A COMPARATIVE STUDY
&
TOTAL (ELF)
PREPARED BY:
EXE-MBA-10
5 PRODUCT MIX 5 14
6 SITUATION ANALYSIS 6-7 14
1. INTERNAL
2. CUSTOMER
3. EXTERNAL
References:
1. www.asianpaints.com
2. www.total.co.in
3. www.en.wikipedia.org
4. www.google.co.in
5. Strategic Marketing – Ferrell and Hartline
Vision: To become one of the top-5 paint companies in the world by leveraging its
expertise in the higher growth emerging markets. Simultaneously the company
intends to build long term value in the industrial coating business through
alliances with established global partners.
Synopsis: Asian Paints is the largest paint company in India in terms of market share
(30%) and turnover (INR 66.80 billion). It has operations in 17 countries in the
world with 23 manufacturing facilities to complement its volume of sales. Through
strategic mergers and acquisitions, it has subsidiaries like Berger International,
SCIB Paints – Egypt, Asian Paints, Apco Coatings and Taubmans.
The Paint industry: The market size of the Indian paint industry is approximately INR 210
billion ( 0.32% of India GDP of 1.31 trillion USD ); growing at approximately 15%
annually. The per-capita consumption (0.6%) of paints in India is a mere 0.5 kg as
compared to 1.6kg in China, 4.0kg in South-East Asia and 22kg in developed
economies around the world. The growth in the Indian real-estate (housing) sector
has been a significant 35% annually and the Indian automobile sector grew by 15 -
20% annually being the major end-users of the Paint Industry (decorative and
refinish). Decorative paints constitute a staggering 75% of t he paint market;
hence the growth potential is enormous.
Pigment
Binders
Additives
Stabilizers
Solvent
Ancillaries:
Wall primer ( Deco-prime)
Wall putty
Wood primer
Wood finish:
Clear finish (PU / Melamyne)
Opaque finish (PU / Melamyne – Palette)
Enamels (Premium / Apcolite / Utsav)
Metal surface:
Premium semi-gloss enamel
Apcolite
Utsav
Exterior paints:
Apex
Apex stretch (water-resistant)
Dura-cast (textured)
Interior paints:
Distempers (Tractor / Utsav)
Emulsions (Royale / Premium / Tractor)
SWOT Analysis:
Strengths:
a) Market leader
b) Strong distribution channel
c) High visibility
d) Wide range of SKU’s
Weaknesses:
a) No foreign partner to bank upon on technology transfers / R&D
initiatives.
Opportunities:
a) As the paint market is fragmented in the un-organized sector with
a market-share of 35%, there exists huge potential for strong
players like Asian Paints to capture the bottom end of the
customer pyramid by mergers and acquisitions where volume of
sales are high but profit margins are low.
b) The nearest competitor for Asian Paints in terms of market share
captures only 20% of the market. This provides AIPL with an
opportunity to be aggressive in marketing without bothering about
the competition.
Segmentation:
The market for the premium royal is the urban population living in
metro/ Tier-1 cities. The product is to be expanded to the niche
markets like Tier-2/3 cities and villages.
Targeting:
Women are comparably more aesthetic oriented than males; hence
to target a product at women can help form opinion leaders within
the family.
Position:
The premium product has to be positioned in the mind of the
customer as a tool to enhance their style quotient rather than as one
to protect your wall.
The product also has to have an ownership appeal, a pride for the
buyer to be associated in being a member of the Royal family.
The product need not be durable to perform over years together as
taste of the buyer changes quite often and the urge to repaint the
wall though the existing coat of paint is adequate for protection of
the walls.
Product Strategy:
Taking the concept of paint as an emotional rejuvenation tool
further, the concept of turning one of the walls into a display walls
with high quality textured paint turning it into a painting masterpiece
is on the rise.
Customers can be provided with high quality artistic painters who
would turn their wall into a painting on display. This will give a
psychological uplift for the middle and lower middle class homes,
who cannot afford to buy paintings through auctions to put on
display, rather help achieve the same aesthetics by application of
the relatively inexpensive paint.
Vision:
Meet growing energy needs on a long-term basis by deploying a sustainable growth model
combining the acceptability of activities with a sustained program of profitable investments.
Synopsis:
Total is a leading multinational energy company with operations in more than 130 countries.
Together with its subsidiaries and affiliates, Total is the fifth largest publicly-traded
integrated international oil and gas company in the world.
a) Upstream operations (oil and gas exploration, development and production, LNG).
b) Downstream operations (refining, marketing and the trading and shipp ing of crude oil
and petroleum products).
c) Chemicals (base and specialty chemicals).
Total; a French company has an upstream production capacity of 2.28 million barrels of oil
equivalent per day across more than 40 countries in the world. It has a downstream refining
capacity of 2.6 million barrels per day with a sale of 3.6 million barrels per day across 16300
service stations across the globe. It is also the world’s largest integrated chemical producers
in fertilizers, petrochemicals and specialities. Headquartered at Courbevoie, France with
Christophe de Margerie as its Chairman and CEO, has operations in India with
Other companies in the Indian lube business include Tide Water Oil Co (India) Ltd, Balmer
Lawrie & Co Ltd, Apar Industries Ltd, IPOL lubricants, Savita group, Valvoline Cummins Ltd
(VCL), FuchsLubricants (India) Pvt Ltd, Gulf Oil Corporation Ltd, and The Andrew Yule
Group
TOTAL started its operations from Iraq in the 1920’s as Petrofina and gradually diversified to
an oil and gas major. The brand TOTAL was conceptualised in 1954 and was rechristened to
its present form in 2003 after undergoing 5 cosmetic changes. The Petro-FINA brand was
launched in 1924 and ELF brand was started in 1965 to give a visual identity to the brand
TOTAL. Both TOTAL and Petro-FINA merged in 1999 to form TotalFina and subsequently
th
merged with ELF to form TotalfinaElf in 2000 the worlds 4 ranked oil major. It is also into
LPG business in India with the brand name as “TOATAGAZ” under Total Oil India Ltd.
Strategic tie-ups with Formula-1 car racing and developing solutions for engines to
perform at high temperatures through R&D.
Partnerships with auto majors like General Motors and Renault.
ELF-Moto for 2-wheelers associates itself with Kawasaki in MotoGP bike racing.
“Bike oil for winners” was the tagline launched in 2008.
'Raasta mudh sakta hai, hausla nahi ' – tagline launched with Shahid Kapoor as the
Brand ambassador.
Product range:
SWOT Analysis:
a) Strengths:
Global brand presence.
Strong R&D support.
Tie-ups with Original Equipment Manufacturers (OEM’s) like GM, Volvo, Tata,
Mahindra, Punjab tractors, Maruti Suzuki, Mahindra Renault, PEUGUOT,
DaimlerChrysler.
Tie-ups with Reliance for using their petrol pumps as point of sale for lubes.
c) Opportunities:
Educating customers regarding the ill-effects of not changing engine oil can
help in brand identification and association.
Brand ambassador “Shahid Kapoor” can infuse a lot of youthfulness to the
brand and help to associate men in the age group of 15-44 with the brand.
Can bank upon the global image of the brand and the trust it commands
across the globe.
With the exit of Chevron (Caltex) from the Indian markets, ELF can siege the
opportunity to gain its market share.
d) Threats:
Market domination by rival brands like Servo and Castrol.
Emergence of brands like SAVSOL.
Adoption of environmental friendly technologies like Bio-lubricants by IOCL.
Segmentation:
Being a premium brand of lubricating oil, the product needs to cater the mid -level
and luxury vehicles in the cities.
Bike riders in the Tier-2/3 cities.
Rural market characterised by bikes, trucks, buses and tractors.
Targeting:
Men in the age bracket of 15 to 45years fit in as the target audience as number of
women drivers is insignificant.
The Gen-X forma a majority of bike riders, hence need to be targeted specifically.
Truck owners/ drivers need to be educated about the brand effectiveness in
delivering mileage.
Positioning:
For the average city driver, the brand needs to be projected with its effectiveness in
increasing the longevity of the engine life.
The bike rider may be more interested in low maintenance budget and a high fuel
mileage.
The bus/ truck driver has to be convinced of good mileage delivery for a successful
purchase.
Product Strategy:
Associate the product with the youth to build a long lasting relationship with the
brand.
Leverage its global brand value to capture the mind of the customer in terms of faith
in quality of products.
Actively promote the product as a “Money Saver” tool for the truck/ bus drivers and
owners.
Tie-ups with Urban transport system like JNNURM, BRTS, and State-Transports to
utilize their fleet service requirements.
Tie-ups with fleet managers like private intercity/ inter-state bus operators, cab
operators, truck/ taxi unions to build opinion leaders for bulk purchases.
Providing warranty on engine performance on using the same brand o ver the
warranty period.
Pricing Strategy:
The price for lubricating oil depends upon the base oil prices which ultimately
depend upon the crude oil prices.
Being into the premium segment the brand commands a premium price over other
Indian brands like Servo, HP Milcy, Mak, Savsol etc.
Total needs to push its premium products where it has tie-ups with OEM’s. For other
markets like local garages/ service stations, the product pricing needs to be
competitive so as to survive on the shelves of auto ancillary dealers.
Procurement of base oil at the cheapest rates with the minimum cost of freight would
help reduce the input cost and offset the cross-subsidised low cost of the PSU
brands.
A strategic tie-up with auto components and spares manufacturing vendors will
ensure low cost of distribution of products as the destination market for both
industries is the same.
Lube oils are a major source of pollution as the disposal of used oil is not proper. A
systematic method for collection and reprocessing of used oi l will not only reduce
input cost but would help the brand in demonstrating an environmental concern to its
customers.
The growth in the lubricating oil market is linked to the growth in the automobile
industry.
Awareness among customers that health of their vehicle engine is linked to the
quality and frequency of change of lubricating oil is needed and the target audience
need to be educated through media campaigns.
Brand identity to be established among customers by positioning it as a y outhful
brand. The brand promotions by mass media campaigns supplemented by brand
ambassadors.
Competitive pricing of 2-wheeler products and tie-ups with OEM’s can push
revenues.
An initiative to become environmental friendly is going to push the brand in the future.
We infer from the above study that businesses need to segment the
market by its product mix and specifically target and position the
product in the minds of the customer by maintaining high quality
standards, capturing the needs of the customer both tangibly and
intangibly by building brands which can edge out the competition to be
the market leader. Businesses also need to create demand/ need
where there is any scope for product diversification by continuously
educating the customers about the positive impacts that the product
can make on their lives. They should be able to provide the best goods/
services to the customers at competitive prices and innovative
technologies. The trust a brand creates with its customer base goes a
long way in customer retention which has to be reinforced time and
again through promotions. The availability of the product at service
points also plays a vital role in delivering value to the customer. Lastly,
the brand has to create a sense of pride in ownership for the customer
by consistent product performance and brand building exercises.