INTERNATIONAL MANAGEMENT INSTITUTE

NEW DELHI

MARKETING MANAGEMENT-2 PROJECT REPORT

ON
“ASIAN PAINTS”

SUBMITTED TO: PROFESSOR NEENA SONDHI

SUBMITTED BY: GROUP NO.-06
PGDM SECTION - A
AVIK PAUL (17PGDM012)
DIVYA GUPTA (17PGDM019)
MANISHA JAIN (17PGDM030)
PRANAV SONI (17PGDM035)
SHASHWAT SURYAVANSHI (17PGDM049)
SOMRIT BASU (17PGDM053)
Stage 2 report
Word count: 4720
Table of Contents

EXECUTIVE SUMMARY .................................................................................................................................. 4

Product .......................................................................................................................................................... 4
Product Mix ................................................................................................ Error! Bookmark not defined.
Product life cycle (PLC).............................................................................................................................. 6
Levels of Product for Asian Paints............................................................................................................. 7
Pricing: .......................................................................................................................................................... 7
Placement/Distribution Strategy: ................................................................................................................. 8
Promotion ..................................................................................................................................................... 9
BUSINESS PLAN ........................................................................................................................................... 10
Goals ....................................................................................................................................................... 10
Vision of the company:........................................................................................................................... 10
Decorative segment ................................................................................................................................ 11
SITUATION ANALYSIS .............................................................................................................................. 11
BUSINESS STRATEGY: .............................................................................................................................. 12
COST BENEFIT ANALYSIS ............................................................................................................................. 13
ASSUMPTIONS AND METHODOLOGY ..................................................................................................... 13
CONTINGENCY PLAN ................................................................................................................................... 17
ACKNOWLEDGEMENTS: .............................................................................................................................. 18
METHODOLOGY: ......................................................................................................................................... 18
Appendices.................................................................................................................................................. 19
APPENDIX 1 ............................................................................................................................................. 19
APPENDIX 2 ............................................................................................................................................. 20
REFERENCES ................................................................................................................................................ 22
EXECUTIVE SUMMARY

Asian Paints Limited is the largest manufacturer, seller and distributor of paints, coatings and other home
décor solutions in India. For this project we have communicated with company representatives and
retailers to find out the marketing mix of the company. This report contains the four Ps of marketing,
which are, product, pricing strategy, place and distribution and promotion.

This project includes the study of the business environment in which the company operates and the
situational analysis. The company’s long term future goals have been studied to provide a strategy which
the company can adopt in the future. This strategy has been decided after a detailed cost benefit analysis.
A contingency plan of action has also been provided.
Product
Product Mix

The products in the marketing mix of Asian Paints provide complete painting solutions ranging from paint
products to accessories and tools for painting.

• Asian Paints’ products include brands like Asian Paints Royale targeted at premium segment. It is
known to provide special effects and textures for the perfect look.
• Apcolite, tractor emulsion, tractor distemper targeted at economy segment.
• Asian Paints’ Undercoats include Decoprime Advanced Cement Primer, TruCare Interior Wall Primer,
TruCare Interior Wall Primer and Royale Wall Base coat.
• Other products include trucare 2x primer putty mix, trucare super putty and acrylic wall putty.
• Asian Paints also provides protective coatings like epoxy coatings, heat resistant paints, powder
coatings for industries manufacturing refrigerators.

Product life cycle (PLC)

Industry PLC-

Decorative Paint segment

This segment is in the maturity level. As the basic main components of paints stay the same and industry
is focused on bringing in product differentiation for keeping the industry afloat and steadily rising. Also,
this segment is mainly considered a luxury segment. So, with rising disposable incomes there is a gradual
shift in the preferences of people from the traditional whitewash to higher quality paints like emulsions
and enamel paints

Industrial Paint segment

This segment of the paint Industry is still in the growth phase. This segment started evolving late with the
entry of Maruti in 1983. Industrial paints are segmented into automotive coating, high performance
coating, powder coating and coil coating. This segment is continuously viewing new developments and
increasing share.

PLC for Asian Paints-

Introduction
This is the stage of low growth rate of sales as the product is newly launched in the market. For Asian
Paints, products like Royale Play, Asian Paints Semi-Gloss Enamel, Asian Paints Apcolite Premium Satin
Enamel falls under this category.

Growth
Growth comes with the acceptance of the innovation in the market and profit starts to flow. The products
like Emulsions fall under this category which includes products like Asian Paints Apex Ultima, Asian Paints
Royale luxury Emulsion.

Maturity
In this stage sales slowdown as the product has already achieved its acceptance in the market. Aggressive
competition in the market results the profit to acme at the end of the growth stage thus beginning the
maturity stage. Asian paints Tractor Acrylic and synthetic distemper, Asian Paints Utsav Acrylic Distemper
may fall under this category.

Decline
This is the stage where most of the product class dies due to low growth in sales. Market may perceive
the product as ‘old’ and may not be in demand. Lime Powder (choona) and stainer which has been a long-
time tradition in India is slowly weeding out from the urban tier 1&2 cities though it may be cash cows for
regional players in rural areas.
Levels of Product for Asian Paints

Ezycolour Consultancy

Royale Atmos

Apcolite Emulsions

Royale Emulsions

Tractor Distemper

• With over 1000+ shades to choose from, Tractor Distemper offers a wide choice in interior wall paints
• Royale Emulsions are perfect if you're looking for something extraordinary. This range of luxury
finishes gives your walls a classy makeover while being high on performance
• Apcolite Emulsions is a dependable range that you can use to give your walls a long-lasting matte,
satin like or lustrous finish
• Royale Atmos is a first of its kind paint that not only looks beautiful, but also cleans the air making it
purer than before. It’s Activated Carbon technology reduces harmful pollutants from the air
• The next big act in the B2C painting services with its Ezycolour Consultancy for offering colour, décor,
and Vastu inspired solutions to customers

Pricing:
Asian Paints follows a cost plus pricing mainly. The pricing is decided as cost plus. For lower priced
products normally the cost of production etc. comes out to be 60% of price and for the higher priced
products it turns out to be 40% of price. On an average this cost comes to 50% for all the products
combined. Of the remaining 50% of the price, the allocation is done as follows:

Logistics with Transport/Clearing and Forwarding Agents (C & F) Agents/Super Stockists margins
constitute 5%, retailers’ margins of 20% and the dealers are given 7% of the price as margin respectively.
Lastly scheme and promotions constitute approximately 8% to 10% of the price. The balance 8% to 10%
is net benefit to the company or net margin to the company. (All data are primary. Please Refer
Appendix)
The following snippets give a comparative idea of the prices offered per litre (Stock Keeping Units i.e. SKU)
by Asian Paints and Nerolac for seven of their select products. While the pricing strategy and the rationale
of pricing for Asian Paints could be deciphered, the same for Nerolac could not be as the idea on costs for
Nerolac was unavailable. This is a limitation of the Study.

Data Source: Asian Paints Colour World Dealer, Maharani Bagh, Delhi

Asian Paints Price per SKU (litre) for Select Products.

Data Source for Nerolac: https://aapkapainter.com/paints

Nerolac Price per SKU (Litre) for Select Products.

Placement/Distribution Strategy:
From the interview with Mr. Ashoke Kumar Paul, former C & F Agent of Asian Paints, we found that Asian
Paints follows a Multi-level channel of distribution mostly consisting of Manufacturer, Wholesaler, Jobber,
Retailer and Final Customer respectively. In certain areas where the company either experiences high
sales volume or cannot cater to the demands through its own channels, it employs super stockists. Super
Stockists enjoy higher commissions compared to C & F Agents as they literally buy the products on
ownership basis i.e. once the products are transferred to super stockists; company bears no risk of
ownership.

Asian Paints has nearly 120 depots across the country. Usually depots are opened up in a particular place
based on sale in the particular area. For Example, a city like Mumbai may have multiple depots. Depots
ensure proper maintenance of the products. However the distance a particular depot caters to varies, but
in no case does it exceed the range of 250-300 km. This is done to ensure a maximum delivery time of 24
hours. Each depot has an area manager, five sales officers (on an average) and 200-250 dealers.

The company promises delivery time to customers based on distance: Local deliveries (up-down i.e. two-
way distance coverage being 50 km) take 4 hours, up to 100 km (two-way) it takes 8 hours etc.

To encourage the dealers to sell more company encourages them through schemes like Volume Purchase
Target Schemes, Prompt Pay Schemes, and Three Month Target Schemes etc.

Margins and Manufacturing Costs have already been covered under Pricing Strategies.

As far as the Shelf Space is concerned Asian Paints again leads the way. A survey done by us in two stores
revealed the following- Durga Paint and Hardware in Delhi gave 75% shelf space to Asian Paints compared
to 25% given to Berger Paints. Another Store in Varanasi gave 60% shelf space to Asian Paints, 25% to
Berger Paints and only 15% to Nerolac.

Lastly a survey done at Asian Paints Colour World Dealer, Maharani Bagh, Delhi revealed an idea about
the process as to how the dealers cater to the needs of the final customers. Mr. Durga Prasad, the
proprietor explained the process: Customer comes to the shop sees the Set Card containing various colour
combinations. A computer-operated Machine is installed in the store where if the colour code referred to
in the Set Card is inserted the Machine automatically gives out the desired colour as output. Thus the
Machine effectively does the colour mixing. The customer is then given the container containing the
desired colour selected by him. Usually a dot is put on the container when it is sold to the final customer.
The customer has to come to the store to take delivery; Colour World Dealer does not deliver their
products at customer's doorsteps. (Written on basis of Primary Data. Refer Appendix).

Promotion
In 1950s, the company used the slogan "Don't lose your temper, use Tractor Distemper" to promote its
longer lasting washable distemper. In 1954, to target middle class segment, famous cartoonist R. K Laxman
created a mascot ‘Gattu’, a young, mischievous boy with a paint brush in his hand. One of the ads involving
Gattu showed him painting a bald man’s head with the quote “Any surface that needs painting needs
Asian Paints”. Gattu became a very popular figure and was a part of every print and electronic media
advertisements for more than four decades during which it led to tenfold increase in sales.
Later, Ogilvy& Mather, the famous advertising agency was hired to create an ad campaign for AP. Gattu
was slowly phased out in the years 2000 – 02 and the new logo with more upmarket look was adopted to
depict the brand as sophisticated and technologically advanced.
To ensure that the name Asian Paints comes up to the mind of every individual who thinks of painting his
home, the company launched ad campaigns that have a family feel to it. The slogan “Har Ghar Kuch Kehta
Hai” tapped the emotional side of the prospective and existing consumers. Relating painting to important
life events like marriage, child birth and festivals connected the audience on an emotional level.
As the company moved away from Gattu, it looked at celebrities to create an impact. One of the ad
featured Ranbir Kapoor inviting rain as his home is painted with durable Asian paints which are not spoilt
in the rain. The slogan “Barish ko aane do” was used. Another ad showed Actress Deepika Padukone
painting a wall to celebrate achievements of father Prakash Padukone. AP’s ads have the element of
humor and jingle and connect to the audience.
Most recently, the company’s communications are no longer one sided. The company is using online
0resources to engage directly with end users. From talking to customers about home painting, the
company is moving towards complete home décor solutions and engaging customers in DIY through
websites like Pinterest, YouTube. The company’s website allows the audience to upload a picture of their
wall and experience how different shades would look on the wall.
Apart from advertising, the AP has also incentivized its distributors and painters through distribution of t-
shirts and caps and added privileges to its members.

BUSINESS PLAN
Goals
Vision of the company:
We want to be an innovative, agile, and responsive world class research and technology organisation
that’s aligned to future customer needs and catalyses the growth of the company across existing and
future businesses.

The goals of the three segments of the company are as follows:

Decorative segment
Though a market leader in this segment, Asian Paints has an objective to increase its sale in this sector. It
plans to add variety in economic paints sector, focus on marketing in rural market and strengthen its
position in emulsion paints. The company plans to achieve this by focusing on ad campaigns for both rural
as well as urban market.
Industrial segment
The company faces strong competition in industrial coating segment. It aims to fight this competition by
focusing on the product and enhancing quality with the help of technological upgradations.
Automotive segment
The target customer for this product is the automobile industry, both Indian and foreign. To increase
operational profits, the company aims to reducing variations and wastages in supply chain.
Marketing Objective
• To capture rural marketing with low price product – ‘UTSAV’.
• Targeting rapid growth in overseas market.
• To market the products through online mediums.
The company is looking at product innovation (developing water based paints), improving shopping
experience and a better complaint redressal mechanism for future growth.

SITUATION ANALYSIS
Asian Paints is the largest paint company in India with a gross turnover of Rs. 14,162.13 Crores and a profit
of Rs. 1803.10 Crores for 2016-2017.

Starting its operations in 1942 the Company gained market leadership in 1967 and has been able to retain
that position for almost half a century. As of 2015, it has the largest market share in the paints industry
with 54.1%. The Company is engaged in the business of manufacturing, selling and distribution of paints,
coatings, products related to home decor, bath fittings and providing of related services. Its products
include wall paints, decorative paints, automotive paints, industrial paints etc.

The Company has the following vision: "We want to be an innovative, agile, and responsive world class
research and technology organization that’s aligned to future customer needs and catalyses the growth
of the company across existing and future businesses." With this view in mind and to have a global
presence the company has set up 24 manufacturing plants in 16 countries and caters to the needs of
customers in 65 countries.

It has a total of 120 depots around the country. (Refer Appendix). Through its extensive dealer network,
Asian Paints has been able to provide rapid service at a breakneck speed to its customers often ensuring
customer satisfaction and at the same time customer delight in the process. Asian Paints is known for its
quality as well as service.
In the decorative paints segment Asian Paints is clearly the market leader while in the industrial segment
Kansai Nerolac leads. However it must be borne in mind that the decorative segment accounts for more
than 75% of the paints category. Also in the organized sector, Asian Paints remains the market leader.

Now we find a very interesting situation here. Asian Paints has nearly reached the highest levels in the
decorative segment category. It has a 75% share there. The industrial segment accounts for 25% of the
paints market in India only.

Also as far as the Real Estate sector in the country is concerned a new wave is being noticed. Previously
real estate prices were skyrocketing; but Government actions like demonetization, stringent Income Tax
Rules against Black Money Transactions and newly enacted RERA (Real Estates Regulation Act aimed at
controlling real estate prices and bring in a transparent regime) has increased transparency in the sector
and has caused a reduction in the real estate prices. As a result the monopoly of a few big players has
reduced in this sector and instead the sector has opened up to small and large players alike. (Refer SWOT
ANALYSIS STAGE 1)

Also the booming population growth in India has raised the demand for real estate and housing. Paddy
lands are also getting used up for housing development. As a result the real estate sector will see an
increase in demand in the coming years.

Based on this Situation Analysis we suggest the following strategy for Asian Paints in the next segment.

BUSINESS STRATEGY:
We suggest in the 120 depots that it has across the country Asian Paints should open up a new wing called
"Asian Paints New Ventures Wing" and employ a direct distribution strategy with the promoters. That
would cause the company to save on the commission costs that it pays to the dealers and super stockists
(which roughly ranges from 20% to 30% on an overall basis). (Refer Appendix).

The idea is catering to the demand of the customers that their prospective places of habitat should ensure
some quality. In the earlier periods when corruption was rampant in the real estate sector often the
promoters used low quality paints from different dealers of the unorganized sector and as a result the
longevity was adversely affected. This irked the prospective buyers and the consumers.

Given the discussion in the previous segment of Situation Analysis we infer that now given the intense
competition in the real estate sector promoters have no choice but to use quality materials in their final
output.

The strategy Asian Paints should employ here is that it should pass on a substantial portion of the savings
on commission costs it has made to the promoters via offer of discounted prices. This would bring down
the prices to charge and at the same time Asian Paints products would become more affordable for the
promoters.

The plus side of this strategy is that promoters can afford to use Asian Paints materials in their new
constructions owing to lower prices and at the same time, Asian Paints can get a somewhat fair amount
of market share of the unorganized paints sector as well. Its lower and affordable prices would be
competitive in so far as the unorganized paints sector is concerned.
Will the new strategy eat into the revenues of the existing dealership business? Chances are unlikely. As
consumers will always want their houses to look better on festive and special occasions the requirement
of retailers and dealers will be always there to cater to these demands. The strategy suggested in this
segment will open up a new avenue of revenue for Asian Paints without increasing the fixed costs much
and at the same time is expected to raise its profits substantially owing to the strategy.

How it will impact the cost benefits i.e. the cost benefit analysis of the strategy is presented in the next
segment.

COST BENEFIT ANALYSIS

ASSUMPTIONS AND METHODOLOGY
1. Tractor Emulsion, Apcolite Premium Emulsion, Apcolite Exterior Emulsion, Ace (Exterior) form a
representative sample of the paints in the low priced segment. Apex Ultima, Royale, Royale Shine form a
representative sample of the paints in the premium segment. These representative samples have been
chosen on the basis of information on turnover we received from Mr. Durga Prasad, Asian Paints Colour
World Dealer, Maharani Bagh, New Delhi and Mr. Ashoke Kumar Paul, former C & F (Clearing and
Forwarding) Agent, Asian Paints, Dunlop Depot (Refer Appendix).

2. These 7 products are classified into two groups-<=300 (low priced) per litre group (Group 1) and >300
(high priced) per litre group (Group 2).

3. The simple average of respective groups has been calculated. For Group 1 it is 210 and for Group 2 it is
433.333 per litre respectively.

4. Low priced products on basis of interview conducted are found to constitute 2/3rd of turnover while
high priced ones constitute 1/3rd of turnover. (Refer Appendix). On basis of that the weighted average
price of Rs. 284.44 per litre has been computed in Sheet called "Weighted Average Price" in the Excel
File. Snapshots of the first two sheets are given below:

Sheet title Price and Group

Sheet Title: Weighted Average Price. Rs. 284.44= 2/3*210+1/3*433.333.
5. On basis of Interview conducted with Mr. Ashoke Kumar Paul (Refer Appendix) we found that the
variable production costs (before promotion, commission etc.) amount to 40% of the Retail Sale Price for
> Rs. 300 per litre group and 60% of the Retail Sale Price for <=Rs. 300 per litre group. Thus Weighted
average cost component=2/3*0.6+1/3*0.4=0.5333333 of Retail Sale Price.

Sheet Title: Cost Details

6. Number of Depots in India as of now was found to be 120. The Dunlop Depot in this year is experiencing
a sale of 1000 kilolitres per month (approximate) (Refer Appendix). We have assumed uniform sale across
all depots.

Company always targets 10% incremental growth on yoy basis over current sales volume. So a monthly
sale volume of 1100 kilolitres has been assumed for next year (assuming strategy implemented next year
onwards). Lowest SKU (Stock Keeping Unit) is assumed to be 1 litre. Number of depots is assumed to be
constant. Paint prices are assumed to rise by 5% over the current year price on average every year (Refer
Appendix).

Thus Y1 Weighted Average Retail Sale Price per litre=Rs. 284.44*1.05= Rs. 298.67. Similarly prices of other
two years have been computed. (We have taken a three-year time horizon).

7. Sales under the new strategy suggested will cause a new department to open up "Asian Paints New
Ventures Wing" (suggested name). In the first year sales is assumed to be 5% of the 1100 Kilolitre sale
per month over and above the 1100 kilolitre sale level. Thus yearly volume is 1st year= 55*12=660 Kilolitre.
5% is assumed based on conservatism as this is a new strategy.

8. On average we found that each depot employs 5 salesmen (Refer Appendix). We assumed 1 salesman
will be required in each depot in the first year for the suggested venture. With increasing volume, the new
wing, we assume, will employ a total of 2 salesmen per depot for the new wing.
Sheet: Previous Year and Expect Depot
9. Average Salary per salesman have been assumed to be Rs. 40000 per month or Rs. 480000 per annum.
We assume it to rise by 5% per annum. This salesman expense has been treated as a fixed expense in
our computation. This includes all perquisites and benefits (Refer Appendix). We have assumed
additional variable promotional and incentive costs of 5% of Retail Sale Price for the new strategy.
Weighted Average variable cost component as a percentage of retail Sale Price per litre have been
assumed to be same at 53.3333%.

10. We assume the company will be charging the new customers (this is a mainly B2B strategy, in effect
the promoters or the builders are referred to as customers of the strategy) the retail sale price per litre
after allowing a discount of 30% on grossing up basis on the weighted average retail sale price per litre
arrived at initially. This is because roughly 30-32% of the Retail Sale Price is allowed as commission to
Retailers, Dealers and Super Stockists when sale is done through channels. (Refer Appendix).

The logic of allowing grossing up basis discount is that we are passing on substantial benefits to the new
stakeholders from the savings made by company but not the full benefits. For instance, 30% of 100=30
but 100/1.3*0.3= Rs. 24 (Approx.)

11. Finally we have assumed a growth rate of 75% by volume (Kilolitres per month) under the new
strategy. Ideally this is a conservative estimate. Primarily Because of the reasons discussed under
strategy and situational analysis before and the brand value of the Asian Paints Brand, a 100% growth
estimate is not out of consideration. But for sake of conservatism, we have assumed a 75% growth rate.
Thus Y1 volume=55 Kilolitres per month. Y2 volume=55*1.75= 96.25 kilolitres per month.

12. Based on the above assumptions and methodology explained above, the breakeven analysis and the
net benefit analysis has been done. Snippets of the computation are shown below:
Sheet: Strategy Cost Benefit Inputs Part 1. (Left Hand Part)

Sheet: Strategy Cost Benefit Inputs Part 2. (Right Hand Part)

Sheet: Cost Benefit Analysis

CONTINGENCY PLAN
In case the suggested strategy does not work out an alternative contingency plan would be needed. One
major finding during the interview with Mr. Durga Prasad was that Asian Paints was not allowing its small
dealers to sell certain niche items like Royale Atmos, Royale Aspira. This was because of the fact that the
company perceived that given the exclusivity of these products selling them through small dealers would
reduce their value proposition. But on the contrary, local customers do demand these products and return
disgruntled when they do not find them. So increasing the market penetration of these products would
be a good idea.

But another idea would be to expand into the rural areas through Jobbers and Super Stockists. To tap the
rural markets profit margins should be reduced but at the same time the lower profit margins could be
offset by lower margins to the jobbers and super stockists in the rural areas. That would enable the
company to eat into the shares of the unorganized players in the rural areas by following a strategy of
market penetration. It would help Asian Paints to increase their foothold as well as their market share.
ACKNOWLEDGEMENTS:
We are thankful to Professor Neena Sondhi, Faculty, International Management Institute (IMI), New Delhi;
for guiding us on the scope of the project and giving us a direction on how to proceed about the project.

Also we would like to thank Mr. Ashoke Kumar Paul, Former Clearing and Forwarding Agent (C & F) for
Asian Paints, Dunlop Depot, NCT Factory Complex, Kamarhati, West Bengal and Mr. Durga Prasad,
Proprietor, Asian Paints Colour World Dealer, 201, Jeewan Nagar, Maharani Bagh, Delhi-110014 for their
extensive inputs on the project. Without their invaluable inputs, the project would not have fulfilled its
scope. The interview transcripts of both are included in the Appendix Segment.

Lastly we would like to thank Durga Paint and Hardware, Delhi for providing us information on shelf space.

METHODOLOGY:
The project especially the second stage is majorly based on primary data. While secondary data has been
collected on certain aspects like product, promotion and prices of various products of Nerolac; other
portions like major part of pricing strategy, placement/ distribution strategy, assumptions of the cost
benefit analysis etc. are all based on primary data collected from extensive telephonic interview and one
market visit. Excerpts of the two extensive interviews conducted for the project's second stage are
included in the appendix segment.
Appendices
APPENDIX 1
INTERVIEW TRANSCRIPT OF INTERVIEW WITH MR. DURGA PRASAD, PRPRIETOR, ASIAN PAINTS COLOR
WORLD DEALER, 201, JEEWAN NAGAR, MAHARANI BAGH, DELHI-110014

1. For how many years have you been associated with Asian Paints?

Ans. Since 1997

2. Why is Asian Paints better than its competitors?

Ans. Customers simply like Asian Paints for its quality. Royal Shine is a great product. For Exterior they
prefer Apex, Apex Ultima. For interior they like Premium Emulsion.

3. Which Paint Variety has the highest turnover?

Ans. Premium Emulsion. At a bit lower cost, Tractor Emulsion and Tractor Uno Distemper provide great
turnovers.

4. Can you give any idea on the order placement and execution process?

Ans. Customer comes to the shop sees the Set Card containing various colour combinations. The
computer-operated Machine is installed in the store where if the colour code referred to in the Set Card
is inserted the Machine automatically gives out the desired colour as output. Thus the Machine effectively
does the colour mixing. The customer is then given the container containing the desired colour selected
by him. Usually a dot is put on the container when it is sold to the final customer. The customer has to
come to the store to take delivery; we do not deliver our products at customer's doorsteps.

5. What is the typical variance in the festive and non-festive season turnover?

Ans. We find that during festive seasons, our sales pick up by roughly 60%.

6. What is the annual turnover of your dealership?

Ans. Rs. 35 Lacs to Rs. 40 Lacs.

7. What areas come under your dealership? Does the company give any fixed target?

Ans. As far as fixed targets are concerned, yes we get that at the beginning of the year. As far as areas are
concerned, we cater to Maharani Bagh and its nearby area's customers mainly. But then entire Delhi is
welcome if they want to buy from my shop. (Laughs)

8. Can you give any idea on Pricing?

Ans. No. That the Company knows.

9. Can you give us the Price per SKU (Stock Keeping Units) for some of the products?

Ans. I will give it only on litre basis. Is that Ok?

Ok.
I am giving you the price per litre for the products which have the highest demand from the customers as
far as my shop is concerned. Please note it down.

10. Any suggestions on where Asian Paints can improve?

Ans. Asian Paints is not allowing its small dealers to sell certain niche items like Royale Atmos, Royale
Aspira. This is because of the fact that the company perceived that given the exclusivity of these products
selling them through small dealers would reduce their value proposition. But on the contrary, local
customers do demand these products and return disgruntled when they do not find them. So increasing
the market penetration of these products would be a good idea.

APPENDIX 2
INTERVIEW TRANSCRIPT OF INTERVIEW WITH MR. ASHOKE KUMAR PAUL, FORMER C & F AGENT, ASIAN
PAINTS, DUNLOP DEPOT, NCT FACTORY COMPLEX, KAMARHATI, WEST BENGAL

1. How long had you been associated with Asian Paints?

Ans.: 20 years.

2. How is Asian Paints better compared to its competitors?

Ans. Asian Paints is known for their superior quality especially in decorative paints segment and more
importantly for its prompt service. Also it allows credit facilities to the customers; dealers negotiate the
credit period as per company rules. The lesser the credit period allowed, higher the commission.
Competitors like AkzoNobel (ICI Paints) are not being able to put up with Asian Paints on the service front.
Also they believe in cash transactions only.

3. Could you elaborate on the Placement/ Distribution Strategy?

Ans. Asian Paints follows a strategy that involves wholesalers, retailers and jobbers. In certain areas where
the company either experiences high sales volume or cannot cater to the demands through its own
channels, it employs super stockists. Super Stockists enjoy higher commissions compared to C & F Agents
as they literally buy the products on ownership basis i.e. once the products are transferred to super
stockists; company bears no risk of ownership.
Asian Paints has nearly 120 depots across the country. Usually depots are opened up in a particular place
based on sale in the particular area. For Example, a city like Mumbai may have multiple depots. Depots
ensure proper maintenance of the products. However the distance a particular depot caters to varies, but
in no case does it exceed the range of 250-300 km. This is done to ensure a maximum delivery time of 24
hours. Each depot has an area manager, five sales officers (on an average) and 200-250 dealers. The
salesman salaries normally amount to around Rs. 40,000 per month. This is inclusive of all perks and
benefits. Normally their salaries increase by 5% approximately per annum.

The company promises delivery time to customers based on distance: Local deliveries (up-down i.e. two-
way distance coverage being 50 km) take 4 hours, up to 100 km (two-way) it takes 8 hours etc.

To encourage the dealers to sell more company encourages them through schemes like Volume Purchase
Target Schemes, Prompt Pay Schemes, and three Month Target Schemes etc.

4. What is the turnover at these depots? Also can you elaborate on the products having highest
turnover?

Ans. As far as products with highest turnover is concerned in the low priced segment they include Enamel
Paints like Tractor Emulsion, Apcolite Premium Emulsion, Apcolite Exterior Emulsion and in the higher
priced segment there is Royale, Royale Shine, Apex Ultima etc. I am referring to the paints with a price of
less than or equal to Rs. 300 per litre as low priced segment and more than Rs. 300 per litre has high priced
segment. As far as the sales pattern is concerned the low priced products make up about 2/3rd of the
sales volume at Dunlop depot and 1/3rd of the sales volume is accounted for by higher priced products.
This pattern more or less remains same every year.

As far as monthly turnover at depot is concerned, so far as I know it is 1000 kilolitres per month
(approximately) at Dunlop Depot. The sales volume rises by 10% on year-on-year basis because that is
target company fixes for its dealers and they have to achieve it if they have to stay in business.

5. Can you give any idea on the pricing strategy of Asian Paints?

Ans. It is usually cost plus. Let me elaborate on the expenses part and the pricing part simultaneously.

For lower priced products normally the cost of production etc. comes out to be 60% of price and for the
higher priced products it turns out to be 40% of price. On an average this cost comes to 50% for all the
products combined. Of the remaining 50% of the price, the allocation is done as follows:

Logistics with Transport/Clearing and Forwarding Agents (C & F) Agents/Super Stockists margins
constitute 5%, retailers’ margins of 20% and the dealers are given 7% of the price as margin respectively.
Lastly scheme and promotions constitute approximately 8% to 10% of the price. The balance 8% to 10%
is net benefit to the company or net margin to the company. Paint prices usually rise by 5% per litre on
average per annum.

6. Can you provide any idea on what Asian Paints can do better?

Ans. In the coming years, the real estate sector is expected to boom. Asian Paints may go for direct
distribution to the promoters or builders at discounted rates for the new constructions while keeping its
sales through dealer network intact for repeat painting jobs. Majority of the sales volume for the company
at the moment comes from repeat painting jobs only.
Moreover it can expand into the rural areas through jobbers and super stockists. It can slash its profit
margins and offer its products there at lower prices. That would ensure competitive rates with the players
from the unorganized sector in those areas.

Thank You.

Welcome.

REFERENCES

https://www.asianpaints.com/more/research-and-technology/vision.html

https://www.marketing91.com/marketing-mix-of-asian-paints/

https://blogs.economictimes.indiatimes.com/et-commentary/the-story-behind-rk-laxmans-
gattu-ke-papa-and-asian-paints/

https://www.mbaskool.com/marketing-mix/products/16979-asian-paints.html

https://en.wikipedia.org/wiki/Asian_Paints_Ltd

http://www.indigo.co.in/portfolio-details/asian-paints-social-website.html

https://cio.economictimes.indiatimes.com/news/strategy-and-management/revealed-how-
asian-paints-leveraged-digital-innovations-to-become-customer-centric/60053105