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

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 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

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 CONTENTS
SLNO COMPONENTS ITEMS COVERED PAGE NO

1 Executive Summary
2 Introduction 1
3 Category analysis 1
Situation analysis-I Sales analysis 2
Share Price analysis 4
4 Competitor analysis 5
Situation analysis-II Customer analysis 7
Assumptions of planning 9
5 Corporate objective 11
Divisional objective 12
Marketing objectives Marketing objectives 13
Programme objectives 14

6 Strategy alternatives 16
Marketing strategy-I Competitor strategy 17
7 Positioning strategy 20
Customer segmentation
Marketing strategy-II and Targeting 22
Core strategy 25

8 Sales forecasts budgets 40

Financial Documents Profitability forecast
budgets 44

Pricing 27
Marketing Product 29
Programme Brand 32
9 Promotion 33
Distribution 36
Service 37
Research 38

10
Control Strategy 46

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 9 46

EXECUTIVE SUMMARY

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

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image, Dealer Vendor relationship &
technology. Company’s 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. Company’s 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

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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 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.

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 SITUATION ANALYSIS-1
CATEGORY ANALYSIS

The different categories of Asian paints Ltd. are –

PAINT :

Company’s 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 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 :

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Asian paints have chemical business consisting of Pthalic Axhydride & pentaerythritol
manufactured at Ankleswar, Gujrat & Cuddalore, Tamilnadu. During 2005-06 approximately
42% of company’s 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
sales
Percentag - 8.93 13.55 11.83 12.08 18.63
e
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
Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06

Results of operation :

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 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 Friday’s for the month of May, June, July 2006.

Table showing the share price (on Fridays of May, June, July 2006)

Date 5 May 12 19 26 2 9 16 23 30 7 14 21 28
May May may June June Jun Jun Jun July July July July
Closing 6487.7 637.5 577.2 553.3 582. 550. 566. 573 597. 581. 571. 581. 585.4
share
5 5 0 70 75 65 05 65 85 25 5
price (in
Rs)
Graphical representation of share price

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 Closing share price (in Rs)

660
640
620
600
580
560
540
520
500
05-May

12-May

19-May

26-May

02-Jun

09-Jun

16-Jun

23-Jun

30-Jun

07-Jul

14-Jul

21-Jul

28-Jul
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.

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 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 ICI India ltd.
company ltd.
Net sales (in 2433.37 1064.22 948.54 971.19
Rs. Crore)

SWOT analysis of Asian paints & its competitors :

COMPANY Asian Paints Nerolac paints Berger paints ICI paints

Strengths 1. Market leader 1. Well ahead 1. In the IInd 1. In the
in overall paint leader in position in the refinishing
market & in Industrial paint industrial paint business it has
decorative paint market sector. one of the best
market in India 2. Tie-up with 2. Tie up with quality refinish
share 40% paint for cars.
kansai paints Herbert-

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 2. Available in provides foreign Germany 2. In decorative
urban & rural technology. valspar of US paints it
area 3. Main supplier & Teodor NV performance is
3. High Quality in the Indian of Holland good

MR & MIS Industrial & 3. recently

Pricing automobile purchased 49%

4.
policy oriented market main share of Quest

to all kinds of client maruty Int. India

customer udyog limited.

Weakness 1. Industrial 1. Market share in 1. Overall 1. Industrial

paint sector decorative paint market position paint market
only 15% share market is very is not very existence
low. impressive. almost 2-3%
2. No tie up
with foreign 2. Market in rural 2. Asian paints 2. Overall
manufactures. area is poor. & Nerolac market conduct
Through it has 3. Considering paints capturing poor.
units in several paint the market
overall
countries. Asian buyer for
market
3.Innovation in paint is well behind
developing new ahead of Nerolac.
product.
1. Acquiring/ 1. Improve its 1. come up 1. Merger with
Increasing position in with new Quest will
market share in decorative paint innovations to provide to have
Industrial paint segment. challenge Asian an experience
sector. Capturing paints & Berger in foreign
2.
2. Developing whole industrial paints market,
particularly in
Opportunities market in paint market
UK.
automobile
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 industry, which
accounts for
50% of
Industrial paint
market.
1. Domination 1. Asian paints is 1. Asian Paints 1. Berger paint
of few foreign coming up rapidly & Nerolac & there are few
countries into the industrial paints are well new entrants in

is paint market with ahead & ICI the market.

2. Nerolac
Threats its new plants & paint is
advancing
in products competing
rapidly
nearly
Industrial
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.

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.

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 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 Paint’s 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.

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.

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 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.

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.

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 MARKETING OBJECTIVES

Four Marketing Objectives of Asian Paints are discussed bellow-

(i) Corporate objective

(ii) Divisional objective

(iii) Marketing Objective

(iv) Programme Objective

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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.

(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

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 (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 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.

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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.

 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.

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  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 4’P’s 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 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.
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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.

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.

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 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.

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.

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 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.

(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 :

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Berger paints is considered as the dark horse of paint industry. While company’s 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 company’s product mix.

v) Berger’s 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

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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.

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.

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 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.

POSITIONING STRATEGY OF ASIAN PAINTS

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 PREMIUM PRICE

ROYALE

INDUSTRIAL
PAINTS

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.

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 CUSTOMER SEGMENTATION :

Base Decorative coating Industrial coating Automotive coat

Premium Medium Popular High Powder Quality Finished
performance coating coating coating
coating
Buyer Up market High Middle Used by Used by Large & Old cars are
haracteristi buyers income class & fertilizer manufacturer small mainly
achiever group & rural petrochemical s of while scale car recoloured
quality & Upper market s & atomic goods & other industrial
fashion middle mostly energy industrial mostly tied
Secker class low installations products up
Socially income mainly used companies
conscious group where to
reduce
corrosion led
losses
Key Quality Quality Cost Quality & Quality & cot Quality, Brightness &
purchasing surfaces surfaces utilization surfaced & cost
influences shades power conting
factor
strength

earch & Brand Brand Cost Utility Variety Brand Cost+

loyal loyal + seeking loyal variety
Evaluation
Cost + seeking
variety
seeking
Company’ through Packet Company Other Tie up with Old vehicles

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 s dealer or paint approaches & manufactures the anto send to work
Authorised paint or can points directly paints can company shops or
urchase
dealer purchasin sold purchase
paints the g paint
customer com of
house 1,2, 5, 10,
litre
Post A warranty Limited or No High scale Medium or no Service Service
Purchase period for no warranty service of warranty provided provided for
some warranty warranty for limited 0-2 years.
years years
Asian paint is the market paint Nerolac is the market leader. Nerolac market leader,
leader, with more than 50% market Asian paint have only 12% 50% share
Market
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

Tires 1

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 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 client’s 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.

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.

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 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 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.

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- 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 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 :

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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.4638-
Rs.4975.
Asian Paints Premium Emulsion Range of 20 lts of this product ranges from
Rs.2648-Rs.3118
Enamels
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

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 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.

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 company’s Decorative
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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

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.

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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. 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

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 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.

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, 1000’s 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.

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 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.

Company’s 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.

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.

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 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.

 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.

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  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.

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.

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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.

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

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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 India’s 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 :

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.

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 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.

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
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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 company’s paid interest in R & D.

The various sector where company is taking care of are –

(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.

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(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 company’s 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 2006-2007

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 : -

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 : -

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(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 X Sales (Y) XY X2

2001 1 1526 1526 1

2002 2 1662 3324 4

2003 3 1888 5664 9

2004 4 2111 8444 16

205 5 2366 11830 25

2006 6 2807 16842 36

x =21 y=12360 xy=47630 x2=91
Formula = y = xa + bx

xy = ax + bx2

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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

2003 1888 216.5 11.46

2004 2111 249.29 11.80

2005 2366 269.15 11.37

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 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.

11.9

11.8

11.7

11.6

11.5

11.4

11.3

11.2

11.1
1 2 3 4 5 6

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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, non-availability 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 :-

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

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 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

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%

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 0.16

0.15

0.15

0.14

0.14

0.13

0.13

0.12
1 2 3 4 5 6

YEAR WISE PROFITABILITY GRAPH

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