INDRADHANUSH PAINTS LIMITED

Case Synopsis

The case talks about the firm named INDRADHANUSH PAINTS LIMITED (IPL).

Founded in early 1940s, it had developed its wide distribution network across India
by 1960s.

At the inception of IPL the paint industry was dominated by multinationals like
- ICI
- British Paints
- Goodlass Nerolac
- Others

Growth of IPL

Multinationals functioning in 1940s concentrated only on the Urban areas.

IPL identified this opportunity and entered the rural markets.

Company started of with small distributors as the large ones were under the control
of multinationals.

It also identified preferences of the rural markets and modified its products
accordingly.

IPLs scenario in 1993

It is one of the largest paint companies with four manufacturing units.

It produces entire gamut of decorative and Industrial paints quality of which is

comparable with best in the world.

It is a market driven company having 47 sales offices throughout the country.

It has presence in all settlements with a population of at least 5000 persons.

Product Range of IPL

Enamel Paints

Liquid Paints

Distempers

Aluminium Paints

Wood Finishes and Varnishes

Stainers

Patti and Fillers.

Of these, the first three items had substantial sales in rural areas.

As purchasing power in the rural market was low, the company introduced
paints in small tins of
-50 ml
-100 ml
-200 ml

Distempers however were in one litre packs.

These small packs gave the company the following benefits -competitive advantage,
-added USP to the product
-Loyal customer base

Issue faced by the company

The sales force working with Mr. Gupta, the current in charge of the rural
marketing operations, reported decline in sales during the past nine months when
compared YOY with last year.

The rural market share of the company had dipped from 45% to 43%.

Task before Mr. Gupta was to present the reasons for the fall in the market share
and also the future plans to increase the market share.

Also in 1993 there was drought because of which the entire paint industry was
declining.

COMPETITION

Rural Paint Market

Organized Market: Branded products, high

in quality, high price, caters to geographical

distributed markets.
Organized sector; 40%
Unorganized sector; 60%

Unorganized market: Low quality products,

low price, low overhead costs, lower excise

duties, caters to markets of geographic proximity etc.
Organized sector
Unorganized sector

MARKET SHARE OF IPL IN ORGANIZED

SECTOR
Market Share of Organized market

IPL; 31%
Others; 43%

Goodlass Nerolac; 15%

Berger paints; 11%

IPL
Others

Goodlass Nerolac

Berger paints

Survey results 1989 & 1993

Proportion used in households

Prices of Material

Types of
materials
Survey 1989

Survey 1993

Survey 1989

Survey 1993

Chuna

63%

15%

Rs. 22

Rs. 25

Cheaper paints
and distempers

2%

45%

Rs. 55

Rs. 62

IPL Harvester
distemper and
paints

35%

40%

Rs. 70

Rs. 80

Survey: Observations
Survey 1989

Chuna was difficult to use.

IPL distemper Harvester was superior to chuna; but was expensive.

Unorganized sector used low price as USP.

Paints were used for painting horns of animals & front entrance door of houses.

Distempers were used for color washing the walls of the houses.

Demand was seasonal i.e. during festivals.

Another 400 units of unorganized sector wereupcoming.

Survey: Observations
Survey 1993

IPL distemper and paints were good quality but were expensive.

Unorganized sector sold materials to the rural retailers directly.

Consumers were switching to paints from chuna.

Survey: Consumer Expectations

Survey 1993

Distempers & paints should be inexpensive and affordable.

Shades should be available in dark and strong colors.

Distempers and paints should not be hazardous to health.

Benefits Received
Offering:
Decoration

Benefits:
Decoration of walls.
Decoration of horns of bulls/bullocks/cows.
Decoration of wheels and body of bullock carts.

Competition level
Benefit: Decoration of walls

Competition level
Benefit:
Decoration of horns of bulls/bullocks/cows.
Decoration of wheels and body of bullock carts.

 Marketing Plan

Planning
Unit

Research
Unit

MAPPING
ENVIRONMENT
- Technological

ANALYSE
ORGANISATION
Mission
Strengths

Goals

-Economic

Weakness

- Cultural

ORGANISATIONA
L OBJECTIVES

Set
Marketing
Mission,
Goals

Impleme
nt

Assess
Performane

Develop Core
Marketing
(STP)

Marketing
Mix
Product

Determine
Performance
Benchmarks

Compare

Price
Place
Promotion

Planning Unit
Mission
Keep on increasing market share by 5% every following year.
Goals
To be the market leaders in Rural sector and have considerable
share in urban areas.

Research Unit
Strength:
IPL had comparative advantage over traditional Chuna & as
survey revealed people were switching to distemper & other
color paints.

Weakness:
Distemper had only one gaudy shade that was RED.
Pricing Strategy was inappropriate according to the market

Mapping Environment

Economic:
Preference was for cheaper product.

Cultural:
Paints were preferably used during festive season.

 Organization objective:
To increase the market share from 43% to45%in the current
year.
Marketing Mission:
To increase the sales of the product.
Marketing Goal:
To have a competitive edge over others.

Develop Core Marketing (STP)

Segmentation:
Psychographic
Target:
People who have cemented house, bullock carts and bullock.
Positioning:
Paints that stay long.

Marketing mix-4Ps
Product: increasing the product depth and using
attractive packaging.
Price : using market penetration strategy.
Promotion: Using radio, colourful banner.
using haats and melas as place of distributing channels
as
free sample.

Promotion

 Implement
Determine performance benchmarks
Assess the performance
Compare

THANK YOU