Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Team: The Chromus 3, Asian Paints Canvas 2012, IIM Kozhikode

Sales and Marketing Event by Asian Paints

  • Be the first to comment

Team: The Chromus 3, Asian Paints Canvas 2012, IIM Kozhikode

  1. 1. TEAM NAME: THE CHROMUS 3 IIM KOZHIKODE Anshul Kumar Apurba Gorai Niyant 8086087963 Ph: 8943305059 Ph: 9539908222
  2. 2. PROBLEM STATEMENT  Dwindling loyalty from the top retailers of Asian Paints  Low consumer involvement in the category- given the fact that the decision making is now becoming family oriented than being only carried out by the Chief Wage Earner (CWE)  Poor customer servicing at the dealer outlets- poor ambience and disinterest of the dealers to spend time with the customers  Changing trade scenarios- macroeconomic policies and entry of big retailers like WalMart into the Indian market  Changing consumer habits with the rising retail trend in India- customer exposure to professional servicing  Exodus of a number of middle and junior level managers to global retailers like Wal-Mart and Carrefour OBJECTIVES  Increasing loyalty of Asian Paints’ top retailers by devising a creative strategy  To decide whether to break the old “open network” or craft an alternative strategy for the same  Increasing customer involvement- specially emphasizing on attracting women for final decision making  Making the customer’s interaction with Asian Paints an experience that stays back with him and leads to the start of a new long lasting relationship with Asian Paints  Aligning Asian Paints with the modern trade scenarios of changing macroeconomic parameters and policies TRANSPARENCY EQUITY FAIRNESS Alignment withPrinciples of transparency, equity and fairness have been AP’s long held competitive advantage. Any strategydecided should make sure that loyalty of the top retailers should be increased but not at the cost of AP’scompetitive advantage and its long held strong dealer baseThey may be small in size but the importance of the other 90% dealers (contributing close to 50% sales )is noless in scripting Asian Paints’ success story of having one of the strongest networks in the country
  3. 3. Asian Paints’ Strength Withheld Strategy1. Strong dealer network 1. Strategy of transparency, equity and2. Giving equal status to all the dealers- fairness to all the dealers- creating a dealer benchmark for competitive advantage of pull to join the illustrious Asian Paints Asian Paints over decades network- long lasting expansion strategy3. Market leader with its span across all for Asian Paints major cities and towns 2. Top 10% dealers (close to 2000)4. Customization at the customer’s end- contributing to around 40-50% sales of successful tinting systems installed across Asian Paints through its long lasting dealers relationship5. Long held relationship with all its major 3. Majority stores in the top 10% dealers are dealers of exclusive nature- contributing to6. Number of exclusive stores driving major Strategy majority of sales of Asian Paints sales 10% 10% differential indirect benefits to the top Equal Status but 90% 90% 10% retailers Strategy 2: Rectangular Structure for dealers Strategy 1: Pyramid Structure for dealers Aligns with the long held Strategy of Asian Paints
  4. 4. TRENDS IN PAINTS INDUSTRY IN INDIAInsights and Trends in the industry 60 51.7*Reportlinker Industry forecast (2015) 50 Unorganised•Forecasted CAGR of around 13% during FY 2012 to Sector 38FY 2015 in the paints industry 35% Organised Sector 40•Paint industry is dominated by decorative paints 30 25.8•Emulsion, which constitutes the majority share of 65% 20decorative paints, is the fastest growing segment ofthe paint industry 10 2.5 3.5 1.25•Presently, the growth of the Indian paint industry is 0 % Share as in 2011being witnessed from new demand India China US Singapore Sri Lanka Qatarpockets, especially in Tier-II and Tier-III decorativecities, thus, signalling the growing acceptance of paints Per Capita Consumption of Paint in Kg around the world as in 2011quality products among the masses 25% Industrial•The industry has a positive correlation with the Paintscountry’s gross domestic product (GDP) as both havethe same growth drivers 1600.00 1466.78•According to ACA report, the leftover paints in the 75% 1400.00 1315.49 1179.82annual sales is approx 10% in US, we assume this to 1200.00 1058.13be more than 10% in India. (Scope for a Green Idea) 1000.00 949 843.5 800.00 749.83 666.51 592.46 600.00 526.63 468.11 400.00 200.00 0.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Growth rate in the paints industry in million liters in India *Source: A Green Idea has the highest potential to add value to the customer to createIndian consumers’ demand for green products is the highest in the world the product pull
  5. 5. TRENDS AND INSIGHTS IN PAINTS INDUSTRY IN INDIA- CONTD 41 42 DIAL DEALER: OUR CONVERSATION Most influential age group is 25-34.Gap 33 34 between average age of home buyer and DEALER INSIGHT 26 24 the paint buyer is 5 years. It is still likely to “We are exclusive dealers for Asian paints 2005 be in the mid 30’s going forward since 40 years. We have developed very 2010 good relations with painters as they are our Average age of the paint buyer in 2005: 41 frequent customers. Our sales depend on Yrs and 38 Yrs in 2010 the referrals provided by painters for Asian Paints. In some cases customers directly 25-34 35-44 45-55 approach us to decorate their home. WeContribution to paint sales in terms of advise them on the colours they can use and suggest painter for them. We getaverage age of the paint buyer in India commission from the painter for providing*Source: Indian Readership Survey 2005,2010 (sample 2.4 his reference. But all this process has neverlacs). Age 25+ been done in more structured manner”In 2011, women accounted for 23% of the total Working women have a major say in terms of paint -G.J Patel, Barodaemployed population in India. buying – a tipping point to decide on to a strategy*Source: Gender Diversity Benchmark for Asia 2011 report to include women in paint purchase.compiled by Community Business A general study about women observes them to be more inclined towards colors and shades. They believe that the décor of the house is a direct DEALER INSIGHT refection of their identity and personality-Anupam Das, New HindustanHardware, Durgapur, 2.5 yrs Asian paints, 8 yrs Main Customers – Males and Painters: Some dealers recommend painters to customers Seed of our Idea and get a commission, but this has never been done in a•Over the past 6 years, he does not sell anything else formal waythrough the stores- such as adhesives•Has been extensively using Visualization software and Consumer involvement in the choice of paints is increasing day by day which in turnphotographers makes a color scheme or a job of professionals more important.•Has gone with the market leader or the paint The emerging trend of exclusive Franchise shops with an opportunity provided to themanufacturer which is in demand in the locality consumers to touch and feel is increasing consumers interest to pick up what he or she*Our conversation with the dealers was with thinks is best suited for their needs.respect to the issues over the years-2005 Today, Customer is looking for value for money. Thus you see products being offered atonwards- including the year case talks about different price points to suit the needs of the consumers & meeting their budgets *Source:, Anuj Jain
  6. 6. STRATEGY SUGGESTED TO MAKE TOP DEALERS MORE LOYAL TO ASIAN PAINTS STUDIO (EXCLUSIVE) CONCEPT (INVOLVEMENT OF DEALER, CUSTOMER AND PAINTER IN A CHAIN NETWORK)Only applicable for the top 10% retailers of Asian Paints•Dealer operated exclusive Asian paints store, will operate as the interaction point for the customers with Asian Paints.•The cost of revamping the store will be borne entirely by Asian Paints while the cost of management (including employees and staff) will be handled by the Dealer•For already existing exclusive dealers of Asian Paints, their old shops will be revamped under a standard model designed by AP•The selection criteria for a dealer also includes minimum shop space available•The dealer will install dynamic software and latest technology inside the studio.•Each studio will have 2- one male and one female (rest dependent on need for a particular studio) AP Consultant. The job of the consultant will be to educate allthe employees of the studio for standard practices of customer handling and servicing as well as an interface between AP and its customers in the shop•Asian paints will help in setting up the Studio by providing guidance and timely workshops for painters and colour experts.•The Studio will have standard walls showing different shades of colours to the customers to make them have a real feel of their houseThe dealer will be encouraged to develop a chain of painters so that the dealer can provide end to end painting solutions to the customerKey differentiator:End to End Solution Provider: The dealer will provide an entire painting service to the customer including consulting, advising about methods involved andappointing a trained AP painter (included in the network), calculating the amount of paint required and most importantly getting back the leftover paint from thecustomer’s house to the dealer shop . The painter will use standard methods as suggested by AP. He will be donning an Asian Paints attire during his stay at thecustomer’s house to increase the visibility of the idea The studio will be an entire personalized service provider to the customerConsulting service to the Appointing one of the The entire job of Leftover paint sent backcustomer about shades and painters in the network painting done to the dealer shop forcolors, modern methods used by from painter’s recycling (GreenAP’s painters, total cost end solution)calculated for the project (Value *Cost Structure for Asian Paints India studios has been shown in the excel attachedproposition)
  7. 7. Dealer Customer will have the END option of just buying the Paint Recycler paint and not going through the entire service chain Asian Paints consultant ASIAN PAINTS SERVICE CHAIN STUDIO Customer START GREEN CHAIN Dealer Painter Value to the customer Value to the Dealer Value to Asian Paints•End to end professional service provided by AP •Value addition in the service solution will create a •Opportunity to build a GREEN BRAND•Less overhead cost as the entire process of customer pull for Asian Paints’ service solution •The entire problem of poor servicing at thepainting is managed by AP Professionals •This will push for higher sales that will give higher dealer’s end is solved•Storage of leftover paint taken care of (Green margin multiples for the total value created for •This store is a perfect medium to attract women-Solution) dealers ambiance and other offerings in the studio•One stop studio for the entire painting solution- •Sense of control and ownership of Asian Paints (a •Providing service solution as a package to thedoes not need to look for different threads in the huge intangible for the dealer) customer will give higher scope for paint salespainting process •This is a long term strategy so the dealer has all •Pull created will create higher demand in the•Cost savings as the paint calculator will calculate the incentives market for Asian Paints productsthe exact amount needed (with additional buffer •Professionalism created in the staff employed by •Perfect platform to initiate a long tempaint- which may lead to the leftover paint ) him with the help of Asian Paints consultant relationship with the customer•Value added servicing and ambience of the studio •Association with a GREEN COMPANY •Awareness and visibility created by branding these studios on a PAN India basis
  8. 8. VALUE OFFERING OF AN ASIAN PAINTS STUDIOStudio walls showing color Trained employees of the Kids Zone- with unlimitedpatterns and shades to make dealer inside the studio- crayons and sheets to let thethe customer have a real feel specially trained under set kids run their imagination on a standards of Asian Paints The Final AP Solution piece of paper Trained professional The Final AP Solution Latest IT and Visualization And at the end of painter appointed by Softwares installed all, it is a paint the dealer for the purchase shop too. customer Customers can skip to choose the end to end service of Asian STUDIO Paints and just buy the paints as well
  9. 9. RATIONALE BEHIND THE STRATEGY SUGGESTED Loyalty created for the top dealers Value created in the chain suggested•Value as suggested in the previous slide is a huge incentive for Total value of the chain will be much more as compared to thethe dealer to go for this partnership disintegrated units of the chain•Huge returns generated and loyal customers Huge Synergies generated in the chain•Sense of ownership created for the dealer No need to push the product GREEN SOLUTION- A GREEN COMPANYThe entire value solution (service offered) provided by AsianPaints will create a pull for its products •Perfect platform for Asian Paints for a CSR initiativeAP will no longer get trapped in the dilemma to find ideas to •Higher awareness created by brand positive reinforcementpush the products Customer doesn’t need to store hazardous paints Huge Sludge generated in the paints industryHuge Value addition to the customer by elimination of need tostore hazardous paints (from huge wastage to leading to huge Total of about 48000 tons/year of paint sludge was beingcost saving for the customer) generated in India in the year 2008-09 (total sludge was huge in 2006 too). This number is rising sharply at a rate of 10-15% on Higher Customer Involvement an annual basisThe ambience, a complete customer experience, incentives *Source cKinetics Consulting(offers), platform for kids inside the Studio (KidsZone), presence of a female AP consultant plays a role in highercustomer involvement From a pure product offering company to Standards created by Asian Paints a product + service solution offering•This strategy will lead to standards in the industry, leading to company will lead to a differentiatinghuge Asian Paints awareness and hence creating a pull advantage for Asian Paints•The Studio will be a one stop solution to customer’s need ofpainting his house STUDIO
  10. 10. STRATEGY SUGGESTED FOR MODERN TRADE: WHY NOT TO GO TO THE BIG RETAILERS ROUTE *Source: Outlook for retailing in India, euro monitor, 2011 Channel Conflict with AP Studio Consumers can buy paint at the Under the sourcing and minimum The strong dealer network is the core competency of Asian paints. If Asian Paints decides to go with big big box stores and mega chain investments criteria in retailing, stores retailers, there will be channel conflict between the stores, but they just can’t buy the like Wal-mart will not be successful in existing dealers /Studio of Asian paints and mega stores quality finishes nor can they get selling furniture or home furnishing operated by big players such as Wal-Mart. Asian paints retailers’ expert advice and products. Rather 100% owned stores has made huge efforts in the past to gain the loyalty of personalized service. have a moderate chance of success dealers and it can’t afford to lose it.Low level of car ownership to hold back big box retailing including products like paint STUDIOThe paint industry is evolving from product to service industry. It will be transformed from commodity to customized product. Theformat of company owned retail stores will be required to cater to these needs. Why Retail route for paints is not a profit deal •Currently 4 % of Indian household have four-wheeler vehicles, so ‘big-box’ stores model does not possess a potent threat to company owned small retail stores . •This will prove to be a major challenge to foreign companies, like Wal-Mart, aiming to set up “big box” stores in India. •Two-wheeled vehicles, on the other hand, are a more common sight. This means that to address the mass market, grocery retailers will have to take into account how much consumers can carry by motorcycle, and make adjustments to both store and pack sizes accordingly.
  11. 11. THE BIG STRATEGY TO INVOLVE THE END CUSTOMER IN DECISION MAKING Handled ByAntecedents to consumer behavior in involvement•I have a strong interest in paint. Scope of Consumer involvement STUDIO•I love playing with colours. •Color/Shades •Today, women influence more than 85% of the•I attach a great importance to painting. •Quality (Durability, Weather shield, Patches etc.) consumer purchasing decisions and complete eight out•I get pleasure by selecting paint colour for my house. of 10 customer satisfaction index (CSI) surveys•When one buys paint, it is like giving gift to one-self •Women want to do business with companies that are•The paint you buy tells little bit about you “good community citizens” and local contributors•The paint colour you chose tells little bit about you •Women appreciate any effort made to educate them•You can tell about a person by the colour he/she selects for his house. about the product•When you buy a wrong paint it is not a big deal if you make a mistake *Source: Jean-Noel •Providing women with educational content to empower•It is really annoying to purchase a paint which is not suitable Kapferer, Gillies them in traditional venues, like local radio and TV, as•When I purchase paint for my house, I am never sure of my choice Laurent, Journal of Advertising well as new mediums such as Facebook and Twitter, will Research, Jan 1986 drive more business to your shop’s door. 5 factors for consumer involvement •Women largely admire any Green initiatives carried out by the companyINTEREST PLEASURE SIGN VALUE RISK IMPORTANCE RISK PROBABILITY *Source: Increase in any of these factors leads to increase in consumer involvement Insights from Women purchasing BehaviorPaints category includes -> majorly Pleasure and sign value ASIAN PAINTS STUDIO: ONE STOP, ALL SOLUTIONS(customer’s association of identity with the brand) as the drivingfactors to increase consumer involvement STUDIO Interest Pleasure Sign Value Risk Importance Risk Probability Ambiance, women The experience made Color patterns shown Educating consumers Risk probability high Asian Paints Studio incentives- pull pleasurable by AP by on walls of the studio about ill effect of poor without the Asian providing an end to will create a sign value quality paints Paints end to end end solution and to the intangible added service solutions providing excellent identity of the customer services customer
  12. 12. CONSUMER INVOLVEMENT FRAMEWORKPleasure Revamping the brand communication STUDIOSign Value To educate the consumers about different paints and the process of INTEREST painting Pleasure of the paint purchasing process is increased through PLEASURE excellent customer services at the Asian Paints Studio Linking the customer’s identity to the color combinations used for SIGN VALUE home décor- including painting the walls Communicating to the customers the need to go for quality paints RISK (like Asian Paints) as lesser quality paints can sabotage the image of the customerMAKING PAINT PURCHASE This will automatically create a pull for women- A FAMILY DECISION creating incentives for all the threads of the family to be a part of the decision making
  13. 13. ATTRACTING WOMEN IN DECISION MAKING: A FAMILY INCENTIVE Miss Casting Shades “Paint your imagination” FB Ambiance inside AP Studio •This is an online and an offline Contest “It’s a lovely place” project to educate customers •Specially crafted walls to show the specially women about basics of •Facebook contest to post color combinations (only for woman) combinations of shades and colors interior décor and color •The structure of the Studio will combinations •Monthly an entry will be shortlisted and winner will be provided Exclusive Asian provide a feeling of a decorative home •As a part of it, an internet portal will be created to interact and Paints Studio Goodies educate customers. The role of Asian Paints •Offline workshops with major KIDS COLOR ZONE Woman Consultant in the Resident Welfare Associations (RWAs) A special zone inside the Asian Paints studio Studio- where crayons and color sheets will be available for kids accompanying •Women find it easier to interact with other women, hence the role of womanMY SHADES. MY IDENTITY their parents to draw the picture of their imagination consultant in the studio could be•Communication strategy showing importantthat colors are a reflection of one’s •She will specifically cater to any femaleidentity THE RIGHT CHOICE customer entering the studio and will act•Choosing the right color is hence •Campaigns showing the damages that as Asian Paints’ interaction point with herimportant to show the right can be caused by choosing the badpersonality that you possess quality paints PAINT A GIRL CHILD’S FUTURE•Nail polish stocks inside the Studio •High Risk- as choosing paints is a onewhere the woman will be allowed to •Social campaign/community initiative to off decision that is not made regularlymix the nail paint shades and a lucky empower the girl child by providing freewinner will be given a nail paints education, helping her to gain a societystock status SOLUTIONS