A PROJECT REPORT ON

ASIAN PAINTS LIMITED

SUBMITTED TO PROF.N.RAJKUMAR
DEAN, IBAT SCHOOL OF MANAGEMENT
BHUBANESWAR

SUBMITTED BY
1. DIANA SAHU (71)
2. PUSPANJALI KAR (90)
3. SASWATO BHATTACHARJEE (98)
4. SIBASIS MOHANTY (107)
MBA-I
SECTION B, GROUP NO-3

ACKNOWLEDGEMENT:
A successful project can never be prepared by the singular efforts but I also
demands the help and guardianship of some conversant person who under pin
actively or passively in the completion of a successful project.
Our project on ASIAN PAINTS LTD would not have taken the
present form in the absence of the invaluable guidance, inspiration and cooperation
from many people.
We take this opportunity to express our deep gratitude to Prof.
N. Rajkumar, Dean, IBAT school of management, Bhubaneswar who have given
us the opportunity to present this project and continuously monitored us to perform
well.
In this context we would like to express our gratitude and
thankfulness to Prof. G.K.Murty for providing us with his advise and support
through our project session.
We also express our thanks to Sakti Hardware, Damana,
Chandrasekharpur, Bhubaneswar for providing us with valuable data.
We are deeply indebted to the Director ,faculty members of our
institute, IBAT school of management, Bhubaneswar for helping us with their
support and guidance that help a lot in successfully completing this project.
Finally we express our cordial thanks to our parents, friends for their
unmatched support , guidance and love throughout the project preparation.
1.Daina Sahu (71)
2.Puspanjali Kar (90)
3. Saswato Bhattacharjee (98)
4. Sibasis Mohanty (107)
Section B,Group No-3

CONTENTS
SLNO

1
2
3

COMPONENTS

ITEMS COVERED

PAGE NO

Situation analysis-I

Category analysis
Sales analysis
Share Price analysis

1
1
2
4

Situation analysis-II

Competitor analysis
Customer analysis
Assumptions of planning

5
7
9

Corporate objective
Divisional objective
Marketing objectives
Programme objectives

11
12
13
14

Strategy alternatives
Competitor strategy

16
17

Positioning strategy
Customer segmentation
and Targeting
Core strategy

20

Sales forecasts budgets

Profitability forecast
budgets

40

Executive Summary
Introduction

5
Marketing objectives
6
Marketing strategy-I
7
Marketing strategy-II
8
Financial Documents

10

Marketing
Programme

Pricing
Product
Brand
Promotion
Distribution
Service
Research

Control Strategy

22
25

44
27
29
32
33
36
37
38

46

EXECUTIVE SUMMARY
3

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 22 countries and has 30 paint
manufacturing facilities in the world servicing consumers in over 65 countries. Besides
Asian Paints, the group operates around the world through its subsidiaries Berger
International Limited, Apco Coatings, SCIB Paints.
The Company's paint business in India consists of Decorative, Industrial &
Automotive coatings. During the fiscal year ended March 31, 2006, paints accounted for
79.1% of the Company's sales. Decorative paints include wall finishes for interior and
exterior use, enamels, wood finishes and ancillary products, such as primers and putties.
Industrial Coatings comprise high performance coatings, powder coatings and auto
refinish coatings. The automotive coating segments are catered to by the joint venture
Asian PPG Industries Ltd. The Company also has chemicals businesses consisting of
phthalic anhydride and pentaerythritol manufactured at Ankleshwar, Gujarat and
Cuddalore, Tamil Nadu, respectively.
The Indian paint market is highly saturated with many paint companies with
varieties of product. Kansai Nerolac paints Ltd. Berger paints India Ltd. ICI India Ltd.
Shalimar Paint Ltd, Snowcem India Ltd are the main competitors of Asian Paints. Among
them Nerolac Paints have a very good market share in the Industrial Paint segment.
Asian Paints adopted some marketing objectives & strategies. Asian paint is
ready to achieve its corporate objective by taking care of the Customers, Employees,
Brand image, Dealer Vendor relationship & technology.Companys three divisions are not
equally performing well.So it has different objective & planning to gain the top most
position in the Indian paint market. Asian Paints has different marketing strategy for the
urban as well as the rural market in India.
The company always maintaining some alternate strategy & keeping in track
with the strategy maintaining by its competitor. In decorative sector company is strong
enough, but it need to take care of the Industrial sector so as to increase the overall sales.

Considering the pricing strategy of Asian paints, company has several priced
products. It starts from very low end to the premium level. Asian paints Colour World
concept helped the consumer to choose the colour combination & other appropriates
according to their wish from a very wide range of product. Companys famous logo
GATTU helped it overcome while entering into the rural market, as visualization has its
own effect. Other than this Asian Paints is using its website as a very good medium to
reach the high/upper middle class consumers. With these tools company is expecting to
generate much more revenue than the earlier years.
Asian paints wonderful promotional strategy helped the company to extend its
business in several other countries with success. A very attractive distribution policies &
proper distribution channel with more than 15000 dealers helped Asian paints to spread
its business in more than 3500 big & small cities in India.
The company used to maintain a very strong market research cell, which helps
them to take care of the consumers need & intensify their R&D accordingly. Asian Paints
approaches the environment issue from the perspective of waste minimization and
conservation of resources. Thus, the continued attempt is to reuse, recycle and eliminate
waste, which results in less and less waste being generated.
Asian Paints, took a huge stride towards promoting the cause of total water
management by giving Mumbai (and neighboring districts like Thane) its first Total
Water Management (TWM) Centre, which is located in the premises of Asian Paints
manufacturing facility at Bhandup.

INTRODUCTION :
Asian Paints Ltd. has a combined turnover of 630 million US dollars. With

its

strong presence in the Indian subcontinent, south East Asia, Far East, South pacific
5

Caribbean, Africa & Europe. Along with Asian paints the group consists of SCIB
chemicals, Berger International & APCO coatings. Together the group has 30
manufacturing unit globally.
The company was incorporated in the year 1942 in India. Asian paints have
extensively computerized its operations in India using the cutting edge solution provided
by SAP & i2. It helped the company drive benefits of faster market analysis for better
decision making.
The product portfolio of the Asian Paints group covers a large spectrum of finish
coasts & ancillary products in decorative paints, wood finishes, automobile OEMs &
refinishes, marine & Industrial coatings.

SITUATION ANALYSIS-1
CATEGORY ANALYSIS
The different categories of Asian paints Ltd. are

PAINT :
Companys paint business in India consists of decorative, Industrial &
Automotive coating. In 2005-06, these accounted for 79.1% of the group sales. It is
estimated that the local market for all paints including cement paints & other powder
products manufactured by all companies big & small would have been around Rs.95
billion in 2005-06.
1) DECORATIVE PAINTS:
Decorative paints account covers almost 75% of the overall paint market in India.
In this segment Asian paint has been a leader for almost four decades. Decorative paints
include wall finishes, for interior & exterior uses, examples, wood finishes & ancillary
products such as primers, putties, etc.

2) INDUSTRIAL COATINGS :
Industrial coatings have a moderate growth rate than decorative coating, led by
the growth in automotive original equipment sector, powder coatings & protective
6

coatings. Industrial coatings are classified into automotive & non-automotive coatings are
classified into automotive & non-automotive coatings. While Asian paints Industrial
coating Ltd. (APICL) services the powder coating segment, Asian paints Ltd. caters to be
remaining non-auto industrial coatings segments.
3) AUTOMOTIVE COATING:
The actual look and feel of a vehicle undergoes a sea of change over time. The paint on a
vehicle loses gloss, is subjected to a lot of wear and tear and hence starts deteriorating.
Asian Paints is not having a very good market share in this segment.

CHEMICALS :
Asian paints have chemical business consisting of Pthalic Axhydride & pentaerythritol
manufactured at Ankleswar, Gujrat & Cuddalore, Tamilnadu. During 2005-06
approximately 42% of companys chemical was sold in-house & rest at open market.

SALES ANALYSIS :
Sales over the last 6 years (in Rs. crores)
Year

12 March

March

March

March

March

March

months

2001

2002

2003

2004

2005

2006

Gross

1526.01

1662.33

1887.7

2111.08

2366.16

2807.05

8.93

13.55

11.83

12.08

18.63

sales
Percentage increasing
Net sales

1322.38

1450.71

1641.27

1841.92

2037.55

2433.37

Parentage

9.7

13.13

12.22

10.62

19.42

increase

Graphical representation of net sales over the period 2001-2006.

Net sales
3000
2500
2000
1500
1000
500
0
2001

2002

2003

2004

2005

2006

Results of operation :
Net sales & operating income of stand alone entity increased to Rs.24333.7
million from 20375 million showing a growth of 19.42% in the year 2005-2006 (March).
This is driven mainly on account of good paint volume sales growth of 13.8% &
price revisions effected during the year. For the group, net sales & operating income
shows an income shows an increase of 17.4% to Rs.30210 million.
Asian Paints has a steady growth over the last 6 years, so the financial condition is
very much stable & it is expected to reach at the top position in the Indian paint market.

SHARE PRICE ANALYSIS:

In the following share price analysis of Asian paints we have considered the
closing price of share of Fridays for the month of May, June, July 2006.
Table showing the share price (on Fridays of May, June, July 2006)
5 May

Closing
6487.7
share
price (in
Rs)

12

19

26

16

23

30

14

21

28

May

May

may

June

June

Jun

Jun

Jun

July

July

July

July

637.5 577.2 553.3 582.

550.

566.

573

597. 581.

571.

581.

585.4

75

65

05

85

25

70

65

Graphical representation of share price

Closing share price (in Rs)

7/28/06

7/21/06

7/14/06

7/7/06

6/30/06

6/23/06

6/16/06

6/9/06

6/2/06

5/26/06

5/19/06

5/5/06

660
640
620
600
580
560
540
520
500
5/12/06

Date

Discussion :
Though there is a downfall in the share price of Asian paints but it is among the
most actively traded stocks in India market. In terms of absolute daily returns the best
performer in the paint market is godless Nerolac, Where Asian paints comes at 4 th place
with a return of 17%. The least risky stock among the paint market was Asian paints with
daily volatility of returns of around 1.43%.
The investment on the stocks of Asian Paints could be a good investment option
from a medium there prospective. It is the largest player in the industry with a vital
strangle hold over the decorative segment.

With its high level of efficiency & developed marketing infrastructure Asian
Paints is well placed in the market & have a very high growth prospect.

SITUATION ANALYSIS-2
Asian paints limited with its three business units decorative, Industrial &
International business is one of the largest paint company in India. It had a sell over 300
million litres of paint in 2005-06. Significantly the group has crossed the Rs.3000 crore
turnover mark-a preset mile stone for the company.
Here we will be analyzing three situations of the company
(i)

Competitor analysis

(ii)

Customer Analysis

(iii)

Assumption on planning

1) COMPETITOR ANALYSIS :
The Indian paint market is highly saturated with many paint companies with
varieties of product. Asian paints ltd, Kansai Nerolac paints Ltd. Berger paints India Ltd.
ICI India Ltd. Shalimar Paint Ltd, Snowcem India Ltd are the market leaders.
Here we are only considering the nearby competitors of Asian Paints which are
Nerolac paints Ltd, Berger paints Ltd & Indian chemical Imperial (ICI) Ltd.
Sales of different companies in the Financial year 2005-2006
Name of the Asian paints ltd Nerolac paints Berger paints
company

ltd.

Net sales (in 2433.37

1064.22

948.54

ICI India ltd.

971.19

Rs. Crore)

SWOT analysis of Asian paints & its competitors :

10

COMPANY

Asian Paints

Nerolac paints

Strengths

1. Market leader 1. Well ahead

1. In the IInd 1.

in overall paint

leader in

position in the refinishing

market & in

Industrial paint

industrial paint business it has

decorative paint

market

sector.

market in India

2.

ICI paints

share 40%

kansai

In

the

one of the best

with 2. Tie up with quality refinish

paint for cars.
paints Herbert-

Tie-up

2. Available in provides

Berger paints

foreign Germany

urban & rural technology.

2. In decorative

valspar of US paints

it

area

3. Main supplier & Teodor NV performance is

good
3. High Quality in the Indian of Holland
MR & MIS

Industrial

&

3.

Pricing automobile
main
policy oriented market
maruty
to all kinds of client

purchased 49%

4.

Weakness

1.

share of Quest
Int.

udyog

customer

India

limited.

Industrial 1. Market share in 1.

paint

recently

sector decorative
is

Overall 1.

paint market position paint

only 15% share

market

very is

not

2. No tie up

low.

with foreign

2. Market in rural 2. Asian paints 2.

manufactures.

area is poor.

Through it has

3.

market

very existence

impressive.

&

Industrial

almost 2-3%
Overall

Nerolac market conduct

units in several

Considering paints capturing poor.

market
overall
paint the

countries.

market

3.Innovation in

paint

developing new

ahead of Nerolac.

Asian buyer
is well behind

for

product.

1.

Acquiring/ 1.

Increasing

Improve

position

its 1.
in with

come

up 1. Merger with
new Quest

will

11

market share in decorative

Industrial paint segment.
sector.

paint innovations

to provide to have

challenge Asian an

experience

foreign
Capturing paints & Berger in
market,
2. Developing whole industrial paints
Opportunities
particularly in
market
in paint market
UK.
automobile
2.

industry, which
accounts
50%

for
of

Industrial paint
market.
1.

Domination 1. Asian paints is 1. Asian Paints 1. Berger paint

of few foreign coming up rapidly &

countries
Threats

into the industrial paints are well new entrants in

advancing

is paint market with ahead

its new plants & paint

rapidly

in products

2.

Nerolac

Nerolac & there are few

Industrial

&

ICI the market.

is

competing
nearly

market

2) CUSTOMER ANALYSIS :
Asian paint with its natural competitive advantage of size (Number 1 in India),
Strong brand equity & largest distribution Network has acquired the number one position
in Decorative segment in India.
There are few reasons due two which the customers in the decorative segment has
been choosing Asian Paint as their brand
1. As we know brand name has its own value & Asian paint is the number one in
decorative segment, so a purchaser automatically leans in purchasing it.

12

For example, we have two different types of paints, namely Apolite glass
Aenamel & Apolite care Emulsion, which are from Asian Paints, Nerolac paints,
Berger paints & ICI paints. Again due to the competitive market the price is very
closed for all the companies. But due to the Branch awareness of common people
they mostly tend to purchase the products from Asian paints.
2. Company have provided with different varieties of product for different income
groups. For e.g. UTSAV which is a low value paint, is growing at a faster rates
& penetrating with high speed at the lower income group. This policy is helping
the company to move from metros to small towns for branded products.
3. In India frequency of painting has still not increased, which is once is 5 years
only. So consumers are normally changing over to the better quantity & branded
paints.
4. In 2001, Asian Paint launched a new product Tractor Emulson, which pulled the
customer who used distemper to move to emulation paints.
Accessibility of Asian paints to the customers :
Asian paints have started a 24 hours customer help centre at Hyderabad. It is information
to consumers to answer their needs for any query related, to their products. Through this
company is also getting a lot of data related to the customers need & appreciations of the
products.
In order to provide better consumer service, company has connected all colour
world installations with Asian Paints main system through software & providing
computes to dealers. This is speeding up order execution, electronic banking will speed
up recovery & money transfer.
Market Share Analysis :
The market share clearly shows that Asian paint is the leader in Indian paint industry.
The nearest competitors of Asian paints are Nerolac & Barger paints. Asian paints has the
largest sells in Decorative paints.

13

Nerolac paints being widely used in Industry it has a greater share price value.
Industries like Bajaj auto limited, Maruti Udyog & many other car manufacturing
companies use Nerolac paints.
The Industrial paint are priced with premium in comparison to the decorative
paint which is mainly used in house hold decoration.
Berger paints & ICI paints are also providing a shift competition to Asian Paints
in decorative paint, but still there is no sign of threat from them.
Again in the Industrial sector Nerolac paint far ahead of all its competitor. Asian
paint presently building up a new manufacturing unit solely to produce Industrial paint.
Asian paints annually spends on an average Rs325 Cr on its selling & marketing
expenses. It givers us an idea about the effort the company put on expanding its market in
all segments.
When customers buy the products of Asian paints As the customers normally
uses the products of Asian paints on certain occasions like. Marriage ceremony, Dewali
or any other special occasions, other than normal paint in houses, customers are very
choosy & brand specific. This appreciation by the customers helped Asian paints to
become the number one paint company in India.

3. ASSUMPTIONS OF PLANNING :
i.

Though Asian paints is the largest paint company in India but in industrial
sector its performance is not satisfactory. A totally new manufacturing unit is
coming up & will start production by 2007. This will definitely through new
challenges to Nerolac paints, which is the present leader in Industrial coating
market. But before that, a proper introduction of positing very important to
sustain in market.

ii.

With the advancement of technology the demand & choice of people changes
rapidly. So intensive R & d will need to be continued to continuously enhance
the quality of the product.

14

iii.

Internet purchasing is new becoming one of popular way to purchase. So

adequate measure will be taken to satisfy customers regarding designing of
website & providing a brief demonstration.

iv.

In International market also Asian Paints has become a top paint company.
But its strategy regarding the international market must be reviewed at a
certain internal so as to maximize value.

15

MARKETING OBJECTIVES
Four Marketing Objectives of Asian Paints are discussed bellow(i)

Corporate objective

(ii)

Divisional objective

(iii)

Marketing Objective

(iv)

Programme Objective

Corporative objective : The corporate objective of Asian Paint is as follows -Asian

Paint has become one of the top decorative company world wide by leveraging its
expertise in the higher growth emerging market. Simultaneously, the company intends to
build long term value in the Industrial coating business through alliance with established
global partner.
With Economic performance as objective the organization now has to develop
short-term goals to reach the overall objective. These Goals are usually functional target
such as production, Sales, new market develop, new product development and technology
up gradation, once the goal are determined the strategies can be evolved to meet the
goals. The organization is now on the way to achieve the overall objective of Economic
performance.
Steps followed by Asian paints for achieving its objective :
Asian paint is following certain steps for achieving its corporate objective. They
are as follows :
(i) Customer Asset : The settings up Asian paints colour world, a chain of state art paint
shop, is a major step towards building customer asset. At the same time company is
focusing more in rural areas than urban area and continuing to provide good and quality
service to the customer.
(ii) Technology asset : Asian paint is one of first Indian company to go hi-tech. Asian
paint has always kept its competitor at bay by constantly re-innovating its business
process and system.

16

(iii) Employee Asset : Asian paint always praise its employee for its success in the
market. Company always considers employee as a biggest factor of its success.
(iv) Dealer vendor relationship : Asian paint always maintain a close relationship with its
dealers because company think that they play a major role in Asian paint recent success.
(v) Brand Asset : Although it is operating in the commodity market but still Asian paint is
investing heavily in branding. Gattu- Asian paint official mascot is very popular in India.

Divisional objective : Asian paint has following division that are as follows :
(i)

Decorative segment

(ii)

Industrial segment

(iii)

Automotive segment

Decorative segment : Asian paint is the leader in this segment. It is ahead that its
competitor Nerolac and Berger in Decorative segment company still have certain
objective for this sector that to increase it sales and to acquire maximum position in the
market share in Indian paint market.
Objective for decorative segment :

To expanding its range in the economy segment.

To strengthen its position in the emulsion segment in both exterior and

interior emulsion.

To continue its strategy of pricing aggression and increase it sales and

to gain the market share along with a good operating margin.

To focus on the rural market as company believes as it as been its

objective since the beginning.

To focus more on adcampaign for enhancement of their sales in urban

as well as rural market.

Industrial segment : Asian paint second line of production deals with the industrial
coating. The constraint in these segment is that it is not as successful as the decorative

17

segment. In these sector it has to face a stiff competition from its nearest competitor
Nerolac and Berger Paints.
Objective for Industrial segment :

To build new infrastructure in the country for Industrial coating to increase the
production capacity.

To develop the quality of the product with a higher technological up gradation.

To increase the sales of the Industrial coating with the help of proper Ad.
campaign programme.

Automotive segment : Automotive is the third segment of the Asian paint. It is a product
which company target for the automobile market in India as well as abroad.
Objective of automotive segment :

To put emphasis on continuous improvement in quality and productivity.

To put emphasis on detect prevention

To reduce variation and wastage in the supply chain.

Marketing Objective : Asian paints the leader in Indian paint Industry has a very
strong marketing division. With more than 35% market share Asian paint is still growing
in leaps and bounce to achieve higher targets. It is changing fundamentally with two
objective in mind a huge ramp in the market share and better growth over the next three
years. Previously company used to function as undifferentiated organization. But now
they have divided it into three section each. And each section has its own independent
support system, targets and performance parameter.
Company marketing objective : As follows

Company is using PC, V-sats based line and internal mesh to become
most networked corporation in India.

Company is trying to cutdown the inventory and improve the working

capital cycle for a continuous production.

18

Asian paint is highly accepted in the urban sector and now the
company is trying to access the rural market with low price product like Utsav
targeting every customer of all income level.

To enhance their marketing in rural sector a huge amount investment is

made in adcampaign and demonstration cum sales technique is going on.

To increase its sales in the urban sector Asian paints today have 30
colour world located in different cities of India where any body can have the
real taste of the colour.

Online marketing has become an integrated part of the company and

company is trying install a strong integrated for online marketing.

Asian paints international unit, which have a dedicated marketing team

is also targeting for a rapid growth in overseal market.

Asian paint is concentrating on the development of technological in

their industrial coating so that to make the product more stronger positon in
the market. And do it they are following the product with huge ad compaign.

Asian paint is now targeting to provide paint solution with insurance.

Asian paint is following unlque strategy of marketing in the rural

areas by using their official mascot. According to the company it feels that
picture are more dominant than name.

Asian paint website Asian paints com provides several information

regarding the product and various other information that is being required by
customer and dealer.

Programme Objective : Programme objective is one of the main objective of the

company. Here the company frames the strategy about the products related issue and
various other thing relating to the business. Most of the company follows the 4Ps policy
namely price, product peace and promotion.
Product : Asian paint details with product that is (i) Decorative (ii) Industrial (iii)
Automative. In decorative segment company has a wide range of product from low price
19

to high price low price product like utsav which is basically targeted to the rural customer
and high price product Apex cefirma for exterior and interior emulsion. Asian paint
investing a huge amount of fun in R & D sector for Quality and the technological
development of product so that it compets globally.
Price : the price range of Asian paint varies according to the product. Asian paint had
always a stragegy in domination in the rural sector. The product that is supplied to the
rural area have low price range. Where as in the urban sector some of the high price
product circulates.
Place : Asian paint is available to all types of customer and the main advantage of the
Asian paint is that it is easily accessible to its customer. At present there are 20,000 dealer
and a large no. of retailer. Asian paints distribution channel extends to the thirty state of
India. Asian paints is also exporting to contrites like Caribbean, Africa, Middle east Asia
and south pacific.

Promotion : Asian paint follow good promotional strategy regarding their sales of the
product. Their promotional strategy are made looking at the different category of the
product and price associated with it. In urban areas Asian paint established colour world
where the customer can enjoy the taste real colour while in rural sector it follow sales
demonstration programme along with van displaying the product of Asian paint in the
rural market. It also invest a huge amount of funds in the advertising sector for the
promotion of this product.

20

MARKETING STRATEGY 1
STRATEGY ALTERNATIVES :
The prospect of a paint company has many dependence like weather, occasions
like puja, id etc. when we consider the decorative segments. So there is always a
possibility of ups & downs in the business. Besides this there is another very important
factor i.e. the position of the competitor. Through Asian paints is the largest paint
company still under circumstances it will have to go for some strategy alternatives.
Alternatives available :
1. As Asian paints market is mainly the decorative segment so a downfall in that
market will lead the company in trouble them it immediate focus will turn to the
Industrial segment.
2. Importance on water based paints may recover a poor situation created due to
sustain poor weather condition in some region.
3. As there is every possibility that conventional coatings are likely to lose some
share ecofriendly coasting is going to be very good alternatives.
4.

With all countries in southeast Asia beginning to adhere to the ASEAN free trade
Area (AFTA) that will reduce trade barriers for paints & coatings. A reduce in
domestic market share of Asian paints then will not be a constant for growth,
became export of paints to the foreign countries will contribute a lot.

5. Increasing the product package & application oriented service will make company
different from others.
6. A strong post sales service division will be an important factor in building
customer loyalty.
7. Tie up with automobile sector with strong appearance will be effective.
8. Lastly but not the least price of oil is increasing day by day, which results to
increase the price of paints. If this can be controlled by stocking oil or directly
linking up with foreign cheap refineries so as get oil at least available price.

21

COMPETITOR STRATEGY :
In the Indian paint industry Asian paints is the leader keeping the other
competitors far behind. In terms of gross sales we can rank the competitors of
Asian paints as :
i) Nerolac paints (ii) Berger Paints (iii) ICI Paints.
In industry they are recognized as trailing firms. But with their high growth
in the industry the competitors can touch or even overtake Asian paitns, for that
the three main competitors have different strategies. Initially one common strategy
must be their mind is to increase the market share.
Now we are considering individual strategies of the three companies.
Nerolac Paints :
Nerolac, despite a strong brand name has grossly underutilized its potential
in decorative paints. But in industrial paint sector it is far ahead of other
competitors. So, its two main targets are : i)

to keep hold of the Industrial paint market

ii)

increase the market share in Decorative paint sector.

All their business strategies mainly rounded this two issues. The different

strategies they are dealing with :

(1) They want to see high growths from decorative segments. In
Industrial sector their supply chasing demand strategy accumulated
lot of inefficiencies, so there is a scoe for cost reduction. So they
want to upgrde the equipments to improve efficiency in
manufacturing & secondly they are taking advantage of IT to
improve over all efficiencies.

22

(2) In decorative segment, they are logging behind the demand. So now
set up is needed as well as they are concentrating on enamels. They
are installing colour dispensing machine across the country.
(3) Concentration on emulsions & distempers, other words interior
paints. Distinguishing the high low end products.
(4) They want to concentrate also on the automobile paint industry. Here
they are already established but Asian paints is also targeting this
sector heavily.
(5) Another important strategy they are considering is to involve the
vendor in their organizational process. For this they want to have
proper vendor management processes.
Berger Paints :
Berger paints is considered as the dark horse of paint industry. While companys
main strength is in decorative sector, it has been actively pushing its presence in
the industrial paint segment. To improve its business the company have some
strategy :
i)

Company is mainly spreaded in Eastern & Southern part of the

company, now it is looking for a rapid expansion at the western region
also.

ii)

Recognizing the saturation of the urban market, Berger is targeting the

rural market.

iii)

They are looking to export in nearby countries such as Bangladesh,

Bhutan, Nepal to boost its revenue.

iv)

Within the paint industry, Industrial paint segment has a higher growth
rate. Keeping this in mind company has targeted a 15% share of
Industrial paints in the companys product mix.

23

v)

Bergers performance in Automotive sector over the lst few years has
been fairly. Here also they are targeting to build up some tie-up with
automobile companies.

vi)

Berger had ticups with Nippon paints of Japan & orica of Australia.
Here they would like to go for the branding of products through proper
advertisement compaign & with their new logo.

vii)

An establishment of new plant in Russia was done in 2005, which is

expected to start production by the end of 2006. company is likely to
utilize the Russian plant to cater to the markets of CIS countries in the
future.

ICI Paints :
Within 3 years of launch of colour future from ICI it proved to define the
International interior designing trend. The company has invested a million dollars
in the R&D of the colour futures concept. Which helps to forecast the international
colour trends in paints. Though ICI is considered as the 4 th paint against in India,
but its presence & development can be a threat to the others.
As a part of its strategy ICI is taking the measures : (i)

It is not looking at the increasing Investments but focusing on

debottenecking the capacity.

(ii)

Considering the increment of channel partners.

(iii)

Improving technology & offering better quality at a moderate price will

help to capture the rural market easily.

(iv)

Improved service & solution to the customers.

The company is slowing penetrating to both of decorative & Industrial paint

segment.

24

MARKETING STRATEGY 2
POSITIONING STRATEGY OF ASIAN PAINTS LIMITED :
Although operating in commodity market. Asian paints have invested heavily in
branding, GATTU, the Asian paints official Mascot is a familiar icon across India. The
company recently augmented their web pressure. Their website, Asian paints.com is an
exhaustive hub of Painting solutions. The site use Maximum interactivity to enhance
user experience. There are painting lips, online shades cards, cost calculation (based on
floor area and number of rooms0 dealer locator and a short of other innovative services.
From the perceptual map we can understand that Asian paints, have wider range
of products for all type of customers consisting of different income levels. It has a
product range from Royal Emulsion, Priced 250-400 which is targeted for up market
buyers. Hpcolilen is a product which is targeted for high income and upper middle class
people. For lowers income group it has UTSAV, TRACTOR EMLSION which priced
vary from 40-100 Rupees. These products are mainly targeted to Rural customers.
In Industrial segment companies position is relatively weak here Werolac paints
captured more than 50% market share. In this segment Asian paints have products like
Apcomin synthetic enamel which is used for industrial coating, and Apco synthetic power
which is used in automobile sector. In this segment also Asian paints faced stiff
competition from Berger and ICI Paints. Bajaj automobiles in the main customer of Asian
paints in automotive sector.

25

POSITIONING STRATEGY OF ASIAN PAINTS

PREMIUM
PRICE
ROYALE
APCOMIN
SYNTHETIC
ENAMEL

APEX
APCOLITE

APCO
POWDER

DECORATIVE
PAINTS

INDUSTRIAL
PAINTS

UTSAV

TRACTOR
EMULSION

LOWPRICE
LOW PRICE

26

CUSTOMER SEGMENTATION & TARGETING :

Customer segmentation is the most important part of the marketing strategy of any
company. Asian paints, the market leader in the Indian paint market segmented their
products mainly in three sectors. (i) Decorative (ii) Industrial (iii) Automotive. Their
customers are all also segmented based on the usage of these products.

CUSTOMER SEGMENTATION :
Base

Decorative coating
Premium

Industrial coating

Medium

Popular

Automotive coat

High

Powder

Quality

Finished

performance

coating

coating

coating

coating
Buyer Up market High

ccharacteristic buyers

income

achiever
quality

Middle

group

Used

by Used

class & fertilizer

& rural

by Large

manufacturer

petrochemicals s

of

& Old cars are

small

while scale

mainly
car recoloured

& Upper

market

&

atomic goods & other industrial

fashion

middle

mostly

energy

industrial

mostly tied

Secker

class

low

installations

products

up

Socially

income

mainly

used

conscious

group

where

to

companies

reduce
corrosion

led

losses
Key Quality

p purchasing
factor

Quality

Cost

Quality

& Quality & cot

Quality,

Brightness &

surfaces

surfaces

utilization

surfaced & cost

influences

shades

power

conting
strength

27

Search &

Brand loyal Brand

Evaluation

Cost

loyal

Cost

Utility

Variety

Brand

Cost+

seeking

loyal

variety
seeking

variety
seeking

Purchase

Companys through

Packet

Authorised

dealer

or paint approaches & manufactures

dealer

paint

or can

paints the purchasing

customer

paint com

house

of 1,2, 5,

Company

Other

points directly paints can

Tie up with Old vehicles

the

anto send to work

company

shops

sold

or

purchase

10, litre
Post A warranty Limited or

P Purchase

period
some

for no
warranty

No

High scale

warranty service of
warranty

years

Medium or no Service

Service

warranty

provided

provided for

for limited

0-2 years.

years

Asian paint is the market paint Nerolac is the market leader. Nerolac market leader,
Market

leader, with more than 50% market Asian paint have only 12% 50% share
share. Nerolac, berger, ICI & market share. Other players Asian paint penetrating
Shalimar are there
ICI
slowly

TARGETING :
Asian paints have an unique customer targeting strategy. They used to follow V tier
customer Target strategy.
Tires

28

Tires 1

Tire 2 Tire 4

Tire 3

Tire 1 - In the recipient end there are strategic solution seekers. Company thinks of
cost reductions, performance & productivity improvement for clients improving
customers & share holder profitability.
Tier 2 Here the Customers whom can be considered as the value or brand sensitive.
Asian paints target this customers with value added VDS integration customer level
service.
Tier 3 These part of the consumer are price sensitive. They least bothered about the
service. These are mainly middle or low income group people Asian paints have several
brand like UTSAV to serve them.
Tier-4 Here the company targets the small manufacturing & local companies, which can
generate revenue, company utilizes its & business & telesales technology to address &
satisfy their needs.
Tier-5 This tier is composed of specific targeted companies that although small in size,
deserve special attention because they are highly innovative in nature. Asian paints have a
good prospect over here.

CORE STRATEGY OF ASIAN PAINTS LIMITED : An origination like Asian paints will always restrict itself for its core strategy on
innovation. For an organization like Asian paints to create a strong future, it has to bred
innovation continuously. This strategy of innovative facts will help any organization to
fulfill their commitment and integrity in dealing, with internal and external customers.

29

For this core strategy of innovation Asian paints encouraged entrepreneurship.

They also give grater autonomy to managers in their reasonability. organiation also
develop high tolerance for failures and encouraged risk taking.
Asian Paints another important core strategy is of managing people and
technology which are also the two important assets.
As it is always a people focused company its employees are the main leaders who
bring a difference to the company.
Asian paints has stressed on employee development and creating leaders of
tomorrow. It always have strong belief in individual ability and creating an environment
in which an entrepreneurial spirit in encouraged. This is why Asian paints have believed
to be a best employees for personal and personal growth.
Along with Mass customization, Asian paints has created a plat form
where Talent is shared across the organization as Manager are given in different areas of
operations. It gives Asian paints on overall good perspectives of business along with
challenges of chandelling new Ares of operations.
The second most important core strategy of Asian paints limited is its technology.
Technology includes both research and development and information technology. Asian
paints has used technology throughout its year to gain a competitive edge in the market
place today, the company has formulated the entire range of decorative coatings though
home grown technology. It has used IT as a tool to bring efficiencies and stress line
operations. This applications will continue in future and Asian paints will not hesitate in
making investment in these areas to gain advantages of the organization.
The Third but important core strategy of Asian paints. In Reconfiguration of value
chain activities :
It is a key task for Asian paints to retain competitiveness and achieve highest
value cost leveraging. Here a Question arises that as per this given requirement who were
the Key initiatives taken by Asian paints during the last 5 years in this regard.
In last 5 year, reconfiguration of value chain activities to increase competitiveness
has been one of the Major core area of Asian paints. An fact Asian paints has been drain

30

stormed as an organization with highest sales and profit figures. But most important has
been initiatives under taken in all areas of operations to increase efficiencies some of the
key initiatives undertaken are :
-

Initiatives in manufacturing to reduce losses at factory.

Sourcing efficiencies

Surat existing assets for better productivity

Introduction of new technology to drive efficiencies and increase productivity.

Implementation of new supply chain solution.

Implementation of an ERP solution.

Besides the above Asian paints have focused on continuously improving

environmental Management standards at our plants. Today all Asian Paints manufacturing
facilities are accredited with ISO 1400/ certification for environment management
standards. These systems have enable company to reduce affluent from the
manufacturing facilities. The introduction of new supply chain has transformed
management

of inventory and forecasting has brought significant benefit for the

company through reduction of working capital. It has completely changed the manner of
functioning of the supply chain division.

MARKETING PROGRAMME
PRICING
Asian paints limited with its three business units decorative, industrial & International
business is one of the largest paint company in India. It has a sell over 300 million liters

31

of paints in 2005-06. Significantly the group has crossed the Rs.3000 crores turnover
mark a preset mile stone for the company.
Products and its price ranges :
The various products and its price ranges are as follows :
Product

Price range

Exterior:Asian Paints Apex

Price of 20 lts. Range from

Rs.3142.00 3328.00

Asian Paints Ace

Price of 20 lts. Ranges from Rs.1761.00 Rs.

2059.00

Asian Paints Tractor Emulsion

Price of 20 lts. Ranges from Rs.1435.00

Rs. 2047.00

Asian Paints Super Decoplast Plastic Price of 20 Ltd. ranges from Rs.2239.00
Emulsion Paints

Rs.2544.00

Asian Paints Interior Wall Finish Matt Price of 20 lts. Is Rs. 2244.00
(White)
Asian Paints Interior Wall Finish Luster Price of 20 lts. Is Rs.2311.00
(White)

Product

Price range

Asian Paints Tractor Synthetic Distemper

Its price ranges from Rs.690 to 757

Wall Finishes

It range from Rs.4638- Rs,4975

Asian Paints Royale

The price for 20 lts. Ranges from Rs.4638Rs.4975.

Asian Paints Premium Emulsion

Range of 20 lts of this product ranges from

Rs.2648-Rs.3118

Enamels

32

Asian Paints Apcoute Premium Gloss For 20 lts the range varies from Rs.2068 to
Enamel

Rs.2350.

Asian Paints Gattu Synthetic Enamel

For 20 lts the range varies from Rs. 1458 to

Rs.1836

Asian Paints Utsav Enamel

For 20 lts the range varies from Rs.1425 to

Rs.1652.

Stainer, Aluminium Paints & Others

Stainers
Apcolite Universal Stainers

For per bottle in plastic bottle of 200ml the

price ranges from Rs.41-Rs.77.

Utsav Stainer

For per boltle in plastic bottle of 20 ml its

price is Rs.34.

Asian Paints Wood Stains

For per bottle in plastic bottle of 5 lts the

range varies from Rs.1000-Rs.1250.

Aluminium

Paints

(Asian

paints

3 For 20 lts its price is Rs.2593

mangoes Aluminium)

Effect of price on future:

In the present economic situation, the GDP growth is expected at 6% for cude oil price
are soaring. Industrial sector has declined at a low rate with continuous slowdown
increment sector. There is depreciation in rupee.
Despite such discouraging macroeconomics it is creditable that Asian paints has posted
very good result.
Asian Paints is trying desperately to keep the same price overcoming the constraints.

33

PRODUCT
Asian paint produces a wide range of products which have more than 1100
shades. Their product were targeted to the different segment of the society. The cost of
the produce of Asian paint varies according different income level of the consumer.
Company follows the principle providing the customer different kind of products and
different price. In companys Decorative premium sector company have products like
Asian paint Royals and Asian paint Emulsion. The cost of these product is Rs.275 and the
latter Rs. 201 where the product like GATTU and Utsav-family product are targeted to
lower income segment people the cost varies from Rs.15 Rs. 20.
Products of Asian paints in decorative segment :
As Asian Paint is the leader in the decorative segment in the Indian paint market it
has wide variety of product. The products are :
(i)

Asian Paints Royale

(ii)

Asian Paints Premium Emulsion

(iii)

Asian Paints Apcolite Premium Enamel

(iv)

Asian Paints Gattu Synthetic

(v)

Asian Paints Utsav Enamel

(vi)

Asian Paints Trator Acylic Distemper

(vii)

Asian Paint Utsav Acrylic Distemper

(viii)

Asian Paint Apex

(ix)

Asian Paint Ace

(x)

Asian Paints Tractor Synthetic Distemper.

Asian Paints Royale : This product of Asian paint is targeted to higher income group and
customer of urban area. The product contains different shades and price of each shade
very. E.g. Regal white

34

Asian Paints Emulsion : it is another product which is targeted to urban area. It is high
price premium product. The shades are white, palm group and base.
Asian Paints Gattu synthetic : It is a product which is targeted customer of reral area. It
price varies Rs.15 to Rs.120 and it has different shades like white, Aquamarine, Azure
Blue and etc.
Asain Paints Utsav Paint : it is product which is targeted to lower income people as well
as rural customer. The various shades were Adyrey, back\, white, super white and etc.
Asian Paints Apex : This product is one of the major product of the saian paints as this
product is targeted to middle class people and avg income level. These paint have wider
range of shades such as classic white, blue ice, Alliance, Antique white, sweet time and
etc. The price varies from Rs.180-Rs. 115.
Products of Asian Paints in Industrial sector : it is the second category of the product that
Asian paint produces. In this segment Asian Paints targets to industry where the paint are
used for protective coatings of the machinery. Road mapping and various other industrial
uses. In these segment the product are normally sold at the premium price. Asian paint in
these sector is behind its competitor Nerolac. Now Asian Paints is trying a lot to improve
the product technology and by bringing new product in this sector to compete with its
competitor. The products are
(i)

Apcomin Synthetic Enamel

(ii)

Apcomin Synthetic Powder

(iii)

Stainer

(iv)

Premium surface & fillers

These products are based on high technological products and are used for asset
(Machinery, tools, equipments) coloring and upcoming synthetic powder is used as
lubricating agent in the machinery. Premium surface and fillers and strainers are used in
for road marking and various other tings in the Industrial sector.
Product for automotive sector : This is the third category of product which is produced by
Asian paint. These segment is slowly being emerging great user of paint in the Indian
market previously automotive company used to import the product from other country.
35

But now some companies like Asian paint, nerolac, Berger have their products in this
segment. This sector is emerging market in India.
Products : The products of Asian paint in this segment are
(1) Allumium Paint
(2) Fibre Paint
(3) Apcolite Hammertone finish
Basically the product in this segment are new but the product are in the great
demand automotive vehicles in India. The product are available in different colour
basically they are used for colouring the vehicles and the spare parts.
Product life cycle : Product life cycle suggests the different stages that a product
undergoes during its life cycle Introduction stage: In these stage the product are
introduced to the market.
(i)

Growth state In growth stage the product gens the memeenturn an grows
rapidly in these stage.

(ii)

Maturity : In these stage the product attains the saturation level it reaches its
maximum point and from that point it starts downfall.

(iii)

Decline stage : In these stage product slowly goes downward in to the slope
because of low demand and various other things. It end stage of a product.

BRAND
a brand is a name, term, sign, symbol, design or a combination of all which is build
intended to identify products or services of a company to differentiate it from its
competitor. Asian paints, the largest paint company in India have established its position
as a great brand. Asian paints promise to deliver consistently a specific set of features,
benefits & services to buyers.

36

Asian paints as a brand name is very much attached with allits products. What evr
may be the product, like ultima, Emulsion, wall finish lustce, Apcolite premium in the
urban area or the UTSAV at the rural area, the brand name is directly attached.
The brand name Asian paints brings to the mind of people certain attributes lie
wonderful coloring, royal treatment, 1000s of colour combinations, pricing not an
important factor of concern as the company provides products for all category of
consumers. Post purchase service is also an important issue related to brand name.
Asian paints Brand extension policies helped them to reduce the effective cost of
launching new colours products in new form, with new name. Line Extension technique
of branding helped them to go with new forms like Asian paints UTSAV Enamel, Asian
Paints Tractor Emulsion, Asian paints Royal.
Companys universal logo GATTU which is not going to be a logo anymore,
helped Asian paints to promote its products in through out India, particularly in rural
areas it got the most popularity.
Asian paints is using its website as a very strong mode for the promotion of
Brand. The wonderful information related to pre-painting & after sales services helped
the company to build its unique brand. The on-line services, colour world &
Advertisements also helped to build the Brand of Asian paints.

PROMOTION
Asian paints the market leader of the decorative segment in the paint market of
the India. As it is not for behind in the other tow section that is industrial coating and
automotive coating. In achieve the current position a lot things are being done by the
Asian paints. The promotion strategy of Asian paints is bringing a lot of positive output to
the company. Company is using different techniques such ad. Compaign, sales
promotion, personal selling, driect marketing and public relation.
37

Promotion strategy :
Direct response marketing : Asian paints is using V-sts based in the and 24 hours online
customer

help line service open. In enable the customer to interact with the company

and know the details about the product, pricing and many things related to the company.
Asian paints is dominating the television advertisemnt by increasing other ad
campaign cost over 50% from next year. A total amount of 85 crores is spent ont eh ad
campaign by asian paint. With huge ad campaign support behind the product the
company is able to making a brand name in the mind of customer. Their particular ad
campaign Mera Walla Blue har ghar kuch kehta hia are being liked by the customer.
Online marketing for urban customer : Asian paint online marketing system is helping
company in lot of ways many customer all the necessary information to the customer. It is
an unique way of promotion.
Colour world : Asian paint had established 30 colur world thorugh out the country giving
the people real taste of colur. The punchline for the colour world is Jjahan Milen world
ke saare colour
Promoting in different cities : Asian paint have large area of Network of distribution. It
has almost retail outlets through out the country situated in the different city of India. All
the customer could easily access the product of Asian paint anywhere and any time.

Promotional strategy followed by Asian paints in rural market

On of thing which is contributing to the profit of Asian paint is that its entry to the
rural market. As Asian paint gets an competitive advantage from its competitor in this
sector. As Nerolac and Berger were only targeting the urban customer.

First of al Asian paint is bring different low cost product like Utsav group in the
rural market.

There packaging very from 200gm to 1 kg \and prices are also relatively low.

To enhance their sales in the rural market they are spending a huge amount of
money in ad campaigns.

38

In rural areas they follow sales demonstration programme where they demonstrate
their different product where a large no. of discount is given on the product, lucky
coupons, free gifts are given to the customer.

Moving vans are being employed to sell their product in different village.

Promotion in international arena

Asian paint is taking we from the domestic market and promoting its product in the
international market with establishing colour world in those place particularly Caribbean,
Africa Middle east Asia and south pacific. A huge amount fund is invested adcapaign for
these product in the international market.
Promotion through Ad campaign : Asian paint has different brands over 1100 shades
targeting different segments. The company decide to promote all the brand under one
name of Asian paint This was a advantage for Asian paint in the Low involvement
segment as the people asked the paint by brand.
Target Audience : The primary target audience for all of the brands marketing and
communication activities has been the adult male who is the primary decision maker.
However female members of the house play an important role in selecting a shade so a
large number of ad are done keeping in mind that thing..

The non-sue of caps in the headline as in the original ad Asian Paint logo which
is sin similar font, the design is meant for better readability and structure of colour
used.

The company mascot Gattu an impish boy with the paint tin and the brush, is
most popular and easily reconciled and is one of the ideal mascot.

Sates promotion : Asian paint uses it sale promotion as key ingredient in its marketing
campaign. It consist of various incentive designed to stimulate faster or greater purchase
of their products.
Giving discount to the dealer ; Asian paint gives certain amount of discount to the dealer
if he increases the sales of the company product.

39

Specialty advertising : Giving Asian paint T-shirt, Caps and other small things to painter
for their advertisement.
Trade show : Asian paint always open its stall in the Industry trade so that it products
would be promoted globally.
Consumer preference : The customer of Asian vary from a period to a big industry in
order to enhance it sales it gives price discount on bulk amount of purchase. The
company give coupons inside the paint pack so that could be taken by the customer as a
gift from the company. Asian paint always try to improve the packaging of the product. If
the product would be fancy and stylish then it would increase the sales of the products.
As industrial coating is one of tis major product the company uses the name of the
company it supply the paint for its promotion.
The promotional strategy adopted by Asian is quite unique apart from having such
good strategy the company is using high profile brand ambassador like Akshay Khanna,
Saif Alikhan to promote their product in the paint market. Promotional strategy of Asian
paint is always aimed looking at customer and this needs and for this strategy company is
enjoying the No 1 Position in the Indian paint market.

DISTRIBUTION
Asian paints have an extensive distribution channel through out the country. It
used to maintain unique channel from the manufacturer to the customer. Distribution
system at Asian paints : 1. Multiplant Distribution setup.
Neither geographic nor product specific.
Offers flexibility & variable cost advantages
2. Servicing has been key competitive advantage.
3. Around 15000 dealers serviced from around 85 sales location.

40

4. Role of distribution department is to ensure timely product availability at these

locations at minimum cost.
The company ahs 4 manufacturing facilities & more than 2800 stock keeping units
(SKUs) These are supported by 6 regional distribution centers, which cater 55 deposits.
Each depot is having branch manager for supervision over more than 15000 dealers in
more than 3500 small & big cities in India.
Asian paint implemented & concisely improving its IT systems over the years. It
has already linked all sites & Depots through V-SAT technology, which helps them to
monitor constantly & has given benefits in streamlining the distribution channel.
Asian paints also implemented 12 solutions to increase its networkings &
solutions, which is a very good replacement of ERP.

SERVICE
Asian paints is Indias largest paint company & the third largest paint company of
Asia today , has an enviable reputtion in corporate & society level for its wonderful
serving.
Asian paints have three different segments : (i) Decorative paints (ii) Industrial &
(iii) Automotive paints.
Its service strategy is also different according to these segments.
(i) Decorative paints :

41

Asian paints some solutions which actually offer a hastle free painting
experiences to the consumer is presently available in 11 different cities in India. It is
particularly meant for premium consumers. In this case painting is done by experienced,
trained applicators & according to the wish & choice of customer in presence of him.
Here time bound completions of the job is assured.
In the website of Asian paints (www.asianpaint.com) all the details related to the
availability of the above facility & the help desk is designed to provide the customer
ample choices.
Asian paints clour world is the unique paint shop of Asian paint available through
out the India, where consumer can directly see the different paint combinations through
software & chose accordingly.
In all t here cases Asian paints also provide warranty for their products & for
home solutions free after paint services to the consumer, if anything wrong happens with
the paint.
For the rural areas, where the most popular product UTSAV, dominate the market,
Asian paint used to organize rallys, car or van advertisement of their product & make
aware the people about their services.
ii) Industrial paint :
here the products are tested under extreme conditions to ensure their durability &
how they can withstand different climatic changes. As corporate level the main consumer
here Asian paint used to provide importance in servicing this sector too. Its website gives
all the product details. It provides technical details regarding the uses of the paint.
Coating specification, health & safety are also given importance as a part of services.
iii) Automotive coatings :
In this segment Asian paints is improving its market share with high speed. Here
the vehicles ultimately goes to the consumer, so Asian paints used to provide direct
consumer service, private cars, motor bikes & MUV (Multi usage vehicles) vehicle
manufactures are directly provided with the post paint service.

42

Asian paint have implemented is solutions. Which helped them to overcome the
homegrown supply chain, which had certain drawbacks, in terms of customer service.
The is solution helped them to continuously monitor the changing needs of the market
place & serve the customers accordingly.
In future so as to become open of largest paint company in the world Asian paints
is also taking care of the services they provide. They want to have more feedback from
the customers through their website & colour world. It is now turning its helpline into an
integral part of its operations. Roughly 75 lakh rupees is considered as the annual service
cost. Quality service is the future mothe of the company.

RESEARCH
Asian paints, the largest paint company of India have a very strong research
methodology. There are two ways they follow : - (i) Market Research (ii) Research &
Development of the products according to customers need & choices.
(i) Market Research :
Asian paints used to hold a very strong market research team. The colour worlds
available throughout India is also keeping the consumer databases & their feed backs.
There are three important respect which came out.
(i) Consumer presences
(ii) Increasing global competition
(iii) Rapidly disappearing completive advantages.
The market research suggests company need to improve its presence in Industrial
sector. Products related to surface coatings & Intermediates need to be modified. UTSAV
range of products achieved a great success in rural market in this area Asian paint need to
take the competitive advantage.
(ii) Research & Developments :
Asian paints have invested 140.54 million Rs. In 2005-06 in the R & D sector,
Which gives an idea about the companys paid interest in R & D.
The various sector where company is taking care of are

43

(i) Development of analytical test methods, characterization technique & application

techniques essential for product development, bench marketing & customer servicing.
(ii) Up gradation of products & processes to reduce environmental & safety concerns.
(iii) As the price of crude oil is increasing day by day. Asian paints is looking for
identification of alternate & new raw materials for the products.
(iv) Quality improvement, cost benefits, supply chain flexibility & crisis management are
also the matter of concern.
Future planning :
Asian paints is growing rapidly throughout the world. In international market company is
planning to introduce new & attractive products though its subsidiaries, like Berger, Apco
coating etc. In Jamaica & Fuji companys market is yet not satisfactory, which is also a
matter of concern.

In domestic market company will concentrate on development of

new products/ product systems. With improved supply chain management.

Asian paints is looking to invest approximately Rs.160 million in R & D in 20062007 financial years. Quality control system will be upgraded & implementation of in
solution will be helpful to grow.

FINANCIAL DOCUMENTS
Asian paints, one of the leading paint company in Indian market, consists of three
different segment. Decorative, industrial & automotive company presently standing in a
very good position as per as the competitors are concern with more than 50% market
share. Company has some planning to increase its overall sales for the financial year
2006-07.

SALES FORECASTS BUDGET OF ASIAN PAINTS : -

44

Paints is a product which is not used in daily life FMCG. Its purchase is mainly
based on the requirement of the consumer. Natural factors, festivals are some factor
which effect the sales.
To increase the sales company is looking at the following factors : (i) Product Style

(ii) Quality

(iii)

Pricing

(iv)

Raw

material

supply

(v)

Distribution system (vi) Promotional activity.

Table showing the previous 6 years data : Rs. Crore
Year

Advertising

& Gross sales

Net profit (PAT)

marketing Exp.
March 2001

176.26

1526.01

105.58

2002

192.49

1662.33

114.31

2003

216.58

1887.7

142.01

2004

249.29

211.08

147.79

2005

269.15

2366.16

173.43

2006

323.58

2807.85

186.78

Now, to forecast the sales for the year 2006-07 we can use the regression analysis
method. The sales for the previous years are increasing in manner & the growth rate
follows a certain trend. So we are using last sqnare method.
Years

Sales (Y)

XY

X2

2001

1526

1526

2002

1662

3324

2003

1888

5664

2004

2111

8444

16

205

2366

11830

25

2006

2807

16842

36

x =21

y=12360

xy=47630

x2=91

45

Formula = y = xa + bx
xy = ax + bx2
putting the values
(12360 = 6a + 21b) x 21 ==> 259560 = 126 a + 441b
(47630 = 21a + 91b) x 6 ==> 285780 = 126a+546 b
solving we get

a = 1186.05
b = 249.7

y = 1186.05 + 249.7 x
for the year 2007; x = 7.
Y = 2934
Now, Gross sales (estimated / forecasted) of Asian paints for FY 2006-07 in 2934 Cr.
(approx).

Relation Gross sales & Advertisement & marketing cost :

Gross sales of a company is strongly effected by the advertisement expanses
incurred.
The advertisement & marketing expanses a percentage of the Gross sales for 2001
- 2006 in as follows :
Rs. In crores :
Year

Gross sales

AD & Mar. Ex.

2001

1526

176.26

11.55

2002

1662

192.5

11.58

46

2003

1888

216.5

11.46

2004

2111

249.29

11.80

2005

2366

269.15

11.37

2006

2807

323.6

11.52

The above table shows that Gross sales & Ad & marketing expenses of Asian paints have
a certain trend. Ad. & Marketing expenses is almost 11.5% of the gross sales.
For the year 2006-07 Gross sales = 2934 Cr. (Approx)
Advertisement expenses = 2934 x 1158 = 340 Cr (approx)

Graph showing the % relation of Gross sales & Ad ex.

47

11.9
11.8
11.7
11.6
11.5
11.4
11.3
11.2
11.1
1

Effect of union Budget 2006-07 of sales :

For the paint sector the union Budget 2006-07 have two import ant implications.
(i)

Reduction in Peak customs duty, lead to reduction in customs duty on most of

the inputs from 15% to 12.5%.

(ii)

CVD of 4% has been imposed accorss the board of tall the imports to
compensate for the sales Tax/ VAT in the domestic market. Full credit of this
duty will be allowed to manufactures of excisable goods.

The budget has a positive outlook & Asian paints is expected to be benefited from it
in terms of sales. Though it has a force casted sales of 2935 core company is expected
to increase it. Certain unidable impacts like increase of price of crude oil, nonavailability of raw material, are certain barriers. Asian paints have achieved a gross
sale of Rs.603.33 in Q1 of Ry06-07. The Q2 is the prime season of the company as it
is the occasion period. Here company is expected to increase its sales volume
tremendously.

PROFITABILITY FORECAST BUDGET OF ASIAN PAINTS :-

48

Profitability of a company for any particular financial year is mainly calculated

based on the two factors (i) Total Income (ii) PBDIT
Where total income is the addition of gross sales & other source of income &
PBDIT is profit before depreciation & Income Tax.
Table showing Total income & DBDIT for 2001-2006
Rs. In crore .
Year

Total income

PBDIT

Profitability

2001

1543.85

208.55

0.14

2002

1635.5

236.15

0.14

2003

1928.31

287.98

0.15

2004

2131.04

292.33

0.14

2005

2462.1

325.66

0.13

2006

2830.11

390.61

0.14

WHERE PROFITABILITY = PBDIT

Total Income
Now, to forecast the profitability of FY 2006-07 we need to forecast the Total income &
the PBDIT of the year.
For this we use the regression analysis method by regression analysis of the total
Income & forecasting it for FY2006-07 we get the amount o be Rs.2999 crore (approx).
Now, PBDIT is measure of profit made by a company for any financial year.
Though actual profit or PAT is different, but PBDIT gives us a measure of the
profitability.
Now, PBDIT of Asian paints for the last 5 years is shown in the above diagram, as
it is to some extent linear increment, we can consider regression analysis method to
forecast the PBDIT for Fy 2006-07.
By forecasting we get PBDIT for Fy 2006-07 = 408.48 crore

49

Now, we have profitability = PBDIT/ Total income

For Fy-2006 07 as per our forecasting
Is concerned profitability = 408.48/2999 = 01362
Now in percentage term for forecasted profitability of Asian paints for fy-2006-07 is
13.62%

0.155
0.15
0.145
0.14
0.135
0.13
0.125
0.12
1

YEAR WISE PROFITABILITY GRAPH

50