

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Description- Father and son made up a mess of the wall, then mom comes up and looks at their scared faces and says that its easy clean paint where walls can be washed to remove dirt without affecting the color.

Attention Factor- The display is quite capable of getting the attention of the common mass as we can see that the lady in the house who is generally most concerned about the cleanliness and longevity of the house takes everything casually as she knows what has been done can be undone easily. This usually attracts the attention of the wives and even the husbands.

Memorizing Factor -The punch line in this display i.e. “daag jaye par rang na jaye”, is quite appealing and people will remember this add for this punch line.

Sentimental Appeal -The casual approach of the lady shown in this act works as sentimental appeal for all women who usually are the most concerned within the family.

Education Factor Just a wash can free the wall of all dust, dirt and stains.

Asian Paints Product Name- Asian Paints Royale (Luxury Emulsion)

Description- Saif Ali Khan who was playing video game and was unaware of the fact that there was a clash between his dog and his

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house butler, who was carrying some food and drinks for Saif and eventually all the food and drinks gets spilt on the walls making a mess of it, later it could be

Easily wiped out because of the Teflon surface protector.

Attention Factor -1.Saif Ali Khan a Bollywood superstar 2. Less cautious nature while at home.

Memorizing Factor -This advertisement is repeated a lot in most of the commercial and news channels which serves the memorizing factor.

Sentimental Appeal -Saif Ali Khan a Bollywood superstar and a member of the royal family advertising for Asian Paints Royale. It’s a good strategy of Asian Paints to bring both the Royals together.

Education Factor- Because of the Teflon surface protector in the paint, the walls will not get easily damaged.

Kansai Nerolac Product Name -Nerolac Impressions Eco Clean Description- In a newly painted house the husband (SRK) is with his

daughter and pregnant wife. As the paint is free of VOC and Lead its

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harmless for even new born children. It is shown that any scribbling in the walls can be easily washed off i.e. the paint is washable.

Attention Factor- Firstly, as because of no fumes and pollutants in the paint it’s even safe for pregnant women as well as new born babies and secondly, paints are wash proof.

Memorizing Factor- It’s not a much repeated commercial as compared to Asian Paints and Berger Paints. Hence its memorizing factor is low as compared to the rest.

Sentimental Appeal -Appearance of King Khan in this commercial as a Brand ambassador is itself the strongest sentimental appeal compared to others for a major section of the population.

Education Factor -It’s not having any side effect as it comes with low VOC and it’s totally lead free.

Exterior Paints Berger Paints Product Name- Weather Coat All Guard Exterior Paints.

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Description- A girl child standing in the window and experiencing the reverse effect of rain i.e. water moving up back to the sky, resembling the same in case of the exterior walls where water will not percolate and damage the construction after the rains.

Attention Factor- Slogans like “Reverse the effect of rain” and “7 years of warranty” are good for gaining the attention of the viewers.

Memorizing Factor- “Reverse the effect of rain” is said a numerous times within the ad which will stay in mind easily.

Sentimental Appeal -Keeping the walls fungus free and spotless

Education Factor -Presence of silicon pushes water away leaving the walls spotless, fungus free, and rain proof.

Asian Paints Product Name -Asian Paints Ultimo

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Description- Features or key advantages are not shown directly to the customers but through expressions and acts it is made understandable that year after year the exterior paint of the house stays without losing its color and glamour, starting from the birth of the child till marriage.

Attention Factor -“7 years warranty with color stay” this slogan which means that year after year the conditions of the exterior walls remain unchanged is good in attracting the attention of the viewers.

Memorizing Factor- 4 to 5 times when the owner of the house tries to tell about the qualities of his son to the different visitors, the visitors without giving attention to his son starts praising or complementing the paint which he has used for his exterior walls.

Sentimental Appeal- No such sentimental stuffs are related to this advertisement.

Education Factor- No such educating stuffs are related to this advertisement.

Kansai Nerolac Product Name Nerolac Excel Exterior Paint

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Description- Son was trying to take a rotten apple then mom comes up and says which is rotten from outside its even rotten from inside, now the brand ambassador SRK comes up and says that the same is the case with the house (directing towards their house which presents a shabby look from outside) so put Neola paints to keep your house safe from outside which will automatically keep it safe from inside, using the key words like anti-germs, anti-allergy and anti-pollution.

Attention Factor- Anti Germs Anti-Allergy Anti-Pollution No Harmful Fumes.

Memorizing Factor- The comparison shown between the rotten apple and the house.

Sentimental Appeal -The Bollywood star ShaRukh Khan giving promotion to any product will itself have a sentimental appeal for a major section of the Indian population.

Education Factor- Tagged as Healthy home paints (low VOC and Lead Free)

ASIAN PAINTS

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Asian Paints is India's largest paint company and the third largest paint company in Asia today with a turnover of Rs 30.2 billion (around USD 680 million). The company has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 21 countries and has 29 paint manufacturing facilities in the world servicing consumers in over 65 countries. Asian Paints is a great marketing success in a branded consumer product business. The company succeeded where others failed in three areas:-

1. It understood the requirements of the Indian paints market better than the MNCs which did not bother to respond to local consumer needs. It was the first to introduce small pack sizes, a variety of shades and a wide range of paint types (enamels, distempers, emulsions) to suit different pockets. Thus, in the sixties, the company came out with plaster distemper, Tractor, to suit the needs of the mass market for a product that was much cheaper than costly emulsions but much better than the widely used whitewash and crude powder distempers. This opened up a huge market and today distemper accounts for 25% of the decorative market in volumes and 15% in value. And as recently as in 1992, the company introduced a synthetic distemper, branded Utsav, aimed at the same rural and low income urban markets .

2. In the highly competitive market emulsions segment, the company introduced as many as 151 shades in its Apcolite range when the competition was offering a maximum of 40 odd shades. The strategy paid off and Asian Paints today commands a 40% share in this segment. It setup an extensive national distribution network to tap demand in smaller towns. Today it has direct dealers in 3,200 towns and 10,000 stickiest. Investments were also made in computer technology to ensure up-to-date information interface between the marketing and production sides of the business. And finally, the company has displayed considerable savvy in its advertising campaigns, dealer relations, point of sale publicity and product demonstrations to consolidate and expand markets. In fact, the company has played a pioneering role in expanding the Indian paints market by identifying high demand potential areas and then tapping them to maximum effect. This ratio is defined as profit after tax divided by the shareholders fund. It measures the profitability of the funds invested in the firm. It is regarded as a very important measure because it reflects the productivity of the risk capital employed in the firm. This ratio measures sales per rupee of Investment in fixed assets. It measures the efficiency

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with which the Fixed Assets are employed- a high ratio indicates a high degree of efficiency in asset utilization and a low ratio indicates inefficient use of assets. It can be seen form the graph that this ratio is increasing for Asian Paints indicating good asset management.

Product Level

Basic Product: The basic need for paint is to protect the wall from cracks, leaks, make it look clean, make and proper ambience etc.

Expected Product: Decorative or Industrial paints, further more like multi choice colors, oil based, mat finish, distemper, primer, wall paint, floor paint, metal paint, wood finish, powder coating, protective coating, fresh coats etc. This level fulfills customer’s requirement and their needs.

Augmented Product: Paint should be of acrylic type, washable, sunlight protected, leaks proof, long lasting, chemical base so it dries fast, polished etc.

Potential Product: Here the customer future requirement is judged and tries to give any such kind of product so we can say a kind of „mass customization‟ product. Some example can be like getting paints which are pearl kind shining, reflective, mirror view color etc.

Price: Royale luxury Emulsion is placed as a luxury emulsion, pricing strategy adopted is value based pricing, Price range 315-345 for 1Lts.

Place: - Extensive distribution network of 4 Manufacturing units, 6 Regional distribution centers ,55 Depots ,15,000 Dealers including Urban and Rural, 90,000 Sub Dealers, Exclusive 3000 Asian Paints Store and 4500 Color World Stores. Asian paint bypassed the bulk buyer segment and went to individual consumers of paints. It went slow on urban areas and concentrated on semi-urban and rural areas. Asian Paint went retail. It went in for an open-door dealer policy. Asian Paint voted for nationwide marketing / distribution.

Promotion Mix: The promotional strategy adopted by Asian is quite unique. The company is using high profile brand ambassadors like AK shay Khanna, Saif Ali khan to promote Royale Luxury Emulsion.

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BERGER PAINTS Berger Paint is the culmination of over seven decade process of evolution and growth that began in 1923.Its growth has been closely linked with the business and industrial development of modern India. The performance of this company is anchored today in a wide variety of decorative and industrial paints which continue to gain an increasing share of the highly competitive Indian paint market .Being an ISO 9001 company its quality products have attained instant and worldwide recognition and continues to meet quality requirements that are demanded today even in the domestic market. The country’s third largest paint manufacturer with its headquarters in Calcutta, Berger control a distribution network comprising of 66 stock points and approximately 10,000 dealers, spread across the country. BPIL has technical tie ups with Herbert’s a subsidiary of the German pharmaceutical major Hoechst for automotive paints, Tender NV of Holland for powder coatings and Valspar Corporation, USA for heavy duty coatings.

The company is particularly active in the powder coating segment and is a supplier to most OEMs in the white good segment. With its thrust shifting to industrial coatings, the company is expanding its powder coating capacity from 840 metric tons to 1,840 metric tons at its existing plant. Recently, it introduced Color Bank, a computerized mixer tinting machine in technical collaboration with Italy Tinto of Italy. Special software, Tinto vision installed in the Color Bank gives the customers a choice of more than 5,000 shades and can even produce the colors offered by the company’s competitors. Another achievement of Berger is the setting up of Berger Pro links.

Pro links is Berger paints response to a market environment that is increasingly driven by technology and calibrated by expertise. Pro links is aimed at placing the initiative in the hand of builders and designers to enable them to directly source innovative product and services. The team is entrusted with maintaining a seamless interface between paint specifies and Berger paints. The objective is to provide specifies with a complete basis for recommending products and processes database technical

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services, color consultancy, site inspection etc. Pro link experts ensure specific solutions to specific problems; whether it is a particular shade that needs development, special climatic factors to be provided for or application factors that have to be maintained. From known – how to legwork the pro link team delivers total support.

ICI INDIAICI India was the subsidiary of the $15bn British multinational company ICI Plc. Brunner Mond and Company one of the four Companies that combined to form ICI in UK in 1926, opened a trading office to sell alkalis and dyes in Calcutta. In 1923, Brunner Mond & Co. India was incorporated and the company's name was subsequently changed to Imperial Chemical Industries India Ltd., in 1929.ICI India is ranked fourth in the paint business, after Asian Paints, Good lass Nicolas -17.Paints and Berger paints unlike the other paint companies ICI India was advertised unit and paint constituted 43% of its net sales.

It identified paints as a thrust area and was aggressively moving to improve its position. The company invested $11 million in a new decorative paints plant near Bombay and constructed a $16.7 million plant for industrial paints near Chandigarh in North India. In order to increase its presence in the paints market, ICI’s growth plan is to beef up its distribution network, widen the purview of specialty products, access newer technologies through joint ventures and of course, targeting the urban and semi-urban markets by introducing more products in the lower and middle segment of the paints market. In order to be amongst the top two players in the industry, the company is firming up plans to aggressively market its products in the country.

The Glidden’s brand is being positioned in the middle segment to supplement Maxi lite in the mass-segment and Deluxe in the premium segment. In response to Jenson & Nicholson’s Insta color ICI launched color solution which can be used for both interior and exteriors. This comprises a menu driven, user friendly touch color screen on a computer that helps consumers visualize as many as 6000 shades on house structures resembling their homes.

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JENSON AND NICHOLSON

Jenson & Nicholson, a leading paint company in the country today was established in the year 1922. It has a country wide presence with 33 branches and stock points across the country and manufacturing plants at Naihati near Kolkata, Sikandrabad near Delhi and Panel near Mumbai. In 1955, it launched India’s first Plastic Emulsion paint, under the brand name of Robbialac. It ventured into the Powder coatings market in 1986, thus becoming the first company in the organized sector to offer this extremely environment friendly coating technology. Subsequently it introduced Instacolor in technical collaboration with M/s Tikkurilla OY of Finland. It is the first company in the country to introduce computerized dispensing system. Jenson and Nicholson launched the Stand ox brand of products in 1996 which offers over 45,000 colors to the Indian car owner. In the very next year, the company in order to cater to highly specialized Marine paints sector, entered into a 50:50 joint venture project with M/s Chugoku Marine paints of Japan. Chugoku is the second largest supplier of marine paints in the world with 30% market share. The new company also handles heavy duty coatings.

KANSAI NEROLAC GOODLASS NEROLAC

It was established in 1920 as GA Hagan Paints and Varnish Co. Ltd. at Bombay. In 1930, three British companies merged to formulate Lead Industries Group Ltd. In 1933, Lead Industries Group Ltd. acquired entire share capital of GA Hagan Paints in 1933 and thus, Good Lass Wall (India) Ltd. was born. Subsequently, by 1946, Good lass Wall (India) Ltd. were known as Good lass Wall Pvt. Ltd. In 1957, Good lass Wall Pvt. Ltd. grew popular as Good lass Nicolas Paints private limited.

 Also, it went public in the same year and established itself as Good lass Nicolas Paints Ltd. It is among the oldest paint companies of the country and the undisputed market leader in industrial paints, with a43% share of this segment. It is a dominant player in the auto paints market which accounts for around one-third of the industrial paints segment. Good lass Nicolas paints’ strength comes from the higher end of the auto paints market - passenger cars and light commercial vehicles (LCVs) account for 60% of the company’s auto paint sales. The rest comes from heavy trucks and two wheelers. In auto paints, the market share of Good lass is now estimated to be around 50% with a 90% share in passenger cars, 60% in

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LCVs, 40% in two wheelers and heavy trucks. Right now, the company is the only significant producer of CED (catholic electro-deposition) primer, with technical know-how from its Japanese promoters, Kansai Paints.

Good lass is the only company offering a complete automotive paint system comprising pre-treatment chemicals, primers, anti-rust coatings, intermediate and top coatings as well as auto refinishes. GNPL supplies 90% of the requirements of MarutiUdyog Ltd. which produces 300 cars a day. The company has a tie-up with Nihon Toshuku Tokyo of Japan for sophisticated coatings for automotive and industrial sectors. Having lost Daewoo’s Ceil contract to Asian Paints, GNPL is pursuing business opportunities with car majors planning to enter the country. It recently tied-up with DuPont, USA for supplying automotive paints to DuPont’s clients in India. Good lass Nicolas Paints Ltd. changed its name to Kansai Nicolas Paints Ltd. in 2006. The present human asset consists of over 2000 professionals and a sales turnover of 1226 cores. It is the second largest coating company in India with a market share of over 20% and also the leader in powder coatings.

Method of CollectionSecondary Data

Secondary data means data that are already available i.e., they refer to the data which have already been collected and analyzed by someone else. When the researcher utilizes secondary data, then he has to look into various sources from where he can obtain them. In this case he is certainly not confronted with the problems that are usually associated with the collection of original data. Secondary data may either be published data or unpublished data.

Objectives

To promote and protect the small scale paint industry in India. To foster unity and co-operation among small scale paint and allied

manufacturers, for their common progress and prosperity.

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To represent and seek redress from Government for the difficulties experienced by its members, by written submission to Government, interaction and representation on relevant Government bodies.

To disseminate among its Members updates in technology and management practices.

To update Members about changes in Government regulations affecting their industry.

Identify problems that may arise, affecting the small scale paint industry and take preemptive measures.

Maintain a library offering member ready access to several national and international publication but most important the standards for paints laid down by the Bureau of Indian.

Scope

The Indian paint industry has come a long way from the days when paints were considered a luxury item. Today the awareness level on preventing corrosion through paints is relatively high, development that should be a huge boost to the paint industry. This report provides in-depth information and analysis on the US$ 925.0 million (2000-01) worth India paint industry. The Indian paints industry offers lucrative scope for stable revenue streams to manufacturers of both decorative and industrial paints.

They focused on all such crucial parameters that make India favorable proposition. Factors that have been given emphasis include the low per capita consumption of paints 1.0 kg growth in construction sector it is being offered industry status and growth in the auto /white good market respectively spurring demand for decorative and industrial paints. The industry has also witnessed increased activity in the industrial variety of paints with the entry of MNCs in auto, consumer durables etc. The report covers both the segment for varieties of paints along with elaboration on product sub- segments. The typical characteristics of the Indian paint industry have been discussed in depth covering the typical features of the Indian industry via raw material intensiveness, working capital intensiveness; seasonality of the current global scenario with reference to the paint industry has been covered with special focus on auto coat market

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which is a key growth area in the international market. The current scenario prevailing in the Indian paint industry has been pictured in detail. The share of the organized and unorganized sector has been dealt with in detail, discussing the impact of recent issues and trends like excise duty rationalizations, quality consciousness in user segments on the industry dynamics. The demand-supply scenario existing in the industry has been covered, detailing paint production trends in India, consumption across user segments, the trends in the exports and imports front and factors influencing pricing. Raw material is a major cost-driver in the paint industry, and thus the report provides comprehensive coverage on duty structure applicable for raw materials, the organized sector has been given an in-depth focus detailing major players, their forte market shares of major across product mixes and price categories.

Recommendation

The company should reduce the dealer discount which was high as compared to the industry.

The company is also trying to shift product mix form lower margin protection paint towards high margin decorative paint.

The company focuses on volume growth, product mix and margin. The current management focus on cost and operational efficiencies

may help in improving working capital efficiency. The good monsoon will increase the demand for decorative paint

especially in rural market .it is believe that good monsoon augurs well for automobiles and consumer durables segment which likely to increase demand for industrial paint going ahead.

Organized manufacturers effort to enhance its distribution network and product offerings move closer to the customer by setting up flagship store and improve service level will help the industry in its drive to make customer shift from unbranded products to branded products.

Conclusion:-

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The top 5 companies make up more than 80%sales of the organized market. The market share of this sector is continuously improving as consumer preference is shifting towards better product offered by the leading brands. Established foreign companies have entered the Indian market by acquiring existing Indian companies. Kansai paint, japan entered the Indian market by acquiring Nerolac, Alzo Nobel the world largest Paint Company entered the Indian market by acquiring ICI paints now Alzo Nobel India

Bibliography

www.slideshare.net

http://www.shalimarpaints.com/aboutus.html

http://www.scribd.com/doc/24945245/Paint-Industry

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