Pricing Models &

Strategies
Project Report Presentation
On
ICI (Paints)
(First Draft)
Overview
I. General Introduction of the Company
II. Introduction /background of Industry in which the company
operates
III. Company’s Role in overall Economy / Industry role in overall
economy
IV. Company’s Products/ Services Introduction
V. Company’s Market landscape (Competitive forces, Customer base,
Tax regime, regulatory bodies) – Tax 17%
Introduction
• Akzo Nobel’s first started business in Pakistan in 1973. Akzo Nobel was the world’s
leading paint manufacturer with stringent checks to ensure quality and ethical
standards in all areas of its business. An example of such compliance was the
company practice to not produce yellow paint, as it could not be manufactured
without adding lead to regular chemicals. Lead was harmful to health.

• AkzoNobel is a leading global paints & coatings company and a major producer of
specialty chemicals. Calling on centuries of expertise, they supply industries and
consumers worldwide with innovative products and sustainable technologies
designed to meet the growing demands of our fast-changing planet. Headquartered
in Amsterdam, the Netherlands, they have approximately 48,000 people in around
80 countries, while our portfolio includes well-known brands such as Dulux and Eka.
Consistently ranked as one of the leaders in the area of sustainability, we are
committed to making life more livable and our cities more human.
General introduction of the company

History
Company’s Products/ Services Introduction
Brands as per market segmentation

• Dulux- Top tier- target market: Niche

• Dulux Promise- Mid tier- Target market- Mass
• Paintax- Low Tier- Target Market: Mass
• Woodcare- Wood Polish- Target Market: Mass
 Competitive Forces
High
-Barriers to new entry
-High tax by the govt High
-High investment on raw material - Multiple Options are
and mauf available in the market.
-unstable economic

High
-Different Prices
-Incentives for Painters
-Local Players catering different
markets.

High
Low
-raw material is expensive.
-Wall paper
-chemical raw materials.
-low cost home made remedies
-imported goods and raw
materials.
Introduction /background of Industry in which the company operates

• Akzo Nobel faced competition from both multinational players like Kanzai and Nippon as
well as local Pakistani paint brands like Berger, Nelson and many others. This made the
paint industry heterogeneous
• according to the latest findings of Federal Bureau of Statistics, around 30,000,000 liters
of paint was produced from 87 units (organized and unorganized sector combined). The
organized paint sector is represented by Pakistan Paint Manufacturers Association
(PPMA).
• The industries also 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 and anti-fouling paint. 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 with a huge potential for further strides in the country’s paint industry
Company’s Role in overall Economy / Industry role in
overall economy

• The paint and coatings industry in Pakistan has registered a steady growth. With GDP growth at
5.3 percent for FY2017 (the highest in the past decade).
• Much like the other countries of South Asia region, the Pakistani paint and coating industry has a
huge unorganized sector, which caters to the price-sensitive consumers in the country. On a value
basis, the unorganized sector accounts for 34 percent of the total industry. There are about 110
small and very small paint producers in this segment. These producers cater to the vast market of
semi-urban and rural areas, where prices are the most decisive factor in buying the paint brand
• The architectural segment accounts for about 81 percent of the total paint consumed in the
country on China Pakistan Economic Corridor (CPEC) are expected to give a much-needed fillip to
the Pakistani paint and coatings industry in coming years.
• Catered by about 20 organized sectors and about 110 unorganized sectors producers, the
Pakistani paint industry has multinational paint producers such as AkzoNobel, Jotun, Kansai,
Nippon and local companies Buxly, Brighto, Diamond, Happilac, Master and Nelson.
• In 2010-2011, the paint market in Pakistan went through a downhill
trend whereby the industry sales shrunk by 15-20%. Experts from the
industry believed two factors to be major contributors to this
occurrence: overall decline in new construction and an increase in the
repairing cycle that moved from every 3 years to every 5 years. Both
improvement in overall paint quality and deteriorating economic
conditions were deemed to be the reasons for the repairing cycle to
increase.
.
Pricing Strategy
• Capture the maximum market share by introducing product range of various prices.
• Focusing on Return on Sales (ROS) Grow top line, Manage costs, Improve efficiencies.
• “Short Term Goals are to focus on maximum volume sale.”

“The changes in the prices are decided in the Head quarters and the dealers
are informed 15-20 days before the price are actually increased. This strategy has a dual
effect, on one hand the price are increased and on the other it helps in blooming sales.
It acts as a promotional tool because dealers pick up their stock with no delay and they
purchase more than the usual bulk. It is also beneficial for dealers because them they
sell their old as well as the new stock on the latest high prices and hence receive a
greater profit”
• Segmentation
ICI Paints has two product lines:
• Dulux Line (D-Line) : Premium
• Non-Dulux Line (Non-D): Non-premium
The Target Market consists of two types of customers:
• Quality Conscious (Upper Class or Elite Class)
• Price Conscious (Upper Middle Class and Lower Middle Class)
Competitive advantage
• Brand equity
the company is international linkages which provides it a competitive
advantage over others
• High brand retention and loyalty
GOAL’S
• INCREASE IN VALUE CREATION FOR THE DEALERS
• INCREASE IN VALUE SELLING WITH RESPECT TO LAST YEAR
Price setting process

Competitor’s
Import duties Dollar fluctuation Raw Material Cost
pricing
VALUE SELLING
Trade offers
They frequently project their pricing to them and provide them trade offer letters
Contractor’s point scheme
They provide point schemes to the contractors on their purchases
Research and Development
They do continuous research and improvements their products
Compliant system
customer assistance is the priority they are responsive ro the queires of customer
10 years warranty
They provide 10 years warranty on their product
Variants
They have three variants for the three different segments (paintex is for the price sensitive customer )