ABOUT PIDILITE• Pidilite Industries (Pidilite) is a chemical company engaged in the development, manufacture and marketing of chemicals various adhesives and sealing materials.• The companys products include adhesives and sealants, construction and paint chemicals, automotive chemicals, art materials, industrial adhesives etc.• The company operates in India, Middle East, Australia, US, Brazil, Singapore and Indonesia.• It’s headquarter is in Mumbai and employs about 3,991 people.• The company recorded revenues of Rs.19,863.2 million in the financial year ended March 2009, an increase of 16.3% over 2007. Its net profit was Rs.1,108.4 million in 09.
COMPANY PROFILE Pidilite - established as a partnership firm Parekh Dyechem Industries in 1959 Started by three brothers -Mr. B K Parekh, SK Parekh and H K Parekh Name changed to PDI Industries after merger with Kondivita Industries in 1984 Merged with Pidilite Industries in 1989 – Merged name changed to Pidilite Industries Launched Fevicol Brand in 1959 Pidilite’s mainstay of earnings is consumer & industrial adhesives and sealants (Almost60% of turnover)
MAJOR BRANDSCompany has in total 40 brands spanning 400industrial and consumer products.FEVICOLCYCLOSTARGENT ARTHOBBY IDEASDr. FIXITROFFM-SEAL
PRODUCTSCONSUMER AND CRAFTSMENINDUSTRIAL SPECIALITY
Company’s revenue consumer and bazar products• Consumer and bazar products accounts of 77% of company revenue.• It consists of following product segment – Adhesive and sealents (49% of the company revenue) – Construction and chemicals(18% of company revenue) – Art materials and others(10% of revenue)
Company revenue industry products• Industrial chemical accounts for 23% of company’s revenue.• Consists of following sub-segment – Industrial adhesive(7%) – Industrial resins(8%) – Organic pigments and preparations(6%)
How did Fevicol become ‘ Fevicol- The Brand’• 65% of furniture production in India is out of wood• The carpenters play a vital role in deciding which adhesive to use• First mover advantage• INITIAL STRATEGY Help carpenters realize the importance of using quality products.• FOLLOW UP Maintaining close contacts with its primary target audience
MARKETING STRATEGIESFocus on qualityBuilding strong bonds with the industrial users.Connecting with consumers through ads.Innovative productsTo summarize, consistent quality, widespreaddistribution networks, and excellent customerrelationships have been the key success factors forthe company.
SWOT ANALYSISSTRENGTHS WEAKNESSES Strong Marketing & Dependent onAdvertising skills acquisitions for someInnovative products products.Focus on quality Launching of brands like CycloLarge product lineBrand value
OPPORTUNITIES THREATSGrowing chemical Cost of productsindustry in India largely dependent onTremendous growth crude oil pricesopportunities for Home Competitorsspecific stores like-Home Town & HomeShop
competitorsName Last Price Market Sales Net Profit Total Cap. Turnover Assets (Rs. cr.)Tata 308.85 7,868.15 6,332.43 408.49 7,716.62ChemicalsPidilite Ind 141.00 7,157.85 2,380.64 303.89 1,426.26United Phos 127.00 5,864.91 2,934.30 157.50 4,698.24Guj 356.05 3,911.21 1,063.81 263.63 2,330.52FlourochemBOC India 270.00 2,302.67 992.13 93.63 1,584.22
Current Position• The company achieved 21.8% growth in net sales• Due to steady domestic demand and pickup in exports in the second half of the year, sales growth was higher than the last few years.• During the year a provision of rupees 250million diminution in value of investment in pidilite middle east ltd.• Earning before interest tax, exceptional items and foreign exchange difference increased by 22.7% profit before tax and exception items increase by 28.5% and profit after tax increase by 5.1%• Company sales have grown at CAGR of 17.85% over the last 5 years
FUTURE PROSPECTSPidilite Industries near-term prospects looks to be stable.The company is focusing on the branded products business, throughaugmenting brands via acquisitions and relaunching andrepositioning its existing brand in order to retain its market share. The company has identified fabric care segment as its focus area.Pidilite is planning to hive of its chemical business, which is going toput a greater emphasis and focus of the management towards thebranded products business. With the current focus on brands and its strong distribution network,the company operations are likely to show healthy profitability in thecoming days.
QUESTION 1• Does Fevicol qualify as a brand bigger than the company? What might be the implications of this? What are the possible solutions?
Fevicol Bigger than the Pidilite1. Oldest brand.2. High brand recall3. Popular among consumer and carpenter.4. Enjoy higher confidence as a brand5. Propelled by imaginative ad. Campaigns.
Implications1. Marketing strategy for other brands become centric to the successful brand.2. Customer loyalty towards the brand3. Benefit the company in the long run4. Company shares (+)ve equity5. Brand image often become greater than the company image.
Suggestions• People are not aware of pidilite products rather than Fevicol.• Promotions are needed for all the products in pidilite, therefore it is recommended for company should either give demonstration or conduct promotion campaign at sites.• Price and quality are the main criteria when launching the new product into the market comparatively major brands in emulsions.
Question 2• Should the brand Fevicol be extended? If yes, then when, where, and how should this be done?
• Yes , Fevicol can be extended.• Place: Canada• When? Right now• How? Direct export Acquisition• Target? Industry segment