(FINAL REPORT)

SUBMITTED TO:- SUBMITTED BY:-

Shailendra Singh Bisht Abhishek Sharda
IBS, Hyderabad Ketaki Bharadwaj
Pooja Bhavsar
Pranay Sharma

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 INDEX
Pg No.
1. INTRODUCTION 3

2. PRODUCTS OFFERED CURRENTLY 5

3. SWOT ANALYSIS OF PAINT INDUSTRY 6

4. PRODUCT INNOVATION 8

5. INDUSTRY OUTLOOK 8

6. PORTER’S ANALYSIS FOR STATIONARY COLOR INDUSTRY 9

7. COMPETITORS 11

8. STP 12

9. THE 4 P’s 16

10. CONCLUSION 19

11. BIBLIOGRAPHY 20

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 INTRODUCTION

Indian paint industry can be broadly divided into two segments:

1. Decorative segment which constitutes the wall paints: exterior and interior, wood paints
etc

2. Industrial segment which consists of automotive paints, and paints for industrial sector.

Decorative segment constitutes around 75 % of the total paint industry and Asian Paints is the
market leader with around 44% share. While in the Industrial segment, Nerolac is the market
leader.

On 1st February 1942 Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani and
Arvind R. Vakil armed with little knowledge but great determination got together to manufacture
paint in a garage on Foras Road, Bombay. They formed the ‘Asian Oil and Paint Company’ (a
name picked randomly from the telephone directory).

Paints are usually considered to be a low involvement product. In earlier times, the decision of
the brand was taken by the builder/contractor and the home owners do not involve much in the
process may be the decision of color rest with the house owners.

Asian Paints realized the need for brand building even during sixties. The focus of the company
was on product innovation and service network and managing quality proposition. The brand
focused on mass and rural market. Asian Paints had a mascot called Gattu who was created by
the celebrated cartoonist R K Laxman. These efforts made the brand a leader during the late
sixties.

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The company then realized that although volume justified the leadership position, share of mind
for the brand was very low. It was due to this reason that Asian paints adopted mass
segmentation. Since the industry at that time was driven by channel driven promotions, building
a brand at that time was "uncommon sense". During 1983, Asian Paints tried to reposition itself
as a premium brand. Asian Paints initiated the corporate campaign aimed to position the
company as the number one player in the industry. The corporate campaign named “Spectrum
of Excellence" was aimed to increase the Salience of the brand in a quiet market.

But this campaign failed to inspire any interest in the consumers and the company felt that the
market at that time was moving towards a commodity market where price was the most
important differential. Asian Paints undertook a consumer research aimed at understanding the
perception of consumers about the product category. The research revealed lot of interesting
insights. Consumers felt that paints could change the mood of the space and it was a sign of
festival. It could make a gloomy place bright and pleasant. From this insight came the campaign
of Asian Paints associating itself with festivals. Research also confirmed that customers tend to
repaint their houses on the occasion of festivities. Thus was born the campaign "Celebrate with
Asian Paints". The campaigns were carefully crafted and there were different campaign for
different regions. These campaigns effectively enhanced the brand equity of Asian Paints and
established itself as a premium brand. More than that, this campaign ensured an emotional
connect with a brand in a low involvement category. The brand also phased out many sub brands
and rest of the sub brands was brought under Asian Paint's umbrella brand.

Since many brands went after the festival seasons, the positioning platform had cluttered during
the late nineties. Hence the brand had to be reinvented because no longer festivities formed an
important part in ones life. More over the consumer buying behavior had changed as people
started associating more importance to home decor and interiors. Hence from a low involvement
category, paint was increasingly becoming a high involvement category.

Thus it led to the birth of a wonderful positioning strategy whose insight was that the brand is
about people and homes and homes reflect the people living in it. Hence "Har Ghar Kuch
Kehta Hai" campaign is a perfect example of a brand connecting to a higher level in the mind of
the customer. The campaigns reinforced the brand as a premium emotional brand.
Along with the campaign Asian Paints also ran parallel ads for its sub brands. Saif Ali Khan
endorsed the premium brand Royale.

Moving forward from the success of Ghar campaign, the brand took ownership of the COLOR.
The insight is that each color has a story to tell. The latest campaign reflects on the color and
uses the campaign "Har Rang Kuch Kehta Hai". The brand is so serious about the color that it
has tied up with IIT to explore new colors and conduct research on colors.

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 PRODUCTS OFFERED CURRENTLY
 Paints for Exterior and Interior Walls

 Paints for wood surfaces to protect from water, dirt, chemicals etc.

 Paints for industries that include protective coatings, floor coatings and road markings.

 Paints for automobiles

 Texture paints for walls

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 SWOT ANALYSIS OF PAINT INDUSTRY

STRENGTH:

 Oil-based paints are largely impacted by the fluctuation in crude prices as 40% of raw
materials are derived from crude. Any significant increase in crude prices will adversely
affect cost of raw materials, and erode margins. However, Asian Paints Limited has taken
effective steps like backward integration of PAN and penta manufacturing to mitigate the
impact of rising crude prices.

 The company is having vast distribution network and the wide variety of products
provides competitive edge to the company.

 New projects in roads, ports and industrial segments increases revenues from protective
coatings for civil applications and road-marking paints to all parts of the building paints
sector, whether interior, exterior, waterproofing or floor coatings.

 Lifestyle based spending by Indian middle class is helping decorative segment of this
industry. Contemporary wood finish formulations are replacing the more traditional lacs
and exterior emulsions take over from cement paints.

WEAKNESS:

 The industrial paint segment provides services to the following industries: automobiles,
auto ancillaries, consumer durables, marine vessels and containers. So the growth of the
industry is highly influenced by the fluctuations of these industries.

OPPORTUNITIES:

 The boom in the housing sector and the realty boom in the economy has increased the
scope of expansion in the decorative paint industry for the companies.

 The increasing income of middle & higher income categories government sops for
housing loan easy financing due to the rising competition among financial institution has
lead to as per in the housing demand

 Housing is the key driver for decorative paints.

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 THREATS:

 Cheaper alternative like sand paints or wallpaper can dampen demand for paints. The
increasing use of wall tiles and wood could also slowdown demand for decorative paints.

 Any increase in interest rates could impact demand for new houses, leading to a further
slowdown in the demand for paints.

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 Product Innovation

Being the leader in Decorative Paint industry Asian Paints has pioneered all fields of this
industry by launching new products and services required. It already has the expertise and
technological know how of this industry and over the years it has developed a good rapport with
its large customer base. Since 1942 it has been able to win over hearts of millions of people by
endeavoring to satisfying customer needs and innovating according to the demands of the
customer. To further increase its revenue and expand its market, Asian Paints enters the
stationary industry for colors. The reason for choosing this industry is that we know colors really
well and having been the market leader in the Decorative Paint sector since long it is the right
time to enter this market.

INDUSTRY OUTLOOK
With the
BARRIER government
OF NEW ENTRY laying emphasis on education and increasing number of schools in
India, more schools are being built which in turn is driving the sales of stationery products.
 ALREADY
Experts estimate EXISTING PLAYER
that the size of the competitive Indian stationery market, comprising notebooks,
WITH STRONG
paper, writing instruments, geometry boxes, sharpener, erasers and colors, is Rs.10,000 crore.
DISRTRIBUTION
This industry is boundNETWORKS.
to grow at a 30% annual rate in the next three years. The biggest
boost has been the historic Right of Children to Free and Compulsory Education Act, 2009
 STRONG BRAND POWER OF
which came into force on April 1, 2010. The Act legalizes the right to free and compulsory
THE EXISTING PLAYER WHICH
schooling for all children between the ages of 6 and 17. This can help us to grow in this sector at
LEADS TO STRONG BRAND
a very fast pace and grow accordingly.
LOYALTY.
Also large growth is expected from the rural areas. At present, rural sales constitutes
 25%
about GOODof EXPERIENCE OF
the total turnover of the industry and is going to grow at much faster pace in the
EXISTING
coming years. PLAYER LEAD TO
THE ADVANTAGE OF
LEARNING CURVE.

PORTER’S ANALYSIS OF STATIONERY COLOUR INDUSTRY

 BARRIER TO THE ENTRY IS
Group HIGH
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 DEGREE OF RIVALARY

 PRODUCT DIFFERNTIATION
.
CREATES INCREASE IN
DEGREE OF RIVALARY.

 COMPETITIVE MARKETING
STRATEGY OF THE EXISTING
PLAYERS INCREASES THE
DEGREE OF RIVALARY.

 PRICING STRATEGY
INCREASES THE LEVEL OF
RIVALARY.

 DEGREE OF RIVALARY IS
HIGH

BARGAINING POWER OF SUPPLIER

 NUMBER OF SUPPLIER IS
HIGH.

 WIDE AVAILABLITY OF
CHOICES FOR THE
COMPANY.

 BARGAINING POWER OF
THE SUPPLIER IS LOW.
BARGAINING POWER OF BUYERS
THREATS OF SUBSTITUTE
 AVAILABLITY OF WIDE
 USE OF COMPUTER IS THE CHOICES.
ONLY SUBSTITUTE FOR THE
COLOUR INDUSTRY AS THE  BRAND IMAGE OF THE
WE CAN USE COLOURS EXISTING PLAYERS.
DIRECTLY FROM THE
COMPUTERS.  BARGAINING POWER IS OF
BUYER IS HIGH.
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 THREATS OF SUBSTITUTE IS
LOW
 OVERALL CONCLUSION OF
INDUSTRY

 THE INDUSTRY IS NOT

ATTRATIVE ACCORDING TO
PORTER ANALYSIS.

 But still we are

targeting this industry
because we have vast
experience and
knowledge of colors and
also the good brand
image that we carry
forward.

COMPETITORS

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CAMLIN LTD:-
Camlin Limited is India’s premier maker of stationery and color products. It has
established a reputation of world class quality at affordable prices. Camlin was basically
incorporated to take over the business of Dandekar & Company; and then it got its present name
in 1988. Its products are marketed under the popular Camel and Camlin brands.

Its stationery division has a wide range of products like fountain pen inks, rubber stamp
inks, duplicating inks, adhesives, writing instruments and gift sets, fountain-pen nibs and ball-
point pens, erasers, stamp pads, scales, carbon paper, etc.

RANGEELA:-

Rangeela is one of the prime products offered by the Pidilite industries.

Pidilite Industries Limited has been a pioneer in consumer and specialities chemicals in
India since 1959. Over two-third of the company’s sales come from products and segments it has
pioneered in India. The product range includes Adhesives and Sealants, Construction and Paint
Chemicals, Automotive Chemicals, Art Materials, Industrial Adhesives, Industrial and Textile
Resins and Organic Pigments and Preparations. Most of the products have been developed
through strong in-house R&D. The Groups turnover is about US $ 350 Million for the year 2006-
07. In a recent report by Economic Times, Pidilite ranked 131st amongst the top 500 listed
companies in India.

Pidilite Industries is the market leader in adhesives and sealants, construction chemicals,
hobby colors and polymer emulsions in India. Their brand name Fevicol has become
synonymous with adhesives to millions in India and is ranked amongst the most trusted brands in
India.

STIC:-

Stic, one of India's top pen brands, came into existence in 1983. Stic Pens Ltd. has grown
into one of the leading writing instrument companies of India. Producing over 1,000.000 pens a
day, it offers a wide range including Ball pens, Fine-liners, Sketch pens, Markers, Hi-lighters,
Color & Activity pens and more recently has also entered the Art Material Segment.         

     

STP (SEGMENTATION, TARGETING AND POSITIONING)

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SEGMENTATION:

(1) Geographic segmentation:

In this type of segmentation, we segregate our consumers on the basis of following

factors:

 Region
 City
 Rural & semi-urban area

As our product is used by kids, it will be made available ubiquitously. Moreover as we are
supporting the governments’ movement of SARVA SHIKSHA ABHIYAAN the products will
also be made available in rural and semi urban areas along with the urban areas.

(2) Demographic segmentation:

In this type of segmentation, we segregate our customers on the basis of following

factors:

 Age
 Family size
 Gender
 Income
 Occupation
 Education

Here we are targeting children between age group of 6 to 17. Also families of lower,
middle and higher middle group will be able to purchase our products as they are affordable.

(3) Psychographic segmentation:

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 In this type of segmentation, we segregate our customers on the basis of following
factors:
 Lifestyle
 Personality
 Socio-economic classification

In today’s times consumers want lifestyle attached with the brand. So we will have our
Asian color outlets in the metropolitan cities. Along with the Asian colors there will be other
stationeries available in these outlets to attract more number of kids. The outlets will be designed
in order to attract and entertain kids as they are the decision makers in this type of buying. This
kind of innovation will give lifestyle value to the customers.

(4) Behavioral segmentation:

In this type of segmentation, we segregate our customers on the basis of following
factors:
 Occasions
 Benefits
 User status
 User rate
 Loyalty status
 Readiness stage
 Attitude towards product

Colors have very high rate of usage amongst kids in schools as well as kids who pursue
drawing as their hobby. But loyalty for one brand is very low because there are other brands
available. So marketer has to be innovative in order to retain consumers. Hence we will look
forward to collaborating with schools in urban areas to supply these colors directly to the school
going kids.

TARGETING:

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  SIZE OF MARKET SEGMENT: The rapid and the steady increase in the size of these
product categories can be attributed to increase in disposable incomes and also
government plans & policies to achieve total literacy. Over the years the market has
extended to rural areas because of this aim to provide free education. So market size of
our product is supposed to be very high. We plan to take over the rural market in a big
way because of its high volume and high growth prospects. As we have seen that other
major players mainly focus on urban and few local manufacturers catering to the rural
sector.

 ACCESSIBILITY: We plan to make our products easily accessible in every

neighborhood stationary stores. We will do this by establishing strong distributorship
network specially by tracking those channels followed by already established competitors
along with establishing new networks. And we will do this by offering more profit
margins to the distributors initially.
We plan to further penetrate the semi urban and rural sector by setting up a dedicated
task force established to cover 2500 schools in first year of the launching of our products.

 SUSTAINABILITY: As we already have vast experience in the field of color, we think

that we will be able to survive in such market. Asian paint is already market leader in the
paint industry, so we have more knowledge of color that we can diverse in this industry.

 RESOURCES AVAILABLE: As Asian paints are already established player in the

paint market we have vast resources available with us to diverse in this segment. So we
can take over market with hostile marketing strategies.

POSITIONING:

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Positioning basically means how consumer perceives our product. What factors it attaches with
our product. These factors work as identity to our brand and product. We will position our
product as:

 HARMLESS: We are going to manufacture organic colors which will be low on lead
content hence reducing the toxicity level.

 FUN: We will have Gattu cartoon flix running on our packaging which will change
every season. So this will add to the fun element. Moreover we are going to publish
comic books on our mascot Gattu as well.

 LONGLASTING: We will be providing more volume of colors as compared to our

competitors; it will last longer than their products.

 QUALITY: Our product will be of higher quality as our parent brand is also perceived
high on quality. This color segment will also add brand value to the parent company.

THE 4 P’s

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PRODUCT:-

Under the banner Asian Colors, we are set to launch Crayons, Sketch Pens and Poster
Colors for kids.

 Crayons:- A pack of 25 different colors of high quality wax crayons with increase in the
size so that it lasts longer.

 Sketch Pens:- A pack of 20 different color sketch sticks with new colors that would help
reflect true picture of the objects.

 Poster colors:- A pack of 15 colors that include the regular colors with extra colors like
Orange, Brown, Pink, Cyan etc also increased volume and paint brush. The advantage of
introducing new colors is that these colors are generally used as a mix of 2 or more colors
till now, but by providing these colors we reduce the effort of kids to keep mixing colors
in order to get the right combination.

Type of packaging

 We will have an attractive packaging with comic flicks of Gattu which will be changing
every season. This will help us attract kids more towards using our products.

 We will have bundle packs of various combinations of Asian Colors’ products so that
kids can buy the packs at reduced prices.

 Also we will have value packs that would also include a coloring book along with our
products at affordable prices

Product difference

 Organic colors made by using natural, environmental friendly ingredients: People

are becoming increasingly conscious about the toxic effects of chemical used in the water
colors & crayons. Kids as young as 3 years are more prone to these toxics as they tend to
put the colors in the mouth. Some of the chemicals traditionally used in the
manufacturing colors were lead and volatile organic compounds (VOC) like toluene,
xylene, and formaldehyde. Lead can harm the nervous system & the VOC can trigger
elergy, asthmaa, irritation in the eyes, and harm the nervous system. Although all the
companies have greatly reduced the toxicity levels in the products they are offering but
none of them have offered safe organic paints which we plan to offer.

 The products we are offering will be entirely eco-friendly made from natural products
like linseed oil, mineral salts & natural food colors and natural pigments.
PRICING:-

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  The pricing of the products will be at par with the competitors’ products. But the
difference maker would be that we will be giving better quality and more quantity than
our competitors at the same price. Also to penetrate the market, the pricing is kept the
same because we are new in this market and want to capture maximum number of
customers in a short span of time.

 We have value packs to attract customers who wish to buy 2 or 3 types of our products.
These value packs would allow the consumer to buy the combination at lesser price than
they buy the products individually.

 Also having a tie up with one of the coloring book manufacturer, we will be providing
the color books with our value packs.

PLACE:-

 As the industry that we are targeting is completely different from our core competency.
Hence we cannot use our established distribution channel of Decorative Paints. So we
need to start from the base and establish a strong distribution network.

 For this we will first apply the trade push strategy to encourage the dealers to market
our product.
 High Dealer Commission
 Attractive Gift Offers to target achievers
 Provide expert services for shelf designing

 We will take care that product should be available in every stationary stores,
Hypermarket like Big Bazar, Reliance, More etc. We will also make it readily available
in the rural market.

 Also in metropolitan cities we will be having Asian Color outlets where apart from the
Asian colors, we will be providing other stationary items as well. These outlets will be
designed in such a way so as to attract kids again and again.

PROMOTION:-

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  Institutional buyers:
We are aspiring to collaborate with Government of India to promote our product. By
helping the Government to promote SARVA SIKSHA ABHIYAN, we will also be able to
position our product in rural market. As well as these kind of steps will help to build good
brand image in eyes of customer.

Also tying up with schools to get a good base of kids and providing them with our
products to promote institutional buying.
 Advertisement:
We will rope in popular child artist, Darshil Safari to promote our product. By this we
will be able to target our prime customers who are kids within age of 5 to 13 years. Each
year we will provide 10% of total sales to advertisement budget. We will air our
advertisements on Disney Channel, Cartoon Network, Pogo, Jetix, Animax etc as these
are the channels which are famous amongst the kids.

 Talent hunts:
We will launch talent hunt:

(1) Kids talent hunt:

This will be organized in different phases. Initially we will hold it on the school
level. The winner will be taken to the next level which will be the city level
round. The winner of the city level will be taken to the state level while the
runners up will be given consolation prizes. The state level winner will go to the
national level where he will have a chance to win a scholarship of Rs. 500,000.
All the state level winners will be given a one time scholarship of Rs. 10000 each.

 Movie promotion:
We will try to promote our product in the upcoming movie which would be based on
kids. The cast of the movie would be our brand ambassadors Darsheel Safary and Saif Ali
Khan.

 Print media:
We will be regularly giving advertisements in the news papers and comics which are
famous amongst kids like champak, tinkle etc. We will also introduce a Gattu comic
series that would be provided with the color packs.

CONCLUSION:

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 According to our analysis and idea about the market we have formed strategies to
Segment, Target and Position our new innovation Asian colors. Following the strategies
formed by us, we will be able to grab the new market we are entering at a fast pace. After
initial success we will follow various innovative strategies to extend our market share for
future growth.

BIBLIOGRAPHY:

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  Official sites of Asian paints, Camlin, Pidilite and Stic colors.

 Wikipedia

 Google

 [Link]

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