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Brand Building

Demerits of marketing a commodity market Commodity market is a market where the different types of commodities are bought and sold. The wheat, rice, etc are the commodities that are exchanged purely on price basis. Brands evolve from unbranded commodities and reach a place where the name is used for identification. This happens mainly because there is a lack of differentiation in case of a commodity. Each unit of a commodity is exactly like every other unit. A product is a commodity when all units of production are identical, regardless of who produces them. In such kind of market an individual producer has no control over his/her price. Whereas the prices of branded products are set by the brand owners and they become price makers. If somebody comes up with a commodity that is unique in itself then that commodity creates a market for itself. Marketers generally enter commodity market because of huge size they offer. Marketing a product in commodity market adds a lot of value to commodities through branding. Consumers, show no involvement in the selection of a commodity. And because of this they mostly select a product based on price. Hence in such kind of market to create a brand marketer will have to put in a lot of efforts to differentiate its product from other general available product and to create a brand. Hence some of the major challenges that are faced by a marketer while marketing a product in commodity market are: To make consumer see and appreciate the value in the branded product compared to its unbranded counterpart. To induce customers so as to increase the involvement of consumer in buying that particular product Finding the right strategy for segmenting the market, targeting the specific users and positioning of the brand keeping in mind the characteristics as well as the needs of the target market. Brand building involves cost, apart from additional cost incurred in packaging, labeling, advertisements, legal protection and a risk that if brand should prove unsatisfactory to the user, the companys image would suffer and it may even affect market for other products of the company. The value of brand building Concept for a Product and Service

Branding is a process, a tool, a strategy and an orientation. Branding is the process by which a marketer tries to build long term relationship with the customers by learning their needs and wants so that the offering (brand) could satisfy their mutual aspirations. Branding can be viewed as a tool to position a product or a service with a consistent image of quality and value for money to ensure the development of a recurring preference by the consumer. It is common knowledge that the consumers choice is influenced by many surrogates of which the simplest one is a brand name. Although there may be equally satisfying products, the consumer when satisfied with some brand does not want to spend additional effort to evaluate many other alternative choices. Once he or she has liked a particular brand, he or she tends to stay with it, unless there is a steep rise in the price or a discernible better quality product comes to his/her knowledge which prompts the consumer to switch the brand. Branding is used as a differentiation strategy when the product cannot be easily distinguished in terms of tangible dimensions (Which invariably happens in case of many non-durables, services and even durables) or in products which are perceived as commodity (e.g. cement, fertilizer, salt, potato chips etc). In all such situations marketers use branding as a differentiation strategy and try to develop an intimacy with target customer. That is, they try to develop and deliver customized products and auxiliary services with tailor-made communications to match with the customers self -image. Branding helps a marketer in following ways: In a market where products are similar, branding can have a large effect on the price that customers will pay. So it can extract a much higher price from consumers pocket compared to a non branded item. In a successful brand buyers or users perceive values which match their needs. Hence making the product in demand Product dies but a good brand never dies If a brand is able to develop a combined tangible and intrinsic value that are higher than any other brand in the category, then that brand will have the highest customer loyalty in terms of purchase, repurchase, and recommendation. Branding increases profitability. For example water is free of cost but a branded water bottle today sold at 12 Rs per litre Brand creates perception amongst consumer. For example, many consumers hold an impression that Sony offers best electronic products.

Brand building challenge Indian paint industry can be broadly divided into two segments: Decorative segment which constitutes the wall paints: exterior, interior, wood paints etc Industrial segment which consists of automotive paints, and paints for industrial sector Decorative segment constitutes around 75 % of the total paint industry and Asian Paints is the market leader with around 44% share. In the Industrial segment, Nerolac is the market leader. Asian Paints realized the need for brand building even during sixties. But at that point of time, the company had a wide range of brands/subbrands. The focus of the company has always been on product innovation and service network and managing quality proposition. Asian Paints Identity, Personality and Symbolism Asian Paints, a market leader in the paint industry started its operation more than 60 years back. In 1995 Asian Paints won corporate performance award by economic time and Harvard business school association of India. The brand Asian Paints is both instructive and inspirational. In the early 80s the brand used to be realized as a symbol of can of paint but in 90s slowly when people started moving towards showing more involvement in buying paints the image changed to painted walls. Travelling from there today the brand stands a position where it is known as the father of beautiful homes. The brand has travelled a lot of distance to reach to its current position. Starting from a point where it just offered products, today it is known to offer complete retail services and home-making experience. Its advertisements have moved from celebrating a freshly painted house in the 90s to a place today where the company talks about a home reflecting the personality of the owners. Now Asian paints has established itself as a company which believes and follow the following: Asian paints is about people who invest emotional energy in creating their homes Asian Paints is about homes which reflect the taste and love of their

owners/residents

The company enjoys enormous competitive advantage in its business. It has earned a big mind share of the consumers mind through Strong brands Great distribution network Good management

It has always focused on innovating and changing the rules of the game. In the long span of sixty years Asian paints has changed the Indian paint market completely, especially the market for decorative paints (Decorative paints dominates paints market with more than 70% share). This strong position is mainly the result of early realization of the importance of brand building process. Asian paints always aimed to become a household name in the domain of paints. This could happen only when it caters to all the sections of society. Company resolved this issue by giving a special focus to mass and rural markets for which it launched low cost products like Utsav distemper. The company has always focused on innovation and being the first mover in its space, be it be the strategy of delayed differentiation, providing samplers to the customers in small sizes, or introduction of tinting machine at dealers shop. Being an initiator in opening so many frontiers it has always been a trend setter in Indian home dcor market. Strategic decisions taken to build the same brand APs success is the result of its strong corporate and marketing strategies. Within marketing strategies it is the distribution excellence that took Asian paints to its current position. Asian Paints always kept consumers at the core of its business. Hence, apart from solid marketing Asian Paints concentrated on building consumer centric initiatives. Some of the most famous consumer centric initiatives Asian Paints undertook are: Asian Paints home solution Helps consumers in getting a painted surface and not just paint Aim of APHS is to control quality of the product delivered to consumers Helps in abridging barriers to purchase and hence consumption

Asian Paints helpline Access to helpline is free of cost: Toll free Most of the people who come to helpline actually end up buying the product Till February 1, 2003, 3175 machines were installed Out of 3175, 827 machines were installed under arrangement with Citibank Color world dealers make more than 50% of sales for Asian Paints Color next Fan decks Shade cards

Color worlds

More color tools

Color tools Fan Deck Asian Paints tied up with NID (National institute of designing) and came up with a fan deck which had 1147 shades arranged in 200 strips of 6 shades each. Color Next Asian Paints aspire to become a color expert in Indian paint market. For this company is taking steps to fulfill the needs of everyone right from a household customer to an expert: architect. As a step to reach towards the goal, Asian Paints came up with color next. Consumer insights & perceptions used to create its values Asian Paints has trounced most other companies in the paint industry such as ICI Dulux, Jenson and Nicholson, Berger etc, because of its strategy to allow the customer to walk into a retail outlet, and find the shade of the paint that they want, and in the size that they desire. If a customer wanted a particular shade in a small size he could get it at Asian Paints outlet. The customer need not compromise on either the shade or the size that he wants, which is not the case elsewhere. Asian Paints customer intelligence made them aware of the customers predicament in either compromising on the shade or the size, while buying paint from a competitors retail outlet.

To sort out the problem of sizes Asian Paints introduced samplers. The concept of sampler is very useful, purchase a sampler having 200 ml of paint and try the paint on your wall and you will be able to see that how the color does looks on that wall. This saves customer from completely depending on the fan decks and shade cards. Also customers are saved from the hassle of imagining the walls in different colors and they can take a much informed decision about which color to use. Initially company focused largely on rural and semi urban markets. Then the company realized that although volume justified their leadership position, but still they had a very low share of mind of consumer. Company felt that it was the result of the mass segmentation that brand had adopted. During 1983, Asian Paints tried to reposition the brand as a premium brand. Hence it initiated the corporate campaign which aimed to position the company as the number one player in the industry. The objective of this campaign was to upgrade itself to a more margin premium product marketer .The corporate campaign "Spectrum of Excellence" was launched, which aimed to increase the voice of the brand in a relatively quiet market. This campaign failed to gather interest from consumers and the company felt that the market is moving towards becoming a commodity market where price is the most important factor determining the success of a brand. Then the company undertook a consumer research to understand the perception of consumers about the product category. The research revealed a lot of interesting insights. As per research consumers felt that paints could change the mood of the space and it was a sign of festival and plenitude. Consumers felt that the paints could make a gloomy place bright and pleasant. This insight forced the company to think deeper and company came up with a campaign of associating Asian Paints with festivals. Research had also confirmed that customers tend to repaint their houses on the occasion of festivities. All these insights gave rise to the campaign "Celebrate with Asian Paints". The campaigns were carefully crafted and because of the cultural diversity in the different regions of India, different campaigns were drafted for different regions. These campaigns effectively enhanced the brand equity of Asian Paints and helped in establishing Asian Paints as a premium brand. These campaign also ensured an emotional connect with the brand inspite of the fact that paints is a low involvement category.

By late nineties company realized that no longer festivities formed an important part in an Indians life. This change in the consumer behavior enforced the need of reinventing the brand. This changed behavior was also decreasing seasonality involved in the paint buying process, this was majorly the result of the importance that people had started giving to home decor and interiors. The choice of color became a high involvement decision. From a low involvement category, paint was increasingly becoming a high involvement category. It was a big challenge for company to align itself to the new consumer psyche. Since then company started giving more importance to customer and their involvement in the product. This can be clearly seen from the campaigns that company focused on. Also introduction of new shade cards with more and more colors in them was a clear indication of company realizing the needs of consumers. Product for each segment While Asian Paints developed strong image of being a premium paint provider, it realized that there is a large chunk of Indian population that cannot afford such expensive paints and hence they use lime often called as chuna to paint their houses. To include these consumers in their consumer set company also came up with low valued paints like Utsav distemper which were comparable to lime when talked in terms of price but were far ahead in quality. These products did not stick to the clothes as did lime and hence gave great satisfaction to its users. Because of a clear advantage that lay in buying Utsav, it became a very famous product very quickly. Since then company made it a point that instead of targeting any one segment they will make products in all price ranges so as to cater to the needs of all the consumers. Slowly this strategy played an important role in making Asian Paints the most preferred paint brand amongst all the customer categories. Economy range: Utsav distemper Medium Range: Tractor emulsion Premium range: Apex, Luxury emulsions, Royale play Dichotomy One of the biggest problems that are faced by the paint companies is that they sell paint as a product but what customer buys is a painted surface hence it pays price for a painted surface and

not paints. And the gap between a paint and painted surface is filled by the painter and the quality of the final product depends on the skill of painter. This means that kind of a job a painter does becomes of extreme importance to the paints company. To handle this aspect Asian paints started training painters and certified certain painters as its premium applicators. This was especially helpful in spreading name, image, customer satisfaction for special products like royale play and textures where the quality of grains and finish depends completely on the way it is applied. Factors that shaped the brand during its life cycle Asian Paints concentrated on individual consumer meant that it would have to deliver wide range of products. Catering to individual involves the company to provide wide variety of products, material, shades and pack sizes. Company believed in making products that consumer wants hence it took feedback from the consumer and modified the product as per the feedback. This kind of a policy helped company in burgeoning its supply chain. In 2000 Asian Paints realized that the firms long term growth depended on their ability to interact more with their end consumers. At the same time, the Asian Paints help line had started receiving calls from the consumers expressing an unfulfilled need for a more complete solution for their home painting needs. In this process Asian Paints learned that they had demanding expectations when it came to service and overall project execution. But because the company sold its products through a network of dealers, hence it lacked visibility to the consumers in the entire painting process and the needs of the homeowner. This situation prompted the company to explore ways to establish a more direct link to the end customer. With this thought in mind, Asian Paints made the decision to move to a service model from a strictly product-based manufacturing business. Taking a step towards moving to become a services company, Asian Paints started with the Asian Paints home solution. Asian Paints Home Solution Asian Paints Home Solutions is a professional painting service offered by Asian Paints Limited. The objective of APHS is to provide a professional, hassle free painting service for consumer homes. The Asian Paints home solutions is responsible for using the system to perform all major

tasks associated with a job: schedule appointments, record completion of site surveys, submit job estimates, order paints through Asian Paints dealers, record progress of jobs, invoice customers, and conduct customer satisfaction surveys. Asian Paints signature showroom Paint is a low involvement item and contrary to other FMCG items the frequency at which a customer paints its home stands normally once in three or four years. So it was very important for the company to focus on the aspect of increasing customer involvement in the paint buying process. One of the initiatives that Asian Paints started for this purpose included opening a signature showroom in Bandra, Mumbai. This showroom showcases the various new and important products of Asian Paints in various settings. Also, the initiative for Architects and builders helped them in reaching to more customers by influencing the decision makers. Role of advertising in brand building process In earlier days most of the times decision regarding the brand of the paint was taken by the painter or the builder. But now days it has changed and because of extensive marketing campaigns by paint companies, customers have become more aware. With the increased awareness even in a low involvement product purchase like paints now a days most decision are taken by customers and architects and less often by builders and painters. Marketing The demand of paints is highly seasonal. It increase abruptly during the festive season and falls in the other times. Considering seasonality in the mind Asian paints started a campaign "Celebrate with Asian Paints. The campaign was designed strategically with different advertisement campaigns for different regions. Theses Advertisement campaigns increased the brand equity of Asian Paints and people could relate more closely to it. These campaign ensured an emotional connect with the brand in a low involvement category also.

Till late nineties many other paint companies had also started focusing on festival season as a mean of promotion also consumer buying behavior changed with people becoming more and more busy no longer festivities formed an important part in ones life hence the brand Asian Paints had to be reinvented. Now people started giving more importance to interiors, colors and home dcor. The choice of color started moving towards being a high involvement decision. So Asian paints had to change its strategy The logo of the brand was changed which was a mascot called as Gattu for a very long time. The company started giving more emphasis to the colors and started focusing on becoming a color expert in Indian dcor market Started focusing on developing special effects paints which could keep people more and more engaged with the brand Asian Paints In 2002, the brand had undergone an identity change and its logo took on a new look in typography and colors. The company gave up its mascot Gattu. Gattu was an integral part of the brand-building that company had done for itself since 60s. All this justified the companys position of being a premium paint brand, which it started focusing on since early eighties. This was done by signing various famous celebrities for the ad campaigns of Asian Paints products. With the paints moving towards being high involvement products Asian paints started focusing on understanding the consumer and the perception of consumer regarding paints. They carried out several consumer researches to understand that. These researches revealed that consumer felt that paints could change the mood of the space and it was a sign of festival. Paints could change a gloomy place into more bright, pleasant and energetic place. These insights forced Asian Paints to focus on ad campaigns that focus on consumer living inside the home and then came the ad campaign which said " Har Ghar Kuch Kehta Hai". And later on to focus on the importance of colors they launched the campaign which said Har Rang Kuch Kehta hai"

How Asian Paints positioned itself in its competitive market Distribution network The distribution network of Asian paints is one of the biggest factors that help differentiating it from other paint companies. The objective was to have a dealer in every town with a population of over ten thousand. Asian paints have 25000 retailers which are present in all the strategic locations. The number of retailer tends to increase heavily during the festival season when the demand increases heavily. It help the company to cater to the high demand that it sees during festive season when it experiences almost 50% of its total demand. The intensive distribution network of the company is one of the biggest strength of company. It took a great deal of work to come up with such a strong distribution network. Main steps that Asian Paints took while building its extensive distribution network are: Asian Paints created a large network of dealers. This is most important to ensure the availability of product in different areas of the country. This dealership network gave a clear edge to the company over its competitors Asian Paints established a network of company depots to serve the dealers. There are six regional distribution centres which cater to depots. Retailers dealers could easily pick up the product of their requirement from depots. Company established a network of 30 company run depots which were spread across the country. The number of depots in a particular city varied as per the demand in that city Asian Paints created a marketing organization that matched its distribution. Company established 4 regional sales offices, 35 branch sales offices and a large number of sales supervisor and sales representative spread all over the country. This marketing organization helped company to control its extensive distribution network. Each branch sales office had its depots. Hence branches serviced dealers and customers in their territory Asian Paints resolved cost vs service tradeoffs in the distribution by doing effective inventory management by making extensive use of IT. Such kind of system was extremely crucial to the business of company since paints are the product with seasonal

demand. The demand drops substantially in the monsoon season and rises rapidly a month before the festive season. In paints business major demand is realized in the later half of the year. This meant that company had to carry huge inventory level to provide good service level during the demand period. The company focused on providing high service levels which was measured as the amount of SKUs present in depot as a percentage of the SKUs that should have ideally been available. Better management of cash contributed majorly to the success of the company. For ensuring that company followed following policies: o Giving a discount of 3.5%: If the payment was made within the stipulated timeframe throughout the year by dealer would get a 3.5% discount in the form of cash back at the end of the year. o Giving a cash discount of 5%: This discount was given to the dealers who made cash payment, any payment given within 24 hours of supply was considered to be the cash payment. These schemes were highly successful and ensured cash reserves with company all the times Asian Paints bypassed the bulk buyer segment and went to individual consumers of paints The time when Asian Paints entered the market bulk buyer segment contributed the major portion of paint business. Inspite of the market trends at those times Asian Paints concentrated on individual consumers. This decision impacted every decision that the company took later in the realm of distribution. Company proved its strategy right by proving itself to be a success. This happened mainly because the company was able to tap a market where other companies where hardly putting any focus, hence gaining a source of competitive advantage. Asian Paints went slow on urban areas and concentrated on semi urban and rural areas Prior to Asian Paints entry into this market most paint companies focused on urban areas, Asian Paints changed the rule of the game after it. Company saw a huge market for paint products in the urban and semi urban areas and focused on it. One more reason behind company following such policy was that the established companies then and their wholesale distributor were not giving entry points to new companies.

Asian Paints went for retail Asian Paints went for retail and again broke the traditional rules that were existing. AP preferred direct contact with retailers and found greater merit in this system. This strategy was also aligned with companys strategy to go to individual customers. Asian Paints went in for an open door dealer policy Asian Paints followed an open door dealer policy; this means anyone who wished to become a dealer of Asian Paints was awarded the dealership. This was again against the general belief at that time following which other companies were limiting their number of dealers. This again was the result of going to individual consumers as this helped the company to reach to every nook and corner of the country. By 1990 AP had a dealership network of 7000, by the end of year 2000 the number reached to 12000. Currently the number of dealers stands at close to 20,000 and still company is adding 200 to 250 new dealers every year. Asian Paints voted for nationwide marketing/distribution At a time when all other companies were focusing on regional marketing, Asian paints focused on nationwide marketing/distribution. Asian Paints did this because it wanted to have an active presence throughout the country, in all the zones and territory. The future steps to consolidate the brand With the increase in trend to refer to professional advice the number of architects in the country is increasing rapidly. This is bringing decision maker closer and closer to more informed influencer i.e. architect. In this way the position of architect as an indirect decision maker is becoming stronger and stronger. Because of this increasing importance of the architects as a decision maker, Asian paints is concentrating a lot on this segment some of the initiatives like Color next already came up. So it is expected that more initiatives will come up which will help company in maintaining a better reach in this segment. With the consumer becoming more and more receptive in trying new and different products, there has come great change. This has lead to greater demand of special products like texture

paints. Companies like Oikos and Jotun are leveraging these opportunities. Hence it is important for Asian Paints to look deeper into this segment and introduce more range into this product category. Special paints like Royale plays have got great attention from the consumers. However there are two main reasons that resist consumers from using such products, the reasons are: Very high cost of Royale plays makes it difficult for the middle class to use such products The product is difficult to apply because of special method of application. To get proper finish customer should hire a well trained and expert painter. But such painters are again very expensive to hire Asian Paints needs to focus on coming up with products that have look and feel of Royale play but are not as expensive as the current prices of Royale play. Also the application process of such products needs to be made a little easy so that even a normal painter can apply these products and hence making them affordable for middle class consumers as well. With the entry of various international players like Sherwin Williams in the Indian market the retail market for paints is becoming more and more competitive. To remain closer to the Indian consumers Asian Paints should focus on opening signature showroom in the states other than Mumbai as well. This will help company in countering the effect of new stores of foreign companies coming in India. Since Asian Paints is much more established in Indian market compared to Sherwin Williams, so it is easy for it to root them out in the very beginning of when they are trying to set themselves in Indian market. Later on SW can pose big threats to Asian Paints. Some of the consumers who buy paints without any expert guidance find it difficult to decide on which product will suit their requirement. Hence company should make available booklets at the retail stores. These booklets should provide complete information regarding the products of the company along with their features. Such action will be of great help to ordinary consumers.