Smm marketing mix project_exe-mba-10_20104001


Published on

Published in: Business
1 Comment
  • Be the first to like this

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Smm marketing mix project_exe-mba-10_20104001

  3. 3. PROJECT: MARKETING STRATEGYName of the organization: Asian Paints India Ltd (APIL)Area of business: Paints (Decorative and refinish) Vision: To become one of the top-5 paint companies in the world by leveraging its expertise in the higher growth emerging markets. Simultaneously the company intends to build long term value in the industrial coating business through alliances with established global partners. Synopsis: Asian Paints is the largest paint company in India in terms of market share (30%) and turnover (INR 66.80 billion). It has operations in 17 countries in the world with 23 manufacturing facilities to complement its volume of sales. Through strategic mergers and acquisitions, it has subsidiaries like Berger International, SCIB Paints – Egypt, Asian Paints, Apco Coatings and Taubmans. The Paint industry: The market size of the Indian paint industry is approximately INR 210 billion ( 0.32% of India GDP of 1.31 trillion USD ); growing at approximately 15% annually. The per-capita consumption (0.6%) of paints in India is a mere 0.5 kg as compared to 1.6kg in China, 4.0kg in South-East Asia and 22kg in developed economies around the world. The growth in the Indian real-estate (housing) sector has been a significant 35% annually and the Indian automobile sector grew by 15 - 20% annually being the major end-users of the Paint Industry (decorative and refinish). Decorative paints constitute a staggering 75% of t he paint market; hence the growth potential is enormous. History of the company:  Promoters: Shri. C H Choksi, Shri. C N Choksi, Shri. S C Dani, Shri. A R Vakil  Started as “The Asian Oil and Paint Company” in 1942.  The Asian Paint mascot – GATTU created in 1954.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 3
  4. 4.  Transformed from a family based business to a professionally managed group in 1957.  Emerges as India’s leading Paint Company in 1967. Marketing strategies adopted:  “Go where the customer is”.  “Asian Paints colour world”.  “Asian Paints Toll-free Helpline”. – A customer care helpline to connect customers and painters.  “Asian Paints Home Solutions” – A painting service in select cities.  “Asian Paints Colour-Next”. – A rich collection of shades.  “Kids World” – A customised painting design for kid’s room walls.  “Do-it-yourself”. – An online paint selector to help you visualize your walls.  “Surprise-your-spouse”. – A makeover of your walls by expert painters in one day.Why do we need to paint?  Houses consist of walls which are made up of Steel reinforcements, bricks and cement.  The very nature of our walls is porous in nature, thus allowing air and water to seep inside and come in contact with the reinforced steel structure.  Cement is alkaline in nature and it reacts with c arbon-di-oxide in the air in the presence of moisture to form calcium carbonate which is more porous. This magnifies the intensity of the seepage and the ferrous content in the Mild Steel is slowly oxidized, a phenomenon commonly called as rusting. The rusted structure expands inside the cement layer resulting in flaking of the outside layer of the paint film.  Paint film also prevents biocide and fungicide attacks.  Paint also improves the aesthetics of a wall.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 4
  5. 5. Composition of Paints:  Pigment  Binders  Additives  Stabilizers  SolventProduct mix in Decorative segment:Ancillaries:  Wall primer ( Deco-prime)  Wall putty  Wood primerWood finish:  Clear finish (PU / Melamyne)  Opaque finish (PU / Melamyne – Palette)  Enamels (Premium / Apcolite / Utsav)Metal surface:  Premium semi-gloss enamel  Apcolite  UtsavExterior paints:  Apex  Apex stretch (water-resistant)  Dura-cast (textured) Interior paints:  Distempers (Tractor / Utsav)  Emulsions (Royale / Premium / Tractor)Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 5
  6. 6. Situation Analysis: a) Analysis of the internal environment:  Market leader (30% market-share)  Strong distribution network  Manufacturing facilities across the country  High visibility in the television and print media.  Product ranges from low cost distempers to premium emulsions.  Brand ambassador (Saif Ali Khan) to promote the premium brands as an extension to his personality. This is to convey the customer that painting of your house is not a necessity driven job rather it is an extension to your style quotient. The advertisement campaigns have also shifted focus from being purely benefit-driven to self-expression driven models. b) Analysis of the customer environment:  Target market classified into; 1. New construction buildings where dealer discounts used for promotion as a B2B marketing strategy. 2. Repainting of existing homes involves easy availability and high visibility. 3. Target marketing for children involves the concept of “Kids World”. 4. House wives are in-charge of managing affairs at home have been targeted in the recently launched “Surprise-your-spouse” tagline.  Research and development has yielded in different variants in paints, the latest being textured versions where aesthetics has an edge over protection.  Socially in India, houses are only painted around the auspicious festival of Diwali; hence the peak sales are achieved only in the months of August - September-October-November. The months for lean sales constitute of April-May-June-July.  With disposable incomes on the rise and a house becoming a mark of one’s affluence, people are willing to spend. It isn’t about home rejuvenation anymore, paint has moved into the sacred domain of emotional rejuvenation.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 6
  7. 7. c) Analysis of the external environment:  The organized paint market in India consists of players like Goodlass Nerolac, Berger Paints, ICI Dulux, Shalimar Paints and Jenson and Nicholson.  Asian Paints, Goodlass Nerolac, Berger Paints and ICI Dulux focus on the upper income level market segment.  Shalimar Paints, Jenson & Nicholson and Snowcem India target the middle income level market segment.  The un-organized sector with a 35% market share taps the bottom income level of the customer pyramid.SWOT Analysis:  Strengths: a) Market leader b) Strong distribution channel c) High visibility d) Wide range of SKU’s  Weaknesses: a) No foreign partner to bank upon on technology transfers / R&D initiatives.  Opportunities: a) As the paint market is fragmented in the un-organized sector with a market-share of 35%, there exists huge potential for strong players like Asian Paints to capture the bottom end of the customer pyramid by mergers and acquisitions where volume of sales are high but profit margins are low. b) The nearest competitor for Asian Paints in terms of market share captures only 20% of the market. This provides AIPL with an opportunity to be aggressive in marketing without bothering about the competition.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 7
  8. 8.  Threats: a) World’s leading paint manufacturing company Akzo-Nobel recent takeover of ICI Paints which has an established brand known as Dulux, is a cause of concern for AIPL. b) Kansai (Japanese Paint Company) has entered into a JV with Nerolac Paints to form Kansai Nerolac Paints (KNPL). The entry of foreign players is seen as a threat to the AIPL market share.Marketing goals and objectives:  To grow the emulsion based volumes which have high profitability per litre of paint sold, Royal brand of emulsion.  To achieve competitiveness in price differentials with competitors through smaller SKU based approach and aggressive supply chain tightening.  To reach the upper segment in Indian village and Tier-2/3 cities tap the emotional quotient of the customer especially his/her desire to project one’s house as a style statement. It is noteworthy that the in Tier -2/3 cities people live in their own houses than flats which are predominant in the cities, and hence the ownership quotient in the rural market is significantly higher.  To promote the product as a means to change the emotional appeal of the house and develop the concept similar to the one like “ Neighbors- Envy-Owners-Pride”.Marketing Strategy for Royal emulsions:Segmentation:  The market for the premium royal is the urban population living in metro/ Tier-1 cities. The product is to be expanded to the niche markets like Tier-2/3 cities and villages.Targeting:  Women are comparably more aesthetic oriented than males; hence to target a product at women can help form opinion leaders within the family.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 8
  9. 9.  In the rural market, the Sarpanch or a large farmer has a grand house. By targeting those through promotions display model homes can be created in villages which would influence the purchase of other farmers who build new pucca-houses as their disposable incomes rise.  In tier-2/3 cities, a tie up with reputed builders to offer display flats/ buildings which have been painted by Royal paint can significantly influence those planning to buy new homes and even those who own a flat for investments and would use the brand to paint their existing homes.Position:  The premium product has to be positioned in the mind of the customer as a tool to enhance their style quotient rather than as one to protect your wall.  The product also has to have an ownership appeal, a pride for the buyer to be associated in being a member of the Royal family.  The product need not be durable to perform over years together as taste of the buyer changes quite often and the urge to repaint the wall though the existing coat of paint is adequate for protection of the walls.Product Strategy:  Taking the concept of paint as an emotional rejuvenation tool further, the concept of turning one of the walls into a display walls with high quality textured paint turning it into a painting masterpiece is on the rise.  Customers can be provided with high quality artistic painters who would turn their wall into a painting on display. This will give a psychological uplift for the middle and lower middle class homes, who cannot afford to buy paintings through auctions to put on display, rather help achieve the same aesthetics by application of the relatively inexpensive paint.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 9
  10. 10. Pricing strategy:  Although a premium product cannot be priced competitively with a non-premium version, the product can be made available in smaller SKU’s to use the Nano-concept to position the product competitively in the rural market and in Tier-2/3 cities.  As most paint containers go waste after the application of paint, the company can promote the concept of discounts on returnable packages which are returned to the franchisee/ distributor in a clean state, like the one used by Cola (beverage) companies in cas e if glass bottles. This would reduce the input cost and also project the brand as a eco-friendly product with recycle ability concept.Distribution/ Supply chain strategy:  A distribution alliance can be made with the Indian Railways to reach the nook and corner of the demography. Specialized containers can be loaded in factories and loaded on rail wagons to be transported to depots far and wide. In exchange the painting contract for the railways can be negotiated, thus giving a medium to display ads not only in passenger trains but also goods trains.  Titanium di-oxide, the major raw material for paint production is mostly imported, hence it forms the significant part of the cost structure. A strategic tie-up/ take-over of vendors will go a long way in reducing import costs.  To reach the rural villages the distribution network to be equipped with mobile paint dispensing vans which will reduce the distribution cost.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 10
  11. 11. Conclusions:  The paint market is fast growing with a major contribution from the infrastructure/ real estate sector.  The per-capita paint consumption in India is low coupled with a high share from the unorganized sector. Hence a huge potential exists for growth in terms of volumes.  Consumption of paints in India follows time cycles according to festive calendar.  Painting is been projected as an item of one’s style quotient rather than the usual perception as a protector of walls.  Low logistics and distribution costs can help to achieve competitive pricing and market penetration for premium products.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 11
  12. 12. PROJECT: MARKETING STRATEGYName of the Company: TotalBusiness: Oil, gas, chemicals, lubricating oils.Vision:Meet growing energy needs on a long-term basis by deploying a sustainable growth modelcombining the acceptability of activities with a sustained program of profitable investments.Synopsis:Total is a leading multinational energy company with operations in more than 130 countries.Together with its subsidiaries and affiliates, Total is the fifth largest publicly-tradedintegrated international oil and gas company in the world.Total engages in all aspects of the petroleum industry a) Upstream operations (oil and gas exploration, development and production, LNG). b) Downstream operations (refining, marketing and the trading and shipp ing of crude oil and petroleum products). c) Chemicals (base and specialty chemicals).The Oil n Gas industry:Total; a French company has an upstream production capacity of 2.28 million barrels of oilequivalent per day across more than 40 countries in the world. It has a downstream refiningcapacity of 2.6 million barrels per day with a sale of 3.6 million barrels per day across 16300service stations across the globe. It is also the world’s largest integrated chemical producersin fertilizers, petrochemicals and specialities. Headquartered at Courbevoie, France withChristophe de Margerie as its Chairman and CEO, has operations in India withAbhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 12
  13. 13. manufacturing facilities at Mahape, Navi Mumbai. The brand name for its lubricatingbusiness is “Elf” competes with other foreign brands like Shell, Mobil, Caltex, Castrol,Penzzoil and Indian brands like Servo, Mak, and HP Milcy in the India markets which is the th6 largest in the world. Compared to the average World consumption of 35 Million tonnesper annum & Asia-Pacific region consumption of 7.5million tonnes, the Indian lube industrywith annual demand of 1 million tonnes is just behind Japan and China in Asia having ademand growth rate of 4% compared to the World growth rate ranging 0% to 2% after theGovernment had reduced import duties on base-oils from 85% to 30%.Other companies in the Indian lube business include Tide Water Oil Co (India) Ltd, BalmerLawrie & Co Ltd, Apar Industries Ltd, IPOL lubricants, Savita group, Valvoline Cummins Ltd(VCL), FuchsLubricants (India) Pvt Ltd, Gulf Oil Corporation Ltd, and The Andrew YuleGroupHistory of the company:TOTAL started its operations from Iraq in the 1920’s as Petrofina and gradually diversified toan oil and gas major. The brand TOTAL was conceptualised in 1954 and was rechristened toits present form in 2003 after undergoing 5 cosmetic changes. The Petro-FINA brand waslaunched in 1924 and ELF brand was started in 1965 to give a visual identity to the brandTOTAL. Both TOTAL and Petro-FINA merged in 1999 to form TotalFina and subsequently thmerged with ELF to form TotalfinaElf in 2000 the worlds 4 ranked oil major. It is also intoLPG business in India with the brand name as “TOATAGAZ” under Total Oil India Ltd.Marketing Strategies adopted:  Strategic tie-ups with Formula-1 car racing and developing solutions for engines to perform at high temperatures through R&D.  Partnerships with auto majors like General Motors and Renault.  ELF-Moto for 2-wheelers associates itself with Kawasaki in MotoGP bike racing.  “Bike oil for winners” was the tagline launched in 2008.  Raasta mudh sakta hai, hausla nahi – tagline launched with Shahid Kapoor as the Brand ambassador.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 13
  14. 14. Why do we need lubricants?  The engines consist of piston and cylinder.  The volumetric expansion inside the cylinder due to combustion of fuel is converted in to mechanical energy by the piston which is then transferred to its wheels through gears.  This movement of the piston against the length of the cylinder causes friction which could damage the engine and gears in the long run.  To minimise this friction, the engine and the gears are submerged in lubricating oil .  Engine oils also act as a cooling agent for the engine to prevent any hot -spots.Product range:  Grease: Multis-3, Lex3 and Wheel Bearing grease.  Gear Oils: AutotransFluid, GEARELF  Brake Oil: Heavy duty brake oil  Engine Oil (2-wheelers): ELFMOTO – Gold, XT, Pro, Fuel, Champ.  Engine Oil (4-wheelers): Quartz – 3000/ 5000/ 7000/ 9000  Commercial vehicles: (truck/ bus): Transmission TM, Rubia, GLACELF Supra (coolant)Situation Analysis for the TotalfinaELF: a) Analysis of the internal environment; rd  TotalfinaElf has a market share of 9%; the 3 largest lubricant brand in India. th  Size of the lubricant market in India is about INR 17000crores, the 5 largest in the world with an annual growth rate of 5%.  The per-capita consumption in India is a meagre 1.1kg as against the global average of 5.6kg.  The total lube oil market constitutes 1.6billion litres with automobile lubricants constituting 950million litres.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 14
  15. 15. b) Analysis of the Customer market;  The customer in the market can be classified into two categories; a) New vehicles rolling out from the manufacturing line. b) Existing vehicles servicing.  With the growth in the economy particularly in the automobile sector posting record growth of 31%, the lube oil market catering the new vehicles at the factory has a huge potential to grow.  Simultaneously the servicing volumes are also bound to grow at a similar pace resulting into high volume of sales. c) Analysis of the external environment;  Indian lubricating oil market constitutes of 44players, dominated by the PSU’s with a 50% combined market share.  Servo brand owned by IOCL is the market leader with a 42% market share followed by Castrol (owned by BP) is the market leader with 27% market share.  Other major players are Shell, Gulf Oil, Tide Water and Oil Company (Veedol) and Exxon Mobil.  PSU companies have an upper hand in distribution due to wide reach of fuel pumps used as points of sale.  Other companies have to rely on tie-ups with service stations of auto companies and local garages.SWOT Analysis: a) Strengths:  Global brand presence.  Strong R&D support.  Tie-ups with Original Equipment Manufacturers (OEM’s) like GM, Volvo, Tata, Mahindra, Punjab tractors, Maruti Suzuki, Mahindra Renault, PEUGUOT, DaimlerChrysler.  Tie-ups with Reliance for using their petrol pumps as point of sale for lubes.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 15
  16. 16. b) Weaknesses:  Low retail space for products as number of Reliance fuel pumps is miniscule.  Have to depend upon service stations/ local garage for advising customers into purchasing the product (opinion leader).  Not a very well known brand among the masses especially Tier -2/3 cities.  Low visibility in the media. c) Opportunities:  Educating customers regarding the ill-effects of not changing engine oil can help in brand identification and association.  Brand ambassador “Shahid Kapoor” can infuse a lot of youthfulness to the brand and help to associate men in the age group of 15-44 with the brand.  Can bank upon the global image of the brand and the trust it commands across the globe.  With the exit of Chevron (Caltex) from the Indian markets, ELF can siege the opportunity to gain its market share. d) Threats:  Market domination by rival brands like Servo and Castrol.  Emergence of brands like SAVSOL.  Adoption of environmental friendly technologies like Bio-lubricants by IOCL.Marketing goals and objectives:  To double its market share by aggressive marketing.  OEM tie-ups to ensure brand loyalty through B2B marketing.  To strengthen the brand base by advertising campaigns.  To reach rural India using efficient distribution.  To achieve technological upgrade of products to make them environmental friendly.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 16
  17. 17. Marketing Strategy for TotalfinaElf lubricant:Segmentation:  Being a premium brand of lubricating oil, the product needs to cater the mid -level and luxury vehicles in the cities.  Bike riders in the Tier-2/3 cities.  Rural market characterised by bikes, trucks, buses and tractors.Targeting:  Men in the age bracket of 15 to 45years fit in as the target audience as number of women drivers is insignificant.  The Gen-X forma a majority of bike riders, hence need to be targeted specifically.  Truck owners/ drivers need to be educated about the brand effectiveness in delivering mileage.Positioning:  For the average city driver, the brand needs to be projected with its effectiveness in increasing the longevity of the engine life.  The bike rider may be more interested in low maintenance budget and a high fuel mileage.  The bus/ truck driver has to be convinced of good mileage delivery for a successful purchase.Product Strategy:  Associate the product with the youth to build a long lasting relationship with the brand.  Leverage its global brand value to capture the mind of the customer in terms of faith in quality of products.  Actively promote the product as a “Money Saver” tool for the truck/ bus drivers and owners.  Tie-ups with Urban transport system like JNNURM, BRTS, and State-Transports to utilize their fleet service requirements.  Tie-ups with fleet managers like private intercity/ inter-state bus operators, cab operators, truck/ taxi unions to build opinion leaders for bulk purchases.  Providing warranty on engine performance on using the same brand o ver the warranty period.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 17
  18. 18.  Alliances with insurance companies to offer discounted premiums on using ELF brand lube oil in vehicles can be implemented.  Through extensive R&D, biodegradable lubricating oils can be seen as a viable option.Pricing Strategy:  The price for lubricating oil depends upon the base oil prices which ultimately depend upon the crude oil prices.  Being into the premium segment the brand commands a premium price over other Indian brands like Servo, HP Milcy, Mak, Savsol etc.  Total needs to push its premium products where it has tie-ups with OEM’s. For other markets like local garages/ service stations, the product pricing needs to be competitive so as to survive on the shelves of auto ancillary dealers.Distribution and Supply chain strategy:  Procurement of base oil at the cheapest rates with the minimum cost of freight would help reduce the input cost and offset the cross-subsidised low cost of the PSU brands.  A strategic tie-up with auto components and spares manufacturing vendors will ensure low cost of distribution of products as the destination market for both industries is the same.  Lube oils are a major source of pollution as the disposal of used oil is not proper. A systematic method for collection and reprocessing of used oi l will not only reduce input cost but would help the brand in demonstrating an environmental concern to its customers.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 18
  19. 19. Conclusion:  The growth in the lubricating oil market is linked to the growth in the automobile industry.  Awareness among customers that health of their vehicle engine is linked to the quality and frequency of change of lubricating oil is needed and the target audience need to be educated through media campaigns.  Brand identity to be established among customers by positioning it as a y outhful brand. The brand promotions by mass media campaigns supplemented by brand ambassadors.  Competitive pricing of 2-wheeler products and tie-ups with OEM’s can push revenues.  An initiative to become environmental friendly is going to push the brand in the future.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 19
  20. 20. Marketing strategies; a Comparison Matrix: Strategies Asian Paints (Royal) Total (Elf) Segmentation Premium brand Premium brand Targeting Women, families, Men (15-45years), builders OEM’s Positioning Style/ fashion High quality, better statement, emotional durability engine quotient protector Product Visual appeal, Reduces engine aesthetics, emotional breakdown, high rejuvenation mileage, money- saver Price Premium pricing, small Premium pricing, packs as low cost units, customers insensitive customers sensitive to price over over price differentials protection Place Local hardware stores, Local garages, exclusive paint shops Reliance fuel pumps, (colour-worlds) OEM manufacturing sites, service centres Promotion Extensive; brand Moderate; brand ambassadors add value ambassadors builds by their style statements a relationship of trust and creates awarenessAbhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 20
  21. 21. Inference: We infer from the above study that businesses need to segment the market by its product mix and specifically target and position the product in the minds of the customer by maintaining high quality standards, capturing the needs of the customer both tangibly and intangibly by building brands which can edge out the competition to be the market leader. Businesses also need to create demand/ need where there is any scope for product diversification by continuously educating the customers about the positive impacts that the product can make on their lives. They should be able to provide the best goods/ services to the customers at competitive prices and innovative technologies. The trust a brand creates with its customer base goes a long way in customer retention which has to be reinforced time and again through promotions. The availability of the product at service points also plays a vital role in delivering value to the customer. Lastly, the brand has to create a sense of pride in ownership for the customer by consistent product performance and brand building exercises.Abhik Tushar Das (Exe-MBA-10) Roll No: 20104001Comments on: Page 21