AkzoNobel Global
AkzoNobel is a leading global paints & coatings company and a major producer of specialty
chemicals. Calling on centuries of expertise, we supply industries and consumers worldwide with
innovative products and sustainable technologies designed to meet the growing demands of our
Nippon Paints. 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).
Paint is categorized in two broad classes:
-
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
countrys paint industry. Like many other industries in Pakistan, the paints industry constituted
an organized and an unorganized sector.
Market Share
ICI Dulux being the largest paint manufacturers has the largest holdings. It has 30% share in the
paint industry in Pakistan. The company has seen a considerable amount of loss in the market
share over the period of time owing to weak company policies as well as increased competition
from foreign brands and more competition entering the market. The market dynamics is shown in
the figure below. Nippon Paint is an international brand Japan and Nelson Paints is a local
brand with majority of the share market in Karachi. Berger Paints has seen a constant decline in
market share as well. Although the overall share market for ICI Paints has declined over the
years, the company still is the market leader in the Premium Paint Market Industry where it has
placed its Dulux Brand effectively.
*The above figures have been taken from the company Mahin Hassan at AkzoNobel Pakistan
Limited ICI Paints Brand Activation Manager South. The company engages in regular
market research practices.
Paint manufacturing was a simple process. Various colour formulations could be achieved by
mixing different chemicals. A one room space of reasonable size was enough to set up a small
paint plant. The challenge however came in quality management; maintaining consistency in
shades of one colour produced in different batches, was difficult. This problem was faced by all
paint manufacturers but was a difficult challenge for players of the unorganized sector. Owing to
low entry barriers, the unorganized sector was vast and comprised of over 2000 different brands
ranging from regional players like Nelson in Karachi, Corona in Hyderabad and Happilac in
Faisalabad to shop owned brands. The shop owned brands were mostly unregistered. As a result,
a paint retailer (referred to as a dealer from here onwards) became a manufacturers customer as
well as his competitor. The unorganized sector had grown exponentially and in some regions
commanded the leadership position. Nelson, for example was a leading paint brand in Karachi.
Although international players had regional alignment in their brand management strategy, a
reasonable amount of freedom was allowed to localize the offering in a particular market.
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 1 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.
Marketing Strategy
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:
-
For quality conscious customers ICI Paints offers D-Line products or Dulux and for price
conscious customers ICI Paints offer Non-D products. This aspect tells us about the difference
between luxury and need. In terms of the service, ICI provides service primarily to the premium
customers at its color studios. The quality conscious customers visit the studios and ask for the
expert advice, get the paint made at the premises only and take it away with them. Although, the
company does not refuse users of Non-D products to visit the store, the POST machine at the
studios is develops only D-line products. Hence this service is targeted towards SEC A.
To cater to the upper middle class and lower middle class, ICI Paints uses its color schemes
service. The sales promoters visit the customers residences and after making them choose a
reasonable color, the sales promoters align them with the closest dealer from where they can
1 Repairing cycle is the average number of years a customer takes to repaint his
house.
purchase Non-D products. ICI paints has authorized dealers in all cities of Pakistan and they
carry all types of stocks D-line as well as Non-D.
To further segment, the products and services are directed at:
Painters
Painting Contractors
Architects
Construction companies
Consumers
Consultant and Design Engineers
Service
Apart from the products, the company provides two services that differentiate it from its
competitors. There is an ICI Color Studio present in every major city of Pakistan Lahore,
Karachi and Islamabad. The main purpose of such a color studio is to provide customers
specialized services about color selection, help them decide the colors, resolve their problems
and also with the help of POST machines, the company is able to make any color the customer
wants in any quantity from the 2000+ colors available in the company shade card. The POST
machine is situated at the back side of the studios and there are special pigments in the POST
machines that help make any color the customer demands be it water based or solvent based.
ICI Paints offers a color palette of more than 6000 colors. The customers can simply walk in and
be transported to a wonderful world of color.
At ICI the employees job does not stop at merely supplying the paints: is important to them as it
is to the user that good results should be obtained from their products. They set great value to
their technical Service Department, which is staffed by individuals of wide practical experience
in the use of paint under all conditions. This experience is readily available to paint users
requiring advice and assistance in the choice of paint to the preparation of painting
specifications. The color studios have graduates from top Pakistan art schools as employees to
help the customers. Many Indus Valley graduates are hired to provide this service and transform
peoples lives.
The second service ICI Paints provide is of Color Schemes. Many people are still unaware of this
service. Any customer can call the company and ask to send any representative to the customers
residence. The sales promoter will be responsible for taking pictures of the house from inside as
well as outside and will ask the customer what are his/her color preferences. The pictures will be
processed using a special software and the customer will be provided with pictures of the house
painted in the asked colors. This service is free of cost and helps the customer in having a better
idea of what color combinations would look good. The color code and product code of each
product is given and stated below each picture which allows the customer to order the right
product from the shop. Further, they are also advised on the amount of paint required by the
customer so that the right quantity can be purchased. To utilize this service, anyone can dial 0800
- Dulux or visit www.icidulux.com.pk.
Niche
The specific service the company provides is: Advisory and consultancy service
Target customer: Color Studios: SEC A - Upper Class or Elite Class, architects and home owners,
quality conscious customers.
Color Consultancy Scheme - Upper Middle Class and Lower Middle Class, painters, etc, price
conscious customers.
Products
AkzoNobel Pakistan has three product categories:
-
Decorative products
Industrial products
Refinish products
ICI Dulux
Dulux is their flagship brand that has earned its reputation based on its consistent ability to
outperform both competitors and the expectations of its consumers with its product quality and
innovation through cutting edge technology. The companys customers are their motivation and
they strive to enrich their lives in any way possible.
The breakthrough technology of ICI Dulux Weathershield Sun Reflect keeps exterior walls up to
5 degrees cooler (may vary on selected shades) The ICI Dulux World of Weathershield range
comprises of the following products:
ICI Dulux range also features a complete Woodcare System which provide technically advanced
undercoats and topcoats that offer a beautiful and luxurious finish that helps to maintain, protect
and beautify wood. Woodcare system includes the following products:
ICI Dulux Woodcare Woodshades
ICI Dulux Woodcare Sealer
ICI Dulux Woodcare Lacquer and Thinner
POST (Point of Sale Tinting) Service
ICI Dulux Point of Sale Tinting (POST) service offers over 2000 shades available all over
Pakistan at over 100 designated dealer outlets. Simply select a color of your choice and the Post
will mix it up for you instantly.
Paintex Range
Paintex is their value for money brand that caters to consumers who aspire to bring home results
that offer value at its best. At AkzoNobel Pakistan they want to provide customers with an
opportunity to enjoy the finer things in life at a reasonable cost. Paintex range includes:
Paintex Emulsion
Paintex Hi-Gloss
Paintex Putty
Paintex Ultra Prime
Paintex Duraguard
Magik Range
Competition
Berger Robbialac a direct competitor of ICI Dulux has positioned its paints against most of
paints of Dulux.
DULUX
BERGER
Wealthershield
VIP Weathercoal
Matfinish
Dulux enamel
Paintex
Primer
Maxilite
S.P.D
Positioning
ICI Dulux paints are positioned as premium high quality paints. They have the slogan.
"Lets Color"
Innovation
Dulux is renowned for its superior quality and in Pakistan too, its quality is the best. Continuous
product research and development, with input from vast international laboratory network, backed
by consumer research (finding out what customers need and want) keeps them above the
competition.
Branding
The company's trade name is combined with individual name of the products e.g.
Dulux Once
Dulux Primer On
Dulux Weather shield had become so popular that "Weather shield" has become a generic name
for weather protective paints. They also have their special colour and brand codes.
Packaging
The paint is available in plastic containers ( Dulux Pentalite Special Plastic Emulsion, Weather
shield) as well as Tin containers of different sizes.
Almost all the packaging is done at its production site in Lahore.
Product Design
A change in the product design is the available of perfumed/ fragrance finishes of which has
attracted those customers who get irritated by the smell of the paints and solvents e.g. Dulux
Pentalite Natural Whites. But there are no continuous changes in the product design.
Color
ICI Dulux offers a wild range of colours as that is the soul of the paint. They have developed
beautiful shades and shade cards. Dulux Master plate plastic Emulsion has 2000 shades and has
huge beautiful shades card which is itself very expensive.
Quality
ICI Dulux does not compromise on quality. About 995% of its raw material is imported and a
strict check on quality is maintained. It is because of its high quality and durability that people
buy it even at high prices and it has captured 70% of the market share in Pakistan.
Price
Pricing Objective: The obvious pricing objectives of ICI Dulux are
Maximization of Profits
Pricing Method
The pricing method adopted is profit based. A target about the profit percentage is decided, after
assessing the net cost, profit is added to it to determine the price. Since ICI Dulux are the Market
Leaders they can easily manipulate prices. 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.
Place / Distribution
The distribution system of ICI Dulux is Dealer oriented. It has a wide network of distribution
throughout Pakistan but all the distribution is done through dealers. ICI Dulux has its own
warehouses and godons and from there the products are directly transported to the dealers who
ultimately sell them out.
Therefore the "Distribution Channel" of all sort of paints is
Producer
Dealer
Consumer
Dealers
ICI Dulux has certain requirements after these requirements are fulfilled a dealer is registered
and is legally allowed to start the distribution.
Special accounts with Dealer's Code (DC) are opened in the computer;
Dealers have to submit a copy of their Identity Card (ID card) and a few more documents;
Most of the distribution and trade is done on cash. Lahore and Karachi are advance payment
markets where as Multan and a few other small cities have a credit market.
Transportation from Lahore i.e. the production site is done through trucks and railway.
Transportation within the city is done by trucks in large cities and by donkey carts in smaller
cities. Even in Multan most of the transportation is carried on the donkey carts.
Promotion
As ICI Dulux has a diversified market it has to use a number of promotional Tools.
Advertisement
Television Advertisement
It is a very expensive tool of promotion but it is worth it. ICI Dulux though still advertises
through Television commercials but it has reduced its intensity. They just use it to create
awareness among their target market about a certain product and try to highlight its main selling
features.
Radio Advertisement
It is a relatively cheaper source of advertisement and due to the channel FM 100, the number of
listeners has increased. Therefore Dulux finds it effective to communicate with its customers
through radio.
Print Advertisement
A substantial pairt of Dulux's total promotional expenditure goes under this head.
Approximately all the good and standard magazines carry the advertisement of ICI Dulux
Point Of Purchase Advertisement
Many color cards, brochures and other informative material is available at dealers shop along
with the product itself in attractive cans. The dealers display contest is other kinds of
advertisement. New dealers are registered where intensive contraction is being done.
Out Door Advertisement
In outdoor advertisement Dulux mostly uses sign boards and they are placed at busy areas where
maximum people can see it.
Personal Selling
Free Dulux Color Advisory Service
They say "for our valued customers, expert help is available through a creative colour
consultancy service provided free of charge. Our colour Advisors would be available to develop
innovative colour schemes to bring out the best in your home."
This is the most important promotional tool and helps to generate maximum demand. TTF
(Trained task force) is a trained mobile team which reaches at the place where construction or
revocation is being done, just on a single phone call. They sometimes reach at the point of
construction or renovation with our being called and give the customers free advice. Another
mobile service available is the LCA ( Lady colour Advisory Service) where innovative and
creative ladies give advice about the colour scheme of the house.
If the customers have any kind of problem or complaint the mobile teams are always there to
help them.
Sales Promotion
Sales promotion is also a very important promotional tool used by Dulux in which different
short term and long term incentive schemes are offered to the dealers.
Sometimes the company provides the dealers with extra discount if they sell upto or more than a
target amount preciously decided.
Dealers are sometimes also given small incentives like T-shirt, wall clocks, folders, brochures,
pen holders etc in return of the sales promotion.
Who are the customers for ICI Paints?
Color Studios
At the studios, the customers are provided with tea and drinks. They are asked to sit at the
couches present and make an informed decision. They are also made to sit at the computers to
manually select colors and see which one will look good. They are also given the option of
having pictures taken of their houses or rooms and let the experts apply colors using the
software. After the color is selected, they are taken to the production room near the machine (if
the customer is willing to see the process done) and the color is made within 5 minutes. At times
there are delays because of back log of orders or improper bases of colors used in the production.
After the transaction is done, the product is kept in the customers car. If the order quantity is
large, the company arranges a Suzuki to deliver the products. If the customer is also in need of a
painter, the ICI Paints recommends good painters and provides them with their contact details
however the company does not take any responsibility of the painters.
Color Consultancy Schemes
The sales promoters visiting the houses are employees of ICI Paints and are properly dressed and
provided with proper training in how to speak and handle the customers. The pictures of the
exterior and interior walls are taken according to the demands of the customer. The pictures are
provided to the color experts at the company the following day and in case of emergencies, it is
delivered at the same day. The color experts take 3-4 days to complete and the same is delivered
to the customer in a special folder.
Color Studios
People & Things orientation:
High Tech:
Personal Interaction:
Time involvement:
Location:
Complexity:
Numbers served per transaction: 1 person takes roughly around 20 minutes at max (many)
Training:
Supervision:
responding to
High Tech:
Personal Interaction:
Greet and meet the customer and take pictures with proper
angle
Time involvement:
Location:
Complexity:
Supervision:
Color Studios
More People
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within the organization to ensure that the products and services are of top quality. ICI paints aims
to delight and inspire customers to transform their surroundings at home and work with
performance products and colors.
With color studios and consultancy services present in the different areas, ICI Paints sponsoring
several campaigns and ICI Paints good quality advertisements on television have helped form a
good image about the company, its products and services. To determine the same, there are
different parameters and I would be using my own knowledge, opinion and discretion to assess
the service silhouette. I would be using evaluating both the services together:
1) How do the customers see the purpose of the services: See the service of great value if utilized
well
2) How necessary are the services?: For all those people who are constructing new houses, it is
extremely necessary for them to have these services. The house owners would be in a better stage
to make decisions accordingly. It is also quite necessary for people renovating their houses.
There is no harm when these services are being provided for free
3) How important is it?: These services are important for all the people in the house construction
phases
4) How are results viewed?: When the customers problems are solved and provided with good
advice on colors, the customers are satisfied and they believe that the service has contributed
positively to their problems. However if the services failed to provide solutions, then the services
are likely to provide negative contribution to the problem solution.
5) Perceived cost: These services are free of cost there is no perceived cost other than the time
involved.
6) Perceived risks: Risks could be of purchasing wrong products not what was recommended
because of miscommunication or incorrect product code on color schemes.
Perception of customers
Customers' Perception is affected by:
The service characters and perception of service silhouette have already been discussed.
Customer needs and wants have also been discussed how they want appropriate advise on color
selections. However, these can be further divided into the following three categories:
-
All in all, the customers perception about the services is good and they believe it adds values
and provides positive contribution in their lives.
SWOT Analysis:
Following is the SWOT analysis of ICI Paints:
Strengths:
1. It is using natural and organic ingredients in its all products.
2. It has strong presence in developed emerging markets and has strong
brand name.
3. It also has strong R&D capabilities.
4. It has high number of variants according to the different needs of their
target market.
5. It is the highly popular brand due to advertising and marketing.
Weaknesses:
1. It has high prices as compared to the other available brands.
2. It entered late into Asian markets due to which it has lesser market
share.
3. Since people have different skin type and hair type therefore it product
might not suit people with sensitive skin.
Opportunities:
1. The demand for natural ingredient products is increasing.
2. The consumer lifestyles are changing due to which their needs for
these products are increasing.
3. The beauty products market is growing with a significant rate.
4. It can introduce the skin care products and shampoo in smaller size
packaging.
5. It can introduce more varieties in product due to different skin type
and hair type of consumers.
Threats:
1. It is facing high competition from Unilever, Avon and P&G.
2. The price competition among branded manufacturers is high.
3. The cost of switching personal care brands for consumer is very low.
II.
III.
IV.
b) Complaint Handling:
In order to have a better customer service center, the customer care
representatives should be trained on how to handle the customer
complaint. In order to train the representative, the HR in collaboration
with the ICI Paints brand manager should develop the best methods
(minimum response time), guidelines, techniques and policies on how
to handle a complaint. It should also include feedback system. HR
should also develop the criteria on which the performance of the
representative would be evaluated.
c) Effective use of VOC:
The HR and brand manager should also develop a system through
which the feedback of customer can be delivered to their respective
team. A weekly meeting should be conducted with all the brand
managers of the 3 categories and manager of customer care center.
The feedback of customers and their solutions should be discussed
here. Also, time & action plan should be prepared. The customer care
center manager should keep the follow up of these time and action
plans.
d) Customer Retention:
The policies and activities regarding customer retention should be
prepared. This includes how to build long term relationship with the
Since the turnover rate would be lesser the employees are going
going to be increased.
16.
regarding ICI Paints brand and they will become loyal customer.
17.
4. Regular Monitoring:
In order to implement system properly, it is very important to monitor
the system on regular basis. Following are the steps:
-
1. The employee can provide innovative and creative ideas as they are in
continuous contact with the customers.
2. Since they know the customer better their feedback can help in
improving current system, procedures and methods.
3. They are also very well aware of the changing needs and wants of the
customers.
4. This system should be two way including feedback and feed forward.
5. It will help the employee to improve and hence service quality will
improve.
5.Provide a Proactive Problem Solving:
1. The customer service team is going to provide solutions to the
customer issues.
2. It will eventually create a database of issues through which the most
popular issue can be identified.
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4. The customer care center can direct contact customer, sales force and
retailer in order to get regular feedback.