Market Structure of the Paint Industry

Paints & Coatings

Presented by:Amit MitraHarshit ParekhSangita KararSahil Jain

Agenda

–Porter’s 5 Forces Analysis

–B2B and B2C Markets

– Major Players and Brands

– Segmentations

– Products in various price segments

– Product features

–Distribution Strategies of Players

– Promotional Activities

– SWOT Analysis of Akzo Nobel

– Category Extention

Porter’s 5 Forces Analysis

Competitive Rivalry:Low to

Medium

Availability of Substitutes:

Low to Medium

Buyers Power:Medium

Suppliers Power:Medium

Entry Barriers:Medium

The Paints Industry is divided into two segments: Industrial and the Decorative Segments.

B2B and B2C Markets

Industrial Paints Segment Institutions where decision making power is with more than one person

•Automotive OEM •Automotive Refinish•Vehicles•Railways•Aircraft•Marine Coatings•Road Marking•Plastic Coatings•Metal Packaging Coatings•General Industrial Coatings•Pre-Coated Metal Sheet

•Commercial Hotels Shopping Malls Offices Restaurants•Industrial Warehouses Manufacturing•Others Hospitals Educational Institutes Government Recreation Amenities

Major Players and Brands

ASIAN PAINTS BERGER KANSAI NEROLAC

• Ace •Luxol Silk •Suraksha Advanced

• Apex-Ultima, Duracast •Rangoli Easy Clean •Nerolac Impression

• UTSAV •Rangoli Super Acrylic •Satin Enamel

•Apex-Duracast •Walmast Antifungal •Synthetic Enamel

•Royale •Bison Super Emulsion •Nerolac Pearl

•Tractor-Emulsion and Acrylic

•Bison Super Acrylic •Nerotex Matt

Major Players and Brands … contd.

SHALIMAR PAINTS DULUX JOTUN PAINTS

•Shaktiman Acrylic Emulsion •Velvet Touch •Fenomastic

•SuperLac Hi •Supreme 3 in 1 •Fenomastic Gold

•Diamond Synthetic Enamel •Weathershield Tex •Jollyfix

•Gold Synthetic Enamel •Supercote Emulsion •Gardex

•Silk Emulsion •Special diamond Glaze •Bengalac

•Xtra Premium •Satin Finish •Durosan

Segmentations

Price

Medium

Mid-price

Economy

Application Area

Interior

Exterior

Metal

Wood

Category Type of paint

Wall Putty

Primer

Distemper

Enamel

Emulsion

Texture coated

Latex

Dripless

Rubber Paint

Products in various price segments

Exterior Paints Interior Paints

WeatherCoat All guard Luxol Silk

Premium Apex Ultima Royale Luxury Emulsions

Weather Shield Max Dulux Velvet Touch

Weather-Coat Smooth Rangoli Easy Clean

Mid Price Apex Asian Paints Premium Emulsion

Dulux Promise Dulux 3 in 1

Economy Berger Walmasta Bison Super Emulsion

Asian Paints Ace Asian Paints Tractor

ICI Supercote

Premium Exterior Paints

COMPARISON Weather Coat All-Guard (Berger) Apex Ultima (AP) Weather Shield Max

Silica Base Present. Reverses effects of rain

Absent. Succumbs to effects of rain

Absent. Succumbs to effects of rain

Water Accumulation Prevents Cannot prevent Cannot prevent

Dampness Prevents No such declared claim

No such declared claim

Antifungal Properties Present Present Present

Fading Non-fading Non-fading Not established

Sheen High sheen Standard sheen Standard sheen

Wet paint opacity Excellent Poor Poor

Brushability Smooth brushability Hard brushability Hard brushability

Warranty 7 years 5 years 7 years

Mid-Priced Exterior Paints

COMPARISON Weather-Coat Smooth (Berger) Asian Paints Apex (AP) Dulux Promise (Dulux)

Silica base Present. Reverses effects of rain

Present. Reverses effects of rain

Colour Guard & Anti-fading technologies. Moderate

prevention

Antigfungal Properties Present Present Present

Extreme weather conditions High resistance Moderate resistance High resistance

Volatile Organic Compound No claim No claim Low. A safe paint

Sheen High Sheen High Sheen High sheen

Shelf Life 3-4 years 3 years 4-5 years

SKU 20L, 18L, 10L, 9L, 4L, 1L 20L, 10L, 4L, 1L 20L, 10L, 4L, 1L

Economy Exterior Paints

COMPARISON Berger Walmasta Asian Paints Ace

Finish Rich matt with premium finish Has a matt finish

Antifungal prop Present Present. Algae poses threat

Water Resistance Absent Moderate

Warranty 3 years 3 years

Premium Interior Paints

Berger Paints Luxol-Silk Asian Paints Royale Luxury Emulsion Dulux Velvet Touch

Niche brand among the range of Berger products “Only one paint offers a pearl

glow finish”

Offers 5000+ shades Water based emulsion with anti- fungal properties Offers 2000+ shades

Usable on various surfaces 72 international shades ‘Colours of the World’

Silky luxurious and high sheen

Has a luxurious finish with a silky glowing finish Luxurious sheen

4 year warranty 3 year warranty 3 year warranty

SKUs - 1L, 4L, 10L, 20L SKUs - 1L, 4L, 10L 20L SKUs - 1L, 4L, 10L, 15L, 20L

Mid-Price Interior Paints

Berger Rangoli Easy Clean Asian Paints Premium Emulsion

Dulux 3 in 1 (“Stay Clean, Stay Healthy”)

Provides high wash ability and easy to maintain

Possesses super acrylic quality The first stain resistant paint

Offers smooth sheen finish Promises excellent durability Health Guard Technology to prevent fungus and bacteria

Longer life and scrub resistant Matt finish with slight sheen More washable than ordinary

emulsion

2000+ shades Applicable on various surfaces

True value for money as it provides more coverage

4 year warranty 3 year warranty 4 year warranty

SKUs - 1L, 2L, 3.6L, 9L, 10L, 20L

SKUs - 500ml, 1L, 2L, 5L, 10L, 20L

SKUs - 250ml,500ml, 750ml, 1L, 2L,5L, 15L

Economy Interior Paints

Berger Paints Bison Super emulsion

Asian Paints Tractor Emulsion - 'Provides a rich finish'

ICI Supercote - “For superior finish and durability”

Offers medium wash ability A perfect buy for existing distempers users

Acrylic emulsion and provides smooth matt finish

Matt finish and has a shelf life of 3 years

Durable, shelf life 1-2 years more on ave. than the

distempersHigh durability

5000+ shades Applicable on various surfaces Offers an emulsion finish at distemper's price

SKUs - 1L, 4L 10L,20L SKUs - 1L, 4L 10L,20L SKUs - 1L,4L, 10L, 20L

Distribution Strategies of Berger Paints

•Berger has a countrywide distribution network of 14,500 dealers including 8000 tinting machines with strong presence in North and East India.

•In the process of increasing its presence in the high growth western and southern regions by setting up exclusive retail outlets and distributor base.

•Strong distribution foothold in Tier II and Tier III cities.

•To launch ‘Lewis Berger Paints Designer Stores’, in eastern region followed by other parts of the country.

Distribution Strategies of Asian Paints

•Focus on individual consumer of paints, instead of bulk buyers as in the beginning.

• Concentration on semi-urban and rural areas, instead of urban areas.

• Strategic decision adopted to bypass the well-entrenched wholesale distributors and directly approach the retailers.

• Open door dealer policy adoption, due to which its dealer network swelled rapidly.

• Increase in number of dealers from 12000 in 2000 to over 24000 in 2011.

• Signature and Colour idea stores concepts, to attract a large number of consumers.

Promotional activities of Akzo Nobel

•Akzo-Nobel - Dulux has promoted sales by giving freebies and discount coupons to distributors, contractors and small time painters.

•Offers many promotional schemes to the dealers which leads to increase in loyalty for the brand and change customer preferences.

•It has opened more than 100 franchisee run ‘Dulux Decorative Centres’ to increase the interactions between consumers and sales people.

Promotional Activities- Asian Paints

• Asian Paints Sharad Samman – Awards provided to top 3 Durga Puja organizers in Kolkata.

•Asian Paints launched the “Mera Wala” campaign in the early 90’s and marked their entry into corporate advertising

• In the early 2000s, the company began expanding its offerings and launched the “Har Ghar Kuch Kehta Hai” campaign, which found an emotional connect with the consumers

• The brand campaign “Badhiya Hai” became extremely popular

• In 2011, Asian Paints launched a ‘Colour Ki Lari’ contest on facebook where fans got a chance to win a home makeover by joining their friends to a specially created ‘lari’ made of Facebook friends

• Follows an open door policy due to which its distribution network has swelled

Promotional Activities- Berger Paints

• Planned in Dec 2012 to tie up with furnishing and lightning firms to offer a complete home décor range to consumers

• Co-branded its ‘Breathe Easy’ range of products with Being Human as a part of company’s commitment towards environmental safety

•Planning to launch ‘Lewis Berger Paints Stores’ in eastern region followed by other parts of the country

SWOT Analysis- Akzo Nobel

Product Innovation and brand building focus has helped Dulux to increase its brand recall

Presence of decorative centers in 10 cities, has helped Dulux provide colors consulting to end consumers

Dulux is more premium skewed and this has helped as the premium tier is growing at the fastest rate

Uncertain economic scenario will affect Dulux due to its premium skewness

Limited presence in rural areas, has affected the market share of Dulux

Strengths

Weakness

SWOT Analysis of Akzo Nobel

Providing services from consumers’ experience point of view; experience of a decorated home.

Providing innovative products which customers are not accustomed to.

Market warming up to eco friendly paints will help brands like Promise and Weather-shield.

Presence of unorganized sector has hindered the growth of brands like Supercote and Maxlite.

Brands like Royale and Luxol give strong competition to Velvet Touch

Opportunities

Threats

Category Extension WallpapersDemand for premium products are increasing as consumers are becoming more aesthetically aware.

Increase in disposable income and a yearning for upgrades, more people are turning their attention towards the premium paint segment.

Premium tier is growing at a faster rate than the mid-price or the economy price tier. Also the life cycle of paints has shortened

Dulux can provide ‘easy to use’ wallpapers, pre-printed with pictures, which could be simply pasted onto the wall.

Wallpapers are environment friendly unlike paints which impacts human health to certain extent.

Category Extension … contd. Pre-printed pictures, can transform the entire room into a showcase room of personal collectibles, creation or memory.

Consumer becomes tired of a style, he can change the style as the wallpapers is easily replaceable and reasonably priced

Dulux Wallpapers can be priced at par with paints in the premium segment.

Dulux can sell the wallpapers through its existing Dulux Decorative Centres. Dulux can also provide suggestions on the wallpapers and colour combinations at these centres.

THANK YOU