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Executive Summary
The purpose and scope of document is to study, analyze and understand the business and
marketing practices of Asian Paints Limited. In order to achieve this objective, two stages
were identified – Data collection stage and the Analysis stage. The first stage includes the
data collected from various sources regarding the following:
1. The Origin, History of the company, its growth, The board of Directors,
Operation units in India and abroad
2. The three closest competitors in the paint industry – Goodlass Nerolac, Berger
Paints, ICI , their origin and growth
3. Financial statements of the Company
4. Information about the 4 P’s of marketing – Product, Price, Place and Promotion in
the Orissa market
5. A customer and dealer survey in Orissa to understand their decision making
process
The analysis stage includes understanding the implications and relevance of the data
collected and drawing conclusions about the company’s business and marketing
decisions.
Asian Paints (AP) Limited is an out-an-out Indian firm in the paint industry that
manufactures and markets a wide spectrum of decorative as well as industrial paints.
Though it had a corporate position of a focused national paint company by catering to
industrial and household customers in Indian market in the past, it has been
systematically repositioning itself in the recent years to become a global player by
entering into a number of other country markets.
The Indian Paint industry is mainly divided into two segments – decorative paints
segment and industrial paints segment. Asian Paints is the market leader in the decorative
paints segment with a market share of 44 % followed by Berger Paints (17 %), Goodlass
Nerolac (15 %) and ICI (12 %). However in the Industrial Paints, Goodlass Nerolac is
the leader followed by ICI, Berger Paints and Asian paints.
Known for its innovative marketing and distribution strength, Asian Paints is one
of the consistent performers in the Indian corporate scene. The company has a track
record of profitability, transparency in operations and strong balance sheet. Factors that
have been given emphasis here include the low per capita consumption of paints (1.0
kilogram), growth in construction sector (it is being offered industry status) & growth in
the auto/white goods market respectively spurring demand for decorative & industrial
paints. The impact of recent issues & trends (like raw material costs, excise duty
rationalizations, quality consciousness in user segments) on the industry dynamics can
also be seen. The industry has also witnessed increased activity in the industrial variety of
paints with the entry of Multi-National Companies in auto, consumer durables etc, which
has been gaining steadily over decorative paints in the last one decade. With the industry
to grow at a CAGR of 8-9 % for the next five years with growth level of 27.4 % for cars
and 8.9 % for two wheelers we see a lot of opportunity in the automobile sector for the
paint industry. Moreover housing industry is also likely to do well in the current year
with the growth rate for the last year being 35 %. So the expected rate of growth for paint
industry for the next five years is around 9-10 %.
At present industry requires highest efficiency in physical distribution as
companies not working on operational efficiency business models have been losing. On
account of this, companies need to invest in sophisticated Supply-Chain Management
tools. Companies need to work on improving internal efficiencies to retain profits which
are under pressure on account of dropping prices. The customer (retailer for the
company) is seen to be dictating terms so companies have no choice but to lure more
customers through incentives. At the same time, companies also need to attract final
consumers by offering value-added services.
So we came up with the following recommendations: To take up trade
promotions, to build up relations with the intermediaries, a need to improve current
inventory levels to cut down costs, a need to promote sub brands so as to increase subbrand
awareness among the customers, improve advertising strategies for targeting
female customers who have assumed a greater role in decision-making and a need to
expand in industrial segment by forming strategic partnerships to take advantage of the
upcoming industrial growth at national and regional levels.
Asian Paints Limited
1. Company History
In 1942, four partners got together to manufacture paint in a garage in Bombay. The
company was named Asian Oil and Paint Company; a name picked at random from a
telephone directory. Up against giant international paint companies, Asian Paints hit on
the innovative marketing strategy of reaching consumers in the remotest corners of the
country with its small, conveniently sized packs. During the 1950’s the company grew
from being a family-managed, small-time paint manufacturer to a professionally
managed organization competing with the best companies in the world. By 1967, through
innovative R&D and ambitious grass-roots marketing, forming strong relationships with
thousands of paint dealers in small towns all over India, the company jolted its
multinational competitors by emerging as India’s number one paint company.
For the next thirty years they maintained their position as market leader through
i. Excellent marketing
ii. Intensive distribution, and
iii. Leadership in Information Technology
In 1996-97 the total sales of Asian Paints reached $175 million, almost double that of
Goodlass Nerolac Paints, (1996-97 sales $94 million) the number two paint company in
the country and Asian Paints continues to be a market leader in the decorative paints
segment till date. In 1998, the company embarked on a major restructuring strategy
under the guidance of management consultants, Booz Allen & Hamilton. The
restructuring was done to bring greater focus to its business, improve efficiencies, control
cost and strengthen its leadership position. After the completion of the restructuring, the
vision for the company was stated. The company is committed to realizing its vision and
has chartered a complete plan of action for realizing its vision.
At present, Asian Paints is one of the ten largest decorative paint companies in the world,
and is largest exporter exporting directly to 20 countries. Recently, it changed its name to
Asian Paints Limited as a part of its global strategy.
Board of Directors
Mr. Ashwin C. Choksi (Chairman)
Mr. Ashwin S. Dani (Vice-Chairman and MD)
Mr. Abhay A. Vakil (Managing Director)
Mr. Mahendra C. Choksi
Mr. Amar A. Vakil
Ms. Tarjani Vakil
Mr. Deepak M. Satwalekar
Mr. Dipankar Basu
Mr. Rajendra A. Shah
Dr. Swaminathan Sivaram
Mr. Mahendra M. Shah
Mr. Hasit A. Dani
Group Subsidiaries
Apco Coatings
Asian Paints Industrial Coatings Limited
Asian PPG Industries Limited
Berger International Limited
Taubmans Paints
Scib Paints Limited.