Paints

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  • ROYAL- Premium segment,
    APCOLITE- Middle Segment
    GATTU,TRACTOR,UTSAV-Economy Segment
    ACE in economy segment,
    APEX in premium segment
  • ROYAL- Premium segment,
    APCOLITE- Middle Segment
    GATTU,TRACTOR,UTSAV-Economy Segment
    ACE in economy segment,
    APEX in premium segment
  • Paints

    1. 1. 1 Paints
    2. 2. 2 Contents  Market Characteristics  History of the Indian Paints Industry  Industry Overview and Outlook  Trends in the Industry  Porters Five Forces Analysis  The Business Process  Consumer Purchase Behavior  Player Profiles  Brands
    3. 3. 3 Market Characteristics  Decorative paints • Caters to the housing sector • Premium paints (acrylic emulsions) used mostly in the metros. • Medium range (enamels) popular in cities and smaller towns. • Economy paints (distempers ) demanded in the suburban and rural markets • Distribution network is the key  Industrial paints • Include powder coatings, high performance coating, automotive and marine paints • Two-thirds of the industrial paints produced in the country are automotive paints • Technological superiority and tie-up with automobile manufacturers
    4. 4. 4 Indian Paints Industry: A Brief History  1902 – Shalimar Paints, Calcutta  1920-45: Asian Paints, Nerolac started operations  1965-91: Paints looked upon as luxury item  1983: Demand for automotive paints picked up with entry of Maruti  1991: Reduction in excise duty and many controls on the industry removed.  After 1991: Steady growth, slow disappearance of unorganized sector units and industry fragments.
    5. 5. 5 Industry Overview  Four main players • Asian Paints- 42% • Goodlass Nerolac-20% • ICI Paints- 14% • Berger Paints- 15%  Asian Paints dominates decorative segment  Goodlass Nerolac dominates industrial segment
    6. 6. 6 Industry Characteristics  Demand for paints linked to the industrial and economical growth  Decorative paints market naturally price-elastic  Industry majors maintain a vast dealership network  High inventory levels
    7. 7. 7 Key Success Factors  Costs and price drivers – raw materials  Working capital management  Heavy seasonality of demand  Brand building  Stocking and distribution  Access to latest technologies
    8. 8. 8 Trends in the Industry  Reduction in excise duties and taxes – larger scale plants  Customer power !  Proliferation of industrial use  Super premium decorative segment – better margins  Niche marketing strategies  India – an exporter  Industry expected to further consolidate
    9. 9. 9 More Trends…  Increased emphasis on attractive packaging, more sturdy packaging, lighter SKUs, etc.  From tin cans to plastic tubs  Asian Paints introducing “sub-stockists”  Focus on rural markets  Computerization and ERP  Less seasonality
    10. 10. 10 Market Practices  Discounting is the norm  Dealers operate with the company on credit – 2 to 6%  Stock sometimes “undervalued” to “save” taxes and excise  Bulk purchasers and “key accounts” are given additional discounts  Distinct Segmentation in the Market • Super economy segment – cement based - <Rs 100 per litre • Economy segment - oil based – Rs 100/- per litre • Medium segment – Rs 200 per litre • Premium segment- Rs 300 per litre • Super premium segment – Rs 1200 for a four litre pack
    11. 11. 11 Industry Prospects  Market slated to grow from 9000 crores to 18000 crores in the next five years !  Per capita consumption of paint is India is around 800 gram, compared to 15-25 kgs in most developed countries.  Organized sector will grow 16 to 20% per annum  30 million new homes, millions of cars and vehicles, Infrastructure projects all will fuel huge demand !
    12. 12. 12 International Players in India  International retailers had until January 2006 been able to operate in India only through franchise arrangements with local partners  The Indian Government passed a regulation in January 2006 allowing entry of foreign single retail brands without the need for franchise arrangement  Starting February 2006, foreign single retail brands are allowed to: • open their own stores in India; • own upto 51% of local joint ventures
    13. 13. 13 Porter’s Five Forces Analysis Buyers power: High Supplier’s power: High Threat of entry Low Threat of substitutes Low Thus, overall the industry is profitable Industrial rivalry : High
    14. 14. 14 Business Process  Factory - nimbleness in the supply chain, efficiency and speed of the production very important , since inventory turnover periods are significantly high.  Depots - normally owned by company, strict quality control essential to prevent loss of inventory due to product deterioration leading to them not meeting the product specifications.  Dealers • Dedicated dealers - Terms of trade more favourable - Higher margins , exclusivity of distribution , greater variety of product lines stocked , technical support in terms of MIS • Independent dealers - Form a large part of the distribution process in paints industry  Customer Factory Depot Dealer Customer
    15. 15. 15  Factors affecting purchase are price, finish, durability, range of colours/ shades  Maximum demand from the household sector who uses paint as a decorative medium  Purchase decision influencer-regarding the above parameters - the dealer or the painter- whose view is given major importance Consumer Behaviour – Decorative Paint
    16. 16. 16  The major factors affecting purchase decision: • Brand, price, quality, durability, timely supply, credit and discount terms, logistics service, relationship with supplier  Access to technological parameters assist paint companies to customize their products as per needs of specific industrial sectors Consumer Behaviour – Industrial Paints
    17. 17. 17 The organized sector  Asian Paints  Goodlass Nerolac  ICI Paints  J&N  Shalimar Paints Players in the Industry
    18. 18. 18 Asian Paints  US $ 680 million Asian Paints Group has a presence in 23 countries  Ranks among the top 10 decorative coatings companies in the world  Subsidiaries - Berger International Ltd., Apco Coatings, SCIB Paints and Taubmans  Market leader in the decorative segment
    19. 19. 19 Asian Paints  Asian Paints CSF – Supply Chain  Market driven strategy  Colour World – Paint retailing of the future  ColourNEXT 2006 , Kids World  Royale Play – readymade special effects  Bye Bye Gattu
    20. 20. 20 Asian Paints Promotional campaigns  Point of sales activities and dealer incentives  Shift from individual branding to umbrella branding – building the Asian Paints brand  Messages of durability, excellent finish, wide range of colour availability – shade combinations
    21. 21. 21 Asian Paints Asian PaintsAsian Paints ApexApex Asian PaintsAsian Paints Ace ExteriorAce Exterior Asian PaintsAsian Paints Premium GlossPremium Gloss Asian PaintsAsian Paints Apcolite PremiumApcolite Premium Asian PaintsAsian Paints Premium EmulsionPremium Emulsion
    22. 22. 22 Asian Paints TouchwoodTouchwood Utsav AcrylicUtsav Acrylic DistemperDistemper Tractor AcrylicTractor Acrylic DistemperDistemper Tractor EmulsionTractor Emulsion
    23. 23. 23 ICI Paints  Multi-divisional company dealing in rubber chemicals, paints, polycarbonate, others  Revenues in 2004 - $157.51 million (paints business)  Mainly auto refinishes and decorative paints  Present in all categories  Brands - Dulux, Duco, and 2K  Only Indian decorative paint manufacturer producing paints that are totally free from toxic metals
    24. 24. 24 ICI Paints Promotional campaigns/positioning Premium brands advertised through television  Dulux Interior - Washability, durability, fungal resistant, smoothness and exclusiveness  Weathershield (exterior wall finish) – Prevents exterior walls from cracking and eroding due to high rutile content
    25. 25. 25 ICI Paints Dulux VelvetDulux Velvet TouchTouch Dulux SupremeDulux Supreme 3-in-13-in-1 Dulux AcrylicDulux Acrylic EmulsionEmulsion MaxtiliteMaxtilite DistemperDistemper Dulux SatinDulux Satin FinishFinish Dulux SuperglossDulux Supergloss 5-in-15-in-1 Dulux GlossDulux Gloss
    26. 26. 26 ICI Paints DuluxDulux WeathershieldWeathershield MaxMax SupercoteSupercote ExteriorExterior Acrylic PrimerAcrylic Primer MaxtiliteMaxtilite DistemperDistemper DuluxDulux TileshieldTileshield
    27. 27. 27 Goodlass Nerolac  Goodlass Nerolac is the second largest paint company  Gross group turnover of approximately Rs 1200 crores  Undisputed leader in industrial segment with a market share of 45% in industrial paints
    28. 28. 28 Goodlass Nerolac  Five strategically located manufacturing units and a strong dealer network of over 11,500 dealers across the country  As opposed to the Asian Paints strategy of hitting the entire gamut of paint segments, GNPL - mainly concentrated on industrial paints segment, which is technology driven
    29. 29. 29 Goodlass Nerolac  Industrial • Automotive coatings • General industrial coatings • High performance coatings - DIMETCOTE • Powder coating Company Product Category Kansai Paint Co., Japan ED Primers, Automotive & Industrial Coatings Nihon Parkerizing, Japan Pre-Treatment Chemicals Oshima Kogyo, Japan Heat Resisting paints Ameron, USA High Performance Coatings
    30. 30. 30 Goodlass Nerolac  Decorative paints • "Nerocem" which is cement paint • "Suraksha" the value pack • "Nerotex" which is a texturized paint • "Excel" the premium exterior paint • “Impressions” the premium interior paint • “Wonderwood” can be used for wooden surfaces
    31. 31. 31

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