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MARKETING

PROJECT ON
ICI

USMAN ALI
MALIK M. BILAL
SHEHZAD ALI

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BRIEF INTRODUCTION OF COMPANY

HISTORY OF COMPANY:

Imperial chemical industry it is British chemical subsidiary of a Dutch conglomerate and


one of the largest chemical producer in the world. It is based in Manchester square
London. It produce paint and specialty product (including ingredients for food, specialty
polymers, electronic materials, fragrances). It employs around twenty nine thousand
people and had a turnover of just over 4.8 pound billion in 2006. Since January 2008, ICI
has been a subsidiary of Dutch chemical group AKZONOBAL, which is the process of
fully integrating two companies.

ICI PAKISTAN:

ICI Pakistan has consistently developed new and innovative areas of business since it’s
formation in December 1926, by the merger of four of the largest chemical companies in
the UK. ICI today is a collection of world-class businesses, many of them leaders in their
sectors. They are strongly led, technologically sophisticated with healthy and sustainable
long-term growth prospects.

ICI Pakistan Limited was set up as a public limited company in Pakistan in 1952. ICI’s
presence in the public limited company and indeed , Pakistan itself. The Khewra Soda
Ash Company, a predecessor of ICI Pakistan itself. The Soda ash manufacturing facility
in Khwera in 1944 with a capacity of 18,000 tones per annum. This facility was sited next
to the salt range as rock salt and limestone; two key raw materials for manufacturing soda
as were available here in abundance.

ICI Pakistan operates a diverse portfolio of business, which along with the other company
in the group, Pakistan PTA Limited, has combined sales of over 50 billion Pak-rupees,
equivalent to 1 percent of the country’s GDP. With this diverse portfolio, ICI is proud to
improve the quality of life of millions of people by providing services to a number of
diverse industries in the Country-to name a few, they are Textiles, Glass,
Pharmaceuticals, Agriculture Livestock, Construction, Automobiles, Chemicals, Cement,
Fertilizer, Rubber, Detergents, Footwear, Food & Beverages and Leather, with back-end
relationships in twenty three countries. As an investment drive, ICI Pakistan is
developing export opportunities in the regional markets especially in the Middle East,
Iran and Central Asian states. Currently, products are being exported to six countries
(Bahrain, Uzbekistan, Iran, Afghanistan, UAE, and Oman).

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In 1995 ICI Pakistan Limited set up a USD 490 million PTA manufacturing facility at
Port Qasim, near Karachi, which was commissioned in 1998. In 2000, the business was
de-merged to form Pakistan PTA limited, which was at the time subsidiary of ICI Plc
UK.

The turnover of ICI Pakistan limited in 2007 was 25.97 billion Pak-rupees and the profit
tax crossed 2.77 billion Pak-rupees. It is one of the largest quoted companies on the
Karachi, Lahore and Islamabad Stock Exchanges with a paid up share capital of 1.39
billion Pak-rupees. The company has around 1300 permanent employees.

Business Portfolio:

Today ICI Pakistan’s five businesses, Polyester, Soda Ash, Paints, Chemicals and Life
Sciences

ICI Pakistan

Polyester Soda Ash Paints Chemicals Life Science

 Polyester Business:

ICI Pakistan pioneered Polyester Staple Fiber (PSF) technology in Pakistan through its
investment in a 12000 tones per annum PSF Plant commissioned in 1982 in Sheikhupura,
near Lahore. Successive expansions and de-bottlenecking in the late 1980’s, major
expansion in 1996 and a recent Asset Modernization and Improvement Project in 2006,
have ensured ICI Pakistan retains its strong position in this industry thus placing the
Business as one of the leading fiber suppliers in Pakistan.

 Soda Ash Business:

2006 marked the 62nd Anniversary of ICI Pakistan’s Soda Ash plant in Khewra. While the
plant dates back to 1929, commercial production began in 1944. Over the years the
capacity of the plant has been increased through expansion in line with market demand.
The total capacity of the plant today is over 280000 tes after commissioning to the
current 50ktpa expansion. In1995, the business commissioned a 10ktpa plant for the
manufacture of Soda Bicarbonate, which was further expanded to 20 ktpa. Sodium
Bicarbonate is a byproduct of Soda Ash. ICI Pakistan’s Soda Ash Business caters to
approximately 70% of the country’s total Soda Ash requirements.

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 Paint Business:

The paints business in Pakistan operates in the Decorative, industry and the refinish
segments. It is the clear market leader in all the three segments. Quality of products and
services, innovation and a legacy of branding have been the foundations of this
enterprise.
With opportunities arising within the country and contiguous markets, the business has
articulated a grow aggressively strategy. The endeavor is to further strengthens ICI;s
position locally while expanding into near markets. The Decorative Business, with its
dominant position, aspires to restructure the market creating a super premium category
with innovative products and services, leveraging the Dulux brand and capitalizing on the
growing mid tier with a comprehensive channel strategy.
In OEM and Refinish segments the focus on services and technical competence will drive
differentiation supported by strategic Japanese partnerships.

 Chemical Business:

ICI Pakistan chemicals business consists of a unique and diversified portfolio


encompassing general chemicals and specialty chemicals (formerly Uniqema). The
General chemicals segments include trading and polyurethanes and are involved in the
import, manufacturing, sale and distribution of industrial chemicals. The trading segment
comprises and extremely diversified portfolio of fourteen major product groupings with
over extremely diversified portfolio of fourteen major product groupings with over 250
product/variants, including sixteen well-reputed trading partners such as National Starch
& Chemicals, Huntsman polyurethanes, Ineos Choir, Nalco, Huntsman toxide,
supplemented by imports of complimentary product lines from companies in the USA,
Europe and the Far East. This segment markets a diversified product range used for
various applications by nearly every industry in Pakistan, prominent amongst which are
power, cement, textiles, paints, pharmaceuticals, personal care, food & beverage,
solvents, detergents, footwear and household appliances.

 Life Science Business:

The Life Sciences business consist of three division; Pharmaceuticals, Animal Health and
seeds. Each division has a strong portfolio of leading brands and impeccably researched
products which promise to improve life. In line with its aggressive strategy to bring in
rapid growth and expand, the Business is entering newer and larger segments by
introducing n novel and innovative products and is also actively exploring export markets
for some of its brands. The Pharmaceutical division having attained leadership positions
in the Cardiovascular & Oncology market has entered into the lucrative Anti-infective
segment. Animal health division being dominant in the livestock segment with
established brand equity has aggressive plans in place to enter and become a major player
in the Poultry segment.

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SELECTED BUSINESS PORTFOLIO

Our selected brands are related to the paint portfolio of ICI. Therefore, we need to discuss
the overall vision of the ICI Company as well as the mission of ICI paints. The goals and
objectives of ICI paints are also given;

ICI Vision:

The company vision is to compete in the industry by emphasizing on customer needs and
to build and promote a culture of continuous improvement.

Mission Statement:

“The ICI paints team intends to remain market leader in the paints business. We wish to
be recognized for offering the best products and excellent customer service. We will run
a high quality, profitability and growth oriented business in an exciting safe environment.

Goals:

1. Total adherence to HER.


2. Dedicated involvement of every employee at all levels of the organization to the
total quality management concepts.
3. A complete focus or prevention of non conformance through cohesive team work.
4. Constant emphasis on “doing it right the first time and every time”
5. Improving the quality of every thing we do, to the complete satisfaction of
internal and customers.

Objectives:

1. To be No.1 in all its 6 Pakistani businesses


2. To achieve turnover of 20% in 2002 from over all business portfolio.
3. To reduce its industrial wastes by 50% till 2004.
4. To contribute at least 25% in overall ICI Pakistan profits.

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SWOT ANALYSIS OF ICI PAINTS:

Strengths:

The major strength of ICI paint Pakistan is affiliation with Akzonobel network and its
latest technology
Large amount of latest color scheme.
Quality of products is also a major strength because ICI paint is providing high range of
products.
ICI paints cover almost all major markets of Pakistan.

Weaknesses:

Promotion is most important tool in order to attract customer to your product by this
factor significant part of ICI cost.
Price factor is another weakness of ICI paint because its competitors are offering fewer
price and other attractive incentives to their customers. So, it has to give weight to
this factor.

Opportunities:

ICI can capture more market share by increasing promotions, by exploring new markets.

Threats:

Increase in Competition.
Political instability in Pakistan

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Dulux is a renowned brand the world over, and here in Pakistan it’s no exception.

Wherever you travel in the country, you are likely to see premium paint brand of ICI at
work beautifying and protecting people’s homes and workplaces.

As a brand Dulux has been known and trusted for generations. ICI is proud of that, and
work hard to ensure not only that it gives consumers the same top quality products they
have grown to rely on, but also that ICI keep innovating to create new products for the
ever-evolving paint market.

Whatever your paint needs, ICI sure you will find something in Dulux range to give you
the results you want.

There are 6134 color shades available in DULUX brand. The range of DULUX consists
of;

 Plastic Emulsion
 Wall putty
 Matt Enamel
 Weather Shield Enamel

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Dulux is the world's leading brand of premium quality paint. It offers the DIY user or
professional help and inspiration to achieve lasting good looks. Whilst Dulux product
ranges vary from country to country, as they are tailored to meet local needs, Dulux's
ambition is constant around the world - to help people create a beautiful environment
with confidence.

Here is a selection of the types of finishes and products available in a wide range of
Dulux colors.

Matt / Flat
Flat paint is non-reflective, so it conceals surface imperfections better than paints with
higher sheen levels. It gives a warm, elegant feel to the room. Well suited to living
rooms, dining rooms and bedrooms.

Soft sheen / Mid Sheen


A mid-sheen finish between matt and silk.

Silk / Velvet
A finish which gives a delicate shine to interior walls.

Eggshell
Compared with flat wall paints, these paints have a slightly more lustrous appearance.
Eggshell is a good choice for rooms where some luster is desired and good cleaning
properties are necessary.

Gloss
This is the most highly reflective paint and also the toughest, most durable and stain-
resistant. Often used on kitchen and bathroom walls, cabinets and trim.

Satin / Semi-Gloss
Semi-gloss paints provide a durable finish with a slightly glossy, medium-luster
appearance. Excellent for kitchens, bedrooms, and children rooms and trim.

Metallic
Gives a modern metallic look, ideal for trim and accessories.

Wood Stain
A subtle translucent finish that colors and enhances the beauty of wood.

Wood Varnish
A transparent hard wearing finish, colored or colorless, which gives a glossy finish to
wood.

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We all want the best quality but we also want it at a reasonable price.

Paintex, is a mid-tier paint brand of ICI paints, provides you with an opportunity to enjoy
the finer things in life while still spending your money sensibly. Paintex gives you a
complete range of exciting color and high quality finishes for all your requirements, at an
affordable price that lets you enjoy color without worrying about costs. There are 29
color shades available in Paintex range.

Our Paintex range includes the following products:

 Paintex Emulsion
 Paintex Hi-Gloss
 Paintex Putty

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Financial Position of ICI

Profit & Loss Account of ICI:


Amount "000" Amount "000"
Particulars 2008 2007

Turnover 31921873 25988351

Sale tax, excise duty, commission and discount -3957958 -2964228

Net sales, commission and toll income 27963915 23024123


Cost of asset -22316574 -18205369

Gross profit 5647341 4818754

Selling and distribution expenses -1220525 -1074549


Administration and general expenses -1074456 -760201
3352360 2984004
Financial charges -219308 -146421

Other operating charges -257569 -222345


-476877 -368766

Other operating income 254425 153285

Balance Sheet:

Equity and liability:


Amount 000” Amount 000"
2008 2007
Authorized capital 15000000 15000000
1500000000 ordinary shares

Issued subscribed and paid up capital 1388023 1388029


Capital reserve 466845 465845
Inappropriate profit 10830012 9544582

Total equity 12683680 11398450


Surplus on revaluation of property plant and equipment 962795 1012167
Non current liabilities:
Provision for non mange met staff gratuity and eligible 142250 119571
retired medical scheme
Deferred tax liability net 597650 -
Current liabilities:
Trade and other payables 4281110 6250235

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Contingencies and committees
Total equity and liability 18667685 18780423
Amount 000” Amount 000”
Assets 2008 2007

Non current assets:

Property plant and equipment 9353769 8506736


Intangible assets - 7700 39737
9361469 8546473
Deferred tax asset net - 354456
Long time investment 712500 582500
Long term loan 330605 204867
Long term deposits and pre payment 30684 37157
1073789 1179180
10436258 9725653
Current assets:

Stores and spares 538540 605480


Stock and trade 2951956 2311336
Trade debts 1003612 1023596
Loans and advances 193254 137080
Trade deposits and short term pre payments 404662 341129
Other receivable 749388 683461
Taxation recoverable 419934 337032
Cash and bank balances 1971081 3615056

Total assets 18667685 18780423

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ICI Pakistan Limited

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Financial Ratios-- Summarized Comments
Year
Financial Ratios Spot Comment
2008 2007
Liquidity Ratios
Cash Ratio 0.46 0.57 Slight decreasing trend. Fair
Current Ratio 1.922 1.448 Increasing trend, Satisfactory
Quick ratio 1.107 0.982 Increasing trend, Satisfactory
Net Working Capital 3951317 2804535 Increasing trend, Satisfactory
Operating Cycle (Days) 74.66 76.904 Decreasing trend, Satisfactory
Leverage Ratios
Debt Ratio 26.80% 33.92% Decreasing trend, Satisfactory, Low risk
Equity Ratio 73.10% 60.08% Increasing trend, Low risk
Times Interest Earned
6.56 7.507 Decreasing trend, Unsatisfactory
(TIE)
Activity / Efficiency Ratios
Accounts Receivable
17.58 18.425 Decreasing trend, Satisfactory
Turnover Days
Inventory Turnover
57.08 58.47 Slight Decreasing trend, Unsatisfactory
Days
Asset Turnover 149.79% 122.59% Increasing trend, Satisfactory
Profitability Ratios
Margin Ratios
Gross Margin 19.85% 20.34% Slight decreasing, Fair
Operating Margin 11.21% 12.04% Very slight decreasing, Fair
Net Margin 7.41% 7.76% Decreasing, Unsatisfactory
Return Ratios
Return on Assets 11.18% 9.62% Increasing, Satisfactory
Return On Total Equity 15.16% 9.62% Increasing, Satisfactory
Marketability Ratios
Earning Per Share 14.9 12.85 Increasing, Satisfactory
Price Earning Ratio 0.67 0.77 Decreasing, Satisfactory
Dividend Per Share 4 3.5 Increasing, Satisfactory
Dividend / Current
40% 35% Increasing, Satisfactory
Yield

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Book Value 98.31 89.41 Increasing, Satisfactory
Market to Book Ratio 10.71% 11.18% Decreasing trend, Unsatisfactory

Conclusion of Financial position of ICI:


After going through the various ratios, I would like to state that:
• The short-term solvency of the company is quite satisfactory.
• Immediate solvency position of the company is also quite satisfactory. The
company can meet its urgent obligations immediately.
• Credit policies are effective.
• Over all profitability position of the company is quite satisfactory.
• Stock turnover rate is satisfactory. Stock of the company is moving fast in the
market.
• The company is paying promptly to the suppliers.
• The return on capital employed is satisfactory.

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Distribution Strategy Of Dulux & Paintex:

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ICI paints divided whole Pakistan into three major areas for the purpose of distribution of
Dulux and Paintex paint;

Pakistan

North Pakistan Centre Pakistan South Pakistan

Islamabad Lahore Karachi


Warehouse Warehouse Warehouse

Dealers in North Dealers in Centre Dealers In all South


Pakistan Pakistan Pakistan

Final Customers in Final Customers in Final Customers in


North Pakistan Centre Pakistan South Pakistan

Above diagram shows the complete distribution strategy followed by the ICI paints.
The ICI paints divide whole Pakistan into three parts; i. North Pakistan ii. Centre Pakistan
iii. South Pakistan. These all areas have warehouses in the hubs like Islamabad, Lahore
and Karachi. Chishti Logistic Company supplies the Dulux and Paintex to all dealers in
all three areas. Then these dealers sell Dulux and Paintex to the final customer.

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PRICE STRATEGY:
One of the four major elements of the marketing mix is price. Pricing is an important
strategic issue because it is related to product positioning. Further more pricing effect the
other marketing mix elements such as product features, channel decision and promotion.

PRICE STRATEGY OF ICI DULUX:

The dulux currently having the “price premium strategy, The dulux is providing the high
quality image in the mind of consumer .This strategy is really working that now it is in
the mind of the consumers that dulux is providing best quality paint in the market as
compared to their competitors.

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 customers 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 low then 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 Weathershield Fresh is Rs. 1050/-, others companies brands
offered in the market are 300-400 Rs less than Weathersheild Fresh.

Price Strategy of ICI Paintex:

In Pakistan most of the people cannot afford the expensive paint. Therefore, ICI
develop its new product with the name of ICI Paintex in which company follow
the reducing price strategy as compare to Dulux, As we can see that the price of
Dulux is 1050 but the price of Paintex is only 550 which shows that the ICI
follows the reduced its new product price.

Personal Selling Strategy of Dulux and Paintex:

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Different companies follow different methods in order to get more and more customer
satisfaction. One of the method through which the companies gets the sympathy of their
customer is “Personal Selling Strategy”.

ICI Pakistan has a unique personal selling strategy. The company has around 3500
customer service staff who are only engage in personal selling of company’s products.
The personal selling staff of ICI consists of young, energetic and experienced people.
These customer service representatives;

 Answer customer queries


 Help customer in color selection &decoration
 Register& resolve the complaints.
 Find a paint store near the customer.

ICI Pakistan also gives the free services of interior decoration to their customers. Beside
this the company also provides free home delivery service to its customers which are one
of the main reasons of its huge sale. The personal selling team of ICI also consists of a
team of technical expertise. These expertise educate customers that how they can get rid
of different problems like color fading, seepage of water from washrooms and kitchens
which destroy the panted walls.
Due to all above personal selling strategies and customer care efforts the ICI Pakistan is
one of the most popular paint providers in Pakistan with largest market share.

Advertising Strategy:

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Advertisement plays vital role in sales of the company. There are many tools that
different companies use for sales promotion e.g. Television, Radio, Billboards,
pamphlets, broachers, newspapers, and magazines etc.

ICI paints not too much focused on the use of all advertisement tools because the ICI
brands have very good market reputation as well as one of the old companies in the field
of paint in Pakistan. For the purpose of advertisement ICI makes the signboards of their
dealers and sometime ICI advertise their brands commercials on television.

Promotional strategy:

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ICI has taken many steps to promote its paint products. ICI uses multiple techniques
under the promotional strategy.

 Word of mouth through its sales representative


 Publicity e.g. recent float truck activity is the part of publicity
 ICI gives free samples to its different customers. Recently ICI give free sample to
many hotels for the purpose of the promotion.
 ICI offers discount to increase the no of dealers.
 ICI offers a token system in the Paintex paint box in order to attract more and
more painters.
 ICI gives the prizes to the painters to increase it sales.
 ICI gives the SINGAPUR return ticket to the most leading dealers for the
purpose of encouragement of more sales.

Product Strategy:

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Product strategy perhaps one of the most important strategy. ICI paints focused on all
level of the product under its product strategy.

Level of the product

Core benefits
The core benefit what a consumer is looking for? In paint products the core benefit is
protecting the walls. The safety need is high concerned with the core benefit.
Basic Product:
ICI basic offering is a paint which gives protection and excellent glass retention on metal
and wood services. It is also in form of liquid
Expected Product:
The customer expects the product to be protected and have excellent retention on surface.
They also except that it should spread smoothly and easily while it should give reliability.
Augmented product:
ICI highest quality premium interior/exterior hundred percent acrylic glasses finishes is
specially formulated to provide exceptional toughness and durability, easy application
and quick curing resulting in a long lasting uniform finish. Dulux glass also provides
excellent adhesion moisture resistance coverage and application resistance, courage and
application properties when applied by brush, ruler and spray. It is ideal for use on
properly prepared interior and exterior substrate such as wood siding trim and sash,
shingles, weather aluminum, metal, dry wall and sound painted surfaces.

Potential Product:
The potential product encompasses all the possible argumentations and transformation
the product or offering might undergo in future, the potential product “fragrance base
paint”. The will be give fragrance of different flowers and roses. The next augmentation
can be launch product in plastic jar. Those will easy to use and less harm to the hands,
while environment protection can be increased by the product, because customer may use
the plastic jar after using the product.

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ICI Dulux is a brand of quality and its all products are quality products which are
manufactured to compete with international paint products. But the Paintex products
manufactured in order to compete with local low quality and low price products
At this time ICI also working on the new products developments.

.,

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