CONTENTS

• Indian paint industry market assessment

• Future outlook

• About the company

• Presence in India

• International presence

• Role of channel partner

• Channel design decision

• Selection of channel member

• Channel structure
 CONTENTS [contd...]
• Alternate channel structure

• Different channels for high end customers

• Distribution task

• Terms of credit, payment mode and mark up

• Channel pricing

• Seasons and specification of inventory

• Stocking norms & practices

• Innovations

• Trade promotions

• Recommendations
 INDIAN PAINT MARKET- MARKET
ASSESMENT

• IN INDIA THE TOTAL MARKET SIZE OF THE PAINT INDUSTRY IS

ABOUT 1400 MILLION.

• THE “ORGANIZED SECTOR “ OF THE INDUSTRY IS ABOUT 55

MILLION.

• THE “ UNORGANIZED SECTOR “ WHICH IS ABOUT 45 % HAS

ABOUT 2400 UNITS.
SECTORS
ARCHITECTURAL – 70%
Decorative – ( housing &
construction sector )

INDUSTRIAL – 30%
(Automotive & consumer
durables)
 INDIAN PAINT
INDUSTRY

DECORATIVE INDUSTRIAL
SEGMENT [70%] SEGMENT [30%]

CONSUMER
PREMIUM AUTOMOTIVE
MEDIUM RANGE DISTEMPER RANGE DURABLES MARINE
RANGE[high end SECTOR [about
[enamel paints] [low end paints] PAINTS OTHER
acrylic emulsions] 2/3rd share]
OEM’S

METROS AND SUB-URBAN AND

SMALL CITIES
LARGE CITIES RURAL AREAS
MARKET SHARE OF MAJOR
PLAYERS IN INDIA ( ON THE BASIS
OF SIZE )
 ON THE BASIS OF PRODUCT

DECORATIVE:
APIL Dominates the Decorative segment with 38% market share.
GNPL the no.2 in the decorative segment with 14 % market
share.
Berger & ICI have 8% & 9% shares respectively.
J&N and Shalimar with 1 & 6 % respectively.

INDUSTRIAL :
GNPL Dominates the Industrial segment with41% market share.
APIL has a 15% market share.
Berger & ICI have about a 10 % and 9 % market share.
 FUTURE OUTLOOK

• Ratio of industrial paint to decorative paint is expected 50:50.

• Demand for paints for new housing is app. 30% , rest from
repainting.

• In decorative coating segment, growth is being observed in

exterior coating segment.

• Premium product in this category are doing well due to

superior quality and durability.
 ABOUT THE COMPANY

• Established in 17th December, 1923.

• Head Office in Kolkata.

• manufactures and markets a range of decorative & industrial

paint products.

• 14 manufacturing facilities in India and more than 153 depots,

besides 4 facilities overseas.

• Workforce of over 2500 employees and a countrywide

distribution network of 20,000 dealers.
YEAR HIGHLIGHTS

1923 Setup on a 2 acres of land in one of India's first

industrial towns close to Kolkata in Howrah, Bengal.

1947 Mr. Alexender Vernon Nible, first managing director

bought over Hadfield's (India) Limited and thus the
name changed to British Paints (India) Ltd.

1965 Share capital of British Paints (Holdings) Limited was

acquired by Celanese Corporation, USA
1973 Marine and decorative segments under the Leadership
of it first Indian Managing Director Mr. Dongargaokar
Madhukar.
1983 British Paints (India) Limited, changed its name to
Berger Paints India Limited.
90’S The COLOUR BANK tinting system was launched
consumer could select from a range of over 5000
shades.
2003-04 and in 2005 the Company ventured into Russia through a foreign
subsidiary.
2011 The Company's consolidated sales turnover for the
year was Rs 2328.12 crs.
 PRESENCE IN INDIA
Howrah
Manufacturing Capacity : 11,200 MT
Berger Paints India Limited
14 & 15 Swarnamayee Road
P.O. Botanic Garden, Howrah 711 103
Phone : +91 33 2668 4706 / 4709 /
6212 / 6213, Fax : +91 33 2668 2956.
Vallabh Vidya Nagar
Manufacturing Capacity : 17,000 MT
Beepee Coatings Limited
Plot No. 433 / Part G.I.D.C.Estate
Vithal Udyognagar, Anand via Kheda
District, Gujrat
Phone : +91 2692 236140 / 6207 / 6334.
Pondicherry
Manufacturing Capacity : 18,000
MT
Berger Paints India Limited
53-56 Pandasozhanallur Village
Nettapakkam Commune,
Pondicherry 605106
Phone : +91 431 2699143 / 9574
Fax : +91 431 2699171.
Goa
Manufacturing Capacity : 6,000 MT
Berger Paints India Limited
316 & 317 Kundaim Industrial Estate
Kundaim, Panda, North Goa
Phone : +91 382 2395 610 / 6407 /6212
EMAIL Id: bilarn@satyam.net.in.
 PRESENCE IN INDIA

Rishra (BAICL)
Berger ICAI
103 G.T. Road, Rishra
District : Hooghly, West Bengal 712248
Phone : +91 33 2672 0641 / 0642 / 0643

Jammu
Berger Paints India Limited
SIDCO Industrial Growth Centre
Sanba, Jammu, Jammu & Kashmir 184 121
Phone : +91 1923 246451 / 6458 / 6459
INTERNATIONAL PRESENCE
 ROLE OF CHANNEL PARTNER

 CONVERGING PLATFORMS: Simplify and facilitate the

transactions by bringing the channel members together.

 EASIER & ECONOMICAL :Easier and economical to work with

intermediaries.

 WIDESPREAD LOCATIONS: Reaching out directly to the consumer

becomes difficult due to widespread geographical locations.

 ENCASHING ON THE INTERMEDIERIES EXPERTISE : It is easy for

manufactures to encash on the experience of the wholesaler +
specialization+ infrastructure+ sales force.
 CHANNEL DESIGN DECISION

• Traditionally most of the paint companies follow manufacturer

wholesaler retailer consumer channel.

• Berger eliminates one of the intermediaries cutting down the

chain, following A Direct Marketing channel which helps you
to contact the customers directly.

• Direct Marketing channel helps you to support accurate

segmentation & sharper targeting of the market segment.
 CHANNEL DESIGN DECISION

• Cost effective :as it eliminates the cost to the various channel

members.

• Facilitates special attention : It allows Berger to facilitate

special attention to key accounts.

• Saves time & hassle free purchase.

 SELECTION OF CHANNEL
MEMBERS

BERGER chooses its channel members based on the following

criteria :

 Dealer should have a sound financial record.

 Dealer should have a goodwill in the market.

 Dealer should have his infrastructure & logistics.

 Dealers should be aware about the company background,

products and services.
 CHANNEL STRUCTURE

14 MANUFACTURING
DIRECT CUSTOMER
PLANTS ACROSS INDIA
DIRECT PROJECT
INSTITUTIONAL /
153 DEPOTS IN CORPORATE
INDIA/ GODOWN
BULK BUYER (
INSTITUTIONAL
DEVELOPERS

RETAILER
 CHANNEL STRUCTURE
DELHI OR EACH STATE
MANUFACTERING UNITS
20,000 dealers all over India
1200 plus dealers on new Delhi alone
DEPOTS/ STORAGE 14 products
1200 shades & depots in Delhi,
badurpur, mayapuri, wazir gunj,
mandor

NORTH SOUTH EAST WEST

+300 DEALERS
FROM EACH
ZONE
 ALTERNATIVE CHANNEL
STRUCTURE

• EXCLUSIVE CHANNEL : Product / service sale of only one

manufacturer/ producer showroom / outlets / franchises.

• SELECTIVE CHANNEL : product/ service sale of different brands

/ products in limited locations ( done through a selected
retailer by most paint companies).

• INTENSIVE / RETAIL CHANNEL : product / service sale of FMCG

/ consumer goods/ wider market coverage .

• Government/ defence canteens or Subsidised stores.

• On Commission bases : with the painter.

 HOW DOES BERGER PUSH ITS PRODUCTS FORWARD
Time to time incentives are given by Berger according to performance of the dealer and
market demand.

 IN STORE DISPLAYS: POINT OF PURCHASE , Berger paint banners, demonstrations on

colour wall etc provided by company.

 TEMPORARY PRICE REDUCTION: They get margins plus incentive promotion scheme to
maintain the dealer.

 CONTESTS: Dealer to dealer contests are held to promote push strategy and best dealer
gets the reward. Berger paints does the same in various geographical areas.

 SAMPLING: Allowing the dealer to experience the product or service by providing samples
of various paints.

 TIEING UP WITH INSTITUTIONAL PROJECTS:A tie up with any of the project in the near by
areas.

 SCHEMES: Promotional schemes and benefits such as Gift vouchers and Seasonal
discounts sponsor trips to the dealers or Giving them a chance to earn profit by selling the
products on the earlier rates instead of the revised rates.
 DIFFERENT CHANNEL FOR HIGH
END CUSTOMERS

 Offering customer solution :Through customer helpline.

 A MENU OF PRESET DESIGNS: Helping you to get designer solution for

your room.

 A wide variety of colour palette and pre-set designs for your room.

 Insuring customer satisfaction by a before photograph of the site and

an after photograph of the site.

 Offering a chance to create a customised colour palette.

 Issuing a completion certificate along with a “friendship ka faida”

booklet.
 Products for high end/low end
customer
High end Medium end Low end

Berger luxol Bison emulsion Dis-temper

Berger silk
Luxury emulsion
 DISTRIBUTION TASK

• The task of the each member of the distribution channel is quite

different but the motive is same for every member i.e. to provide
the product to the consumer.

• The manufacturers task is to provide product to the wholesaler.

• The wholesalers task is to provide the product to the retailer.

• The retailers task is to provide the product to the consumer.

 TERMS OF CREDIT

 Most manufacturers give 7 to 10 days credit period to wholesalers

as company does not want block payments more than that period.

 The credit period is extended for certain wholesaler depending

upon how they meet their targets and can be extended up to 21
days.

PAYMENT
 Cheque is a preferred mode of payment by the manufacturer
however.

 Payments from customer is through

Terms of Credit cash.
 MARK-UP

 The typical mark up on any product by a retailer is 7-10 %

and by a wholesaler is 1-2 %.

 There is less mark up on running products such as Berger

enamel.

 More mark up on less running products such as silk.

 New products allow you to have a higher mark up as the

price doesn’t not have an earlier price point.

 Further, a healthy competition allows you to have a mark up

on the products.
 CHANNEL PRICING– Berger Paints

Cost to produce = Unknown Manufacturer

(As manufacturer is a seller)
UNKNOWN

Wholesaler
Cost to produce = Rs 220/litre
1-2 % Gross Margin received
by wholesaler on sale to
retailer
Cost to produce = Rs 225- Retailer
230/litre
7-10% Gross Margin received
by retailer on sale to
consumer
Consumer
Cost to produce = Rs 240/litre

Source : 6 Direct Interviews with the

retailers
 SEASONS AND SPECIFICATION
OF INVENTORY

Typical seasons for the paint industry

 After monsoon until November.

 From 15th march to 15th July.

 Off season is April.

Margin and discount

 Dealers collect their margins at the time of sale of products.

 Margin\discount provided by company is between 3.5 to 5%.

 MARGIN SHEET

PRODUCTS Cost to Cost to Cost to retailer Mrp

manufacturer wholesaler Per meter (Rs.)
per meter Per meter

Red oxide Unknown 1853.57 1890.64 2022.98

primer(421)
Berger kidz Unknown 1438.94 1467.71 1570.45
DL
Jadoo white Unknown 405.03 413.13 442.04

Snow white Unknown 3894.73 3972.62 4250.70

Matt wo(181) Unknown 247.28 252.22 269.87

Source : Price list and 6 Direct Interviews with the

retailers
 STOCKING NORMS AND
PRACTICES
 A stock typically depends on sale: on as and when sale happens.

 The stock depends upon the group in which the paint falls such as
an average selling paint for eg. Emulsion is kept more in stock while
a distemper is stored average.

 The kind of buyer based on geographical area.

Specification of inventory

 Inventories extended in the starting of the season.

 Increased at the time of Diwali.

Terms of Credit
 On as and when basis keeping a minimum stock of 20 litres of a sub
category of a paint.
 Selling strategies B2C
• Berger paint have large area of Network of distribution. It has almost retail outlets
through out the country situated in the different city of India. All the customer
could easily access the product of Berger paint anywhere and any time.
• First of al Berger paint is bring different low cost product like Utsav group in the
rural market.
• To enhance their sales in the market they are spending a huge amount
of money in ad campaigns. Festive seasons includes price discounts on the items
of Berger paints.
• They follow sales
demonstration programme where they demonstrate their different product where
a large no. of discount is given on the product, lucky coupons, free gifts are given
to the customer.
• Moving vans are being employed to sell their product in different village.
• The customers of Berger vary from a period to a big industry in order to enhance
its ales it gives price discount on bulk amount of purchase. The company give
coupons inside the paint pack so that could be taken by the customer as a gift
from the company.
• Berger paint always try to improve the packaging of the product. If the
product would be fancy and stylish then it would increase the sales of the
 Selling strategies B2B
• According to Primary research, the maximum dealers go for 200 containers for a
month, this is done through average sales of the paints by the dealers.
• Dealers get 7-10% margin which accounts him their profits from Berger. According
to this, they recommend the product accordingly and even place them at right
places where the product sales can be maximized.
• Dealers get 5-10 days order cycle time margin which accounts him their profits
from Berger. According to this, it shows that they are about to sell almost 70% of
what they have collected 10 days back.
• Dealers get trade discounts which not only attracts dealers to company but it also
accounts for extra added advantage in selling the product to the customers. The
word of mouth publicity also forms an integral part of communication in this area.
• Dealers get Brochures and ads which serve them a purposes of looking and having
records of variety of Berger paints. Trade meetings and personal visit also follow
the trend.
• Specialty advertising: Giving Berger paint T-shirt, Caps and other small things to
painter for their advertisement.
• Trade show: Berger paint always open its stall in the Industry trade so that it
products would be promoted globally.
 INNOVATIONS
• Pre painting audit of structure before painting starts. The surfaces to be
painted are checked for surface porosity, moisture content, alkalinity,
effervescence, water seepage, undulations, micro cracks, etc.

• Recommending appropriate painting system keeping in mind the wall

surface and climatic conditions. Suggesting the kind of primer, topcoat,
pre-primer coat (if any), etc. that should be used.

• Product and shade development along with preview facility so that we can
provide tailor made discerning customers having specific requirements we
tailor make products and shades as inputs for providing specific properties.
Post selection of shades we give visual print to the building with the
chosen shades through our preview facility through which one can find out
how the building will look like before painting in virtual sphere through
simulation software.

• Technical Services to provide solutions to overcome typical problems and

on-site supervision.

• Recommending panel of contractors to undertake quality jobs and ensure

on-time delivery.
 RECOMMENDATIONS

• Various schemes provided by company to the dealers must be

completely entertained by the help of personal meetings as most
of the dealers are not well educated to understand the schemes.

• Frequency of advertisements on television should increase.

• Advertising campaigns for rural segment of the society should be

targeted.

• Dealers and painters should meet at a regular interval of time as it

helps to promote the brand as well as maintain the goodwill of the
company in the market.
 RECOMMENDATIONS

• Asian and Nerolac paints are used to do advertisements by

painting of shops, whereas Berger paints just provide a hoarding
to the dealers. Company should start painting of shops for
dealers. It serves dual purpose, firstly it will attract customers
and it also provides satisfaction to the dealers.

• There must be a demarcation between target of small dealers

and big dealers, so that small dealers can also get motivated to
complete their target.

• Berger should use competitive pricing for some its products

which are competing with Asian and Elite paint products in the
market.
THANK YOU

GROUP No.1