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1.1 Company’s Profile Asian Paints (Nepal) Pvt. Limited Asian Paints (Nepal) Pvt. Limited is the leading paint company in Nepal. It is a subsidiary of Asian Paints Ltd, India with 51 % share. In Nepal, it started its operation in 1985. The manufacturing facility is located at Hetauda industrial estate and has a capacity to manufacture over 8000 Kilo Liter (KL) of paints annually. It is the first paint company in Nepal with ISO-9002 certification. All products have certification of approval from Nepal Bureau of Standards. It has annual turnover of Rs. 1.33 billion, with overall market share of around 38 %. Asian Paints has been able to establish clear leadership in Nepal. It leverages its worldwide experience to deliver products of International quality & range to the consumers. Asian Paints manufactures complete range of decorative, wood finishes and industrial coatings. The company has also set up over 1100 Colour Worlds to offer wide range of shades to the consumers.
Nepal Shalimar Paints Nepal Shalimar Paints, one of the leading names in paints industry in Nepal was established in 1997. It has annual turnover of 400 million with overall market share of around 11.5 %. Its manufacturing facility is located at Birgunj and has production capacity of 24000 Metric Ton (MT). Its head office is located at Adarshnagar, Birgunj and the corporate office of Kathmandu is located at Durbarmarg. Their Kathmandu depot is located at Kuleshwor.
1.2 Objectives of the Study The objective of this project work is to study and analyze the marketing mix strategies of two leading paints company of Nepal. The study also aims to make a comparative analysis of their marketing mix. 1.3 Limitations of the Study
Within the available period of time and resource constraints, detailed investigation of the product was not possible. Information furnished here is based on the analysis of information obtained from marketing executives of the two companies and also from the various secondary sources such as internet and other literature.
2. MARKETING MIX ANALYSIS
2.1 Product Mix Asian paints product mix: Asian paint produces a wide range of products which have more than 1100 shades. Their products were targeted to the different segment of the society. Company follows the principle providing the customer different kind of products at different price. Its product range includes Wall paints, Metal paints, Wood Finishes, Primers and others. Apart from offering the customers a wide range of decorative and industrial paints, it even custom-creates products to meet specific needs. Asian paint investing Development sector competes globally. The different categories of Asian paints Ltd. are 1
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1) DECORATIVE PAINTS: Decorative paints account covers almost 75% of the overall share of paint market. In this segment, Asian paint has been a leader for almost two decades. Decorative paints include wall finishes for interior & exterior uses, wood finishes & ancillary products such as primers, putties, etc. In decorative segment, company has a wide range of product from low price to high price. Low price product like Utsav, is basically targeted to the rural customer and high price product like Asian Paints Royal and Asian Paints Emulsion are targeted to urban and sub-urban customers. The products are Asian Paints Royale: This product of Asian paint is targeted to higher income group and customer of urban area. The product contains different shades and price of each shade very. E.g. Regal white. Asian Paints Emulsion: It is another product which is targeted to urban area. It is high price premium product. The shades are white, palm group and base.
Asian Paints Gattu Synthetic: It is a product which is targeted to customer of sub urban area. It has different shades like white, Aquamarine and Azure Blue. Asian Paints Utsav Paint: It is product which is targeted to lower income people as well as sub urban customer. The various shades were Adyrey, back, white, super white, etc. Asian Paints Apex: This product is one of the major products of the Asian paints as this product is targeted to middle class people and average income level. These paints have wider range of shades such as classic white, blue ice, Alliance, Antique white and sweet time. 2) INDUSTRIAL COATINGS: Industrial Coatings is the second category of the product that Asian paint produces. Industrial coatings have a moderate growth rate than decorative coating, powder coatings & protective coatings. In this segment Asian Paints targets to industry where the paint are used for protective coatings of the machinery. In these segments the product are normally sold at the premium price.
The products are (i) Apcomin Synthetic Enamel (ii) Apcomin Synthetic Powder (iii) Stainer (iv) Premium surface & fillers These products are based on high technological products and are used for asset (Machinery, tools, equipments) coloring and upcoming synthetic powder is used as Lubricating agent in the machinery.
Product Variety Asian paints has different variety of product range from interior and exterior wall paints to wood finishes as shown in table below. Interior Wall Paints Royale Luxury Emulsion Premium Emulsion Tractor Emulsion Tractor Acrylic Distemper Tractor Synthetic Distemper Table 1: Product Variety of Asian Paints Exterior Wall Paints Wood and Metal Paints Ace Exterior Emulsion Apex Weather Proof Exterior Emulsion Apex Textures Exterior Emulsion Elsatometric HiPerformance Ext. Paint Ustav Enamel Gattu Synthetic Enamel Apcolite Premium Satin Enamel Apcolite Premium Gloss Enamel Wood Finishes PU Wood Finish Exterior PU Wood Finish Interior Melamyne Touch Wood
Raw materials Raw materials are divided into three major groups, namely pigments (titanium dioxide, zinc oxide etc.), solvents (mineral turpentine) and resins and additives. Pigments are finely ground solids of different shades to give color, durability, consistency and other properties to paint. It is also one of the major raw materials, accounting for one-third of the total raw materials cost.2 The company buys raw material from India and South East countries. Quality Asian paints have a quality product to offer. In fact, the tag line of the company is ‘Quality’. They market themselves as ‘The most preferred paint company in Nepal’. They present themselves as trust worthy and believe in relation building. They provide a quality product at reasonable price. Brand Name A brand is a name, term, sign, symbol, design or a combination of all which is build intended to identify products or services of a company to differentiate it from its competitor. Asian paints,
the largest paint company in Nepal, have established its positions as great brand. Asian paints promise to deliver consistently a specific set of features, benefits & services to buyers. Packing All the paints of the company come in the package of 500 ml, 1 Ltr, 4 Ltr, 10 Ltr and 20 Ltr. Warranties Generally, all the paints of Asian Paints have life time warranty. However, customers claiming warranties have to meet some conditions. It takes warranty only for not fading of the color, which belongs to Asian paints. One of its products, Apex Ultima comes with a warranty of seven years. New product
Asian paints recently launched a new product. About one and half years back it launched Ace exterior emulsion. The product was a result of continuous upgrading of product. It has an exterior emulsion paint named Apex-Ultima, Wh...ich offers a 7 year performance warranty (on anti-flaking, anti-fading & anti-fungal properties; conditions apply). Nepal Shalimar Paints Product Mix: It has production capacity of 24000 M ton. It has well equipped Research Department which consists of all quality testing materials and has latest software worth of Rs. 10 million. Product variety Nepal Shalimar paints offer a wide range of products. On the basis of surface to which the paint is to be applied, paints are of three types i.e. Metal, Cement and Wooden. Further cement paints are divided into exterior and interior paints. On the basis of affordability, it is again divided into top quality and general quality. There are near about 1050 shades. Different paints provided by the company under different variety are shown in table below.
Table 2: Product Variety of Nepal Shalimar Paints Exterior Emulsion(for cemented surface) Interior Emulsion(for cemented surface)
Weather Guard Exterior Emulsion
Unique touch Super Acrylic Plastic Emulsion
EXE Exterior Emulsion
Diamond Acrylic Emulsion
Interior Distemper(for cemented surface)
Synthetic Enamel(for cemented surface)
Diamond Acrylic Washable Distemper
Diamond Hi-Gloss Super Synthetic Enamel
Diamond Acrylic Washable Distemper
Goldlac GP Synthetic Enamel
Shalimar Cement Primer
Shalimar Aluminum Paint
Shalimar Red Oxide Primer
Shalimar’s Wall Care Putty
Shalimar Wood Primer
Diamondcem/Goldcem Cement Paint
Raw materials Raw materials are divided into three major groups, namely, pigments (titanium dioxide, zinc oxide etc.), solvents (mineral turpentine) and resins and additives. Pigments are finely ground solids of different shades to give color, durability, consistency and other properties to paint. It is also one of the major raw materials, accounting for one-third of the total raw materials cost. The company buys raw materials mainly from India.
Brand name Nepal Shalimar Paint is a well known name in Nepalese paint market. It has fourteen years of experience in paint industry.
Packaging Exterior Emulsion and Interior Emulsion comes in the package of 20 Ltr, 10 Ltr, 5 Ltr and 1 Ltr. Distempers come in the package of 20 Kg, 10 Kg, 5 Kg and 1 Kg. Synthetic Enamels and Primers come in the package of 20 Ltr, 4 Ltr, 1 Ltr and 500 ml. Wall care putty comes in the packing of 40 Kg and 20 Kg. Cement Paints are available in the package of 25 Kg and 20 Kg. Warranties All the paints by the company have a warranty of five years. The company is now launching new paints with seven years warranty especially targeting markets of Kathmandu and Pokhara. New Products In an effort to offer a wider choice to customers, Shalimar paint has begun a color tinting service called ‘Color Space’ which gives customers a wider choice of color shades. The service is actually a new generation machine that uses computerized support to mix and match imported colorants with high quality bases.
Promotion means the way to introducing, selling and regular making of necessary attractive tools for the customers to influence their purchasing behavior. Generally there are two different concepts in the terms for promotion or promotional tools. They are Advertisement and Sales Promotion. Advertisement: The aim of Advertisement is to inform, persuade, or remind the products of the company. This offers a reason to buy. Sales Promotion: A key ingredient in marketing campaigns consists of a collection of incentives tools, mostly short terms, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. This offers an incentive to buy. Coming across to the promotion strategies of Nepal Shalimar Paints and Asian Paints (Nepal) Private Ltd; they use different kind of promotion tools. They are described below: Asian Paints Promotion Mix Asian paints use various promotional tools to promote its product. Some of the tools used are discussed below:
Promotional Price: The Company has provided a discount of 3 to 4 % for a purchase of product of value more than Rs. 20,000. It also provides free quantity on purchase of same product in bulk. The details of promotional price can be referred from Annex. Advertisement: Regular newspaper ads in National Newspaper like Himalyan Times and
Kantipur Daily, TV ads and FM ads are given. Advertisement is also done through hoarding boards placed at different parts of country. At the same time, ads in magazines like The BOSS and New Business Age is done for the purpose of targeting affluent, educated and high profile business class customers. The Company uses different advertisement policy to promote its products. Point of purchase displays: Wall display is shown at all the major depots and dealer shops around the country. Corporate Social Responsibility (CSR): As a part of CSR and promotion, the company regularly undertakes small projects like freely making and painting the public toilet and bus stops, which can be seen at several places of different cities. They have also been active in road safety initiatives including putting up traffic road signs and messages, thereby adding their name in every work to promote brand name. Direct Marketing: For the direct marketing channel, the company has its own website available at www.asianpaints.com.np.
Shalimar Paints Promotion Mix The company use variety of promotional strategies to promote its product. It provides a lot of discounts to its dealers to promote its product. It has placed a flash boards at all of its dealers shop. The company uses push strategy to increase its market share. Coupons: For the purchase of different types of Shalimar Paints, provides different bonus points at a consumers’ and painters’ level. Some of them are listed in following table.
Table 3 : Bonus Offers Items Quantity Bonus Points 5 7 3 2 Bonus Point Prizes
Diamond lac Weather Guard
Per Litre Per Litre
5000 points = Mobile Set Rs 6000/10000 points = 21” colour TV Rs 12200/ 50000 points= Cash prize Rs 67500/80000 points= 1 Hero Honda Motorcycle
Diamond Distemper Per Kg Wall Putty Per Kg
Prizes (based on target sales to retailers): At dealer level, sales targets are given for particular month and when fulfilled, they are awarded with certain foreign trips. Recent prizes given wereChina Tour for a couple, 7 people Bangkok Tour and constellation prizes, which include silver coins. Sales Target (Dealer Scheme): Upon completion of the sales target, the company offers various foreign trips to dealer as listed below: Sale up to Amount a) Rs 6000000/b) Rs 3000000/c) Rs 1500000/Trip to Switzerland Egypt Europe
Product Warranties: The Product warranty range from product to product. For example, Interior Paints: 7 Years Warranty Exterior Paints: 5 Years Warranty (Subject to terms and conditions mentioned) Advertisement: The Company uses different advertisement policy to promote its products. They are regular newspaper ads in National Newspaper, TV ads, FM ads. Hoarding boards are placed at different places around the major cities.
In this way, Shalimar paints is using attractive promotional strategies for promotion. These strategies mentioned above changes time to time according to demand, supply and competitors’ strategies. 1.2 Price Mix
Price is the one element of the marketing mix that produces revenue, whereas the other elements like promotional, product and place produce cost. Prices are the easiest marketing mix element to adjust product feature. Price also communicates the value positioning of the product or brand of the company. The customer’s perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a physical item; it also has psychological connotations for the customer. The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important to be fully aware of the brand and its integrity while deciding the price. Asian paints Price Mix Asian Paints is selling its products all over Nepal where there are concrete building or at least houses with tin roofs. They are selling their products according to genre, i.e. classification of paints such as metal paint, cement paint and wooden paint; interior paint, exterior paint; premium quality paint and economic quality paint. Their price differs from paint to paint. They don’t decide their price according to the demand of that product. Prices are same almost for the year but only fluctuate slightly when there is fluctuation of price in raw material. According to Asian paints, they are deciding their price on the context of quality. Asian paints classify its products into 2 categories- economic and premium. In both economic and premium they have metal paints, wooden paints and cement paints (interior and exterior). Premium quality cost between Rs. 15000 to Rs. 17000 and economic quality cost about Rs. 9000 to Rs. 10000 for 20 Liter pack of same type of paints. This has been done to satisfy consumers with different economic class. The list price of some of famous products is listed below. Table 4: List Price Product Apex Ultima (Exterior) Packing 20 Ltr. 20 Ltr.
Max Retail Price (Rs.) 15572 18903
Ace Supreme Discounts
Company usually provides 25 to 30 percent discount on maximum retail price for customers. The company has also policy of providing discount to its dealer but this discount differs from season to season. For example, the discount provided by the company for the period, Mangsir 2067 is given in the table below. Table 5: Discounts on a Mangsir 2067 Period 1st to 10th Mangsir 11 to 18 Mangsir 19th to 29th Mangsir
In Bill Discount 4% 3.5 % 3%
Minimum Bill Value (More than NRs) 20’000 20’000 20’000
For bill value more than NRs 20,000, Asian paints provide 3 to 4 percent discounts within the period of given month. Other discounts provided by the company are shown in Annex. Credit Term Asian paints provide a credit term of one month to its dealer.
Shalimar Paints Price Mix Major exterior paints from Shalimar are weather guard, Exem exterior and Exe exeterior. Price list of these products in package of 20 Ltr is given below in the table. Table 6: List Price Product Weather Guard Exem Exterior Exe Exterior Discounts Nepal Shalimar Paints provide a discount up to 35 percent on maximum retail price to its consumers. It provides a bulk purchase discount of 1 to 2 percent and cash purchase discount of 2 to 3 percent to its dealers.
Packing 20 Ltr. 20 Ltr. 20 Ltr.
Max Retail Price (Rs.) 13462 10228 9979
Credit Term Nepal Shalimar paints provide a credit term of 45 to 60 days to its dealer.
Place, as an element of the marketing mix, is not just about the physical location or distribution points for products but also encompasses the management of a range of processes involved in bringing products to the end consumer. Asian Paints Place Mix Asian Paints has a huge distribution channel for its product all over the country, as its sales reach more than Rs.1.33 million a year. Channels: The Asian paints use a number of intermediaries’ levels to serve the end users. The channel system used by Asian paints is two levels. The product after manufacturing goes to huge depots, from where it is send to dealers and finally to the consumers. The channel system is shown as below:
Coverage Asian paints outlets (color bank) are very evenly spread throughout the major cities, making them very accessible and convenient to the consumers. Location The factory of Asian Paints is located in Hetauda Industrial Estate, Makawanpur. Its corporate office is located at Gwarko, Kathmandu. This is its head office as well as Kathmandu depot. It has five huge depots where the product goes after manufacturing. all over Nepal. Inventory The company prefers to maintain low inventory levels. It has large number of suppliers all over the country. The availability of automated color making machines in every dealer shops makes possible to reduce the large amount of readymade paints. Transport The company uses its own fleet of transport for distributing its product. Even though Asian paints targets the urban and sub-urban middle and upper middle class people, they are distributing their products all over Nepal because of a recent increase in demand of its product to all segments of the population Nepal Shalimar Paints Place Mix Channel The Shalimar paints use a number of intermediaries’ levels to serve the end users. The channel system used by Asian paints is three levels. The product after manufacturing goes to huge depots, from where it is send to dealers, retailers and finally to consumers. The channel system is shown as below: Depots are located at Biratnagar, Kathmandu, Birgunj, Pokhara and Butwal. The company has more than 350 dealers
Coverage Shalimar Paints have covered a large market in terms of area. It has targeted sub urban areas and small cities. Location Factory of Nepal Shalimar Paints is located in Birgunj. Its head office is in Adarshnaga, Birgunj. It has six depots all over Nepal from where it supplies product to all over Nepal. Its depots are located at Biratnagar, Birgunj, Kathmandu, Pokhra, Nepalgunj and Butwal. The company has more than 600 dealers all over Nepal.
Inventory Nepal Shalimar Paints maintain an inventory of nearly Rs. 10 million annually. Transport
The company does not use its own fleet of transport for distributing its product. However, it has outsourced its distribution process to various third party distributors. These distributors then supply the product to a large number of dealers.
2. CONCLUSION AND RECOMMENDATION
Conclusion Looking over the marketing mix of both the companies, we get that the potential market for both the products are the same in Nepalese context but eventually both target different section of market. Asian Paints has targeted premium market and premium customers even though it is producing paints for every section of market and Shalimar Paints has presence in all level of markets with access to most of the rural areas where we do not find anyone using Asian Paints. When we look over the pricing we can see that there is difference of Rs 5000 to Rs. 7000 between Asian Paints and Shalimar exterior paints. Even though they have the same kind of product variability, the targeted section as per the market analyst is different from the perspective of consumer’s perception. As for the promotional strategy, both the companies are using the same promotional strategies in some area but some different strategies are also there. They both are using the trade discounts and the same advertisement media but in different way, which is already discussed in above
sections. Additionally, Asian Paints is contributing towards CSR and has Point of purchase display and some direct marketing approach which Shalimar doesn’t use. Shalimar paints are giving foreign tours and painters’ scheme to their dealers, retailers, which Asian Paints is not providing. Looking over the place strategy, Shalimar paints has influentially targeted middle level, higher level and rural markets, whereas, Asian paints has not influenced rural market a lot and is specifically focused in urban areas.
Recommendations The products of Asians paints are perceived as expensive products, even though in recent years the company has focused on low level income groups and has produced the products according to their needs. However, Asian paints is not able to convinced the consumer that it has all levels of products ranging from cheap , medium to expensive and premium products. Thus, the company can use a different kind of promotional strategies to promote such kind of economical products. Since, the company is not able to reach to the minds and homes of the people in rural areas, the extensive distribution program with promotional attributes can be used to penetrate such kind of product in that market. As for Shalimar paints , the company has very low market share comparing to Asian paints, so it needs to rigorously extend its market share with increasing need for product features , quality and promotional tools. Both the companies can also use the jars as shown in the figure below to pack their products. The jar is not only attractive but also convenient in pouring paint.
(Source: www.dutchboy.com) References Kotler, Philip et.al, Marketing Management - A South Asian Perspective, 13th edition. Pearson Education Inc. (ISBN: 978-0-13-600998-6) Kotler, Philip and Armstrong, Gary: Principal of Marketing, 8th edition. Pearson Education Inc. (ISBN: 0-13-95-7002-0) http://www.asianpaints.com/international_presence/ip_nepal.aspx http://www.iponepal.gov.np/resultdetail.php?id=8024 http://www.financialexpress.com/news/shalimar-paints-its-future-with-a-new-strategy/91105/0 http://www.scribd.com/doc/47967942/ASIAN-PAINTS http://www.equitymaster.com/research-it/sector-info/paint/paint-inputs.html
Annex Discounts provided by Asian Paints to its dealers are listed in the following tables: Table: Discount list to dealers Product TAD ASE Color /Base Cement Primer Exterior Primer AP Wall Putty Minimum qty. billed in single bill 200 Kg 38 Ltr 500 Kg 70 Ltr 200 Kg Free volume in same bill 40 kg. 4 Ltr 120 Kg 10 Ltr 40 Kg
Table : Bill Discount on Products Product Utsav Acr. Distemper ASE Blazing White Gattu Enamel Minimum Qty. 40 Kg Plus 40 Ltr Plus 40 Ltr Plus In Bill Discount(Per Kg) 15 40 24
The Purchase 100 Ltrs of any of the following emulsion give 8(4x2) Ltrs of the same emulsion free: 1. Tractor Emulsion
2. Ace Exterior Emulsion 3. Apex Exterior Emulsion 4. Apex Ultima Exterior Emulsion 5. Royale Luxury Emulsion Address Asian Paints (Nepal) Pvt. Ltd. Bhartiya Gorkha Sainik Niwas, Thamel, Kathmandu, Nepal. Tel:- 977-1-4423777/4414082 Fax:- +977-1-4417606 Pictures: Nepal Shalimar Paints GPO: 12244, Ktm, Kuleshwor Tel: 4281569 Email :email@example.com
Fig: Group photo with Mr. Shankar Banzade, Marketing Executive, Asian Paints Nepal
Fig: Group photo with Mr. Madhav P. Gautam, General Manager, Sales and Marketing, Nepal Shalimar Paints Products:
Fig: Asian paints product variety
Fig: Nepal Shalimar paints product variety