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ICI Paints Pakistan Limited

A Dissertation By Ahsan Rashid MBA-2091154

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Table of Contents
PAINT INDUSTRY IN PAKISTAN....................................................................................4 Growth in Paint Industry..........................................................................................4 COMPANY PROFILE......................................................................................................6 ICI Pakistan Limited.................................................................................................6 History..................................................................................................................6 ICI Paints.................................................................................................................8 PEST ANALYSIS......................................................................................................... 10 PORTERS’S FIVE FORCES MODEL OF COMPETITION..................................................12 MARKET ANALYSIS: ICI WEATHERSHIELD..................................................................15 PROBLEM DEFINITION...............................................................................................16 FACTORS INFLUENCING DEMAND.............................................................................17 COMPETITOR ANALYSIS............................................................................................19 Sale Of Fake Paint................................................................................................. 20 MARKET POSITIONING:............................................................................................. 21 BCG Matrix............................................................................................................ 21 SWOT ANALYSIS.......................................................................................................23 MARKETING-MIX STRATEGY......................................................................................26 ICI WEATHERSHIELD’S MARKETING-MIX STRATEGY...............................................27 Product............................................................................................................... 27 Price...................................................................................................................30 Placement / Distribution.....................................................................................31 Promotion...........................................................................................................34 DECISION PROBLEM..................................................................................................39 RESEARCH PROBLEM/QUESTIONS.............................................................................39

ICI PAINTS 3 MBA-2091154 `` RESEARCH OBJECTIVES............................................................................................39 HYPOTHESIS.............................................................................................................39 REVIEW OF LITERATURE...........................................................................................41 LIST OF QUESTIONS..................................................................................................42 RESEARCH PROPOSAL..............................................................................................44 SAMPLING PLAN........................................................................................................49 DESCRIPTION OF ACTIONS........................................................................................51 QUESTIONNAIRE FOR CONSUMERS (A).....................................................................52 QUESTIONNAIRE FOR DEALERS/PAINTERS (B)..........................................................57 SURVEY ANALYSIS.................................................................................................... 63 Quality & Reliability...............................................................................................63 Factors responsible for selection...........................................................................73 Token Incentives...................................................................................................77 Price Discounts & Motivational Incentives.............................................................80 Fake Paint..............................................................................................................83 SUMMARY OF FINDINGS............................................................................................93 CONCLUSION & RECOMMENDATIONS.......................................................................95

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PAINT INDUSTRY IN PAKISTAN
The paint industry in Pakistan operates both in the organized as well as the unorganized sectors. There are around 22 paint producing units in the organized sector. There are two multinational companies also in the organizational sector. According to an estimate, over 350 units producing paints are operating in the unorganized sector. Many of them are also not covered under the excise net in the same way as the organized sector and therefore, are in a better position to compete in the local market. According to the latest findings of Federal Bureau of Statistics, around 30,000,000 liters of paint was produced from 87 units. Pakistan Paint Manufacturers Association (PPMA) represents the organized units in the paint sector. Paint is categorized in two broad classes; namely water based paint and solvent based paint. The industries produce a wide range of finished and intermediate products which include pigments, distempers, plastic emulsion, enamel, undercoat, primers, rubber paint, aircraft paint, marine paint, anticorrosive paint, anti fouling paint, etc. Growth in Paint Industry The demand for paints is derived from expansion in construction, building, manufacturing, transport and other sectors. The country has yet to go a long way in its development efforts. There appears to be a sizable potential for further strides in the country’s paint industry. Moreover, the development of chemical industry is also taking place and therefore, most of the raw materials used by the paint industry are expected to be produced and manufactured locally during the next five years. The paint industry would thus find cheaper raw material for further expansion and growth. There are huge opportunities for the growth of paint industry in Pakistan. But due to Economical recessions and unstable Political conditions this industry has declined. Pakistan is currently experiencing a GDP growth rate of 3.5-4.5%. Meanwhile the paint industry is witnessing a 6-8% growth rate. This high growth can be attributed to the current boom in both the automotive as well as the construction industry. However if we see the data below, it can be easily said that there is still great potential for growth in the paint industry in Pakistan.

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Per Capita Consumtion [Paints]
0.5 Liters 8 - 10 Liters 4 Liters Pakistan Singapore Brazil

The table above shows a comparison of the per capita consumption of paints in Pakistan, Singapore and Brazil. Thus it can be seen that Pakistan is way behind with only 0.3 Liters of consumption from these more developed countries.

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COMPANY PROFILE
ICI Pakistan Limited ICI Pakistan Limited (Imperial Chemical Industries) is located in Karachi, Pakistan. The company was subsidiary of ICI Plc United Kingdom but with worldwide takeover of ICI PLC by AKZO NOBEL now AKZO NOBEL is 75.81% stake holder of ICI PAKISTAN. It was set up as a public limited company in Pakistan in 1952. The ICI Group is a renowned international business. It employs approximately 31,000 people worldwide. The vision of ICI is to be the leader in formulation science. It has, and continues to develop, a portfolio of businesses that are major players within their respective industries, bringing together outstanding knowledge of customer needs with leading edge technology platforms to provide superior products to its customers. Through these attributes, it aims to create superior value for ICI customers and shareholders, without compromising its commitment to safety, health, environment and the communities in which it operates. ICI Pakistan Limited is involved in various businesses including:

Polyester Fibers Soda Ash Paints Chemicals Pharmaceuticals

   

History

1944 The Khewra Soda Ash Company, a predecessor of ICI Pakistan Limited, set up a soda ash manufacturing facility in Khewra with a capacity of 18,000 tonnes per annum. This facility was sited next to the salt range as rock salt and limestone, two key raw materials needed for manufacturing soda ash, were available here in abundance. 1953

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The Khewra Soda Ash company was incorporated as a public limited company. 1966 The Khewra Soda Ash Company changed its name to ICI Pakistan Manufacturers Limited. Over the next few decades, major changes took place in the company as our Specialty Chemicals and Polyester plants were commissioned, and Imperial Chemical Industries (Pakistan) Private Limited and Paintex Limited both merged into ICI Pakistan Manufacturers Limited.

1987 We changed our name to ICI Pakistan Limited We launch our Seeds business as well as the Dulux range of coatings. We also established ICI Pakistan PowerGen and set up the ICI Pakistan Foundation as a charitable trust. 1995 We set up a USD 490 million PTA manufacturing facility at Port Qasim, near Karachi. 1998 PTA manufacturing facility commissioned. 2000 The business was de-merged to form Pakistan PTA Limited, which was at the time a subsidiary of ICI Plc UK. 2007 We completed 50 years of continuous listing on the Karachi Stock Exchange. 2008 We formally became part of the AkzoNobel Group, bringing us under the banner of one of the largest coatings and chemicals companies in the world.

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ICI Paints "The ICI Paints team intends to remain market leaders in the Paints Business. We wish to be recognized for offering the best products and excellent customer service. We will run a high quality, profitable and growth oriented business in an exciting and safe environment." [Mission Statement] The ICI Paint business can be divided into three categories    Industrial Automotive Decorative

All the three business have embarked on programs which focus on the consumer and customer needs. The focus is to understand the needs of the major stakeholders. Pursuing research, market understanding and delivering high quality product and services forms the nucleus of creating a competitive advantage in the market place for the paints business. The Industry & Automotives coatings business of ICI paints besides gaining strength in the local market also aspires to become a regional player. Self leveling epoxy floor coatings have been the new addition in the product portfolio and have been well received by major customers. After the initial success of the Turn-Key project management concept with one of the leading customers where a one shop solution in terms of design, fabrication and commissioning of automotive paints is done by ICI, the business is now offering it to other customers also. The Decorative segment of the business is driving a strategy of providing a super premium range of products with a wide color range under the Dulux brand that fulfill the growing needs of the market. Pentalite Classis was the first launch in this category. A super premium plastic emulsion with five properties of resisting hairline cracks, high scrub resistance, and better flow, anti fungal and luxurious finish was very well received by the consumers, architects and painting professionals.

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After its initial success in the furniture market segment the Dulux Woodcare range is now available in the retail segment also. In one stroke the consumer can now get the shade of wood that he or she wants. Expanding and improving service levels have been the major thrusts of the Decorative business. After the great success of the first color studio in Karachi a second color studio was opened in Islamabad. Now consumers in Islamabad also have the platform to experiment with colors, come up with new contrasts and combinations that reflect their persona and lifestyle projecting their color aspirations into their living environments. The housing and the color consultancy team has been re-structured with more feet on the street and proper training to help consumers with new color trends and interior design solutions. According to the latest survey conducted by ICI Paints the entire market for decorative paints is 210 Million Liters. This market can be subdivided into two categories – the organized market and the un-organized market. The organized market refers mainly to the market that purchases decorative paints from paint manufacturers and equals 73 Million Liters. The unorganized market on the other hand constitutes of the market which uses paint substitutes for decorations and equals 137 Million Liters.

DECORATIVE PAINT MARKET
210 Million Liters

ORGANIZED UNORGANIZED
65%
137 Million Liters

35%

73 Million Liters

The organized market can be further divided into three categories based upon the various qualities of paint being manufactured. These categories include:  Premium

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 

Mid-Tier Low-Tier

PEST ANALYSIS

Political-Legal factors:• Political Instability Since the independence in 1947, Pakistan has continuously faced political instability. The political instability has led to uncertain environment in the country, which is a threat for any business including ICI Paints. • Inconsistency in Rules & Regulations The rules and regulations are changed quite frequently due to changes in the government that effects the business flow for any company. E.g The last government had introduced subsides for the chemical sector but now the current government is planning to finish all subsides. • Law & Order Situation The law and order situation is crucial as it has causes serious disruption on business activity. The suicide bombing and military operations have had an adverse effect on the confidence of foreign investors. • Taxation Laws The government is providing relief to the paint industry. There is a 10% reduction in the central excise duty on paint products. Economic factors:• Economic Situation

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Economic conditions are not very sound. The rising political instability has led to economic instability as well. • Inflation Inflation remains the biggest threat to the economy. The surge in global petrol prices and thus local petrol prices hurt the buying power of consumers that reduced the demand for products. Due to inflation the cost of doing business has also gone higher. If Pakistan keeps on getting better grants and loan waivers or if any other economy boosting factors such as controlled inflation rate and economic growth take place, it will benefit the entire industry including ICI Paints. • Unemployment The unemployment rate is going up and up which has increase the level of poverty thus further reducing the buying power of the people.

Social-Cultural factors:• Western Life Style Increasing globalization has amplified the influence of “Western Culture” in Pakistan. The lifestyle of Pakistani people is changing rapidly. People are more conscious about their houses presentation. • Population To meet the demands of a rapidly increasing population, there is an increase in the number of construction projects in Pakistan which is a positive sign for ICI Paints. Technological factors:• Latest Technologies Companies have technology with which they can have a competitive advantage in the Pakistani market. Companies are investing in the their infrastructure to not only expand but also to upgrade their existing structure. • Paint Industry Technology

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The current focus in paint industry is now on creating paints and coats that preserve and protect the environment while beautifying our surroundings.

PORTERS’S FIVE FORCES MODEL OF COMPETITION
The threat of substitute products

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Although products such as distemper (choona), wallpaper, tiles etc are available but customers are not likely to substitute them for paints as it would compromise on quality and at the same time would not server the purpose. The growing share of companies in the unorganized sector provide a low price substitute.

The threat of the entry of new competitors • With regard to the paint industry in Pakistan, there is a high threat of new entrants. The main reason for this being low entry barriers, as there is no requirement of high capital investment to enter the paint business. Also, there are no proprietary product difference and low switching costs which puts the phrase “brand loyalty” into jeopardy. What make the paint industry attractive for newcomers is also the ease of acquiring skilled people, material and supplies. Moreover, lack of long term contracts also contributes towards the attractiveness of the industry for the newcomers. However, there are established brand identities as well as consolidated distribution channels to be accessed which would result in strong retaliation to be faced by the newcomers. Such is an example of Nippon who set up its business in Pakistan recently.

• •

The Bargaining power of customers • Bargaining power of the intermediaries is high because the industry is divided into the structured and unstructured market and does not act as a unified whole to leverage the bargaining power in its favor. Therefore the more the channel sells each product, the higher the margin they keep for the company. The bargaining power of end users however, is low because there a large number of buyers, each with relatively small purchases. In addition to this, the organized paint sector has also accepted branding which creates loyalty and decreases the price sensitivity, resulting in low bargaining power of buyers.

• • •

The Bargaining power of suppliers • Bargaining power of suppliers is low in the decorative segment as inputs required are commodities and there a number of suppliers available who are fighting for a small market.

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However, since big companies fight on the “quality” dimension and cannot switch their suppliers are in a position to negotiate their terms upon providing the desired raw material which makes the overall bargaining power of suppliers moderate.

The Intensity of competitive rivalry • • The paint industry can be characterized as a fragmented industry divided into the organized and unorganized sector. The unorganized structure is the biggest threat for established brands.

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MARKET ANALYSIS: ICI WEATHERSHIELD
The decorative paint market can be divided into two broad categories interior and exterior. The interior market as the name suggests refers to the paints being used for indoor decorations. Similarly the exterior market corresponds to the paints being used to decorate the outdoors. The exterior market of paints in Pakistan is of 7 Million Liters. ICI dominates the market share with 4.2 Million Liters with its Weathershield.

MARK TS ARE E H 20% 20% 60%

ICI Berger Others
4.2Million Liters

Currently ICI has a 60% market share with its major competitor being Berger. Berger has a 20% market share followed by a 20% share by smaller brands which include Berger, Blackhorse, Silversand, Master, Nippon, Gobi, Hapilac etc. ICI with its Weathershield technology is leading the premium market for exterior paints. The Weathershield system provides full-protection to the exterior of the house against natural wear and tear. The Weathershield protection is said to last for up to 5 years.

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PROBLEM DEFINITION
In 1973, ICI launched its Weathershield technology in UK. The Weathershield technology reached Pakistan in 1984. In March 2007 ICI Paints added a new product ‘Weathershield Fresh’ to its Weathershield range. With the launch of this new product ICI was hopeful to capture 70 – 80 % of the market share but only managed to increase its share to 60%. Therefore the problem of this study is to determine how the market share of ICI Weathershield could be increased from 60% to 70%.

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FACTORS INFLUENCING DEMAND
ICI Weathershield being a premier paint targets mainly the urban areas of Pakistan. It focuses primarily on households. Unlike the usual products where the decision-maker is the final consumer, painters and contractors also have the ability to influence the decision making process. A study was done by ICI Paints in 2009 to determine the forces responsible in influencing a customer. The study revealed the following results.

FACTORS INFLUENCING CONSUMERS

17% 11% 24%

4% 44%

Own Experience Family / Friends Advertisements Painter / Contractor Retail Outlet

Thus the market for ICI Paints can be divided into five major market segments. These segments include:      Dealers Retailers Contractors Painters Consumers

Factors influencing the level of demand

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The housing industry in the largest industry of Pakistan. Pakistan is one of the 20 countries of the world where Real Estate business is on the top of the list. So the housing boom will add fuel to the demand level of paints. These include the continued migration of rural consumers to urban areas in search of work and an improved standard of living. This improving quality of life will increase in level of demand for the product. The number of Pakistanis returning to the country having worked abroad will also fuel growth, as these consumers bring with them knowledge of the products available in the west, as well as general lifestyle trends to which they have accustomed. Rising inflation can cause decrease in the purchasing power of the people.

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COMPETITOR ANALYSIS
ICI Weathershield is leading the exterior market for paints with a 60% market share. Berger is the only other competitor that also deals in premium quality paints. Berger has a 20% market share followed by a 20% share by smaller brands which include Berger, Blackhorse, Silversand, Master, Nippon, Gobi, Hapilac etc.

MARK TS ARE E H 20% 20% 60%

ICI Berger Others
4.2Million L iters

ICI Weathershield dictates prices in the exterior market. All the competitors including the smaller players follow the same pricing strategies. The price of ICI Weathershield is 5% more than that of Berger’s Weathercoat. Berger has still to come-up with a product to compete with the new Weathershield Fresh which comes with an added feature to repel dust. The new ICI Weathershield is also available in a lot more colors than any other exterior paint in the market. Thus Berger is lagging behind in its product development strategies. Recently, all the other paint providers besides ICI have developed a new strategy to give incentives to painters and contractors by offering them discount-tokens. These tokens vary from a discount of Rs. 50 – Rs. 300. As these painters and contractors have a significant influence over the consumer in choosing which paint to use, this token scheme has helped boost up their sales significantly. However ICI Weathershield believes in focusing on the end-consumers instead of giving tokens to contractors. It believes that this will help develop long-term loyalty from its consumers resulting in repeat sales.

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Sale Of Fake Paint All personnel interviewed expressed their firm opinion that at least 20% of the paint sold in the local market is “fake paint” sold under popular brand names. Since ICI Weathershield is the most popular brand for the exterior paint, the percentage of fake paint sold under its brand name is even higher. Although ICI Paints has a large number of authorized dealers and most of these dealers are loyal to the company, however the general public is not completely aware of how to differentiate the genuine dealers. Also some of these authorized dealers are not quite as loyal and ICI Paints has occasionally received complaints in this regard, which have been adequately dealt with. In addition the ICI paint products including the Weathershield is also being sold by other shopkeepers who are not authorized dealers. Paint purchased through these shops has even lower credibility. ICI Weathershield is supplied in metal containers, which are not sealed in any foolproof fashion. The containers are also not printed and instead a printed wrapper is pasted onto the containers. This makes it easier for the persons who are in fake paint business. Also it is very easy for the shopkeepers to fill up ICI containers with cheaper alternate brands and the consumer may only see the adverse results on long term period. There have been instances when ICI Weathershield wrappers have been stolen from the premises of the wrapper printers. It is also a normal practice that as soon as a consumer brings home ICI Weathershield paint, the first thing the painters do is to remove printed wrappers in order to sell them. The customers are generally dependent upon the advice and assistance of the Painters or Painting Contractors in the selection and purchase of the paint. Even when the purchase has been made very carefully, the purchased paint is largely in the custody of the Painters and they have ample opportunity to maneuver.

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MARKET POSITIONING:
In order to better understand how to increase the market share of ICI Weathershield, we have to position the brand with its direct competitors. That is best demonstrated with the help of the BCG matrix. BCG Matrix The BCG matrix categorizes brands according to two parameters, the rate of market growth and the relative market share. There are four categories under which brands may fall:
• • • •

Star: High market growth & high relative market share. Cash cow: Low market growth & high relative market share. Question mark: High market growth & low relative market share. Dog: Low market growth & low relative market share.

The market positioning of ICI Weathershield and its direct competitors is shown in the diagram below. As it can be seen ICI Weather shield has high market share and high relative market share, therefore it is categorized as Star.

M A R K E T G R O W T H

STAR
HIGH

QUESTION MARK NIPPON PAINTS

ICI PAINTS

CASH COW
LOW

DOG ROYAL PAINTS

BERGER AND MASTER PAINTS

HIGH

LOW

RELATIVE MARKET SHARE

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The purpose of the BCG matrix is to help devise a strategy in order to help resolve the problem of increasing the market share from 60% to 70%.

Strategies under BCG matrix: The various strategies available to improve the market position of a brand are as below: • Differentiation Strategy: Differentiation strategy is that the company differentiates its products or services to those of other companies.

Cost Leadership Strategy: Under this strategy the product or service is provided at the lowest possible cost so that it higher margins may be earned by the company.

Focus Strategy: This strategy gives importance to focus on the customer/ target market; identifying and serving them better.

ICI Weathershield is at present following the differentiation and focus strategies. Although controlling costs is an important matter, ICI Weathershield does not believe in comprising its quality. That would be detrimental to its leadership position in the market. Also the number of household users is greater than the number of corporations within the country and contractors always use the brand demanded by their consumers. For this reason the brand employs differentiation and focus strategies. These strategies suit the present situation of ICI Weathershield and therefore should be continued.

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SWOT ANALYSIS
Another method of analyzing a brand’s competitiveness is through the assessment of internal strengths (S) and weaknesses (W), as well as environmental opportunities (O) and threats (T).

As Berger paint is holding the second highest market position after ICI Weathershield, SWOT analysis of both ICI Paints and Berger Paints has been conducted below.

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STRENGTHS ICI Paints • Brand Name. • More than 80 years of experience in the paints industry. • Multinational Company. • World renowned chemicals and paints manufacturers. • Having production setup in more than 55 countries. • Wider range of products. • Wider dealer network as compared to its competitors. • Business volume is very high as compared to the competitors. • Focuses on safety, security, health and environment as a corporate social responsibility. • Technological Advantage. Berger Paints • Gained reasonable market share in very short time period. • Comparatively fast supply of products. • Having 2 manufacturing plants as ICI had only 1 which helped in improving the delivery of goods. • Good discounts and incentives for business partners as compared to ICI Paints.

WEAKNESSES ICI Paints • Very low discounts for business partners. • Complex Supply Chain Configuration. • Comparatively less convenient delivery of the products as business partners are in 1000’s. • Meeting demand becomes a challenge in the demand season. Berger Paints • Poor dealer network as compared to ICI. • Complaint often arises in the product while applying. • Low range of products. • Lower quality products in comparison to ICI • Lack of formulating competent strategies.

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OPPORTUNITIES ICI Paints • Pakistan is developing country and there is a lot of business growth in this country. So seeking new markets in this area is great opportunity. • Finding solutions to the painting problems can also help to grow. Such product are still absent in the market which can gain the attention of customers. So to work on those problems lead to a great opportunity. • Higher standard of living and awareness developing in Pakistan. Berger Paints • Berger should formulate its strategies and develop its product keeping in view about the growth opportunity in this country. • Higher standard of living and awareness developing in Pakistan.

THREATS


• •

ICI Paints Threats to the new entrants in the market. e.g. Nippon Paints Japan has entered the market of Pakistan Fake Paint Political instability in Pakistan Economic instability

• •

• • •

Berger Paints Threat of the expanding market of ICI Paints. Threats of other new entrants in the paints market e.g. Nippon Paints Japan has entered the market of Pakistan Political instability in Pakistan Economic instability Threat of the new innovative products of ICI.

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MARKETING-MIX STRATEGY
The marketing mix comprises of the following: • • • • Product Place Price Promotion

The four marketing mix elements are interrelated decisions. Marketing mix is affected by whether a firm chooses to compete on the basis of price or on one or more other elements .When a firm relies on price on its primary competitive tool .the other elements must be designed to support aggressive pricing. For example, promotional campaign likely will be built around a theme of “low, low price,” In non price competition however product, place and promotion strategies come to fore front.

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ICI WEATHERSHIELD’S MARKETING-MIX STRATEGY The marketing mix of ICI Weathershield is as following. Product “A product is anything that can be offered to a market to satisfy a want or need of a customer at profit”. Any product can be classified into either a consumer product or a business product. Consumer product is the one that is bought and consumed by a final consumer. While a business product is the one that is bought for the purposes of reselling or for business use. ICI Weathershield comes under the definition of consumer product as a household buys the product and use it. Elements of the Product

QUALITY

SERVICE VARIETY

PRODUCT

PACKAGIN G

BRAND NAME

FEATURE

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“World of weather shield” was launched and for the first time in history, an exterior putty and exterior primer which was having an additional feature of being waterborne was introduced by ICI Pakistan Limited.

First and foremost priority of the company is to maintain the standard and quality of the existing product which are already in the markets. Their manufacturing, meeting demands of the market had become a great challenge for the company. And the main thing which is taken in to account before getting the product out of the gate of Factory is to maintain the quality of every single pack of the product. Dulux Weathersheild Fresh was launched with the features of Fungus guard, Color lock and Dirt Guard.

Paint which overcome the hairline cracking. Paint which resists alkali, salts.

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Exterior paint which gives smoothness and luxurious finish like interior paint. Oil base paint which has no smell; is odourless or has fragrance. It is available in Dulux Matt Enamel, Dulux Enamel and Dulux Pentalite Classic. It would be an achievement to have the same quality available in ICI Weathershield.


Exterior paint which retains its shade for long time. Wide range of colors to choose from. ICI Weathershield is available in 6,134 shades as opposed to Berger’s Weathercoat which only comes in 12 basic shades. Some of the shades of Weathershield are shown below.

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Price “Amount of money needed to purchase something”. Elements Of Price

LIST PRICE

CREDIT TERMS

DISCOUNT S

PRICE

PAYMENT PERIOD

ALLOWANC ES

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As far as the pricing is concerned it is the most difficult decision because keeping all the things on one side price matters. ICI Paints is promoting different brands on different prices according to the market segmentation. Dulux is the most expensive brand in the market. The reason is that the best raw material and components are used in the manufacturing of the Dulux. Second reason is that Dulux target market is upper tier. And to some extend upper tier of middle tier. But paying more for Dulux , customer feels value . If we compare the price of Dulux with other local brands , it’s the fact that price difference is not more than 20-100 rupees. As far as quality is concerned , by paying more customer is not worried about the quality . For the market which is middle tier, ICI’s brands Paintex Emulsion and Glidden are the brands with low price and optimum quality within the tier. If we go into the comparison of Paintex and Glidden their price is lower than the other paint brands selling in the market. Glidden is purely priced to cover the buying power of middle tier. The price of the products in which ICI is having technological edge over competitors is comparatively high. The reason is that ICI is enjoying state of monopoly for that product. There is no product in the market to encounter them. The price of Dulux Weathersheild Fresh is Rs. 1050/-, others companies brands offered in the market are 300-400 Rs less than Weathersheild Fresh. Same is the case with Dulux Gloss Finish and Dulux Matt Enamel Odourless Range. The price is Rs. 300-400 more as compared to other brands. So pricing factor vary from brands to brands and target market.

Placement / Distribution “Place includes company activities that make the product available to target consumers.” Placement is the process in which the final good or service is made available to the end customer. The channels used for this purpose are known as “Marketing Channels”. Marketing channels are defined as “set of independent organization involved in the process of making a product or service available for the use or consumption by the consumer or business user”.

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Elements Of Placement

CHANNELS

TRANSPOR T

COVERAGE

PLACEMEN T

INVENTOR Y

ASSORTME NTS

LOCATION

The overall ICI Paints products are manufactured in ICI Paints Lahore. For all Pakistan stocks dispatch is carried out from factory warehouse. There are further 5 warehouses in the country. • • • • • Lahore Islamabad Multan Karachi Quetta

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The distribution channel includes Distributors and Dealers/ retailers. The Pakistan is divided into 4 Regions. • • • • Upper Lower Punjab Center Punjab Lower

Every region is headed with Regional Sales Manager and in every Region there are further Area/ Territories. The supply activities are carried out with keeping the region and areas. One region cannot carry out supply in others region same in the case with areas/ territories. The product is only delivered to the company approved dealer or distributor. Distributor can sale to the customer which is not approved dealers of the company. Main consumption of paint is on dealer/retailers counter. The delivery is made through 2 modes • Distribution Vehicles • Freight On Road ( goods transportation service) By these 2 means ICI manage the distribution and placement of their products to be available for their customers and consumers. Marketing Systems “A distribution channel structure in which products, wholesaler, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate”. ICI paint is also using vertical marketing system in the placement if its products. Here come the old concept of dealership. That means, giving right to a third party to sell the product on their behalf. ICI Paints, like other competitors, supplies the paint products through the appointed dealers in various regions and areas. The current number of ICI Paints appointed dealers all over Pakistan is more than 2200. Dealers’ margin is around 5-10% depending upon their performance in terms of volume sale. The Company also extends credit facility to the dealers. The limit of the credit available to a dealer is also dependent upon his past sale performance. ICI Paints, like 2 to 3 other major paint manufacturers spends considerable funds on the advertisement of their products. Both the electronic and print media is employed for the sale promotion. In addition the paint manufacturers offer various types of incentives/gift schemes to the high performer dealers and even to the paint contractors. For example, ICI Paints and Berger every year, take their high performer dealers abroad on Company expenses for tourism visits to

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various nearby countries. Nearly all paint manufacturing companies offer various types of material gifts to the high performing dealers and even to the painting contractors. Unlike ICI Paints, all other manufacturers also run a cash token incentive scheme. Tokens of various monitory values are put in the paint boxes. Since the paint boxes are normally opened either by the painters or the paint contractors and the customers are generally not aware of such schemes, therefore the beneficiaries are invariably the painters or the paint contractors. This aspect therefore becomes a strong motivating force for them to recommend such specific brands of paint.

Promotion “Promotion means an activity that communicates the merits of the product and persuades target customers to buy it”. Good Promotion always plays an important role in the success of any product. A good product can be fail if not properly promoted. Nippon is taking big steps to promote it’s product by maintaining good relationship with the community of Pakistan. The basic aim at the behind of these steps is to promote their own product through a moral way.

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Elements Of Promotion

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PERSONAL SELLING

ADVERTISI NG

DIRECT MARKETIN G

PROMOTIO N PROMOTION PUBLIC RELATIONS

Before getting a product into the market, ICI’s culture is to invite its business partners (dealers/distributors) to give them orientation regarding new product what ICI is going to launch, with what features and how it will work. After this first step when product is introduced to the business partner’s second step is its promotion how the promotion is done. • • • • • • • • • • T.V Advertisement on different channels Radio Advertisement , F.M 100 Bill boards almost in every big city Posters / Banners Small gifts for dealers/distributors to push new product sale Small gifts for painters / contractors who are labor force who apply paint Painters party to introduce them new product T – Shirts printed with product logo on them Caps Key chains

SALES PROMOTIO N

EVENTS & EXPERIEN CES

ICI PAINTS 38 MBA-2091154 ``

The sales team is assigned a target the placement of the new product on every counter. With the help of direct marketing, ICI employees gives orientation to the customers and Painters that what the new product is and what features it has. Currently T.V commercial of ICI Dulux Odourless, in on air on different T.V channels.

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DECISION PROBLEM
“Does ICI Paints need to modify its marketing strategies in order to increase the market share of Weathershield from 60% to 70%?”

RESEARCH PROBLEM/QUESTIONS
  

What properties customer deem important in a particular brand of exterior paint? What are the perceived relative merits and demerits of Weathershield? How does the market mix of ICI Paints compare with the competition? What other aspects affect the market share of Weathershield?

RESEARCH OBJECTIVES
 To determine what aspects do people deem important in selecting a particular brand of exterior paint. To determine how people rate Weather Shield against other available brands of exterior paints based upon the identified aspects. To determine the changes in the marketing mix which could increase the market share of Weathershield by 10%. To determine the effects of tokens-incentives being offered by other suppliers of paints. To determine whether the market share could be increased by controlling the fake paint being sold in the market under the brand name of ICI Weathershield.

 

HYPOTHESIS
 Token incentive offered by the competition is restricting the market share of ICI Weathershield.

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Sale of fake paint in the market under the brand name of ICI Weathershield is restricting the market share of ICI product.

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REVIEW OF LITERATURE
Thorough website search was conducted for relevant documents/studies. Contact was also made in this regard with the concerned personnel of ICI Paints. Following documents were located / secured and were reviewed in detail.      Annual reports of ICI Paints for the last 5 years. ICI Weathershield brochure describing the product in detail. Paint Industry in Pakistan. Environmental report for Paint Sector in Pakistan. ICI Paints Website

ICI PAINTS 42 MBA-2091154 ``

LIST OF QUESTIONS
 Current size of exterior paint market. Any printed information available?  Growth rate in exterior paint market. Any printed information available?  Major suppliers of exterior paint.  When was ICI Weathershield launched?  Market share of ICI Weathershield verses other exterior paint brands.  Growth rate in the sale of ICI Weathershield. Any printed information available?  Growth rate in the market share of ICI Weathershield. Any printed information available?  Various factors/properties considered important by the consumers in the selection of a particular brand of exterior paint.  What forces influence/guide the consumers in selecting any specific brand of paint? Who are the real decision makers?  Relative price of Weathershield verses other similar products.  Typical sale promotion activities of ICI Paints. Is there an advisory service? What is its set up and how does it function?  Any special sale incentives offered by ICI for Weathershield?  Any special sale incentives offered by competition for their brands of exterior paint?  Possible/perceived reasons which limit the market share of Weathershield  Is fake paint sold in the market?  Approximate percentage of the sale of fake paint in the market?  What is the basis/indications for concluding that fake paint is being sold in the market?  How can one confirm the sale of fake paint?  Can a control in the sale of “fake sale” under the brand name of ICI result in an increase in the market share of Weathershield?

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 What can be done to control the sale of fake paint under ICI brand name?  Could a sealed container be helpful in reducing the sale of fake paint?  What other steps can be taken to increase the market share of Weathershield?  Number of ICI Paint Dealers in Pakistan/Lahore.  What is the Dealer’s margin?  Is ICI paint available at shops other than authorized dealers?  Any direct sales to consumers from the Factory?
 Any previous relevant studies carried out?

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RESEARCH PROPOSAL
I. Purpose of the proposed research design: The main purpose of this research is to determine how to modify the marketing strategy to increase the market share of ICI Weathershield from 60% to 70%. Research Objectives  To determine the changes in the marketing mix which could increase the market share of Weathershield by 10%.  To determine the effects of tokens-incentives given by other suppliers of paints

 To determine whether the market share could be increased by controlling the fake paint being sold in the market under ICI Weathershield brand name II. Type of study: For this research two research methods will be used • • Exploratory Research Descriptive Research

Exploratory Research Literature survey: A literature survey will be conducted by collecting related secondary information about the distribution process of the organization .This information will be acquired from the retailers and different model shops of the ICI paints. Experience survey: Interviews will be conducted with the higher management of the organization and with those belong to the competitor organization to have a clear idea as how the whole distribution system is working and to identify the loop holes amongst different marketing channels and to come up with an appropriate solution to improve the distribution procedure.

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Descriptive Research

• •

Detailed Interviews Structured Questionnaires

Detailed Interviews: With Contractors: Detailed interviews will be conducted with the contractors to see if they are satisfied with ICI products and if not, what the major factors responsible for that are. With Retailers: Interviews will be conducted with the retailers to have a more comprehensive knowledge about the way they are working with the marketing channel of the company and the distribution approach they have adopted to enhance the company’s image in the market and amongst the consumers. With Management: Interviews will be conducted with the management to get more awareness about company’s management policies and marketing strategies.

Structured Questionnaires: For Households/Direct Consumers: Questionnaires will be distributed and get filled by the households as to see their preferences and elements they consider while selecting the paint for their house .What improved features they would like to see in the paint brands they purchase and how they compare it with other alternatives. For Distributors/Retailers/Contractors: To have a clear idea about their preferences and suggestions they have for the betterment of the company.

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III.

Definition of the target population and sample size: For our research, we have specifically targeted the following segments of the market: • • • • • Painters Retailers Dealers Contractors Households/Direct Consumers

The total sample size of the research will be 100.From each segment 20 sub samples will be picked randomly.

IV.

Sample technique and data collection method: Same technique consists of: • • • • Questionnaires for Consumers / Painters / Retailers / Contractors Telephonic and face to face interviews with people currently working in the industry Experienced survey with the professionals Literature survey

V.

Specific research instruments:

• • • •

Internet Related articles Interviews Questionnaires

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VI.

Potential managerial benefits of the proposed study: Following are the major benefits which management will drive after the research is completed: • • Developing a core strategy to increase the market share of the company by eliminating the effect of the token reward system To establish a system to eliminate the sale of fake paint under ICI Weather Shield brand name

VII.

Proposed cost structure for the total project: Questionnaire cost • Material cost Three A4 size papers per questionnaire = Rs. 3 per questionnaire Total number of questionnaire = 100 Total cost of questionnaire 3 x 100 = Rs. 300

Printing cost Cost of one page = Rs. 3 Total print outs cost = 3 x 300 = Rs. 900

Total questionnaires cost = 300 + 900 = Rs. 1200

Transportation cost For conducting 5 interviews

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Total transportation cost = Rs. 1000 (fuel plus transportation fare) • Telephone expenditures For approximately 30 to 40 calls = Rs. 1000

Total Cost: 1200 + 1000 + 1000 = 3200

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SAMPLING PLAN

Target Population Unlike typical products – there is limited knowledge amongst the masses regarding paints. The only people who can provide reliable information are either individuals who have been involved in the purchase of paint or the paint-dealers, paint-contractors and painters. As a result the target population for our survey instrument would comprise of: • • Head of the households Paint Dealers / Paint Contractors / Painters

Sampling Frame Having two separate survey instruments required us to have two different sampling frames for each. Thus the sampling frame for the consumer questionnaire consists of all households which spread over the various geographical areas of Lahore. The second questionnaire which is designed for dealers / painters / paint contractors has a sampling frame that includes all the paint shops located at the various markets of Lahore.

Sampling Procedure Due to limited time we have opted for non-probability sampling. In non-probability sampling we have chosen a mixture of convenience, judgment, snowball and quota sampling. We will be relying on our judgment when selecting elements from the sample frame. Although we will make an effort to include samples from all the segments but due to limited time the sample would have to be convenient. As we wish to target individuals who have had a certain level of exposure to the purchase, sale, or use of paint we will also be asking our respondents to guide us through our sample selection. To diversify our sample based on certain demographics such as household income etc. we are going to assign certain quotas to specific areas while selecting the elements.

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Sample Size Due to the nature of the study and the limited time the sample size could not be very large. As a result the following sample size has been chosen which should be sufficient. 50 50 Sample Elements The sample elements would consist of the head of the households who are the most likely decision-makers in the purchase of paint as well as the paint-dealers, paint-contractors and painters. House holds Dealers / Painters

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DESCRIPTION OF ACTIONS
The research objectives and the hypothesis were reviewed in detail in order to determine the type of information and the primary data to be collected. In view of the nature of the research objectives it was decided to pursue the method of communication for the collection of the data and to target the relevant persons who are involved in the decision making process for the selection of a particular brand of the exterior paint. Two lists of questions were developed – one for contacting the consumers and the other for contacting the Painters, Dealers, Retailers and House Builders, who are considered to be relatively more knowledgeable about the subject.

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QUESTIONNAIRE FOR CONSUMERS (A)

1)    2)   

Locality of the house based on property cost Above Average Average Below Average Visible standard of living Above Average Average Below Average

3)   4)  

Category of the resident Owner Living on rent Have you been involved in the purchase of exterior paint? Yes No

5)   

When is the last time that you had your house painted? Less than 6 months ago 6 Months – 1 Year ago 1 Year – 2 Years ago

ICI PAINTS 53 MBA-2091154 ``

  6)       

2 Years – 3 Years ago More than 3 Years ago Which exterior paint did you use? Berger ICI Master Silver Sand Gobi Other [Specify] __________________ Don’t Know

7) How important do you consider the following factors while selecting a particular brand of exterior paint? Very Imp Important Unimportant Very Unimportant Brand Reliability Price Dealer Reliability Own experience Advice of Friends Advice of Painter Advice of Retailer                            

8) How would you rate the following exterior-paint manufacturers in terms of quality and reliability?

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Very Good Berger ICI Master Silver Sand Gobi     

Good     

Poor     

Very Poor     

9)  

Who bought your paint? Personally Painter/Paint Contractor buys the paint [Skip to Question 11]

10) From where did you buy the paint?  Appointed company dealer

 Retailer Can you name the shop: ___________________

11) Can you differentiate between a company appointed dealer-shop and a non-dealer shop?   Yes No

12) Are you aware of any “token scheme” being offered by paint manufacturers? 

Yes No [If No, Skip to Question 15]

13)

Are you familiar with the details of the “token scheme”?

ICI PAINTS 55 MBA-2091154 ``

  14)      15) 

Yes No

(If Yes, Elaborate: ________________________________)

Which paint suppliers are offering the “token scheme” as an incentive? Berger ICI Master Silver Sand Gobi Are you aware of any price-discounts being offered by paint suppliers? Yes No [If No, Skip to Question 17]

16)     

Which suppliers of paint are offering price-discounts? (tick all that apply) Berger ICI Master Silver Sand Gobi

17) In your opinion is fake exterior paint being sold in the local market under various brand names?   Yes No [If No, Skip to Question 19]

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18) Are you aware of any campaign launched by any paint manufacturing company to warn against the sale of fake paint?   Yes (If Yes, elaborate: ___________________________________ ) No

19) Are you familiar with customer support service being offered by ICI Paints?   Yes (If Yes, elaborate: ___________________________________ ) No

20) What other steps can ICI Paints take in order to increase the market share of Weathershield? ________________________________________________________________ ________________________________________________________________

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QUESTIONNAIRE FOR DEALERS/PAINTERS (B)

1)   

Category of the respondent? Dealer Retailer Painter / Paint Contractor

2)

Shop Location: __________________________

3)       4)   

Which exterior-paint brands do you stock? Berger ICI Master Silver Sand Gobi Others (Specify: ____________________________________________) How many years of experience does the respondent have in this field? Up to 5 years 5 – 15 years More than 15 years

5) How would you rate the following exterior-paint manufacturers in terms of quality and reliability? Very Good Good Poor Very Poor

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Berger ICI Master Silver Sand Gobi

    

    

    

    

6) Relative rating of properties of various brands of exterior paint. (Rate from 1-5: 5-Very Good, 4-Good, 3-Satisfactory, 2-Poor & 1-Very Poor) Properties
Paint Quality Regular S upply Better Margins Commissions / Incentives Consumer Preference

ICI

Berger

Master

Silver Sand

Gobi

7) How much importance does a consumer give to the following while selecting a particular brand of paint? Very Imp Own experience Family/Friends Painter / Contactor Retailer Others 8)      Important      Unimportant      Very Unimportant     

Can a layman easily differentiate between a company appointed dealer and a

non-dealer shop?

ICI PAINTS 59 MBA-2091154 ``

 

Yes No

9) Which of the following suppliers of various brands are offering a token scheme as an incentive?      Berger ICI Master Silver Sand Gobi

10) Which of the following suppliers of various brands are offering price discount on their retail price?      11) Berger ICI Master Silver Sand Gobi

Which of the following suppliers of various brands offer any other type of motivational sale incentives?     Berger ICI Master Silver Sand

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Gobi

12) Is fake exterior paint being sold in the local market?   Yes No [If No, Skip to Question 20]

13) What is the basis/indication for the assumption that fake paint is being sold in the market?    General market view Customer/Painter complaints Other [Specify: ______________________________________ ]

14) How can one confirm the sale of fake paint in the market?   Tempered Paint-box Painter’s view upon usage

15) What could be the approximate average percentage of the sale of fake exterior paint?    Up to 10% 10% - 20 % More than 20%

16) Is the quantity of fake ICI Weathershield more or less than the perceived average sale of fake paint?    More than average Average Less than average

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17) Has there been any general awareness campaign launched by any paint manufacturing company to warn consumers about fake paint?   Yes No

18) Is it relatively easier or more difficult to refill the paint boxes of ICI Weathershield?    Easier More difficult Same

19) Looking at a new-unopened box of ICI Weathershield, can one confirm whether it is genuine or fake?   Yes [If Yes, How? ________________________________________ ] No

20) What can ICI Paints do to minimize the sale of fake Weathershield?    Sell through designated dealers only Introduce a tamper-proof seal Other

21)

What other steps can ICI Paints take in order to increase the market share of Weathershield? _________________________________________________________________ _________________________________________________________________ _________________________________________________________________

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ICI PAINTS 63 MBA-2091154 ``

SURVEY ANALYSIS
Quality & Reliability In order to assess how consumers and dealers perceive the quality & reliability of ICI Weathershield in respect to the other products of other paint manufacturers the following questions were used for both questionnaires.

Q. How would you rate the following exterior-paint manufacturers in terms of quality and reliability? Very Good Berger ICI Master Silver Sand Gobi      Good      Poor      Very Poor     

The above question yielded the following results: • Consumer Survey:
ICI Frequency Very Good 57 Good 26 Poor 12 Very Poor 5 Total 100 Percent 57.0 26.0 12.0 5.0 100.0 Valid Percent 57.0 26.0 12.0 5.0 100.0 Cumulative Percent 57.0 83.0 95.0 100.0

Valid

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Berger Frequency Very Good 30 Good 55 Poor 6 Very Poor 9 Total 100 Percent 30.0 55.0 6.0 9.0 100.0 Valid Percent 30.0 55.0 6.0 9.0 100.0 Cumulative Percent 30.0 85.0 91.0 100.0

Valid

Master Frequency 5 29 47 15 4 100 Percent 5.0 29.0 47.0 15.0 4.0 100.0 Valid Percent 5.0 29.0 47.0 15.0 4.0 100.0 Cumulative Percent 5.0 34.0 81.0 96.0 100.0

Valid

No Reponse Very Good Good Poor Very Poor Total

Silver Sand Frequency 9 3 52 28 8 100 Percent 9.0 3.0 52.0 28.0 8.0 100.0 Valid Percent 9.0 3.0 52.0 28.0 8.0 100.0 Cumulative Percent 9.0 12.0 64.0 92.0 100.0

Valid

No Reponse Very Good Good Poor Very Poor Total

Gobi Frequency 20 6 27 39 8 100 Percent 20.0 6.0 27.0 39.0 8.0 100.0 Valid Percent 20.0 6.0 27.0 39.0 8.0 100.0 Cumulative Percent 20.0 26.0 53.0 92.0 100.0

Valid

No Reponse Very Good Good Poor Very Poor Total

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Dealer Survey
ICI Frequency Very Good 87 Good 13 Total 100 Percent 87.0 13.0 100.0 Valid Percent 87.0 13.0 100.0 Cumulative Percent 87.0 100.0

Valid

Berger Frequency Very Good 15 Good 66 Poor 8 Very Poor 11 Total 100 Percent 15.0 66.0 8.0 11.0 100.0 Valid Percent 15.0 66.0 8.0 11.0 100.0 Cumulative Percent 15.0 81.0 89.0 100.0

Valid

Master Frequency Very Good 21 Good 18 Poor 54 Very Poor 5 5 2 Total 100 Percent 21.0 18.0 54.0 5.0 2.0 100.0 Valid Percent 21.0 18.0 54.0 5.0 2.0 100.0 Cumulative Percent 21.0 39.0 93.0 98.0 100.0

Valid

Silver Sand Frequency 8 6 26 35 25 100 Percent 8.0 6.0 26.0 35.0 25.0 100.0 Valid Percent 8.0 6.0 26.0 35.0 25.0 100.0 Cumulative Percent 8.0 14.0 40.0 75.0 100.0

Valid

No Response Very Good Good Poor Very Poor Total

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Gobi Frequency 26 10 10 32 22 100 Percent 26.0 10.0 10.0 32.0 22.0 100.0 Valid Percent 26.0 10.0 10.0 32.0 22.0 100.0 Cumulative Percent 26.0 36.0 46.0 78.0 100.0

Valid

No Response Very Good Good Poor Very Poor Total

As one can see above ICI Weathershield is ranked the best among the consumers in terms of quality and reliability. There were 57 individuals who ranked ICI Weathershield as “Very Good” as opposed to only 30 individuals who ranked Berger’s Weathercoat as “Very Good” the other major competitor. On the other hand 87 dealers considered ICI Weathershield as “Very Good” as opposed to only 15 dealers for Berger. Another question was used to determine the perceived qualities amongst the dealers based on various factors. The following question was used.

Q. Relative rating of properties of various brands of exterior paint. (Rate from 1-5: 5-Very Good, 4-Good, 3-Satisfactory, 2-Poor & 1-Very Poor) Properties
Paint Quality Regular S upply Better Margins Commissions / Incentives Consumer Preference

ICI

Berger

Master

Silver Sand

Gobi

ICI PAINTS 67 MBA-2091154 ``

The above question yielded the following results:
ICI - Paint Quality
100
70 60 50

Berger - Paint Quality

80

60
40 30 20

40

20

Percent

Percent
Satisfactory Good Very Good

10 0 Satisfactory Good Very Good

0

ICI - Paint Quality

Berger - Paint Quality

Berger - Regular Supply
60

50

40

30

20

Percent

10

0 Poor Satisfactory Good Very Good

Berger - Regular Supply

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Berger - Better Margins
50

40

30

20

Percent

10

0 No Response Very Poor Poor Satisfactory Good Very Good

Berger - Better Margins

ICI - Better Margins
40

30

20

10

Percent

0 No Response Very Poor Poor Satisfactory Good Very Good

ICI - Better Margins

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ICI PAINTS 70 MBA-2091154 ``

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Berger - Commission / Incentives
60

50

40

30

20

Percent

10

0 No Response Very Poor Poor Satisfactory Good

Berger - Commission / Incentives

ICI - Commission / Incentives
30

20

10

Percent

0 No Response Very Poor Poor Satisfactory Good Very Good

ICI - Commission / Incentives

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Berger - Consumer Preference
60

50

40

30

20

Percent

10

0 Poor Satisfactory Good Very Good

Berger - Consumer Preference

ICI - Consumer Preference
80

60

40

20

Percent

0 Poor Satisfactory Good Very Good

ICI - Consumer Preference

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Factors responsible for selection In order to understand how important the consumers consider various factors while selecting a particular brand the following question was used.

Q. How important do you consider the following factors while selecting a particular brand of exterior paint? Very Imp Brand Reliability Price Dealer Reliability Own experience Advice of Friends Advice of Painter Advice of Retailer        Important        Unimportant        Very Unimportant       

This question yielded the following results:
Brand Reliability Frequency Very Important 78 Important 22 Total 100 Percent 78.0 22.0 100.0 Valid Percent 78.0 22.0 100.0 Cumulative Percent 78.0 100.0

Valid

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Price Frequency Very Important 58 Important 37 Unimportant 5 Total 100 Percent 58.0 37.0 5.0 100.0 Valid Percent 58.0 37.0 5.0 100.0 Cumulative Percent 58.0 95.0 100.0

Valid

Dealer Realiability Frequency Very Important 52 Important 40 Unimportant 8 Total 100 Percent 52.0 40.0 8.0 100.0 Valid Percent 52.0 40.0 8.0 100.0 Cumulative Percent 52.0 92.0 100.0

Valid

Own Experience Frequency Very Important 48 Important 42 Unimportant 7 Very Unimportant 3 Total 100 Percent 48.0 42.0 7.0 3.0 100.0 Valid Percent 48.0 42.0 7.0 3.0 100.0 Cumulative Percent 48.0 90.0 97.0 100.0

Valid

Advice of Friends Frequency Very Important 27 Important 49 Unimportant 17 Very Unimportant 7 Total 100 Percent 27.0 49.0 17.0 7.0 100.0 Valid Percent 27.0 49.0 17.0 7.0 100.0 Cumulative Percent 27.0 76.0 93.0 100.0

Valid

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Advice of Painter Frequency Very Important 70 Important 13 Unimportant 16 Very Unimportant 1 Total 100 Percent 70.0 13.0 16.0 1.0 100.0 Valid Percent 70.0 13.0 16.0 1.0 100.0 Cumulative Percent 70.0 83.0 99.0 100.0

Valid

Advice of Retailer Frequency Very Important 55 Important 36 Unimportant 7 Very Unimportant 2 Total 100 Percent 55.0 36.0 7.0 2.0 100.0 Valid Percent 55.0 36.0 7.0 2.0 100.0 Cumulative Percent 55.0 91.0 98.0 100.0

Valid

The above data suggests that the factor which is given the most importance amongst the consumers is dealer reliability (78% - Very Important) followed by the advice of painter (70% Very Important). Thus the advice of the painter and dealer plays a vital role in the selection of a particular brand of paint.

Q. How much importance does a consumer give to the following while selecting a particular brand of paint? Very Imp Own experience Family/Friends Painter / Contactor Retailer     Important     Unimportant     Very Unimportant    

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The question yielded the following results:
Own Experience
70 60 50 40 40 30 20 60 80

Painter / Contractor

20

Percent

10 0 Very Important Important Unimportant

Percent

0 Very Important Important Unimportant

Own Experience

Painter / Contractor

Retailer
40 60

Family Friends

50 30 40

20

30

20 10

0 Very Important Important Unimportant Very Unimportant

Percent

Percent

10 0 Very Important Important Unimportant

Retailer

Family Friends

As shown above the painter and paint-contractor is considered most important (72% - Very Important) by consumers while selecting a particular brand of paint. Likewise, the retailer also plays a significant role in the decision making process of the consumer.

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Token Incentives Awareness The following question was devised to determine the awareness level of consumers regarding the “Token Scheme” being offered by various exterior paint manufacturers. Q. Are you aware of any “token scheme” being offered by paint manufacturers?   Yes No

The question yielded the following results:
Aey ua aeo a y" k ns h m " b in o r db p in m n fa tue r o w r f n to e c e e e g ffee y a t a u c r rs
7 0 6 0 5 0 4 0 3 0 2 0 1 0 0 N Rs o s o epne Ys e N o 3

Percent

A y ua a o a y" k ns h m " b in o re b p in m n fa tu r re o w re f n to e c e e e g ffe d y a t a u c res

Are you aware of any "token schem being offered by paint m e" anufacturers? being offered by paint m anufacturers Frequency Valid No Response Yes No 3 Total 6 58 33 3 100 Percent 6.0 58.0 33.0 3.0 100.0 Valid Percent 6.0 58.0 33.0 3.0 100.0 Cumulative Percent 6.0 64.0 97.0 100.0

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The results showed that 58% of the consumers were aware of “Token Schemes” being offered by paint manufacturers.

Who benefits from Token Schemes? Another question was used to determine how many consumers were familiar with the details of these “Token Schemes” and who they felt benefited from them. Q.   Are you familiar with the details of the “token scheme”? Yes No (If Yes, Elaborate: ________________________________)

The results are as follows:

Are you familiar with details of the "token scheme"?
50

40

30

20

Percent

10

0 No Response Y es No

Are you familiar with details of the "token scheme"?

Are you familiar with details of the "token scheme"? Frequency 42 33 25 100 Percent 42.0 33.0 25.0 100.0 Valid Percent 42.0 33.0 25.0 100.0 Cumulative Percent 42.0 75.0 100.0

Valid

No Response Yes No Total

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Token Scheme benefits who?
80

60

40

20

Percent

0 Painter Consumer

Token Scheme benefits who?

Token Scheme benefits who? Frequency 8 23 31 69 100 Percent 8.0 23.0 31.0 69.0 100.0 Valid Percent 25.8 74.2 100.0 Cumulative Percent 25.8 100.0

Valid

Missing Total

Painter Consumer Total System

As shown above there were 33 consumers who felt that they were aware of the details of the token scheme and amongst these individuals 23 of them felt that the consumers benefited from the token scheme.

Which suppliers are offering Token Schemes? Consequently another question was used to assess which paint-manufacturers were offering the “Token Schemes” from the dealers. Q. Which of the following suppliers of various brands are offering a token scheme as an incentive?

ICI PAINTS 80 MBA-2091154 ``

    

Berger ICI Master Silver Sand Gobi

Which of the following suppliers of various brands are offering a token scheme as a incentive Frequency Berger 42 ICI 1 Silver Sand 3 Gobi 8 Berger & ICI 7 Berger & Silver Sand 14 Berger & ICI & 10 SilverSand & Gobi Berger & Silver Sand 15 & Gobi Total 100 Percent 42.0 1.0 3.0 8.0 7.0 14.0 10.0 15.0 100.0 Valid Percent 42.0 1.0 3.0 8.0 7.0 14.0 10.0 15.0 100.0 Cumulative Percent 42.0 43.0 46.0 54.0 61.0 75.0 85.0 100.0

Valid

Price Discounts & Motivational Incentives The following questions were used to assess which suppliers were offering price-discounts and other motivational incentives to dealers for the sale of paint.

Q. Which of the following suppliers of various brands are offering price discount on their retail price?     Berger ICI Master Silver Sand

ICI PAINTS 81 MBA-2091154 ``

Gobi

Q. Which of the following suppliers of various brands offer any other type of motivational sale incentives?      Berger ICI Master Silver Sand Gobi

These questions yielded the following results:
Which of the following Suppliers of various brands are offering price-discounts on their retail price Frequency 2 10 5 12 10 7 54 100 Percent 2.0 10.0 5.0 12.0 10.0 7.0 54.0 100.0 Valid Percent 2.0 10.0 5.0 12.0 10.0 7.0 54.0 100.0 Cumulative Percent 2.0 12.0 17.0 29.0 39.0 46.0 100.0

Valid

No Response Berger ICI Master Berger & ICI Berger & Master Berger & ICI & SilverSand & Gobi & Master Total

ICI PAINTS 82 MBA-2091154 ``
Which of the following suppliers of various brands offer any other type of motivational sale incentives? Frequency 2 18 1 8 35 6 6 24 100 Percent 2.0 18.0 1.0 8.0 35.0 6.0 6.0 24.0 100.0 Valid Percent 2.0 18.0 1.0 8.0 35.0 6.0 6.0 24.0 100.0 Cumulative Percent 2.0 20.0 21.0 29.0 64.0 70.0 76.0 100.0

Valid

Berger ICI Master Silver Sand Berger & ICI Berger & Master Berger & ICI & SilverSand & Gobi Berger & ICI & SilverSand & Gobi & Master Total

ICI PAINTS 83 MBA-2091154 ``

Fake Paint • Consumer Questionnaire

Following question was designed to assess whether consumers felt that fake paint is being sold in the market. Q. In your opinion is fake exterior paint being sold in the local market under various brand names?   Yes No [If No, Skip to Question 19]

The question yielded the following result:

In yo r o in n is fa e rio p in b in s ld in th lo l m rke u p io ke xte r a t e g o e ca a t?
10 0

8 0

6 0

4 0

Percent

2 0

0 N R s o se o epn Ys e N o

Inyo r o in nis fa e rio p in b in so inth lo l m rke u p io ke xte r a t e g ld e ca a t?

As shown in the graph almost 80% consumers are aware of the fact that fake exterior paint is being sold in the local market under various brand names whereas approx.20% consumers felt otherwise.

ICI PAINTS 84 MBA-2091154 ``

The following question was designed to assess the awareness level amongst consumers regarding any campaigns launched by paint manufacturing companies to warn against sale of fake paints. Q. Are you aware of any campaign launched by any paint manufacturing company to warn against the sale of fake paint? Yes (If Yes, elaborate: ___________________________________ ) No

 

The question yielded the following result:
Aey ua aeo a yc m a n a a s fa ep in r o w r f n a p ig s g in t k a t?
8 0

6 0

4 0

Percent

2 0

0 N Rs o s o epne Ys e N o

Aey ua aeo a yc m a n a a s fa ep in r o w r f n a p ig s g in t k a t?

As shown in the above bar chart more than 75% consumers were not aware of any such campaigns.

ICI PAINTS 85 MBA-2091154 ``

Dealer Questionnaire

Following question was designed to assess whether dealers and painters felt that fake paint is being sold in the market. Q.   Is fake exterior paint being sold in the local market? Yes No

The question yielded the following result:
Isfa ee teio p in b in s ldinth lo a m r e k x r r a t e g o e c l ak t?
8 0

6 0

4 0

Percent

2 0

0 Ys e N o

Isfa ee teio p in b in s ldinth lo a m r e k x r r a t eg o e c l ak t?

As shown in the graph almost 70% dealers and painters are aware of the fact that fake exterior paint is being sold in the local market under various brand names whereas approximately 30% felt otherwise.

ICI PAINTS 86 MBA-2091154 ``

Following question was designed to assess the ways through which dealers and painters felt that fake paint is being sold in the market. Q. What is the basis/indication for the assumption that fake paint is being sold in the market?    General market view Customer/Painter complaints Other [Specify: ______________________________________ ]

The above question yields the following results:

Wa a th In ic tio th t fa ep in is b in s ldinth m rk t? h t re e d a n a k a t e g o e a e
5 0

4 0

3 0

Frequency

2 0

1 0

0 N Rs o s o epne G n ra Mrk t V w e e l a e ie C sto e P in r C m u mr a te o Mrk t V w &C mla a e ie o p

W a a th I d a nth t fa ep in is b in s ldinth m rk t? h t re e n ic tio a k a t e g o e a e

The above bar chart shows that 35% dealers have no idea whereas approximately 40% dealers and painters think that customer/painter complaints are the major indications that fake paint is being sold in the market and almost 15% think that general market view is the major indication and 10% painters/dealers think that both market view & complaints are the basic indications.

ICI PAINTS 87 MBA-2091154 ``

Following question is designed to assess the confirmation of the sale of fake paint in the market. Q.   How can one confirm the sale of fake paint in the market? Tempered Paint-box Painter’s view upon usage

The above question yields the following results:
Hw a o c c n mh s leo f k p in int emr e o c n n e o fir t e a f a e a t h ak t
6 0

5 0

4 0

3 0

Percent

2 0

1 0

0 N Rs o s o e pn e T mee Pi t Bx a pr d a - o n Pi t r ve u o a e's i w p n n

H w a o c c nir th s leo f k p in int emr e o c n n e o f m e a f a e a t h ak t

As shown in the above bar chart more than 50% painter and dealers confirmed the sale of fake paint through painters view upon usage whereas approximately 35% painters and dealers have no idea about the sale of fake paint.

ICI PAINTS 88 MBA-2091154 ``

Following question is designed to assess the approximate average percentage of the sale of fake exterior paint. Q. What could be the approximate average percentage of the sale of fake exterior paint?    Up to 10% 10% - 20 % More than 20%

The above question yields the following results:
W a c u b th a p x a a e g p rc n g o th s leo fa ee t h t o ld e e p ro im te v ra e e e ta e f e a f k x
4 0

3 0

2 0

Percent

1 0

0 N Rs o s o epne U to1 % p 0 1% 2% 0 - 0 Mreth n2 % o a 0

Wa c u b th a p x a a e g p rc n g o th s leo fa ee t h t o ld e e p ro im te v ra e e e ta e f e a f k x

As shown in the above bar chart approximately 35% of painters and dealers think that up to 10% is the average sale of fake exterior paint in the market whereas approximately 10% of the painters and dealers think that the sale of the fake exterior paint lies between 10% to 20% and almost 30% feels that the sale of fake exterior paint in the market is more than 20%.

ICI PAINTS 89 MBA-2091154 ``

Following question is designed to assess that either the quantity of fake ICI Weathershield is more or less than the perceived average sale of fake paint. Q. Is the quantity of fake ICI Weathershield more or less than the perceived average sale of fake paint?    More than average Average Less than average

The above question yields the following results:

Isth q a tityo fa eIC Wa es ie m r o le sth nth p r ie e e un f k I e th r h ld oe r s a e ec v
6 0 5 0

4 0

3 0

Percent

2 0

1 0 0 N Rs o s o epne Mr th na e g oe a v ra e Ae g v ra e L s th na e g e s a v ra e

Isth q a tityo fa eIC Wa e h ldm reo le sth nth p rc v e un f k I e th rs ie o r s a e e ie e

ICI PAINTS 90 MBA-2091154 ``

As shown in the above bar chart approximately 50% of the painters and dealers think that the quantity of ICI Weathershield is more than the perceived average of the sale of fake paint whereas almost 15% of them think that it was about average and only about 8% of them think that the quantity of ICI Weathershield is more than the perceived average of the sale of fake paint is less than average.

Following question is assess to design that either there has been any general awareness campaign launched by any paint manufacturing company to warn consumers about fake paint. Q. Has there been any general awareness campaign launched by any paint manufacturing company to warn consumers about fake paint?   Yes No

The above question yields the following results:
Hst eeb e a yg n r l a ae e sc ma nla n h db a yp in mn a h r e n n e ea wr n s a p ig u c e y n a t a u
6 0

5 0

4 0

3 0

Percent

2 0

1 0

0 N Rs o s o ep n e Ys e N o

H st eeb e a yg n r l a ae e sc ma nla n h db a yp in mn a h r e n n e ea wr n s a p ig u c e y n a t a u

ICI PAINTS 91 MBA-2091154 ``

As shown in the above bar chart only 18% of the painters and dealers were aware of such campaigns.

The following question was devised to estimate whether it was easier or more difficult to refill the paint boxes of ICI Weathershield in comparison to its competitors.

Q. Is it relatively easier or more difficult to refill the paint boxes of ICI Weathershield?    Easier More difficult Same

The above question yields the following results:

ICI PAINTS 92 MBA-2091154 ``

Isit e s r o m r d u tor fill th p in b x so IC Wa e a ie r oe iffic lt e e a t o e f I e th rs
7 0 6 0 5 0 4 0 3 0 2 0 1 0 0 N Rs o s o epne Es r a ie MreD u o iffic lt Sm a e

Percent

Isit e s r o m red u tore th p in b x so IC Wa e a ie r o iffic lt fill e a t o e f I e th rs

As we look at the above bar chart results more than 65% of the painters and dealers felt that it was easier to refill the container of ICI Weathershield.

Following question was designed to speculate which of the following proposed solutions would be most effective to minimize the sale of the fake ICI Weathershield paint.

Q.   

What can ICI Paints do to minimize the sale of fake Weathershield? Sell through designated dealers only Introduce a tamper-proof seal Other

ICI PAINTS 93 MBA-2091154 ``

The above question yields the following results:
W a c n IC d to m im e th s le o fa e W a e h ld ht a I o in iz e a f k e th rs ie
8 0

6 0

4 0

Percent

2 0

0 N Rs o s o epne S ll th u hd s n e ro g e ig a In d c ata p r p tro u e me O e th r

W a c nIC d tom im th s leo fa eW a e ie ht a I o in ize e a f k e th rsh ld

By looking at the above results more than 65% of the painters and dealers were in favor to sell the ICI Weathershield paint through designated dealership whereas almost 23% of them were in favor of introducing a temper-proof seal in ICI Weathershield paints to minimize the sale of fake paint.

SUMMARY OF FINDINGS
The survey findings can be summarized as follows:
• The quality of ICI Weathershield is considered the best amongst the various paint

manufacturers.
• ICI does not offer as many incentives to its dealers as other competitors.

ICI PAINTS 94 MBA-2091154 `` • The advice of the painter and dealer plays a vital role in the selection of a particular brand

of paint.
• Consumers are unaware of the details of the token scheme and how they take advantage

of consumers.
• A substantial amount of fake paint is being sold in the market. • Fake ICI Weathershield is sold more than the products of other competitors. • Consumers are unaware of campaigns against the sale of fake paint.

• Selling through designated dealers or introducing a tamper-proof seal could reduce the sale of fake paint.

ICI PAINTS 95 MBA-2091154 ``

CONCLUSION & RECOMMENDATIONS
Based upon the market survey, the quality of ICI Weathershield is already considered to be the best. However ICI paints should carry out the following recommendations in order to increase the market share of Weathershield from 60% to &70%; • Devise a suitable strategy to nullify the effect of the incentive of “Token Scheme” being offered by Berger for its product. The beneficiaries of the “Token Incentive” are mostly the Painters/Painting Contractors. They also have maximum influence on the selection a specific brand of paint by the consumers. It is therefore essential the strategy must include some kind of incentive for the Painters/Painting Contractors. One of the approaches could be to give some kind of award to the Painters/Paint Contractors based upon the number of wrappers of Weathershield box collected. Install measures to eliminate/minimize the sale of fake paint under the brand name of ICI Weathershield. This can be achieved by: • Designing and installing a proper sealing system on the Weathershield boxes on similar lines as being done presently by Berger.

• •

Raising public awareness through advertisement about the fake paint sold in the market. Taking suitable measures whereby ICI Paints official Dealers are easily recognizable – perhaps by displaying a sign board.

Several strategic options can help ICI Paint overcome its weaknesses and gain market share from the competition.

Forward integration: ICI at the moment is depending on dealers for the sale of their products. These dealers store company’s products, retailers have to get ICI products from these dealers & then offer customers for sale. If ICI instead of depending on dealers use their own on distribution to supply products to retailers then they can increase the sales of their products by giving products to every possible retailers and in this way they can get acceptance of every retailer to get their product and offer it to customer for sale.

ICI PAINTS 96 MBA-2091154 `` •

Backward integration: Presently ICI Pakistan is purchasing its raw material from both local as well as foreign suppliers. About 75% material is purchased from foreign countries and 25% is purchased locally. As such as huge quantity of raw material is purchased from foreign countries that’s why change in government import duties have a great impact on prices of raw material which also increase the prices of finished products. Therefore if ICI acquires local suppliers for start making its own raw material then it can save itself from such fluctuations in prices, which could result in the stabilization of prices, and customers can purchase the products at low prices. If ICI gains control over their local suppliers by ownership and take charge of their operation then a significant cost cutting is possible. After getting ownership if ICI start manufacturing all or most of the required raw material locally then they can significantly reduce the volume of import thus avoiding the heavy import duties imposed by the govt. It will result in decrease in cost of product and ICI would be able to offer its product at a relatively cheaper price.

ICI PAINTS 97 MBA-2091154 ``

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