EXECUTIVE SUMMARY

The Indian Paints & consumer behavior to purchase with a variety of new players &
product flooding the market. The Indian market, which is under transition, is also
getting more and more competitive both in terms of consumption and quality
consciousness. A booming paints and varnish industry has resulted innovate
marketing techniques come into play. All major players like Modi Paints, Nerolac
Paints, Berger Paints and few other players are trying to strengthen their retailing
operations with different marketing strategies/techniques because the paints and
varnish industries come under the impulse category where factor like supply change
management. The width of distribution, advertisement, packing & communication
make all the differences.
In the background of the above scenario, it was decided by the company to carry out
a research to determine what dealers think about Asian Paints and Varnish. Is Asian
Paints and Varnish gives value for money, means total satisfaction or not.
This Project which was assigned to me is basically a dealer survey throughout the
project. I had found out the image of the product, purchase behavior of consumer
from dealer, their expectation the reasons of satisfaction and dissatisfaction.

To purchase with a variety of new players & product flooding the market. The
Indian market, which is under transition, is also getting more and more competitive
both in terms of consumption and quality consciousness. A booming paints and
varnish industry has resulted innovate marketing techniques come into play. All
major players like Modi Paints, Nerolac Paints, Berger Paints and few other players
are trying to strengthen their retailing operations with different marketing
strategies/techniques because the paints and varnish industries come under the
impulse category where factor like supply change management. The width of
distribution, advertisement, packing & communication make all the differences.
In the background of the above scenario, it was decided by the company to carry out
a research to determine what dealer thinks about Asian Paints and Varnish. Is Asian
Paints and Varnish gives value for money, means total satisfaction or not.
This Project which was assigned to me is basically a dealer survey throughout the
project. I had find out the image of the product, purchase behavior of consumer
from dealer, their expectation the reasons of satisfaction and dissatisfaction.

OBJECTIVES OF THE STUDY

This study is to analyze the sales promotion techniques, especially through

advertisement, used by Asia Paints.

To find out the influence of Advertising & Sales promotion on the sales of
the Asian Paints products
To find the most effective tool of Sales promotion technique to entice
customers
To study various advertising & Sales promotion techniques used by Asian
Paints
To analyze the different medium through which the advertisement reaches
maximum number of people in the market

RESEARCH METHODOLOGY

Research is a systematic method of finding solutions to problems. According to

Clifford woody, research comprises of defining and redefining problem,
formulating hypothesis or suggested solutions, collecting, organizing and evaluating
data, reaching conclusions, testing conclusions to determine whether they fit the
formulated hypothesis
For the purpose of study, both primary and secondary data has been collected. The
observational method and survey research method is used to collect the primary
data.
The necessary data has also been collected from official records and other published
sources. The collected data is classified, tabulated, analyzed and interpreted later.
DATA COLLECTION:
There are two types of data collection
1. Primary data
2. Secondary data
Primary data
Primary data is personally developed data and it gives latest information and
offers much greater accuracy and reliability.
There are various sources for obtaining primary data i.e., Mail survey,
personal interview,
Field survey, panel research and observation approach etc.
The study to maximum extent dependent on primary data, which is collected
by way of structures personal interview with customers.

Secondary data
Secondary data is the published data. It is already available for using and its
saves time. The mail source of secondary data are published market surveys,
government publications advertising research report and internal source such as
sales, sales records orders, customers complaints and other business record etc. the
study has also depended on secondary data to little extent, which is collected
through internal source.
Secondary sources considered:
Websites
Journals
Annual Reports
Sampling Design:
A sample design is a finite plan for obtaining a sample from a given
population. Simple random sampling is used for this study
Sample Size:
Number of the sampling units selected from the population is called the size
of the sample.
For this study, a sample of 50 respondents was interviewed from the
customers and workers of Asian Paints.
Research Findings:
Considerable amount of time was spent to collate the findings of the
research. The findings had to be stated. These findings were also discussed with the
management team at Asian Paints to get a lateral view.

Literature Review
Vecchio, Del, Devon et.al. (2006) ' report the results of the study, which examined
the effect of sales promotion on brand preference through Meta analysis. Results of
51 studies had been integrated. As per the study sales promotions do not affect post
promotion brand preferences in general. But depending upon characteristics of sales
promotion and the promoted product, promotion can either increase or decrease
preference for a brand.
Ndubisi, Oly, Nelson and Moi, Tung, Chiew in their study evaluated the impact of
sales promotional tools, namely coupon, price discount, free sample, bonus pack,
and in-store display, on product trial and repurchase behaviour of consumers. The
moderation role of fear of losing face on the relationship between the sales
promotional tools and product trial was also examined. The results of study show
that price discounts, fiee samples, bonus packs, and in-store display are associated
with product trial. Coupon does not have any significant effect on product trial.
Trial determines repurchase behaviour and also mediates in the relationship between
sales promotions and repurchase. Fear of losing face significantly moderates the
relationship between in-store display and product trial
Swaminathan, Srinivasan studied the impact of coupons on brand sale and how that
impact decays over the life of the coupon. The authors use an econometric model to
demonstrate the coupon effect in terms of equivalent price reduction, account for
coupon effect over time, allow inference of coupon effects when retailers decide to
double or triple the coupon value and provide both self-coupon and cross-coupon
elasticities at different levels of aggregation. Results indicate that the effect of
doubling the face value of coupon result in more than a proportionate increase in
elasticity and both self and cross- coupon elasticities are much smaller in magnitude
than the average self-cross price elasticity.
Laroche, Michel et.al. studied the effect of coupons on consumer's brand
categorisation and choice process using fast-food restaurants in China. Results
suggest that there are both direct and crossadvertising effects i.e., the presence of a
coupon for a focal brand has an impact on consumer's attitudes and intentions
towards that brand.
Lewis, Michel developed an approach for simultaneous measurement of the
influence of a dynamic loyalty programme and more traditional short- term
promotions. They argue that the loyalty programmes under examination
successfblly alter behavior and increase retention rates. Email based coupons,
shipping fee and general price levels all significantly affect customers purchase
decisions.

Anderson, T. Eric and Simester LDuncan investigated how the depth of a current
price promotion affect future purchasing of first time and established customers
based on three large scale field experiments on durable goods sold through a direct
male catalogue. The findings reveal different effect for first-time and established
customers. Deeper price discounts in the current period increased future purchases
by the first time customers (a positive long-run effect) but reduced future purchases
by established customers (a negative long- run effect)
Dawes, John reported the result of his study on the effect of a massively successful
price promotion in a consumer goods category. Specifically, he sought to determine
if this large price promotion had any long-term impact on brand value; short-term
impact on total category volume for the retailer; short-term effect on competing
retailers; and long-term effect on category sales for the retailer who runs the
promotion. Results of the study showed that a very successful promotion did not
have any longer-term effect on the brand (positive or negative), but it did expand the
total category for the retailer, though temporarily. Sales dropped slightly for one
competing retailer at the time of promotion out of the three units studied. It was
observed that the promotion was followed by a decline in the total category volume
for the retailer, suggesting some degree of purchase acceleration or stockpiling by
consumers, Longer-term negative effect on category cancelled out approximately
two third of the gain of the price promotion to the retailer.
Baohong et.al reviewed various studies relating to the impact of promotion on
brand switching and found that these studies used choice models, especially logit.
According to these studies promotion has a strong effect on brand switching. The
authors show that logit choice model can substantially over estimate brand
switching because they do not take in to account the rational adjustments that
customers make to take advantage of promotion. Logit models do not take in to
account stock piling and deceleration strategies. They use a dynamic rational model
and compare it with a logit model. The result was that logit models over estimate
brand switching, that nested logit helps address the problem but not completely and
that dynamic rational model provides the most accurate estimate of switching.

LIMITATIONS OF THE STUDY

Every study has its own limitations in terms of methodology and available resources
for its conduct. This study was not an exception and was carried out under the
following limitations:
The research was confined only to Asian Paints in Hyderabad region
The study is limited to advertisement practices of Asian Paints only. Others
are not taken into the purview of the study
Few respondents were reluctant while answering the questions
The time was also one of the hindrances in the research
Some important information was not there due to confidentiality involved in
it
Accuracy of the study is limited due to the possible bias of the respondents.
Time constraint:
The time duration of conducting the research w3as less. So lots of
other factors were ignored.
A large sample could not be taken due to same reason.
It was only possible to conduct the survey during free hours. The dealers did
not respond when contacted during peak hrs.
As the areas covered in the survey were off the route and the any convenient
mode of transport was not available. The investigator faced a lot of problem
Most of the consumer were ignorant and were not willing to respond that
leads inaccuracy in the data collected.

CHAPTER- I

Sales Promotion Practices Of Asian Paints AN INTRODUCTION

In this market which is full of competitors, we would like to know the

strategies that help us to beat our competitors. This study helps us to know how we
can overcome our competitors with regard to Advertisement.
Sales promotion - Sales promotions are short-term incentives to encourage the
purchase or sale of a product or service.
Sales promotion includes several communications activities that attempt to
provide added value or incentives to consumers, wholesalers, retailers, or other
organizational customers to stimulate immediate sales. These efforts can attempt to
stimulate product interest, trial, or purchase. Examples of devices used in sales
promotion include coupons, samples, premiums, point-of-purchase (POP) displays,
contests, rebates, and sweepstakes.
There are three types of sales promotion strategies: Push, Pull, or a combination
of the two.
A push strategy involves convincing trade intermediary channel members to
"push" the product through the distribution channels to the ultimate consumer via
promotions and personal selling efforts. The company promotes the product through
a reseller who in turn promotes it to yet another reseller or the final consumer.
Trade-promotion objectives are to persuade retailers or wholesalers to carry a brand,
give a brand shelf space, promote a brand in advertising, and/or push a brand to
final consumers. Typical tactics employed in push strategy are: allowances, buyback guarantees, free trials, contests, specialty advertising items, discounts,
displays, and premiums.

10

A pull strategy attempts to get consumers to "pull" the product from the
manufacturer through the marketing channel. The company focuses its marketing
communications efforts on consumers in the hope that it stimulates interest and
demand for the product at the end-user level. This strategy is often employed if
distributors are reluctant to carry a product because it gets as many consumers as
possible to go to retail outlets and request the product, thus pulling it through the
channel. Consumer-promotion objectives are to entice consumers to try a new
product, lure customers away from competitors products, get consumers to "load
up" on a mature product, hold & reward loyal customers, and build consumer
relationships. Typical tactics employed in pull strategy are: samples, coupons, cash
refunds and rebates, premiums, advertising specialties, loyalty programs/patronage
rewards, contests, sweepstakes, games, and point-of-purchase (POP) displays.

11

CHAPTER - II

12

Asian Paints Ltd - A Profile

Asian Paints is Indias largest paint company and Asias third largest paint
company, with a turnover of Rs 77.06 billion. The group has an enviable
reputation in the corporate world for professionalism, fast track growth, and
building shareholder equity. Asian Paints operates in 17 countries and has 23
paint manufacturing facilities in the world servicing consumers in over 65
countries. Besides Asian Paints, the group operates around the world through its
subsidiaries Berger International Limited, Apco Coatings, SCIB Paints and
Taubmans.
Forbes Global magazine USA ranked Asian Paints among the 200 Best
Small Companies in the World for 2002 and 2003 and presented the 'Best under a
Billion' award, to the company. Asian Paints is the only paint company in the
world to receive this recognition. Forbes has also ranked Asian Paints among the
Best under a Billion companies in Asia In 2005, 06 and 07.
The company has come a long way since its small beginnings in 1942.
Four friends who were willing to take on the world's biggest, most famous paint
companies operating in India at that time set it up as a partnership firm. Over the
course of 25 years Asian Paints became a corporate force and India's leading
paints company. Driven by its strong consumer-focus and innovative spirit, the
company has been the market leader in paints since 1968. Today it is double the
size of any other paint company in India. Asian Paints manufactures a wide range
of paints for Decorative and Industrial use.
In Decorative paints, Asian Paints is present in all the four segments v.i.z
Interior Wall Finishes, Exterior Wall Finishes, Enamels and Wood Finishes. It
also introduced many innovative concepts in the Indian paint industry like
Colour Worlds (Dealer Tinting Systems), Home Solutions (painting solutions
Service), Kids World (painting solutions for kids room), Colour Next (Prediction
of Colour Trends through in-depth research) and Royale Play Special Effect
Paints, just to name a few.
13

Asian Paints has always been ahead when it comes to providing consumer
experience. It has set up a Signature Store in Mumbai where consumers are
educated on colours and how it can change their homes.
Vertical integration has seen it diversify into products such as Phthalic
Anhydride and Pentaerythritol, which are used in the paint manufacturing
process. Asian Paints also operates through APPG (50:50 JV between Asian
Paints and PPG Inc, USA, one of the largest automotive coatings manufacturer in
the world) to service the increasing requirements of the Indian automotive
coatings market. Another 50:50 JV with PPG has been proposed which will
service the protective, industrial powder, industrial containers and light industrial
coatings markets.
Asian Paints along with its subsidiaries has operations in 17 countries
across the world and 23 paint manufacturing facilities, servicing consumers in 65
countries through Berger International, SCIB Paints-Egypt, Asian Paints, Apco
Coatings and Taubmans. Asian Paints operates in 5 regions across the world viz.
South Asia, South East Asia, South Pacific, Middle East and Caribbean region
through the five corporate brands viz. Asian Paints, Berger International, SCIB
Paints, Apco Coatings and Taubmans. In 7 markets, it operates through its
subsidiary, Berger International Limited; in Egypt through SCIB Paints; in 5
markets in the South Pacific it operates through Apco Coatings and in Fiji and
Samoa it also operates through Taubmans.
International Presence:
Today the Asian Paints group operates in 17 countries across the world. It
has manufacturing facilities in each of these countries and is the largest paint
company in eleven countries. The group operates in five regions across the world
viz. South Asia, South East Asia, South Pacific, Middle East and Caribbean
region through the five corporate brands viz. Asian Paints, Berger International,
SCIB Paints, Apco Coatings and Taubmans. The Group operates as:
Asian Paints in South Asia (India, Bangladesh, Nepal and Sri Lanka)
14

 SCIB Paints in Egypt

Berger in South East Asia (Singapore), Middle East (UAE, Bahrain and
Oman), Caribbean (Jamaica, Barbados, Trinidad & Tobago)
Apco Coatings in South Pacific (Fiji, Tonga, Solomon Islands and
Vanuatu)
Taubmans in South Pacific (Fiji and Samoa)
The company has a dedicated Group R&D Centre in India and has been
one of the pioneering companies in India for effectively harnessing Information
Technology solutions to maximize efficiency in operations.
Products & Services:
The companys primary products include:
1. Asian Paints Acrylic Wall Putty
Asian paints acrylic wall putty is water-based putty. It is one of the best
products of its kind available in the market. It provides a very strong durable
foundation & brings out the best performance from the finish paints. Both in
looks & durability.
2. Asian Paints Apex
Apex Weatherproof Exterior Emulsion is a water-based 100% acrylic,
exterior wall finish. A high performance, long-lasting exterior paint specially
formulated to withstand extreme tropical conditions of high rainfall, humidity
and heat, Apex provides excellent resistance against the growth of algae and
fungi on the walls. It offers excellent protection against alkali and UV
degradation too.
3. Asian Paints Apex Dholpur Tex
Cost range: premium finish: rich sheen availability: across all colour
world dealers.

15

4. Asian Paints Apex Ultima

Asian paints apex ultima advanced anti algal weather proof emulsion is a
water-based, modified acrylic, anti algal, high performance exterior wall finish.
It incorporates the latest state-of-the-art technology to provide long-lasting
exterior performance even in the most extreme tropical conditions of India. Its
unique advanced anti algal chemistry ensures that exterior walls are provided
with power-packed resistance against algae and fungi growth. Its has very good
dirt pick up resistance and dirt cleaning properties.
5. Asian Paints Decoprime Wall Primer St
Asian paints deco-prime wall primer (st) is suitable for use as primer for
masonry topcoats like distempers, emulsions, luster & matt wall finishes. It helps
in providing a suitable surface for application of subsequent coats of putty &
finish paint. It set a fast, has good sealing properties, good resistance to wall
alkalinity, moisture & fungus.
6. Asian Paints Wood Primer
Asian paints wood primer is specially formulated to protect wood. It has
an excellent sealing & filling properties which protects wood from swelling due
to absorption moisture. Wood primer penetrates wood fibre & gives excellent
adhesion to substrates & also serves as a sound base for application of undercoats
& finishing coats. It also protects the finish coat from exudation of resinous
matter oozing out from wood.
7. Asian Paints Tractor Synthetic Distemper
Asian paints tractor synthetic distemper is water-based, interior wall
paint. It is the most popular distemper brand in India and gives walls a finish that
is good looking, time-tested, durable and value for money. Asian paints tractor
synthetic distemper gives a uniform matt film, which can be wiped with clean
water. Being oil bound, the paint film becomes harder over a period of time,
which gives better washability and durability. cost range: mid-range finish: matt
availability: across all colour world dealers.
16

8. Floor Coatings
Concrete floors represent a significant investment for any industry.
Despite this, it is often the most neglected and abused part of the structure. Apart
from the mechanical abuse, spillages of various kinds of chemicals also occur
often weakening the reinforcement and concrete surface. The need to protect the
surface with a suitable coating is quite obviously there. an increasing awareness
of the limitations/drawbacks of concrete flooring is now resulting in wider
acceptance of floor coatings. Limitations include the accumulation of dust due to
the formation of laitance and difficulty encountered during cleaning owing to
surface texture. Furthermore, the presence of cracks and surface porosity allows
various oils to seep in, resulting in unappealing patches. Weakening of the
reinforcement and concrete surface due to chemical spillage and the possibilities
of microbial growth are other significant drawbacks. apart from these, concrete
floors are aesthetically unappealing making the workplace dull. the apcoflor
coatings are hard wearing, abrasion resistant coatings available in wide range of
attractive colours. They have excellent mechanical properties and provide floors
that are tough and long lasting. They, apart from protecting the concrete surface,
help tide over the limitations without affecting the intrinsic strength of concrete
floor.
9. Protective Coatings
Protecting industrial assets is increasingly becoming critical owing to
rising asset costs, harsh weather conditions and mounting chemical pollution.
Therefore asset owners are looking at specialized protective coatings specific to
their requirements. We perceive this to be just the right environment for asian
paints to demonstrate its growing technical strength. Protective coatings from
asian paints offer a choice of high-performance, heavy-duty coatings, designed to
protect assets against the specific corrosive environment they are exposed to.
Asian paints protective coatings are tested under extreme conditions to ensure
that they are durable and can withstand the vagaries of the different climatic
conditions. Today the range of coatings find use across diverse industries such as
17

nuclear, thermal or hydro power plants, chemical, petrochemical or fertilizer

plants, refineries, sugar, pulp and paper industry, offshore structures,
pharmaceuticals etc. at asian paints, we understand the specific environment that
your assets are exposed to, so as to offer the right coating solution for your
needs.
10. Road Markings
Road markings are the silent custodians of road safety in this era of four
and six lane highways. Markings signify the delineation of traffic path and the
lateral clearance from traffic hazard for the safe, smooth and orderly movement
of traffic. Apart from traffic guidance, they also serve as a tool for controlling,
warning and providing information to road users. Though the cost of road
markings is fractional in comparison to the cost of the road, its importance is
indisputable. Often a key parameter used to judge the road quality is the quality
of the installed road marking. asian paints commands market leadership in the
field of thermoplastic road markings. asian paints offers a variety of road
markings. These include hot applied retro reflective thermoplastic material, fast
drying highly durable 100% acrylic retro-reflective water borne paints and
conventional water / solvent based road marking paints. apcotrak range of
coatings includes coatings such as water based road marking paints conforming
to is-164, 1981 (amended 1993) - specification for ready mixed paint for road
marking, ordinary water based road marking paint and the 3rd generation road
markings: apcotrak wbr, fast drying highly durable 100% acrylic retro-reflective
water borne paints. These represent a generational shift in markings. They are
safer to handle as heating is not required. Do not soften on environmental heat
and hence dirt pickup is eliminated.
Corporate Information:
Asian Paints is a fully integrated paints company that employs the most
advanced and prudent principles for its working. Know about the company, its
strategies, management structure in detail here.

18

Vision:
Asian Paints aims to become one of the top five Decorative coatings
companies world-wide by leveraging its expertise in the higher growth emerging
markets. Simultaneously, the company intends to build long term value in the
Industrial coatings business through alliances with established global partners
History:
Today:
Asian Paints becomes the 10th largest decorative paint company in the
world
Asian Paints is more than twice the size of its nearest competitor
It is one of the most admired companies in India
Present in 22 countries with 27 manufacturing locations, over 2500
SKU's, Integrated SAP - ERP & i2 - SCM solution
Rated Best Employer by BT-Hewitt survey, 2000 Bluest of the blue chips
by Hindu Business Line; Most admired company to work for by ET-BT
survey, 2000
On the recommendations of Booz, Allen and Hamilton, Asian Paints
restructured itself into Growth, Decorative and International business
units and adopted SCM and ERP technology
Asian Paints aims to become the 5th largest decorative paint company in
the world
1967:
Asian Paints emerges as India's leading paint company ahead of any
international competition.
1957 66:
19

 The family-owned company makes the transition to a professionally

managed organisation.
British company Balmer Lawrie rejects the products of a giant British
paint company in favour of Asian Paints.
Asian Paints embarks on an ambitious grassroots marketing campaign,
partnering with thousands of dealers in small towns all over India.
1954:
Asian Paints mascot, Gattu, the mischievous kid, is born.
1945:
Asian Paints touches a turnover of Rs. 3,50,000, with an innovative
marketing strategy "to reach consumers in the remotest corners of the
country with small packs."
1st February, 1942:
Armed with little knowledge and great determination, Champaklal H.
Choksey, Chimanlal N. Choksi, Suryakant C. Dani and Arvind R. Vakil
get together to manufacture paint in a garage on Foras Road, Bombay.
They name their company 'The Asian Oil & Paint Company', a name that
they picked randomly from a telephone directory.

Sales promotion:In an industry the availability of stocks is crucial determinant of sale,

control of material units assumes great significance especially since Asian paints
offer the widest range of products, shades and packs to the 13000 dealers in the
country through the network of over 47 depots.
This is achieved through a sophisticated material distribution system
which optimizes production and movement from plants and meshes it with
demand pattern in the market.
20

 Rural Marketing Initiatives since 1960.

Advertising & Promotional Expenditure started in 1980s.
Advertising Methods- Radio, Print, Internet, POP, Retail Outlets,
Seminars, Workshops.
Market leader -38% share in organized sector.
Asian Paints bypassed the bulk buyer segment and went to individual
consumers of paints
Widest product range -product shades, wide colors, pack sizes
40 different decorative paints -1200 shades, 8 different sizes in packing,
No. of brands -all segments.
Strong in inventory control (18 processing centers, 350 raw material and
intermediate goods suppliers, 140 packing material vendors, 6 regional
distribution centers, 72 depots are integrated)

Packaging:
Asian Paints has four production plants and each has four distinct packing
patterns. So that the work of the go down in charge becomes easier in
recognizing the tins from which plant they have come. The packing is as follows

Ankleshwar

Bhandup

Patancheru

Kasna

Pricing
In the narrowest sense price is the amount of money charged for a product or
service.

21

Price has been the major factor in affecting buyer choice. This is still true in
poorer nations, among poorer groups and with commodity products. However
non price factors have become more important in buyer choice behavior in recent
decades.
With respect to Asian Paints there are two price lists.
Dealers price list
Maximum price list.
Dealer price list:
It is applicable to dealers and consists of their trade discount of 3%,
additional trade discount of 3%, cash discount 5%.
Maximum Price List:
MPL = consists of dealers price list trade discount 3% - additional trade
discount 3% - cash discount 5% + local tax.
Those dealers who have regular payment of performance are benefited
largely by cash discount and those dealers whose payment is not regular do not
get products.
The company operates at a very low over due outstanding rate. Thus it can
be said that the company has very stringent rules regarding the credit given to the
dealers.
Promotion:
Asian Paints promotional activities consists of advertisements, schemes,
point of purchase, painters schemes.
The advertisement activities are given to OGILVY AND MATHER who has
designed the advertisements as shown and partly by contract ad agency.
The success of Asian Paints is primarily attributed to marketing acumen. The
company has made excellent use of the electronic and print media, besides
publishing informative brochures for all its products. The companys mascot
22

Gattu created to give an ethnic touch has almost become synonymous with the
generic product.
Target Group
According to the information provided by the company personnel the target
group differs from product to product.
Utsav -

rural (chunna and distemper)

Distemper -

middle income group

Royal -

higher income group

Financial Results:
The company has aligned the accounting year of all overseas subsidiaries in
line with the parent company in FY 2009-10
o The annual consolidated results are not comparable with the previous
year as the previous year includes 15 month results of overseas
subsidiaries (Jan 09 Mar 10)
o The Quarterly consolidated results are not comparable with the
previous quarter as the previous period includes 6 month results of
overseas subsidiaries (Oct 09 Mar 10)
Sales Performance of Asian Paints - Q4 FY 2010-11:

Standalone sales grew by 24.0% in value terms

23

 Paints segment sales has grown by 25% over Q4 FY 2009-10

Consolidated sales grew by 4.7% in value terms
Growth of 22.6% with comparable period of overseas subsidiaries
International Operations impacted by global slowdown & challenging
market conditions
o Civil unrest in Egypt and Bahrain disrupts operations in the last
quarter
o Growth mainly led by the South Asian markets
o High Raw material costs reduced margins considerably
Significant Developments:
Board of APL approved plans to accelerate growth of the non-decorative
coatings
businesses in India by enhancing its fourteen year old relationship with PPG
Industries Inc. (PPG), one of the worlds leading coatings and specialty
Products Company
APL and PPG to expand their existing non-decorative coatings presence in
India jointly through their current 50-50 joint venture relationship (APPG),
and also by establishing a second 50-50 joint venture
Industrial businesses of both APL and PPG will be part of this second JV and
APL and APICL plants will toll manufacture for them
APL to take the lead in the second venture and PPG to take the lead in APPG
in order to utilize their respective strengths to best capture the growth in
infrastructure development and globally driven markets in India
The arrangement is subject to regularity approvals and is expected to be
completed during 2011

24

Paint:
Basically, Paint is a mixture of four elements.
Solvents
Binders
Pigments
Additives
Solvents
Which give paint its flow, and enable it to be brushed on a surface
Binders
Which hold the paint together, as well bind it to the surface that is painted,
thus giving its property of durability.
Pigments
Which give paint its color and opacity.
Additives
Which give paint special properties such as resistance to fungus, rust ..etc.,
Paints can be distinguished as
1. Emulsions:
These are water based paints Acrylic Emulsions are extremely durable and
give wall silky and smooth finish. They are washable and easy to maintain.
Eg: Asian Paints offers three brands to choose.
Premium

Apcolite Royal Acrylic Emulsion.

Medium

Apcolite Super Acrylic Emulsion.

Economical

Super Decoplast.
25

2. Distempers:
These are also water based paints but their binders may be very natural or
synthetic. Distempers are economically priced, they offer good value for money as
they are durable.
Eg: Asian Paints has
Tractor Acrylic washable Distemper.
Tractor washable Synthetic Distemper.
3. Luster and matt finishes:
These are solvent based paints are extremely durable. The former gives a
gloss egg shell finish while matt finishes have a dead matt finish.
Eg: Asian Paint has
Apcolite luster finish.
Apcolite synthetic matt finish.
4. Exterior Finishes:
For exterior cement paint is mainly used as it is economical. It also has a
reasonable life if in areas where monsoon is not too heavy.
Eg: Gattu cem.
5. Enamels:
It provides the best coating for metals they are tough, durable, glossy in
finish. The smooth shiny look lasts for years. Enamels protect from corrosioin.
Eg:
Apcolite Synthetic Enamel.
Mangoes Synthetic Enamel.
6. Primers:

26

Primers are usually the first coat applied on a surface it is meant to prepare
the surface for painting. It offers protection to the paint.
Eg:
Asian Metal Primer.
Woodorite Primer.
7. Fillers / putties:
It is used to fill up the crises or any unevenness to ensure that the finish coat
gives a smooth surface.
8. Autoacquer:
It is NITRO CELLULOSE paint for auto finishing.
Eg:
Krilo
Apca
Aspa
The Indian Paint Industry
Foundation for paint was laid in the year 1902 with the setting up of
Shalimar Paints in Calcutta. It was during the and after the World War II. That large
number of paint manufacturing units was set up in India. Since then the Indian paint
industry has made substantial progress.
The paint industry has come to the recognition as an important sector in the
national economy in producing industrial coating and decorative paints. Decorative
paints available in wide range of combination account for 70% of the coatings total
production. While industrial paints share the balance of 30%. This rate is
diametrically opposite to the trend in the industrialized countries where industrial
paints account for 70% and Decorative paints for the balance of 30%.

27

The Indian paint industry is at the crossroads. All most all-major paint
companies have expanded or are expanding its capacity substantially. With demand
rising slowly competition is becoming increasingly intense.
The decreasing growth rate has made the paint companies to woo customers
aggressively. The customer is being offered 10% rebate in most products, Unheard
in the industry so far. Most companies have increased their discounts to their
dealers to unimaginable level dealers are offered higher credit levels, flexibility in
payment, foreign trips for selling even low value products and the like.

The

increasing competition to offer solutions through technology has made all the paint
make as offer a large number of shades through computerized colour dispensing
system.
Currently, the industry has a sales turnover of about Rs 3,600 crore. In terms
of volume, it corresponds to 5 lakh tones. The industry is composed of two sectors,
the organized and the unorganized. The organized sector controls 70 per cent of the
total market. The remaining 30 percent is in the hands of the unorganized sector,
consisting of 2000 odd small-scale units.
The industry is not capital intensive. It is however working capital intensive.
The demand for paints is fairly price-elastic and is linked to economic and industrial
growth. Demand is somewhat seasonal in nature-low during monsoon months, high
during festival seasons.
The Main Segments:
The industry comprises two main segmentsapplication-wise

1. Decorative/architectural paints
2. Industrial paints
The Decorative/Architectural Paint segment accounts for 70 percent of the total
paint market while in the industrial paint segment accounts for the remaining 30 per
cent. The industry is, however, expected to undergo a structural shift towards
industrial paints in the next few years, when its share is expected to go up to 50 per
28

cent in line with the global trend. Industrial paints thus hold greater growth potential
in the coming years. Actually with the decorative segment gradually bottoming out,
companies are already increasing their focus on industrial paints. Industrial paints
are technology intensive.
The Industrial Paints segment can be further classified into automotive
paints, marine, powder coatings, high performance coatings, and others. Original
equipment manufacturers (OEM) of products such as automobiles, furniture and
while goods such as refrigerators are prime consumers of industrial paint. The
automobile industry accounts for 50 per cent of the industrial paint market. A good
part of the demand is from shipping and heavy industry, Navy being the largest
customer in shipping.
Till early 90s paints were treated a s luxury items by the governments this
resulted in higher excise duty and higher end prices, leading low consumption of
paints in India. However the progressive reduction of the excise duty from 40% in
93-94 to 18% in 96-97, the companies have passed on the duty reductions as price
cuts.
However the per capita consumption of India is still a merge of .5 kg
compared to 26 kg in U.S and 1.2 kg in Thailand.
As already mentioned paints were viewed as luxury item by many even
today. Their productive value is not under stood and repainting is limited and if ever
done is once in 7 10 years. The government interest to protect all surfaces is also
low and the loss due to corrosion is estimated to be over Rs. 5,000 cores p.a. By the
central Electro chemical Research institute at Karaikad, Tamilnadu.
With a view to emphasize the importance of protection through painting the
Indian paints Association (IPA) had brought slogan in 1995 Paint and Protect.
This slogan is popularized through various communications however a lot needs to
be done to reach the millions of customers effectively.
Importance of Paints:
Generally paints and coatings are applied to products to protect them from
29

 Environmental Corrosion.
Protection of Food and Beverages in metal cans.
Improve aesthetic appeal.
Developments In Various Segments:
Two significant developments took place in the last three years in the decorative
paints segment.
Advent of Computerized Colour Dispenser
Sudden increase of Exterior Market.

Colour Dispenser:
Traditionally companies used to supply pre mixed shades to dealers who in
turn offered to their customers.
Asian Paints brought in the manual colour dispensing concept in 1998 and
offered 151 shades through it. This was the first salvo in offering in variety of
shades. This concept took off and Asian Paints went about establishing 2000 colour
corners which would stock the 151 shades. Additional shading requirements were
catered by providing colures as per the demand after mixing the bases with strainers
through colour dispenser other companies followed it soon and Goodlass Nerolac
introduce ed 301 shades under the same concept.
The concept is similar to that of the manual colour dispenser except that the
dispensing is automatic pre decided formula registered in the computer and the
shades are offered instantly shops to customers.
Today Berger Paints, is the 2nd Company to enter this system offering 5000
shades a clear indication of the trend. In the year 1997-98 has seen the introduction
of the concept by the two giants. Asian Paints and Nerolac. Today around 1,000
dealer shops are installed this concept.

30

CCD or it is called AUTO COLOUR DISOENCER have helped the

dealers to reduced their inventories offer a large variety of shades instantly,
consistently and accurately. Consumer have also benefited by this concept as the
shopping environment has changed dramatically with the advent of CCD.
Exterior Market:
The second development is the introduction of the 100% Acrylic Exterior
Paints and the focus of major companies on the Exterior Paints market.
Traditionally, the exterior paint market was catered to by KILLICK NIXON and
several other small players. The main offered were cement paints in India. But the
real change has be thought by Asian Paint through APEX its 100% exterior paint
market has started growing exponentially. In 1999 Nerolac introduced EXCEL in
the category and offered qualitative product at low material cost. Both Apex and
Excel have propelled the exterior paints growth by over 60% in 2002 and the trend
is expected to continue for at least of three more years.
A major development in 1997-98 was the Pay by scooter / car concept by
companies. As practiced in western countries, in India also the concept of taking
care of the complete painting job has been under taken by paint companies.
Goodlass Nerolac has commenced this concept with Mahindra cars by managing the
entire paint shop and being paint on the basis of per painted cars. Asian Paints also
followed it up with a similar tie up with LML for its scooters.
Powder Coatings
The other industrolycoat powers, in collaboration with VAISPAR
CORPORATION of U.S.
Higher performance coatings is another rapidly growing segment which is
used at fertilizer / sugar plants, airports, big construction projects, Berger, Asian.,
Nerolac dominates this segment due to their international collaborations and high
quality range of products.
Paints Defined

31

Technically paints can be defined as a homogenous fluid made from our

ingredients namely pigments, resins, solvents and additives which the raw materials
can be classified into four categories. A typical paint formation consists of over 500
input materials.
However the key raw materials are:
Pigment:- Titanium dioxide
Resins:- PAN, Pentaerythrill
Together these constitute 40-50% of the total raw material dependent on the
category of paints.
To conclude the following are the critical factors in success in decorative and
industrial paints.
The Main Players
Asian Paints, Goodlass Nerolac, ICI (India), Berger, Jenson & Nicholson and
Shalimar are the leading companies in the organized in the organized sector. The top
six manufacturers account for about 80 per cent of the market in the organized
sector in value terms. Asian Paints (AP) is the industry leader, with an overall
market share of 33 per cent in the organized sector. Threat of global competition is
minimal in the industry. AP dominates the decorative segment, with a 38 per cent
market share. Goodlass, a Tata company, is number two with a 14 per cent market
share. Berger and ICI have 9 per cent and 8 per cent shares, respectively, in this
segment followed by Shalimar, with 6 per cent.
Goodlass dominates the industrial paints segment, with 41 per cent market share.
AP is a poor second here, with a 15 per cent market share. Berger, ICI, and Shalimar
are the other substantive players in the sector, with 10 per cent, 9 per cent and 8 per
cent shares, respectively.
The dominance of Goodlass in industrial paints is largely the result of its technical
association with the Japanese paint major, Kansai Paints, which has a 29.5 per cent
equity stake in the company. Goodlass has a lions share of 70 per cent in the OEM
passenger car segment, 40 per cent share of two-wheeler OEM market and 20 per
32

cent of commercial vehicle OEM market. Goodlass also holds 20 per cent to the
white goods segment.

33

CHAPTER - III

Comparative Analysis of Asian Paints with Nerolac

The Indian paints industry is dominated by two large players namely Asian
Paints and Kansai Nerolac. In this article, we take a look at how these two
companies stack against each other.
First, we will discuss the business operations. Then we will have a look at the
financial performance and lastly the valuations of both these companies.
Business Overview
Asian Paints is India's largest paint company. It is the market leader in decorative
34

paints and has 24 paint manufacturing facilities. In the decorative paint category, it
has presence across all the four segments namely interior wall finishes, exterior wall
finishes, enamels and wood finishes.
Kansai Nerolac is the second largest paint company in India. The company is the
market leader as the original equipment (OEM) paint supplier to the likes of Maruti,
Mitsubishi and Tata Motors etc. Kansai Nerolac currently has five manufacturing
facilities in India.
In a nutshell, the focus of Asian Paints is more on the decorative segment while that
of Kansai Nerolac is on the automotive segment. The net sales of Asian Paints were
Rs 96.3 bn in FY12 while that of Kansai Nerolac were Rs 26.0 bn. Thus, in terms of
size, Asian Paints is almost 3.7 times Kansai Nerolac. Also, it may be noted that
Asian Paints has a well diversified global presence while the focus of Kansai
Nerolac is mostly limited to domestic markets.
Financial Performance
In the financial performance section, we will analyze the sales growth, margins and
return ratios of the two companies. For the purpose of comparison, we analyze the
data over the last five years. It may be noted that the data for Asian Paints is
consolidated while that of Kansai Nerolac is standalone. However, it may be noted
that there is very minimal difference between Kansai's standalone and consolidated
numbers as it has limited subsidiaries. Thus, the performance is comparable.
Now, let us have a look at the sales performance of both these companies. Over the
last 5 years Asian Paints' revenues have grown at a CAGR of 21.3% while those of
Kansai Nerolac have grown at a CAGR of 16.3%. Revenue growth of Asian Paints
is slightly better because it was able to capitalize on the real estate boom that was
evident over the last 4-5 years. This augmented the sales from the decorative
segment. Also, its overseas operations provided the company with the necessary
growth support.
Now, let us see the operating performance of both these companies.
Over the last five years average EBITDA margins of Asian Paints were 15.7%. For
Kansai Nerolac the same stood at 13.4%.
EBITDA Margins FY08 FY09 FY10 FY11 FY12
Asian Paints

14.9% 12.3% 18.4% 17.0% 15.7%

Kansai Nerolac

14.1% 11.5% 15.5% 13.6% 12.5%

Data Source: Company reports & Equity master

35

It can be seen from the above table that the EBITDA margins of Asian Paints are
higher than that of Kansai Nerolac in each of the past 5 years. This is predominantly
because Asian Paints has strong presence in the decorative segment where it can
exercise its bargaining power once the raw material prices rise. However, Kansai
Nerolac's bargaining power is on the lower side as it deals with large auto
customers. As such, its ability to pass on the price increase is limited to a certain
extent.
Now let us have a look at the return ratios of these two companies over the last 5
years.
RoE

FY08 FY09 FY10 FY11 FY12

Asian Paints

41.6% 33.1% 48.9% 38.5% 36.0%

Kansai Nerolac 20.2% 15.1% 21.4% 22.5% 20.3%

Data Source: Company reports & Equitymaster
It can be seen that the RoEs of Asian Paints are significantly higher than that of
Kansai Nerolac. Du Pont breakdown reveals that this is primarily due to better net
margins and asset turnover of Asian Paints. It may be noted that both the companies
are virtually debt free hence leverage has had limited impact on RoEs of either of
them.

Valuations
Now let us have a look at the valuation metrics of both these companies. For the
purpose of our analysis we compare the last 5 years trailing twelve month average
P/E, P/BV and EV/EBITDA multiples.
Valuation
EV/EBITDA P/E
Ratios
Asian
Paints

17.5x

P/BV

29.4x 10.8x

36

Kansai
Nerolac

12.4x

20.7x 4.0x

As can be seen from the above table, Asian Paints is more expensive than Kansai
Nerolac on all the three chosen valuation metrics. Superior performance in the past
has led Asian Paints to trade at a premium valuation to Kansai Nerolac.

Which is better?
In terms of margins, sales growth and return ratios Asian Paints is far ahead of
Kansai Nerolac. However, since it has superior return ratios and better historical
performance it also trades at premium valuations to Kansai Nerolac.

But in order to know which one is better at current levels we need to know whether
the valuation gap is expected to widen or narrow. If the gap widens between them
and Asian Paints trades at a further premium we need to see whether the
fundamentals support the expansion of multiple. If not, than Kansai would appear
relatively cheap and vice-versa. So, basically apart from financials one also needs to
keep a closer look at the valuations of these companies in deciding which one is
better

37

CHAPTER IV

DATA ANALYSIS
1. Age of the Respondent
Table 1:

Respondents Age

S.No.

Age

No. of Respondents

Percentage (%)

<=30

16%

30-35

18

36%

35-40

22

44%

>40

4%

50

100%

Total
Source: Primary Data
Figure 1: Respondents Age

38

Source: Primary Data

Interpretation
The above graph illustrates that majority of the respondents i.e. people are in the age
group of 35-40 years. Eight respondents in the survey are less than or equal to 30; 18
persons are in the age between 30-35 years; and only 2 persons are aged about 40 years.
2. Customer Purchasing Pattern
Table 2:

Customer Purchasing Pattern

S.No.

Occupation

No. of Respondents

Percentage (%)

Builders

20

40%

Contractors

10

20%

Engineer

18

36%

Others

4%

50

100%

Total
Source: Primary Data
Figure 2: Customer Purchasing Pattern

39

Source: Primary Data

Interpretation
The above graph shows that majority of the respondents (40%) are builders and 36% are
engineers. 20% of the respondents are contractors. The study reveals that all the
respondents are in the construction industry, so they are well capable of assessing the
painting products offered in the market by different companies.
3. Do you prefer using painting products of Asian Paints
Table 3:

Customers Preference Of Asian Paints Products

S.No.

Option

No. of Respondents

Percentage (%)

Yes

47

94%

No

6%

50

100%

Total
Source: Primary Data

Figure 3: Customers Preference Of Asian Paints Products

40

Source: Primary Data

Interpretation
The above graph illustrates that majority of the respondents prefer to use piantings of the
company. Of the total 50 respondents, 47 people said that they prefer in using products
of the company rather than its competitors. Only 6% of the respondents said that they
dont prefer much in using companys paints.
4. Are you satisfied with advertising policy used by Asian Paints?
Table 4:

Customers Satisfaction On Advertising Policy Of the Company

S.No.

Years

No. of Respondents

Percentage (%)

Highly satisfied

23

46%

Satisfied

25

50%

dissatisfied

4%

Dissatisfied

0%

Highly dissatisfied

0%

50

100%

Neither satisfied nor

Total
Source: Primary Data
41

Figure 4: Customers Satisfaction On Advertising Policy Of the Company

Source: Primary Data

Interpretation
The above graph illustrates that 50% of respondents are satisfied with the advertising
policies of the company. 46%, representing 23 people said they are highly satisfied,
while only 2 people said that they are neither satisfied nor dissatisfied.

42

5. Does the promotional activity attract you in buying products of the company?

Table 5:

Customers Opinion On Promotional Activities For Buying Paintings

S.No.

Option

No. of Respondents

Percentage (%)

Yes

43

86%

No

14%

50

100%

Total
Source: Primary Data

Figure 5: Customers Opinion On Promotional Activities For Buying Paintings

Source: Primary Data

Interpretation
43

The above table shows that 86% of the respondents are attracted to purchase the
products of the company by seeing the promotional activities. 14% of the people,
representing 7 respondents, said that they have occassionally or have seen the
promotional activities of Asian Paints for buying paintings of the company.

6. Through which advertising mode you got attracted to buy the products?
Table 6:

Media Mode, Asian Pains

S.No.

Option

No. of Respondents

Percentage
(%)

Television

18

36%

Hoardings

15

30%

Newspaper & Magazines

10

20%

Friends & Relatives

8%

Other

6%

50

100%

Total
Figure 6: Media Mode, Asian Paints

Source: Primary Data

Interpretation
44

The above graph depicts that 36% of the total respondents are attracted by seeing the
advertisement of the company through television, while 15 people said through
hoardings. 10 people said that they are attracted through newspaper & magazines and 4
people said they are attracted to purchase through information from friends & relatives.

7. What promotional activity has made you to buy the products of Asian Paints?
Table 7:

Type Of Promotional Activity

S.No.

Option

No. of Respondents

Percentage (%)

Discounts

28

56%

Gifts

10

20%

Holiday Tours

16%

Other

8%

50

100%

Total
Source: Primary Data

Figure 7: Type Of Promotional Activity

Source: Primary Data

Interpretation

45

The above graph indicates that 56% of the respondents agree for the reason of their
attraction because of huge discounts provided by the company if we place a bulk order.
20% said because of the gifts, while 8 said because free holiday packages provided by
the company.

46

8. How often you have seen the advertisements of Asian Paints?

Table 8:
S.No.

Observing Frequency Of Asian Paints Through Advertisements

Option
Many Times

No. of Respondents

Percentage (%)

10

20%

Often

12

24%

Some Times

16

32%

No Idea

12

24%

Total
Source: Primary Data

50

100%

Figure 8: Observing Frequency Of Asian Paints Through Advertisements

Interpretation
The above graph depicts that 10 of the total 50 respondents have seen the advertisements
of Asian Paints many times. 24% of the respondents i.e. 12 out of 50 people said they
have often seen about the products, while 16 respondents said that that they have heard
or seen the products of Asian Paints sometimes. So, it can be concluded that Asian
Paints have to increase its promotional campaign to become a market leader.
9.

Do you think advertisement practice play as a key sales promotional tool?

47

Table 9:

Customers Opinion On Advertisement Practices

S.No.

Option

No. of Respondents

Percentage (%)

Yes

48

96%

No

4%

50

100%

Total
Source: Primary Data

Figure 9: Customers Opinion On Advertisement Practices

Source: Primary Data

Interpretation
Of the 50 sample chosen, 96% of the respondents opined that advertisement play as a
key sales promotional tool that helps companies to stand in the market and earn good
profits. Only 4% of the people said advertisement doesnot play as a key promotional
tool.
10. Are you satisfied with the promotion policy of Asian Paints?
48

Table 10: Customer Satisfaction Towards Sales Promotional Policy

S.No.

Option

No. of Respondents

Percentage (%)

Strongly Satisfied

21

42%

Satisfied

20

40%

3
4

Neither Satisfied Nor

Dissatisfied
Dissatisfied
Total

10%

8%

50

100%

Figure 10: Customer Satisfaction Towards Sales Promotional Policy

Source: Primary Data

Interpretation
The above graph illustrates that majority of the customers (42%) are highly satisfied by
the sales promotion policy of the company, which ensures strong growth of the
company. 40% of the customers are satisfied, while only 8% are dis-satified with the
sales techiques.

49

CHAPTER V

50

FINDINGS
1. Majority of the respondents i.e. people are in the age group of 35-40 years
2. The study revealed that all the respondents are in the construction industry,
so they are well capable of assessing the painting products offered in the
market by different companies
3. Of the total 50 respondents, 47 people said that they prefer in using products
of the company rather than its competitors
4. 50% of respondents are satisfied with the advertising policies of the
company. 46%, representing 23 people said they are highly satisfied, while
only 2people said that they are neither satisfied nor dissatisfied
5. 86% of the respondents are attracted to purchase the products of the
company by seeing the promotional activities
6. 36% of the total respondents are attracted by seeing the advertisement of the
company through television
7. 56% of the respondents agree for the reason of their attraction because of
huge discounts provided by the company if we place a bulk order
8. 10 of the total 50 respondents have seen the advertisements of Asian Paints
many times
9. 96% of the respondents opined that advertisement play as a key sales
promotional tool that helps companies to stand in the market and earn good
profits

51

LEARNINGS
1. Its overwhelming to find out that the organization works in a systematic
manner. A blend of co-ordination will definitely enhance the performance of
the company
2. Quality clubbed with reasonable pricing and quick delivery made the product
of the company stand apart. The marketing campaign should focus on this
aspect more and make according to its line.
3. The strength of the company is its customized products. This very fact must
be highlighted in the marketing campaign.
4. As the products are reasonably priced, the ambit of the target consumers
should be stretched so that middle class consumers also fit into it.
5. The company must stick to a norm while giving discounts on repeat
purchase. This will certainly help in sales promotion in order to create repeat
purchase.
6. The company can introduce some reward schemes so that a person is
benefited after the fulfillment and over achievement of the target. This is
predominantly done to motivate the sales force and enhance their
performance from introducing new advertisement techniques.
7. In order to tap the potential market, the company should advertise its
products through various media, including newspapers, magazines, and
television etc.
8. The advertising should create enough interest in potential consumers to
ensure that the company should position itself as the one stop paint
company with all the colors one could want.
9. Company needs to look at its advertising operations. In todays environment
advertising is the media to reach the public faster.
10. Company should adopt more strategic audit of its advertising media.
52

CONCLUSION
Sales promotion is a most important aspect in any company. The study was
conducted in Asian Paints regarding sales promotion with special reference to
advertisement practices. The project was helpful to gain some knowledge about the
organization and also about sales promotion conducted in the organization.
Asian Paints is the most preferred company for purchasing paints, its recall
and recognition level is high .Sales promotion is the only factor that is influencing
its sales. The company has to really work hard at its advertising campaigns and
there should be consistency in advertising, and should not be only during its sales
promotion campaigns. It stands far ahead from its competitors, but to remain in
competition the company has to really improvise its products on a frequent basis.

53

ANNEXURE

Questionnaire
This study is a part of our course curriculum and is being conducted for Asian
Paints Ltd. The purpose of this study is to determine the sales promotion &
advertisement practices followed in the painting industry. Your responses will be
kept confidential and the information obtained will be used in aggregate and not in
person. We are grateful to you for your time and effort.

54

1) Respondents Age
[ ]
a) <=30

b) 30-35

c) 35-40

d) >40

2) Customer Purchasing Pattern

a) Builders

b) Contractors

[ ]
c) Engineer

d) Others

3) Do you prefer using painting products of Asian Paints

a) Yes

[ ]

b) No

4) Are you satisfied with advertising policy used by Asian Paints?

a) Highly satisfied

b) satisfied

d) Dissatisfied

e) Highly Dissatisfied

[ ]

c) Neither Satisfied nor Dissatisfied

5) Does the promotional activity attract you in buying products of the company?
[ ]
a) Yes

b) No

6) Through which advertising mode you got attracted to buy the products?
[ ]
a) Television

b) Hoardings

c) Newspaper & Magazines

e) Friends & Relatives

55

d) Other

7) What promotional activity has made you to buy the products of Asian Paints?
[ ]
a) Discounts

b) Gifts

c) Holiday Tours

d) Other

8) How often you have seen the advertisements of Asian Paints?

a) Many Times

b) Often

c) Some Times

d) No

Idea
9) Do you think advertisement practice play as a key sales promotional tool?
a) Yes

[ ]

b) No

10) Are you satisfied with the promotion policy of Asian Paints?
a) Strongly Satisfied

b) Satisfied

[ ]

c) Neither Satisfied nor Dissatisfied

d) Dissatisfied
Now the quantitative part of the questionnaire is over. We would like to end with a
few questions requiring your thoughts and opinions. Kindly answer the following
questions.

11)

What exactly you feel about the products of Asian Paints?

12)

Please suggest areas of improvement for promoting products of Asian Paints

1)
2)
3)
56

2. Asian Paints Changing the Rules of the Game -

A CASE STUDY
Asian Paints marketing leadership over competitors
Asian Paints entered Indian markets almost as a late entry when companies
like Good lass Nerolac, Berger Paints and others were ruling the roost in the
highly competitive paint industry. Their marketing Policy was to sell anything
from small to big but maintain the quality no matter what. They were also
constantly improvising and innovating. They were and are concentrating on
household markets offering a variety of shades to the buyer more than their
competitors. They also appointed dealers at key places in India and some of
57

the dealers were even given computerized mixing for the desired shades as
required by the customers.
Even small purchases can make the distinction between profit and loss,
survival and extinction. Asian Paints has for a long time now sold very small
cans of paint which are used to color the horns of bulls during the Pola
festival in Maharashtra and the auspicious small red and yellow stripes at
the bottom of the front door of Tamil Nadu homes. This might not always be
remunerative, but it has given a tremendous boost to the companys brand
recall. When the market is up, everybody makes money. But when the chips
are down, only good brands stay afloat.
Small efforts like this have made Asian Paints the leader in the vast Indian
market for decorative paints with a market share of 50 per cent. Companies
make industrial and automotive paints also but those account for not more
than a quarter of the overall market for paints in the country. These
segments too have seen some improvement in sale of late. In the last one
year, Asian Paints has improved its share by about 400 basis points. Rivals
include Kansai Nerolac, Berger and ICI (Dulux and Velvet Touch).
A dominating market share helps in many ways. A top executive of a Northbased paints company says that Asian Paints has a competitive ratio of two,
its market share, in other words, is more than twice its nearest rival, which
gives it a huge advantage over others in purchase of raw material as well as
distribution. It can afford to participate in segments where the profit margins
are not so good. It also uses it to leverage its position with the dealers.
Not just did it grab a larger chunk of the market, Asian Paints also
outperformed the industry by a sizeable margin in the quarter ending June
2009. Taking away share from rivals, Asian Paints grew its sales 18 per
cent, while industry revenues were up by 12 per cent. That happened in
spite of the severe bind that the real estate sector found itself in. Developers
have decided to go slow on new projects as real estate buyers, individuals
as well as companies have turned cautious. Individuals too are not building
homes at the same pace as before. Most paint companies have an eye on
the current festival season. If people paint their homes in large numbers,
there is still a slim chance that they could reach last years 18 per cent
growth in sales revenue. Or else, they will have to settle for lesser growth.
Asian Paints looks on course for 20 per cent growth.
The trick is to discover the right catchments, keep track of them and stay in
close touch with the customer. What helped Asian Paints weather the
slowdown, which was more pronounced in cities such as Mumbai,
Bangalore but less so in Delhi, was the brisk business that it did in the more
resilient economies of smaller cities and towns. Tapping its strong dealer
network, the company was able to cash in on the relative prosperity in these
markets and take away the share from competing brands.

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3. Asian Paints Brightens Up India's Growing Middle Class An Article

If you wanted to have a paint company, youd want to be in an industrializing
country, where millions of people were joining the middle class and buying their
first homes. And you would have started it decades ago, lining up paint dealers in
every little town so youd already have a lock on the market when the country takes
off. To keep your head start, youd obsess about customer service, stay on top of the
latest technology and hire professional managers trained at the best schools. This is
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how Asian Paints came to dominate the walls and ceilings of India, creating three
billionaires along the way.
Asian Paints started in 1942, reached the top of the Indian market in 1967 and has
stayed there ever since. It now sells through 35,000 dealers across India. Over the
last five years its revenue has nearly doubled, to $2 billion for the year ended Mar.
31. Profits have more than doubled over the same period, to $205 million for that
year. And the stock has jumped 140% since August 2008, giving it a market
capitalization of $6.3 billion. Its now Asias third-largest paint company, behind
Japans Kansai and Nippon, and the worlds 13th largest. This year it appears on the
Fab 50 for the third time in a row. The company knows its customers well, says
Adrian Lim, senior investment manager at Aberdeen Asset Management, a U.K.
firm that owns 1.6% of Asian Paints. It has resilient business plans, healthy cash
flows and a strong balance sheet.
The Mumbai Companywhich sells interior and exterior paint and similar products
has been refashioning itself into a home decor company, hoping to benefit from
Indias soaring urbanization and the increasing willingness of customers to spend
more on their homes. Theres been a massive transformation in the Indian
consumer, says K.B.S. Anand, Asian Paints managing director and chief
executive. Earlier, people used to paint when the walls were peeling. Now its
about decor. A person can choose a particular pattern with a particular color. We
perceived this before most of our competition.
To capitalize on the trend, the company launched a premium range of paint in 2004
called Royale Play. Each paint adds a different special effect to interior walls,
lending them a metallic luster, a soft sheen or a stucco finish, for example. Asian
Paints lined up Bollywood star Saif Ali Khan to promote the premium line.
Along with the paint, the stores have also gone up market. In 2009 the company
introduced dealer-owned Colour Idea stores and now has 100 of them. Unlike the
traditional dealers who sell through hardware stores where paint cans jostle
alongside hoes and hammers, the new stores focus on matching customers to the
right color. Theyre outfitted with color boards displaying samples of interior and
exterior finishes, and theres a color consultant on hand who provides computer
visuals showing how a room will look once its painted with a certain color. Asian
Paints also runs two high-end showcase stores, in Mumbai and New Delhi. These
dont sell any paint, but there are wall upon wall of displays showing various shades
and textures under different light settings.

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The companys four founders sure werent thinking signature stores when they
began making paint during World War II. With the war curtailing paint imports,
Suryakant Dani, Champaklal Choksey, Chimanlal Choksi and Arvind Vakil decided
to make paint locally. Today Asian Paints does business in 17 countries in the
Middle East, South and Southeast Asia, the Caribbean and the South Pacific, and
operates 25 paint making plants10 in India and 15 overseas.
Descendants of three of the four foundersthe Danis, Chokseys and Vakilsown
more than half the company, and they each have fortunes crossing $1 billion. The
Choksey family exited in the late 1990s (see box, below). Two representatives from
each of the three families sit on Asian Paints 14-member board. Members of the
second generation are in nonexecutive positions, but two third-generation members
are involved in day-to-day operations.
Anand, 58, took charge in April of last year and is now spearheading three
initiatives: a foray into the home improvement segment, bolstering the industrial
paint division and boosting the international business. Last month Asian Paints
bought a 51% stake, for $20 million, in Indian kitchen company Sleek International,
which sells modular kitchens and kitchen accessories. This is an aligned business,
says Anand. The basic customer is the samethe homeowner. This is a large
potential market thats growing. Eventually we want to be in all areas of home
improvementfrom furnishings to bathrooms.
With industrial paint Asian Paints last year forged a second joint venture with the
U.S. PPG to make industrial coatings, which include floor coatings and road
markings. (The first was in 1997 for automotive coatings.) While industrial paint
makes up only 6% of revenue, its important for diversification. As for the
international business, which contributes 13% of revenue, the company is looking to
do more business in emerging markets such as Bangladesh and Nepaland in the
Middle East, which supplies half its overseas revenue. It wants 25% of revenue to
come from international operations eventually.
Back in India the economy has been slowing for three years, and that is creating
headwinds for Asian Paints. Another challenge is the falling rupee, because the
company imports most of the raw materials for its products. It raised prices by 5%
last year and has already announced three price hikes for this fiscal year to counter
the rupees fall. Company executives are philosophical about the slowdown. If the
economy doesnt grow [faster] and purchasing power is reduced, I dont think paint
is the most important thing that youll buy, agrees Anand, who has seen many
down cycles in his 34-year stint with the company. Well have to learn to live with
lower growth.
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But the long-term story is solid. Indias urban areas are expected to gain 200 million
people by 2030, meaning more construction, more houses and more paint. The
Indian paint market certainly has room to grow: Annual paint consumption is only
1.9 kilos a person, as opposed to 5.5 kilos for the Asia-Pacific region. Paint
consumption in rural areas is growing even faster than in the country overall, and
thats where the company has long been the strongestAsian Paints wooed small
shopkeepers in villages and tiny towns early on because foreign companies
dominated paint sales in the cities.
When everybody was concentrating on urban markets, they realized that there
could be a big rural ?market, says N.K. Bhatia, a past president of the Indian Paint
Association. Even the colors that Asian Paints produced in the early years were a
nod to what rural India wanteddark aquamarine or deep daffodil, because dark
shades were considered to be powerful.
Loyal dealers form the backbone of Asian Paints. Take S. Muralidharan, who has
been a dealer for 25 years, selling paint to large builders and to retail buyers who
walk into his store in Chennai. We get lots of customers because of Asian Paints
brand image and the quality, he says. The service is good, the supply is good, and
the dealers are taken care of. The company has nearly three times the number of
dealers as Berger PaintsIndias second-largest paintmakerand every year adds
1,000 to 2,000 to the mix.
Asian Paints certainly found itself well positioned when the boom times came, but it
also didnt blow its lead. Indeed, Nomura Securities notes that in the past decade the
company has gained market share. One strategy was to find more ways to stay close
to its customers as it kept getting bigger. In the late 1990s it started a customer help
line, which now receives 2,000 calls a month. It offers home-painting services in 13
citiesan employee comes to the home, sizes up the job, and then brings in painters
who cover up the furniture and do the work. It sent out Happy Painting Guides to
300,000 customers last year. It provides color consultancies, in which an employee
with interior-design training comes to the home to suggest what can be done for the
walls. It also trains 8,000 painters a year in two-day workshops to ensure that they
apply its premium paint the right way. The customer interaction leads to insights:
Asian Paints has started offering 200ml samples of its premium paint at a nominal
price, allowing a customer to paint a swath of a wall to see how the color will look
a significant improvement over the shade card.
Asian Paints pioneering use of technology has also been critical to its growth. It
bought its first mainframe computer in the 1970sback when computers were
virtually unheard of in India. Soon it began using computers to forecast demand and
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improve the supply chain. It also introduced computerized color-matching back in

the mid-1970s. There were PCs in branches by the early 1980s. Today it dishes out a
free paint app for smart phones. A key factor in Asian Paints coming out ahead of
the competition is the significantly better supply chain it had, which allowed the
company to service a much larger number of dealers than the competition, says
Manish Jain, research analyst at Nomuras Mumbai office.
Analysts also say Asian Paints understood early on the importance of having a good
management team. It started hiring from premier engineering and business schools
in the 1960s. Anand himself holds an engineering degree from the Indian Institute of
Technology, Bombay and a diploma in management from the Indian Institute of
Management Calcutta. The son of a Navy officer, he was hired straight off campus
in 1979 and has done everything from running a paint factory and handling labor
negotiations to leading the decorative business.
These days Anand has his eyes on the competition. All the major players in the $5.3
billion Indian paint market are expanding capacity and seeking to boost market
share. Kolkata-based Berger aims to double its revenue in the next five years to top
$1 billion; it bought the Indian decorative paint business of U.S. paint company
Sherwin Williams in March. Kansai Nerolac, the third-largest Indian paintmaker
and a wholly owned subsidiary of Kansai, has raised its capacity by 25% in the past
year and signed Bollywood star Shah Rukh Khan to pitch its range of paint.
The worlds largest paint company, the Netherlands AkzoNobel, entered India in
2008 with its purchase of British paint major ICI and plans to reach $1.3 billion in
annual revenue by 2018.
The multinationals are seeing a slowdown everywhere, so ?everyones going to try
things in India, says Anand. Competition, while ?already stiff, will get stiffer.
But the ?competition notwithstanding, Asian Paints appears to have figured out
how to grow ahead of the market, says Nomuras Jain. We expect it to maintain its
leadership in the long term.

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4.

Brochure, photos & leaflets

Broacher:-

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Photos:-

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Leaflets :66

BIBLIOGRAPHY

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Books:
1. Philip Kotler (2004) . " Marketing Management " , ISBN 81-7808-654-9
2. Philip Kotler, Swee Hooring, Vhin Titing Tan (1998), Marketing
Management Pearson Prentice Hall 11th Edition New Delhi.
3. Philip Kotler (1997) Principles of Marketing Pearson Prentice Hall 11th
Edition New Delhi.
4. G.C.Beri (1997) Marketing Research Tata M.C.Graw Hills New Delhi.

Web Sites:
http://www.asianpaints.com/
http://www.marketingteacher.com/
http://www.forbes.com/
http://www.businessstanderds.com/

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