STRATEGIC MARKETING

Presented ByNeha Ghorad

EPGDM - 1031415011

Strategic Marketing Analysis Of India’s No. 1 Paint Brand

• PART I – Introduction, history, vision, international presence, awards, products & services, overall

scenario of the company

• PART II– Current brand scenario versus company scenario– Current Marketing Situation- how is the organization marketing and selling a brand

• PART III– Internal analysis - Business goals, Internal marketing, export, supply chain and distribution

• PART IV – External Analysis -Market Analysis, Competitor analysis, Customer focus

• PART V – Executive Summary

Contents of Presentation PART I

PART 1

Introduction - Asian Paints Group A chemicals company, Indian MNC which started operations in 1942

Headquartered at Mumbai

India’s largest, Asia’s Third largest paint company

Turnover INR 141.83 billion

Operates in 17 countries with 23 operational plants In India, The manufacturing plants are located in Maharashtra, Gujarat, Andhra

Pradesh, Uttar Pradesh and Tamil Nadu.

Exports are done to 65 countries

People asset consists of 7000+ employees

PART I

History• Established in 1942 as a partnership firm by a team of four friends

Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani and Arvind R. Vakil.

• Touched the turnover of INR 350,000 in 1945 which induced the need to go professional

• With deliberate efforts, a family owned business got nurtured to become a professional organisation by 1966.

PART I

Vision

• To become one of the top five decorative coatings companies world-wide by leveraging its expertise in the higher growth emerging markets.

• Simultaneously, the company intends to build long term value in the industrial coatings business through alliances with established global partners.

PART I

International Presence

• Asian Paints in South Asia (India, Bangladesh, Nepal and Sri Lanka)

• SCIB Paints in Egypt

• Berger in Asia (Singapore & Indonesia), Middle East (UAE, Bahrain and Oman), Caribbean (Jamaica, Barbados, Trinidad & Tobago)

• Apco Coatings South Pacific (Fiji, Tonga, Solomon Islands and Vanuatu)

• Kadisco in Ethiopia

• Taubmans in South Pacific (Fiji and Samoa)

PART I

Awards and Recognitions ((Last 5 years)

• Most Impactful Companies of the Decade by CNBC Awaaz in Jan 2015

• Forbes Magazine's - Asia's Fab 50 List of companies in 2011, 2012, 2013 and 2014.

• 13th amongst the top paint companies in the world by Coatings World - Top Companies Report 2013

• In March 2012, Asian Paints was presented the Asian Centre for Corporate Governance & Sustainability Award for the Best Governed Company in 2011.

• Mr. P M Murty, past MD & CEO, Asian Paints received the 'CEO of the Year' award from Business Standard,(March 2011).

PART I

Products

• Interior wall paints, Exterior wall paints, Wood surface paints, Metals surface paints.

Decorative paints

• Protective coatings, Floor coatings, Road markings.

Industrial coatings

• Wall primer, Acrylic Wall Putty, Exterior Wall Putty, Wood PrimerAncillaries

• Automotive/vehicle paintsAutomobile

PART I

Market Share

OVERALL SCENARIO OF THE COMPANY

Board of Directors Company Structure Financial Scenario Supply Chain Management Human Resource Management IT R & D Group Subsidiaries

PART I

Board of Directors PART I

Company StructurePART I

Financial Scenario• Market Capital INR 8million• Stock trading at INR 773.6• Indian promoters 53%• No share holding by foreign

collaborators• Net Profit margin 9.8%• CFO – Jayesh Merchant (comp sec)

• Cashflow trends indicate increasing operational excellence, low input from investments and a great market response driving the net cashflow.

Supply Chain Management

– Most essential for business continuity.

– State-of-the-art supply chain system using cutting edge technology to integrate all its plants, regional distribution centres, outside processing centres and branches in India.

– 19 paints plants in India, two chemical plants, 18 processing centres, 350 raw material and intermediate goods suppliers, 140 packing material vendors, 6 regional distribution centres, 72 depots are integrated.

– The supply chain runs through a wide spectrum of functions right from materials planning to procurement to primary distribution. It has played a pivotal role in improving operational efficiencies and creating agile procurement, production and delivery systems. It has also enhanced the flexibility of operations, lowered output time and reduced delivery costs, while improving customer-servicing levels and profitability.

– The Supply Chain Management is backed by IT efforts that help the company in demand forecasting, deriving optimal plant, depot and SKU combinations, streamlining vendor relationships, reducing procurement costs and scheduling production processes for individual factories.

PART I

Human Capital Management• 6000 employees in 17 countries brings in a lot of diversity in workforce culture and a unique

blend of mindset and skills

• Human resources systems are designed to create a focused, performance oriented and agile company having committed people with self discipline and ownership.

• An open and interactive work culture brings out the best in people. A sense of ownership and freedom to experiment at their workplace brings out creativity and innovation in every individual.

• Excellent training is provided to develop leaders and re-strengthen competencies from within the organisation. Campus placements are also done.

• Best suited people would be having a set framework of result-orientation, market insight, customer perspective, trust, respect and problem solving.

PART I

Information Technology• Integrated Supply Chain Management (SCM) Solution from i2 Technologies, and Enterprise

Resource Planning (ERP) solution from SAP.

• Business continuity - Disaster recovery site in South India.

• A supplier portal includes an automated digital document exchange facility for interaction with suppliers.

• An employee portal has also been set up which encourages social collaborations.

• Customer Relations Management (CRM) tools are being used in Asian Paints Helpline and Home Solutions initiatives.

• ERP, CRM, Business Intelligence and Portal software and integrated SCM systems has helped improve efficiency in the business as well as increase the transparency and accuracy of information across the company.

• To match the pace of growth of our international business, we are focusing on improving transaction systems and messaging platforms. Implementing of a portal platform for improved collaboration and sharing of information across all geographies is already underway.

PART I

Dedicated in-house IT team adding value to business process in terms of higher productivity, lower costs, speed, consistency and standardization

Research and Development• A new Research & Technology centre at Turbhe, Mumbai.

• The entire decorative coatings portfolio for the Indian market and for overseas ventures is developed in-house.

• Supports Manufacturing in process cycle time reduction & improves productivity by alternate / break through processes

• Supports company strategy around Technology development, Sustainable new products, Green products, Value reengineering for productivity improvement and cost optimization

• Company scientists had won the Roon award in 2013 – one of the highest technical achievements in the coatings industry

PART I

Group of Subsidiaries

• Apco Coatings - South Pacific islands. Operates in Fiji, Tonga, Solomon Islands and Vanuatu under the brand name of Apco Coatings.

• Asian Paints Industrial Coatings Limited - to cater to the powder coatings market.

• BIL became a part of the Asian Paints Group in Nov 2002 & has presence across three regions viz. Middle East(Gulf), Caribbean and South East Asia(Singapore).

• SCIB Paints - became a part of the Asian Paints group in Aug 2002 & is among Top 5 paint companies in Egypt.

PART I

PART 2

Current Scenario – India• Indian Paint industry is estimated to be of INR 100,000 cr for the year

2020 according to president of Indian Paint association Mr. D P Basu.• Growth rate 17% CAGR from past 7 years• Product life cycle shows indian paint industry in the growth stage, the

industry can achieve good amount of appreciation in coming future

PART 2

Current Scenario - India PART 2

The decorative to industrial paint ratio is 71:29

Current Scenario - India PART 2

• In 1954, R K Laxman created Gattu.• In 2012, O&W were hired for rebranding.

BrandingPART 2

Strong Brands InternationallySubsidiary companies enable to have a global presence

PART 3

Business Goals PART 3

• Company goal for 2017

– “To be the fore runner of inspiring décor and to actively empower customers to create their dream homes”.

Marketing StrategiesMarketing Strategies involved following innovative concepts:

• Small Packs • Exterior Paint Segment • Consumer and Dealer helpline • Colour Next (Prediction of Colour trends through in-depth research) • Special effect and textured paints • Signature Stores • Colour Ideas store • Samplers• Beautiful Homes Guide • Water Proofing and Wallpaper business • Ezycolour Service brand • Home Solutions (Painting solution service) • Colour Consultancy @ Home

PART 4

Market Analysis• No 1 Paint company in India• Over $ 2 Billion group revenue• 3 Times to nearest competitor in India• 47 years of market leadership in India• 3rd largest paint company in Asia• 13th largest company in World• Presence in 19 countries, servicing 65 countries• 26 paint manufacturing plants worldwide• 7000+ Human capital

Worldwide Operations• Presence in 19 countries, servicing 65 countries • 26 paint manufacturing plants worldwide

Marketing Environment & Customer Analysis• SWOT Analysis– Strength• Market leader• Wide distribution network• Pricing power

– Weakness• International presence is retricted• Industrial paint segment is not completely covered

– Opportunity• Indian economy is growing• Shorter repainting cycle• Growth in tier II and III towns• Steady growth• Decrease in use of distemper

– Threat• Volume based economy• 300+raw materials• Threat from rising crude prices

Marketing Environment & Customer Analysis

• PESTEL Analysis– Political• Political situation is stable• Democracy• Government is promoting exports

– Economic• Second fastest growing economy• Market based economy• Purchasing power parity is 3rd largest• FDI is introduced in paint sector

– Social• Population wise 2nd economy in world• Raw material prices are stable

– Technological• Emerging IT sector• Lead free paints• Modernisation of paints(waterproff paints,

watercoating, teflon coating paints, etc)

– Environmental• Seasonal and climatic changes• Lead free paints• Impact of volatile compounds (VOC)

– Legal• Environmental law• Pollution control law• Health and safety law

Competitor Analysis

Published data of 2015 by Morgan Stanley report, AP is considered to be :i.3rd Largest in Asiaii. 13th Largest in the worldAP continues to grow and give stiff competition to industry rivals

Customer Focus• Powerful Consumer Connect

• Innovative retailing strategy showcasing latest product and solution offerings enabling consumers to get inspired, try and decide

• Strong presence in all product segments, servicing over 34,000+ dealers

PART 5

Executive Summary

Business Expansion strategy• Business Portfolio parameters for FY 2014-15:• AP can venture into automobile sector and have corporate tie-ups for maintenance of

infrastructure buildings with MNC’s, banking institutions, government offices, hospitals and educational institutions

• This would lead to constant and assured amount of cash flow and also the enlargement of “Improvement & renovation” parameter of business portfolio.

• Decorative Coatings – India 81%• Industrial Coatings – India • PPG Asian Paints • Asian Paints PPG • International Operations • Home Improvement Business – India• Sleek • Ess Ess • Chemical Business

• Kansai Nerolac, the competitor is planning for a new manufacturing set-up in Gujarat estimated at a cost of INR 350cr as declared on 9th June 2015 by the BOD.

• This may lead to cost advantage which can result in softening of the product prices offered by nerolac.

– 300+ raw materials– Crude prices unstability impact highly to paint industry– Raw material prices are going to be steady. Should focus more on R&D

of substitute raw material for production.– Also, alternate packaging material can be researched and sourced to

get the cost advantage.

Competitor analysis & cost strategy

• The brand recall of Asian paints needs to be increased. Tag line or a jingle is missing. Legacy is untold.

– Tag line or jingle should be introduced to differentiate. Something like “Asian paint hai, Apna paint” which identifies it being Indian will add value.

– Re-enforcement of 70+yrs of customer service will help to retain the consumer– Feel marketing can be used– Advertising activities which involve statistics of market share & AP’s dominance

in India and its history will help to attract new consumer

Brand Marketing - Reinforcement strategy

Overcoming the Technology Barrier

• Direct Marketing and Direct selling mode is untapped.• Asian Paints Android Application will help to attract the tech

savvy youth. • The app may contain info for nearest dealer store, types and

range of products and guide the consumer according to his requirements.

• Also, the registered consumer can order the paint online and get delivery at his doorstep.

• Meeting with professional from AP can be arranged on request for making a choice and budgeting.

Mobile Application

Government Tie-up

• India loses over Rs.200,000 crore annually due to corrosion.

• Entrepreneurship is the buzz word for today’s political environment.

• A tie-up with government for industrial coatings of SEZ or Industrial estates will help lessen the corrosion

• Also, maintenance contracts can be created with government firms for offices and industrial locations

• This will help in getting the desired boost even when economic is sluggish as contracts are already in place

Corporate Collaboration

• Decorative to Industry Paint ratio is 67:33• For 2020, if the Industrial ratio is improved, more revenue can be

generated.• Automobile industry is fast blooming • A collaboration with a automotive firm will deliver strategic advantage to

AP and give good returns.• Moreover, a systemtic flow of industrial paint can also be talked upon for

collaboration

• According to Mr. D P Basu, president of Indian Paint association, the Indian paint industry is estimated to grow to 100,000 cr and current decorative to industry paint ratio is 67:33.

Increasing the current market share from 49% would help in getting good returns of the growing industry.

1. A merger with the competitor in India, like Nerolac can help get the extra boost and profitability.

Also, Berger, can also be a good option being already acting as a subsidary for Asia & Middle east regions

Please refer the excel for projections.

Growth Plan 2020

Thank You