Asian Paints

PRESENTED BY:SIZZIL ISLAM CHOUDHURYABHISHEK KUMARVINEET SHASHIDHARANVINAY KUMAR REDDY KUNDURUNARESH KUMAR N

(EMULSIONS)

…KYUNKI HAR GHAR KUCH KEHTA HAI…

ABOUT ASIAN PAINTS

Asian paints was started in 1942 by four friends.

Forbes Global magazine USA ranked Asian Paints among the 200 Best Small Companies in the World for 2002 and 2003.

Asian Paints was presented the 'Best under a Billion' award. It is the only paint company to receive this award.

"Business Today" in Feb 2001 ranked Asian Paints as the Ninth Best Employer.

ASIAN PAINTS- TODAY

FLOW OF THE PRESENTATION Objective of the research Introduction Data Analysis and facts Elasticity Pricing Strategy Key Findings Conclusion

OBJECTIVE OF THE STUDY

To analyze the demand of EMULSIONS of Asian Paints

To forecast the future demand of Emulsions by taking in to consideration the potential Buyers of the product.

PAINT PRODUCTS OF ASIAN PAINTS

INTRODUCTION OF PAINT INDUSTRY IN INDIA

Oligopolistic Market Indeterminate Demand Few Sellers Differentiated Product

The Indian paint industry is a $2 billion sector.

Grew at 9% rate in the last fiscal Market Growth of about $200 - $400

million per year over next 5 yearsPer capita consumption of paint in

India is 800-900 grams compared to 15-25 kg in the developed countries

CONTD…..

33%

67%

$ 2 b Paint Industry In India

Organised Unorganised

LEADERS IN THE INDUSTRY

Asian Paints (India) Ltd. (APIL) Kansai Nerolac Paints Ltd. (KNPL) Berger Paints Jenson & Nicholson Ltd (J&N) ICI (India) Ltd.

ASIAN PAINTS

Market Leader with 33% share in the organised paint market

Largest distribution network Largest Brand Equity Berger Group and ICI are nearest

competitors with 17% market share each Dominates the decorative segment with 38%

market share More than 15000 retail outlets

FINANCIAL PICTURE OF ASIAN PAINTS

Year Sales

(In crores)

Operat-ing Profit (Lakhs)

Interest

Net Profits

Loans

2008 3416.16

3595.53

8.27 377.89 1005.90

2007 2821.29

2953.38

6.87 269.93 851.68

2006 2319.16

2447.78

3.83 187.81 694.86

2005 1941.52

2052.28

2.75 173.82 637.27

2004 1742.46

1800.63

5.27 147.58 583

DATA ANALYSIS AND FACTS 3 types of consumers existing in the market

divided on basis of income groups Premium (Prefer Emulsion) Average (Emulsion + Distemper) Poor (Prefer Distemper)

Pre-mium53%

Average25%

Poor22%

Distribution of Consumers

DATA ANALYSIS AND FACTS (CONTD..)

Asian Paints38%

Berger17%

ICI17%

Nerolac 16%

J &N12%

Market Share in decorative paints Industry

DATA ANALYSIS AND FACTS (CONTD..)

Consumers rely more on Dealers & Contractors other than ad’s Reasons being

Info about Quality Durability Price Long Lastingness

PRICE SENSITIVITY FACTORS

Raw material Intensive Industry Near half of them imported petroleum

products Major Raw Materials:

Titanium Dioxide Phthalic anhydride Peutarithrithol

PRICE SENSITIVITY FACTORS (COTD….)

Factors which influence price of paint Prices of the raw materials Import Policies Global Crude oil Prices Govt. Policies Packaging Costs

ELASTICITY OF DEMAND OF PAINT

Demand for Decorative Paints is relatively Elastic in short term

In Long term it depends on the overall economic growth

Income of people also plays an important role

Premium customers are more Quality conscious than price sensitive.

Average customers are more price sensitive

CROSS-PRICE ELASTICITY

Cross Elasticity of the demand is defined as the ratio of the percentage change in the demand for one good to the percentage change in the price of some other goods.

Substitute goods: Berger,Nerolac,J&N etc.Cross Elasticity will be positive.

Complement goods: Distemper etc.Cross Elasticity will be negative

INCOME ELASTICITY

Income elasticity of demand measures the responsiveness of the demand for a good to a change in the income of the consumers.

Income Elasticity =

•

% Change in Quantity% Change in Income

1000

300

QUANTITY

PRICE

ELASTICITY-EFFECT

KINKED DD CURVE

PRICING STRATEGY

Owing to the fact that this is an oligopolic market, Asian Paints adopted a policy of cost-plus pricing strategy.

Cost-plus pricing strategy determines the price of a product or a service by adding up all direct and indirect costs which are related with the production and sale of that product(service) or not.

In this strategy, all the costs are first taken up as unit costs per product and then a pre-determined % of these costs are marked as MRP.

PRICING STRATEGY(Contd…)

• ADVANTAGES:• Easy to calculate.• Easy to administer.• Minimal information required.• Drives market towards stability.

DATA ANALYSIS AND FACTS

Asian ICI Berger Nerolac J &N

92% 90% 92%85%

70%

Availibility of Different Brands

DATA ANALYSIS AND FACTS

RANK BRAND

1 Asian Paints

2 Dulux

3 Berger

4 Nerolac

5 Shalimar

6 Nitco

Sales Information of different brands as projected by the dealers

DATA ANALYSIS AND FACTS

Variation in Sales in different Quarters Comments by the dealers:

Sales in the third quarter is equivalent to the rest of the year

But, now growth in the third quarter is reduced by 10% compared with the same quarter of last year.

KEY FINDINGS

Asian paint emulsion used for interior decoration by the premium segment of customers.

Dealers and Contractors : Tools for APIL to create a slot in the customer’s mind.

Problems with the other brands give APIL the lead in the market.

KEY FINDINGS CONTD…

Low profit margin a great concern Sales rises in the third quarter. Little shift in the income of the average class

makes them shift to the emulsion category. Bad credit terms.

SUGGESTIONS FOR STILL BETTER DEMAND!

Dealers should get price relaxation.

THANK YOU !!