Asian Paints has been India s largest paint company for more than four decades; it

s nearest competitor is less than half of its size. The journey from a garage st
artup whose name was randomly picked by its founders from the telephone director
y to its pre-eminent position today has been made possible through excellence in
every step of the value delivery process. It is interesting to note the evoluti
on of its strategy over the decades, especially since many of the leaders in con
sumer products from the days of the license raj have failed to remain relevant a
nd face competition of the post-liberalization era.
The analysis is based upon the value chain mentioned below:-
Choose the value
Segmentation
Targeting
Positioning
Provide the value
Product development
Service development
Pricing
Manufacturing
Distributing
Communicate the value
Sales force
Sales Promotion
Advertising
Choose the value
The target segment for Asian Paints has changed over a period of time in respons
e to the changing demographics and strategies of its competitors. When it entere
d the market in the 1940s the space was dominated by multinational companies lik
e Jenson & Nicholson. The foreign companies appointed a few traders as their who
lesale distributors and allowed them to perpetuate a situation of monopoly. Thes
e distributors had neither the compulsion nor the motivation to invest in distri
bution infrastructure and expand into semi-urban and rural areas. As a result, p
aint dealers concentrated on big cities where they could make the sales without
much investment in distribution infrastructure and market development. Seeing th
at this bulk buyer segment although huge at that point of time was stagnating, A
sian Paints decided to ignore this segment for the present and go to individual
consumers. Asian Paints positioned itself to serve the rural markets with small
pack sizes, allowing it to reach the remote parts of the country.
After successfully capturing the rural markets, Asian paints successfully expand
ed to target the mid-tier and premium segment over the course of the next few de
cades. The strategy of creating sub-brands with a distinct promise for each segm
ent allowed it cover the entire market. So while the Utsav and Tractor Acrylic i
n the economy segment offered protection and adhesion, the Royale Play offered s
uperior finish, color range and special effect finish.
Provide the value
Asian Paints has been at the forefront of innovation, reaching the markets with
new products before its competitors. At the time of Asian Paint s entry, paint com
panies were supplying paints in containers of 500 ml or larger. Asian Paints saw
that there was a felt need in the market for paints in smaller packs and harnes
sed the business opportunity by supplying paints in small packs sizes of 200 ml,
100 ml and 50 ml. This proliferation in pack sizes contributed immensely to its
success in rural markets.
In the early 90s, Asian Paints was the first to offer 150 shades to consumers, t
his soon expanded to over 1500 shades in the mid 90s. This was made possible thr
ough a tinting mechanism that allowed it to offer innumerable shades to the cust
omer with only a limited set of bases and colorants that were manufactured and t
ransported throughout the supply chain. Being in the business of colors , Asian Pai
nts utilized color to achieve differentiation.
Asian Paints also innovated to offer services such as HOME SOLUTIONS that offer pa
inting services in select cities. It carries out intensive research with interio
r designers, architects and the fashion community to arrive at trend movements i
n color. This study has gone a long way in helping various industries decide the
ir color combinations for a range of products ranging from furnishings, flooring
s to home accessories, while also ensuring that Asian Paints is in-tune with the
latest trends.
Along with product launches, Asian Paints focused on distribution, as it realize
d that distribution and service were the keys to success in the paints industry.
Right from the start, apart from the urban markets, it also focused on small to
wns with population of up to 10,000, and on rural markets. Unlike other companie
s, field officers dealt directly with the dealers in small towns. With 22,000 de
alers, Asian Paints has the largest network of distributors among the paint comp
anies. It has a service level of more than 85 per cent whereas that of other lar
ge paint companies falls between 50 and 60 per cent. Asian Paints has been able
to keep costs low while maintaining the high service levels through a strong com
mitment to manage inventory and dealer credit.
Communicate the Value
Asian Paints has managed to garner a huge mindshare of the consumer in an indust
ry that has been traditionally commoditized. It has done this by remaining consi
stent to its core purpose of continuously rejuvenating the living and working sp
ace of people and bringing joy to their lives, even while the message might have
evolved over a period of time.
The communication from Asian Paints centered on festivity and joy till the early
90s. This was born from the observation that demand for paints was highly seaso
nal and peaked around Diwali. However, by the mid 90s, the consumers had changed
with festivals losing importance in the overall scheme of things and demand for
paint itself becoming less seasonal.
In the year 1999, Asian Paints revamped the brand when it was found that it curr
ently lacked some of the values like contemporariness and global outlook. The ol
d mascot Gattu was discarded to adopt a more contemporary brand personality. A rev
amp was undertaken in the entire packaging and visual identity of the brand to b
e attractive to the growing middle-class in urban markets.
Asian Paints has always been more successful in striking a chord with the consum
er and clearly conveying the functional and self-expressive benefits. It consist
ently remained a step ahead of the competition in its communication, such as the
Mera waala cream.. campaign to covey the wide color range , and while its competi
tors were busy talking about the color range, Asian Paints saw the increasing in
volvement in home making to come up with the Har ghar yeh kehta hai . campaign.
With its superior performance in all aspects of the value delivery process, it i
s not difficult to see why it has been a success. More important however is the
lesson in the success of Asian Paints for all companies to constantly rejuvenate
themselves in the face of changing environment while remaining loyal to their c
ore purpose.