InnoVision 2016

Berger Paints Case Study

Competition

Group Name:
Raahu-Ketu
IIM Trichy

Members Name:
Amit Singh Tolia
Prem Kishor
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Company background
Industry Paint
Objectives:
Founded 1923 Hard objectives
To bring the greater number of
CEO Abhijit Roy
local applicators to the Berger
Employee strength 2800+ fold.
Soft objectives
Headquarter Kolkata To increase customer
Market Share 17.5% satisfaction, Customer loyalty,
Market share and sales
Distribution network 25,000+ dealers

Revenue Rs 4500 crore

Source: https://www.bergerpaints.com/

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Industry Analysis
New Entrants
Technology, Initial investments
Distribution Network needed to
Start (Crucial)

Suppliers Competitors Customers

Presence of Unorganised
Sector limits the price
Negotiation.
Higher price war through
Due to wide availability
Product differentiation
of choices

Industry is attractive with rising

demand due to increased
purchasing power and high
disposable income and sharp Substitutes
decline in raw material and Availability of substitute
crude oil prices resulting in Is negligible
better profit margins.
Government schemes favoring Weak Moderate High
the industry by creating more
demands.

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Technology VRIO Analysis
Berger Express Painting (XP) a
Valuab Rare Costly to Organized to
technology to make it a Faster, le imitate capture
Cleaner and Better experience for value
the customer. Technolog
The tools: y

1. Sanding Machine with in-built For Berger, Technology is a source of

vacuum suction system to keep temporary competitive advantage, but they
the surroundings dust-free and can exploit this to collaborate with
minimizes paint Contractors to convert this temporary
drippage/spillage (cleaner) advantage into Sustained Competitive
advantage and capture the maximum value.
2. Auto roller, further process
speeds up the painting
processes, reduces the time by
half (Faster).
3. Airless Paint sprayer, delivers
better surface preparation and
a uniform finish which is
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Data about Applicators
Most of the Applicator earns for hand to mouth wages, and its a very unorganized sector,
which is controlled by contractors who handles a group of workers/Painters. Therefore the
company should concentrate on these contractors to sell the machines and to get the
applicators on board. The applicators charges on two basis: Per square feet model
which includes cost of paint, primer, sealer and labor cost and Per day charge Model
which includes only labor cost.
Per sq ft Model Per Day Charge Model
Charges varies from Rs10-35/sqft depending Charges of painters per day is about Rs400-
upon Brand of the paint and the nature of 500(depending on the expertise) and helper
painting. E.g. Interior, Exterior etc. gets Rs250-300.
Suppose applicator have to paint 10000sqft Suppose applicator have to paint 10000sqft
which normally takes 15 days. Now using the which normally takes 15 days. Now using the
express service he can do it in 8 days saving express service he can do it in 8 days. Now he
the labor cost of 7 days, which will add to his can charge extra premium(Rs700 in this case)
profit. for this Faster, Cleaner and Better service,
Saving => 7*500(daily wage of painter) which will increases his daily wage and giving
+7*300(Daily wage of helper)= 5600. him extra time to get more work.
Before/After scenario:
1. Earnings=>[(15*500)+(15*300)]=12000
2. New Earnings=>[(15*700)+(15*300)]=15000

Source: primary survey and interviews of Contractors

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Steps needed to taken by Berger
Company have to reach out to Applicators to explain the benefits of the new
Express Painting Technology and convince them to buy their machine, this will
come with the Training and certification of painters.
Company needs to collaborate with local contractors(painting) by explaining them
the risk sharing format.
Code generation to form database, send painters and get warranty (only in case if
Bergers certified people paints)
Company will provide a toll free number to customers to get
the available painters in their area. Toll free Number
To avail the warranty customer has to use the one time code
shared with them at the time of purchasing (Every purchase Shared One Time
within a minimum limit will be liable to get the code). Code
Certified local painter will come to the doorstep of the
Certified painters
customer to do the paint job, he will charge the payment slight Code System
at less cost
higher then normal fee.
Customer address will be stored in the database for future use,
in case he needs a repair. Risk Sharing
Local painters will be not bind to work only for Berger, but
priority will be given to Berger customers. Priority to Berger
Risk Sharing will be there between Berger and Contractor if customer
any complain comes. Berger will provide Paints but the labor
cost will have to bear by contractor, encouraging them to do
6 the job properly to address minimum complaints.
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Company-Customer value
Company Value Customer Value

Market value will increase as Loyalty Bonus, With the code usage
better customer satisfaction due next time on purchase loyalty
to quality work discount will be provided.
Customer loyalty n retention will Less Cost, Cost of painting is
increase, customer database coming down.
(code usage, feedback) Hassle free Service, Cleaner better
On the basis of feedback company faster, warranty included.
can give incentive and rating to Getting service by Certified
the painter. workers.
Risk sharing on cost in case of
revisiting because of warranty.
Competitive advantage (vrio)
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Applicator Value
Increased Earning, they can charge premium for
their expertise service.
Will be able to do more work, free to work
anywhere.
Incentives for better performance. With more
service they can earn.
Applicator Value
Training and certification from Berger will lead to
increase their market value which further help
them to get more business.
,
Award and Recognition.

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Thank You