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A Comparative Analytical Report on Marketing Mix of Asian Paints Nepal Ltd and Nepal Shalimar Paints

Submitted By: Elites Group Dilip Raj Uneet Kaur Vishal Vivek MBA II Term

April 3, 2011

Acknowledgement

A successful project can never be prepared by the singular efforts but it also demands the help and guardianship of some conversant person who guides actively or passively in the completion of a successful project.

We would like to express our earnest gratitude and deep respect to our Instructor, Assistant Professor R. B. Mahato, Kathmandu University School of Management for allowing us to undertake this work and for inspirational guidance, untiring support, constant encouragement and overall supervision throughout the project period.

Our sincere gratitude goes to Assistant Prof. Jyoti Regmi Adhikari, Coordinator, MBA Program for her valuable suggestions and help during our project work.

We would like to thanks Mr. Shankar Banzade, Marketing Executive, Asian Paints Nepal and Mr. Madhav P. Gautam, General Manager, Sales and Marketing, Nepal Shalimar Paints for their valuable support during our project work.

Table of Contents

Executive Summary

Asian paints (Nepal) Pvt Ltd and Nepal Shalimar Paints Ltd are two leading paints companies in Nepal. Paint industry has a business of 3.5 billion in Nepal. Asian paints have a market share of 38 percent where as Shalimar paint has a market share of 11.5 percent. Both the companies have their own marketing mix. Both companies provide a variety of paints. Cement paints, wood paints, metal paints are the categories under which both the companies produce their products. Under cement paints they provide interior paints for interior wall and exterior paints for exterior walls of the house made of bricks and cement. Asian paints target more to the urban and sub urban customers where as Nepal Shalimar Paints target urban as well as rural customers. Both the companies have reached almost all area of the country. From factory the product goes to depot from where the product is transferred to the dealers and finally consumers. Nepal Shalimar paints buy its raw material mainly from India where as Asian paints bring its raw material from India as well as south east. Asian paints claims that they have premium product and so they charge a premium price. Asian paints are more expensive than Nepal Shalimar paints. Asian paints are using an extensive promotion strategy. They promote their product through all media. They have advertisement in daily newspapers, magazine, TV, radios etc. Shalimar paints also do use the same kind of promotional tools but the schemes are different then Asian

INTRODUCTION

COMPANYS PROFILE Asian Paints (Nepal) Pvt. Limited Asian Paints (Nepal) Pvt. Limited is the leading paint company in Nepal. It is a subsidiary of Asian Paints Ltd, India with 51 % share. It started its operation in 1985 in the kingdom of Nepal. The manufacturing facility is located at Hetauda industrial estate and has a capacity to manufacture over 8000 Kilo Liter (KL) of paints annually. It is the first paint company in Nepal with ISO-9002 certification. All products have certification of approval from Nepal Bureau of Standards. It has annual turnover of Rs. 1.33 billion, with overall market share of around 38 %. The company has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity. Asian Paints has been able to establish clear leadership in Nepal. It leverages its worldwide experience to deliver products of International quality & range to the consumers. Asian Paints manufactures complete range of decorative, wood finishes and industrial coatings. The company has also set up over 1100 Colour Worlds to offer wide range of shades to the consumers.

Nepal Shalimar Paints Nepal Shalimar Paints, one of the leading names in paints industry in Nepal was established in 1997. It has annual turnover of 400 million with overall market share of around 11.5 %. Its manufacturing facility is located at Birgunj and has production capacity of 24000 Metric Ton (MT). Its head office is located at Adarshnagar, Birgunj. Corporate office of Kathmandu is located at Durbarmarg. Their Kathmandu depot is located at Kuleshwor.

Objectives of the study The objective of this project work is to study and analyze the marketing mix strategies of two leading paints company of Nepal. The study also aims to make a comparative analysis of their marketing mix.

Limitations Within the available period of time and resource constraints, detailed investigation of the product was not possible. Information furnished here is based on the analysis of information obtained from marketing executives of the two companies and also from the literature.

MARKETING MIX ANALYSIS

1. Product Mix Asian paints product mix: Asian paint produces a wide range of products which have more than 1100 shades. Their products were targeted to the different segment of the society. Company follows the principle providing the customer different kind of products and different price. Its product range includes Wall paints, Metal paints, Wood Finishes, Primers and others. Apart from offering the customers a wide range of decorative and industrial paints, it even custom-creates products to meet specific needs. Asian paint investing Development sector competes globally. The different categories of Asian paints Ltd. are for Quality a huge amount of fund in Research and

and the technological development of product so that it

1) DECORATIVE PAINTS: Decorative paints account covers almost 75% of the overall share of paint market. In this segment Asian paint has been a leader for almost two decades. Decorative paints include wall finishes, for interior & exterior uses, examples, wood finishes & ancillary products such as primers, putties, etc. In decorative segment company has a wide range of product from low price to high price low price product like Utsav which is basically targeted to the rural customer and high price product.

The products are: Asian Paints Royale: This product of Asian paint is targeted to higher income group and customer of urban area. The product contains different shades and price of each shade very. E.g. Regal white Asian Paints Emulsion: it is another product which is targeted to urban area. It is high price premium product. The shades are white, palm group and base.

Asian Paints Gattu synthetic: It is a product which is targeted customer of sub urban area. It has different shades like white, Aquamarine, Azure Blue and etc.

Asain Paints Utsav Paint: It is product which is targeted to lower income people as well as sub urban customer. The various shades were Adyrey, back, white, super white and etc.

Asian Paints Apex: This product is one of the major products of the Asian paints as this product is targeted to middle class people and average income level. These paints have wider range of shades such as classic white, blue ice, Alliance, Antique white, sweet time and etc.

2) INDUSTRIAL COATINGS: Industrial Coatings is the second category of the product that Asian paint produces. Industrial coatings have a moderate growth rate than decorative coating, powder coatings & protective coatings. In this segment Asian Paints targets to industry where the paint are used for protective coatings of the machinery. In these segments the product are normally sold at the premium price.

The products are (i) Apcomin Synthetic Enamel (ii) Apcomin Synthetic Powder (iii) Stainer (iv) Premium surface & fillers These products are based on high technological products and are used for asset (Machinery, tools, equipments) coloring and upcoming synthetic powder is used as lubricating agent in the machinery.

Product Variety Interior Wall Paints Royale Luxury Emulsion Premium Emulsion Exterior Wall Paints Ace Exterior Emulsion Apex Weather Proof Exterior Emulsion Wood and Metal Paints Ustav Enamel Gattu Synthetic Enamel Wood Finishes PU Wood Finish Exterior PU Wood Finish Interior

Tractor Emulsion Tractor Acrylic Distemper Tractor Synthetic Distemper Utsav Distemper Raw materials

Apex Textures Exterior Emulsion Elsatometric HiPerformance Ext. Paint

Apcolite Premium Satin Enamel Apcolite Premium Gloss Enamel

Melamyne Touch Wood

Raw materials are divided into three major groups, namely pigments (titanium dioxide, zinc oxide etc.), solvents (mineral turpentine) and resins and additives. Pigments are finely ground solids of different shades to give color, durability, consistency and other properties to paint. It is also one of the major raw materials, accounting for one-third of the total raw materials cost. The company buys raw material from India and South East.

Quality Asian paints have a quality product to offer. In fact the tag line of the company is Quality. They market themselves as The most preferred paint company in Nepal. They present themselves as trust worthy and believe in relation building. They provide a quality product at reasonable price.

Brand Name A brand is a name, term, sign, symbol, design or a combination of all which is build intended to identify products or services of a company to differentiate it from its competitor. Asian paints, the largest paint company in Nepal have established its positions as great brand. Asian paints promise to deliver consistently a specific set of features, benefits & services to buyers.

Packing All the paints of the company come in the package of 500 Ml, 1 Ltr, 4 Ltr, 10 Ltr and 20 Ltr.

Warranties Generally all the paints of Asian Paints have life time warranty. However warranty has some category. It takes warranty only for not fading of the color. One of its products, Apex Ultima comes with a warranty of seven years.

New product Asian paints recently launched a new product. About one and half years back it launched Ace exterior emulsion. The product was a result of continuous upgrading of product. It has an exterior emulsion paint named Apex-Ultima which offers a 7 year performance warranty (on anti-flaking, anti-fading & anti-fungal properties; conditions apply).

Nepal Shalimar Paints Product Mix

It has production capacity of 24000 M ton. It has well equipped Research Department which consists of all quality testing materials, latest software worth of Rs. 10 million.

Product variety Nepal Shalimar paints offer a wide range of products. On the basis of surface to which the paint is to be applied, paints are of three types i.e. Metal, Cement and Wooden. Further cement paints are divided into exterior and interior paints. On the basis of affordability it is again divided into top quality and general quality. There are near about 1050 shades. Different paints provided by the company under different variety are as follows:

Exterior Emulsion(for cemented surface) Weather Guard Exterior Emulsion EXE Exterior Emulsion EXEM Exterior Emulsion

Interior Emulsion(for cemented surface) Unique touch Super Acrylic Plastic Emulsion Diamond Acrylic Emulsion

Interior Distemper(for cemented surface)

Synthetic Enamel(for cemented surface)

wood,

iron

or

Diamond Acrylic Washable Distemper Diamond Acrylic Washable Distemper

Diamond Hi-Gloss Super Synthetic Enamel Goldlac GP Synthetic Enamel

Primer Shalimar Cement Primer Shalimar Red Oxide Primer Shalimar Wood Primer

Others Shalimar Aluminum Paint Shalimars Wall Care Putty Diamondcem/Goldcem Cement Paint

Raw materials Raw materials are divided into three major groups, namely, pigments (titanium dioxide, zinc oxide etc.), solvents (mineral turpentine) and resins and additives. Pigments are finely ground solids of different shades to give color, durability, consistency and other properties to paint. It is also one of the major raw materials, accounting for one-third of the total raw materials cost. The company buys raw materials mainly from India.

Brand name Nepal Shalimar Paint is a well known name in Nepalese paint market. It has fourteen years of experience in paint industry.

Packaging Exterior Emulsion and Interior Emulsion comes in the package of 20 Ltr, 10 Ltr, 5 Ltr and 1 Ltr. Distempers come in the package of 20 Kgs, 10 Kgs, 5 Kgs and 1 Kg. Synthetic Enamels and Primers come in the package of 20 Ltr, 4 Ltr, 1 Ltr and 500 Ml. Wall care putty comes in the packing of 40 Kgs and 20 Kgs. Cement Paints are available in the package of 25 Kgs and 20 Kgs.

Warranties All the paints by the company has a warranty of five years. The company is now launching new paints with seven years warranty especially targeted markets of Kathmandu and Pokhara. New Products In an effort to offer a wider choice to customers, Shalimar has begun a color tinting service called Color Space which gives customers a wider choice of color shades. The service is

actually a new generation machine that uses computerized support to mix and match imported colorants with high quality bases.

2. Promotion Mix

Promotion means the way to introducing, selling and regular making of necessary attractive tools for the customers to influence their purchasing behavior. Generally there are two different concepts in the terms for promotion or promotional tools. They are Advertisement and Sales Promotion. Advertisement: The aim of Advertisement is to inform, persuade, or remind the products of the company. This offers a reason to buy. Sales Promotion: A key ingredient in marketing campaigns consists of a collection of incentives tools, mostly short terms, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. This offers an incentive to buy. Coming across to the promotion strategies of Nepal Shalimar Paints and Asian Paints (Nepal) Private Ltd; they use different kind of promotion tools. They are described below:

Asian Paints Promotion Mix a) Trade Discounts (for dealers) as for Mangsir 2067: Value in bill discount Period 1st Mangsir to 10th Mangsir 11th Mangsir to 18th Mangsir 19th Mangsir to 29th Mangsir In bill discount Minimum Bill Value

4% 3.50 % 3%

Greater than NRS 20000/Greater than NRS 20000/Greater than NRS 20000/-

b) Free Offer: Purchase minimum quantity as mentioned below and get free quantity almost free Product Minimum quantity billed in Free volume in same bill single bill ASE Colour TAD AP Wall Putty(20 kg) Cement Primer WT Exterior Primer 38 litre 200 kg 200 kg 500 kgs 70 Ltr 4 ltr ASE 40 kgTAD 40 kg AP Wall putty 120 kg AP Wall Putty 10 ltr exterior primer

c) Free Beers

I. Purchase 100 ltrs of any of the following emulsion and get 8 (4*2 ) ltrs of the same emulsion almost free (1)Tractor Emulsion (2) Ace Exterior Emulsion (3) Apex Exterior Emulsion

Advertisement: Regular newspaper ads in National Newspaper like Himalyan Times, Kantipur etc, TV ads, FM ads and at the same time hoarding boards at different parts of Nepal. At the same time ad in magazines like The BOSS is done for the purpose to target affluent educated and business class. The Company uses different advertisement policy to promote its products Point of purchase Displays: Wall display is shown at the depots, Balkumari.

Corporate Social Responsibility (CSR): As a part of CSR and promotion, the company regularly undertakes small projects like painting free the public toilet which can be seen at Koteshwor and free painting at bus stops.

Direct Marketing: For the direct marketing channel the company has its website available: www.asianpaints.com.np

Shalimar Paints Promotion Mix The company use variety of promotional strategies to promote its product. It provides a lot of discounts to its dealers to promote its product. It has placed a flash boards at all its dealers shop. The company uses push strategy to increase its market share.

1. Coupons: For the purchase of different types of Shalimar Paints associates different bonus points at a consumers and painters level. Some of them are listed below: Items a) Diamond lac b) Weather Guard Quantity Bonus Points Bonus Point Prizes Per Litre Per Litre 5 7 3 2 5000 points = Mobile Set Rs 6000/10000 points = 21 colour TV Rs 12200/ 50000 points= Cash prize Rs 67500/80000 points= 1 Hero Honda Motorcycle

c) Diamond Distemper Per Kg d) Wall Putty Per Kg

2. Prizes(based on target sales to retailers): At dealer level sales targets are given for particular month and when fulfilled, the dealers are awarded certain foreign trips. Recent prizes given were: China Tour for a couple, 7 people Bangkok Tour and constellation prizes- silver coins.

3. Sales Target (Dealer Scheme): Sale up to Amount a) Rs 6000000/b) Rs 3000000/c) Rs 1500000/Trip to Switzerland Egypt Europe

4. Product Warranties: Interior Paints: 7 Years Warranty Exterior Paints: 5 Years Warranty (Subject to terms and conditions mentioned)

5. Advertisement: The Company uses different advertisement policy to promote its products. They are regular newspaper ads in National Newspaper, TV ads, FM ads and at the same time we can see hoarding boards at different places on Kathmandu itself.

In this way Shalimar paints is using attractive promotional strategies for promotion. These strategies mentioned above changes time to time according to demand, supply and competitors strategies.

3. Price Mix Price is the one element of the marketing mix that produces revenue, the other elements produce cost. Prices are the easiest marketing mix element to adjust; product feature, channel and even promotion take more time. Price also communicates to the market the company intended value positioning of its product or brand. The customers perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a physical item; it also has psychological connotations for the customer. The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brand and its integrity. Asian paints Price Mix Asian Paints is selling its products all over Nepal where there are concrete building or at least houses with tin roofs. They are selling their products according to genre i.e. classification of paints such as metal paint, cement paint, wooden paint; interior paint, exterior paint; premium quality paint, economic quality paint. Their price differs from paint to paint. They dont decide their price according to the demand of that product. Prices are same but only fluctuate due to fluctuation of price in raw material. According to Asian paints, they are deciding their price on the context of quality.

Asian paints classifies its products into 2 categories; economic and premium. In both economic and premium they have metal paints, wooden paints and cement paints (interior and exterior). Premium quality cost between NRs 15000 to 17000 and economic quality cost about 9000 to 10000 for 20 Ltr pack of same type of paints. This has been done to satisfy consumers with different economic class. List Price Product Apex Ultima (Exterior) Ace Supreme Discounts Company usually provides 25 to 30 percent discount on MRP for customers. The company has also policy of providing discount to its dealer but this discount differs from season to season. The discount provided by the company for the period mangsir 2067 is given in the table below. Period 1st to 10th Mangsir 11th to 18th Mangsir 19th to 29th Mangsir In Bill Discount Minimum Bill Value (More than NRs) 4% 3.5 % 3% 20000 20000 20000 Packing 20 Ltr. 20 Ltr. 20 Ltr. MRP 15572 18903 9819

For bill value more than NRs 20000 Asian paints provide 3 to 4 percent discounts in period 1st to 29th Mangsir. Other discount provided by the company is in Annex. Credit Term Asian paints provide a credit term of one month to its dealer.

Shalimar Paints Price Mix

List Price Product Weather Guard Exem Exterior Exe Exterior Packing 20 Ltr. 20 Ltr. 20 Ltr. MRP 13462 10228 9979

Discounts Nepal Shalimar Paints provide a discount upto 35 percent on MRP to its consumers. It provides a bulk purchase discount of 1 to 2 percent and cash discount of 2 to 3 percent to its dealers.

Credit Term Nepal Shalimar paints provide a credit term of 45 to 60 days to its dealer

4. Place Mix

Place, as an element of the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of a range of processes involved in bringing products to the end consumer.

Asian Paints Place Mix

Asian Paints has a huge distribution channel for its product all over the country as its sales reach more than1.33 million a year.

Channels

Manufacturer

Company Depots

Dealer

Consumer

Coverage Asian paints outlets (color bank) are very evenly spread throughout the major cities making them very accessible and convenient to the consumers.

Location The factory of Asian Paints is located in Hetauda Industrial Estate, Makawanpur. Its corporate office is located at gwarko, kathmandu. This is its head office as well as kathmandu depots. It has five huge depotss where the product goes after manufacturing. Depotss are located at Biratnagar, Kathmandu, Birgunj, Pokhara and Butwal. The company has more than 350 dealers all over Nepal.

Inventory The company prefers to maintain low inventory levels due to having large no. of Suppliers and large number of color shades.

Transport The company use its own fleet of transport for distributing its product. Even though asian paints targets the urban and sub urban middle and upper middle class people they are distributing their products all over Nepal because of a recent increase in demand of its product to all segments of the population

Nepal Shalimar Paints Place Mix

Channel
Manufacturer

Company Depots

Dealer

Retailer

Consumer

Coverage Shalimar Paints have covered a large market in terms of area. It has targeted sub urban areas and small cities.

Location Factory of Nepal Shalimar Paints is located in Birgunj. Its head office is in Adarshnaga, Birgunj. It has six depots all over Nepal from where it supplies product to all over Nepal. Its depots are located at Biratnagar, Birgunj, Kathmandu, Pokhra, Nepalgunj and Butwal. The company has more than 600 dealers all over Nepal.

Inventory Nepal Shalimar Paints maintain an inventory of about 10 million.

Transport The company does not use its own fleet of transport for distributing its product. However, it has outsourced its distribution process to various third party distributors; these distributors then supply the product to a huge number of dealers.

CONCLUSION AND RECOMMENDATION

Conclusion Looking over the marketing mix of both the companies we get..that the potential market for both the products are the same in Nepalese context but eventually both target different section of market as we can see Asian Paints has targeted premium market and premium customers even though it is producing paints for every section of market and Shalimar Paints has a rep in all level of markets with access to most of the rural areas where we do not find anyone using Asian Paints. When we look over the pricing we can see that there is difference of Rs 5000-7000/- between Asian Paints and Shalimar exterior paints even though they have the same kind of product variability but the targeted section as per the market analyst is different from the perspective of consumers perception. As for the promotional strategy both the companies are using the same promotional strategies in some area but some different strategies are also there. As for them they both are using the trade discounts and the same advertisement media but in different way which can be seen from the above. Additionally, Asian Paints is contributing towards CSR and has Point of purchase display and some direct marketing approach which Shalimar doesnt use and for Shalimar, they are giving foreign tours and painters scheme, which Asian Paints is not providing. Looking over the place strategy Shalimar paints has influentially targeted middle level higher level and rural markets but Asian has not influenced rural market a lot and is specifically focused in urban areas even though it has cheap products. Recommendations The products of Asians paints are perceived as expensive products, even though in recent years the company has focused on low level income groups and has produced the products according to their needs. However, Asian paints is not able to convinced the consumer that it has all levels of products ranging from cheap , medium to expensive and premium products , so the company can use a different kind of promotional strategies to promote such kind of economical products.

Since, the company is not able to reach to the minds and homes of the people in rural areas, so extensive distribution program with promotional attributes can be used to penetrate such kind of product in that market. As for Shalimar paints , the company has very low market share comparing to Asian paints, so it needs to rigorously extend its market share with increasing need for product features , quality and promotional tools. Both the companies can also use the jars as shown in the figure to pack their products. The jar is not only attractive but also convenient in pouring paint.

References

Annex:

Product

Minimum qty. billed in Free volume in same bill single bill

TAD ASE Color /Base Cement Primer Exterior Primer AP Wall Putty

200 Kg 38 Ltr 500 Kg 70 Ltr 200 Kg

40 kg. 4 Ltr 120 Kg 10 Ltr 40 Kg

Purchase 100 Ltrs of any of the following emulsion and get 8(4x2)Ltrs of the same emulsion almost free: 1. Tractor Emulsion 2. Ace Exterior Emulsion 3. Apex Exterior Emulsion 4. Apex Ultima Exterior Emulsion 5. Royale Luxury Emulsion

Product Utsav Acr. Distemper ASE Blazing White Gattu Enamel

Minimum Qty. 40 Kg Plus 40 Ltr Plus 40 Ltr Plus

In Bill Discount(Per Kg) 15 40 24

Address

Asian Paints (Nepal) Pvt. Ltd. Bhartiya Gorkha Sainik Niwas, Opp. Saraswati Bahamukhi Campus, Lekha Nath Marg, Thamel, Kathmandu, Nepal. Tel:- 977-1-4423777/4414082 Fax:- +977-1-4417606 .. Nepal Shalimar Paints GPO: Kathmandu

12244,

Ktm,

Kuleshwor

Tel 4281569 Tel 4285414 Fax 4425142 E-Mail

Photos of our visits, promotional picture if cha banneproducts pictures if possible Letter of acceptance--- it is remaining to bring Address put.of both company.

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