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History Of Paints

Color has captivated everyone throughout the history, be it myriad cultures, age-groups, occasions, etc. Color has become a significant part of every family. Every age and every region has produced dyes and pigments based on the availability of the resources. The history proves the existence of colors from past thousands of years, discovered in the caves of Southern Europe.

Paint is defined as the group of emulsions, consisting of pigments suspended in a liquid medium, for use as decorative or protective coatings. Today, contemporary paints and coating consist of countless of hundreds of thousands to fulfill the varied requirements of hundreds of thousands of applications.”Paint” ranges from the broad group of environmentally sound latex paints that many consumers use to decorate and protect their homes and the translucent coating that line the interior of food homes and the translucent coating that line the interior of food containers, to the chemically complex, multi-component finishes that automobile manufacturers apply on the assembly line. Paint made its earliest appearance about 30,000 years ago .Cave dwellers used crude paints to leave behind the graphic representations of their lives that even today decorate the walls of their ancient rock dwellings. The utility of paints has evolved from a decorative use to a surface protection use. Also, know as surface coatings, paints can be classified on the basis of end use, solvent system and solid content.

Paint is comprised of three separate things working together. A pigment is used for the color. A binder is used to hold the pigment to the wall. And lastly, a carrier is used to apply the pigment and binder to whatever. There are many types of paint but they all have these components. For white latex paint, the carrier is de-ionized water, the pigment is very finely ground Titanium dioxide, and the binder is a synthetic polymer that resembles liquid rubber. The pigment and binder are put together with force (grinding) and then the two are slowly dispersed into the water.

Titanium dioxide is the single largest input used in the manufacture of paints. It is a pigment (non-petro-based) that accounts for about 30% of material costs. Phthalic anhydride (PAN) and pentaerythritol (Penta) are the other two important petro-based inputs used in the manufacture of resins. Organic pigments, solvents, oils and a range of chemical additives are also used in the manufacture of paints.

2 .INDIAN PAINT INDUSTRY

The Indian paint industry has come a long way from the days when paints were considered a luxury item. Today the awareness level on preventing corrosion through paints is relatively high, a development that should be a huge boost to the paint industry. The Indian paints industry offers lucrative scope for stable revenue streams to manufacturers of both decorative and industrial paints. The Indian Paints sector is valued at Rs 66 bn in value terms and is very fragmented. The current demand is estimated to be around 650,000 tonnes per annum and is seasonal in nature. The per capita consumption of paints in India stands at 0.5-kg p.a. as compared to 1.6 kg in China and 22 kg in the developed economies. India's share in the world paint market is just 0.6%.

The typical characteristics of the Indian paints industry include raw material intensiveness, working capital intensiveness, seasonality of demand, price elasticity of demand and low entry barriers with respect to technology and funds.

Crucial parameters that make India a favorable proposition include the low per capita consumption of paints (1.0 kilogram), growth in construction sector (it is being offered industry status) and growth in the auto/white goods market respectively spurring demand for decorative and industrial paints. The industry has also witnessed increased activity in the industrial variety of paints with the entry of MNCs in auto, consumer durables etc, which has been gaining steadily over decorative paints in the last one decade.

Indian paint industry is century old and the can be retraced by the history of Shalimar paints which was set up in the year1902 in Kolkata. Till the 2nd World war, industry consisted of small paint producers and 2 foreign companies. Post World War 2, imports were restricted which led to the birth of many domestic manufacturing facilities producing paint. Nevertheless, foreign companied ruled the market. Initially, British paints such as Goodlass Walls (currently famous as Kansai Nerolac), ICI, British Paints (now known as Berger Paints), Jenson Nicholson and Blundell & Eomite dominated the market.

The Indian paint industry has evolved a lot in recent times, both in terms of industry structure and product portfolio. Not long ago, paints were largely considered to be a luxury item. Such a mind‐set has changed significantly of late due to the growing awareness on preventing corrosion through paints, by providing a massive fillip to the paint industry. Indian paints industry is Rs.15, 000 crore market

Growth drivers for Indian paint industry

Per capita consumption at 1.5kg is currently very low as compared to the developed countries (20kg/annum). Usage of lime extracts (chuna) in rural and semi‐urban markets as well as lesser awareness of the protective attributes of paints can be one of the reasons for lower consumption levels. With growing income levels, both in urban as well as rural India on the back of various government initiatives like NREGS, Farm loan waivers, pay commission led salary hikes etc, the per capita consumption will improve in the medium as well as long term.

Rising income levels:

According to McKinsey, proportion of low income groups was expected to decline from 24% in FY05 to 10% in FY10e, and it has. This has acted as a significant catalyst for demand growth in decorative paints.

Increasing media exposure:

With better awareness levels, a gradual shift from unbranded to branded segment as well as improvement in product mix for various players like Kansai Nerolac, Asian Paints as demand for emulsions continues to outpace enamels and distempers.

Rising urbanisation:

This has led to creation of new homes, in‐turn, fuelling incremental demand. Currently, only 28% of Indian population is urban.

Urban Share of total population

Increase in nuclear families:

This is a consequence of younger demographics (60% of India's population is below 30 years of age), with proportion of working population expected to increase from 40% in FY05 to 48% in FY15e.

% of population in 15‐64 age group

Healthy growth in consumption levels expected for both, urban and rural India

Growth in Auto Sector

With production of passenger cars expected to grow, demand for automotive paints will continue to remain healthy as sales are expected to grow in double‐digits. And with realty majors launching new projects, construction activity is expected to gain momentum and generate demand for decorative paints. Globally, the industrial paints segment accounts for a major share, indicating that this segment offers many opportunities for paint manufacturers.

Growth in Auto Segments (FY06‐10)

The emerging trends in the decorative industry are:

3. INDUSTRY SEGMENTATION

The paint industry can be segmented as follows:

  1. End Usage classification: Paints are grouped in either decorative or industrial paints Decorative paints are used for household and construction purposes while latter can be used for industrial products. Decorative Paints consists of myriad types like enamels, acrylic emulsions, distempers and exterior paints. Industrial ones include the marine, anti corrosive metal coatings, etc.
  2. Solvent Based classification: Paints which use petro products or water as main solvents. These days water based paints are becoming popular on environment friendliness.
  3. Solid Content: Classified based on type i.e. liquid or solid. Powder coatings find application mainly in white goods industry.

The Indian paint industry has surprisingly only private manufacturing units. This can be reasoned by the fact that in the past, government perceived paints as luxury product and hence taxed heavily, thus regulating the industry to a non-core business.

Sector wise Division

Classification of paint industry can be done either product-wise or sector-wise. Sector-wise implies organised and unorganized sectors. The pie chart indicates the same.

Organized Sector is dominated by 6 large players and the unorganized sectors owned by about 2500 units manufacturing various categories of paints. Though the organized sector controls 65% of paint market, unorganized sector with 35% of market share is still a force to reckon with.

Organized sector can itself be divided into 2 distinct segments (Product wise): Industrial segment which is growing at 15% approximately and decorative segment which is growing at 8% approximately. As shown in the graph, most of sales are accounted for primarily by decorative segment. Decorative segment enjoys almost 77% and industrial segment owns 23% of the market.

Organised Market Segment Division

Decorative Segment

It caters to the housing sector. The following falls under decorative segment.

Industrial Segment

Industrial Paints include powder coatings, high performance coatings and automotive and marine paints Two-thirds of the industrial paints produced in the country are automotive paints.

Structure of Paint Industry

4. MARKET PROFILE

The leaders in the organized paint industry are Asian Paints (India) Ltd. (APIL), Goodlass Nerolac Paints Ltd. (GNPL), Berger Paints, Jenson & Nicholson Ltd. (J&N) and ICI (India) Ltd.

“Asian paints” is the industry leader with an overall market share of 33 per cent in the organized paint market. It has the largest distribution network among the players and its aggressive marketing has earned it strong brand equity. The Berger Group and ICI share the second slot in the industry with market shares of 17 per cent each. GNPL has a market share of 15 percent in the organized sector.

APIL dominates the decorative segment with a 38 per cent market share. The company has more than 15,000 retail outlets and its brandsTractor,Apcolite,Utsav,ApexandAceare entrenched in the market. GNPL, the number-two in the decorative segment, with a 14 per cent market share too, has now increased its distribution network to 11,000 outlets to compete with APIL effectively. Berger and ICI have 9 per cent and 8 per cent shares respectively in this segment followed by J&N and Shalimar with 1 and 6 per cent shares.

GNPL dominates the industrial paints segment with 41 per cent market share. It has a lion's share of 70 per cent in the OEM passenger car segment, 40 per cent share of two wheeler OEM market and 20 per cent of commercial vehicle OEM market. The company is also venturing into new areas like painting of plastic, coil coatings and cans. APIL, the leader in decorative paints, ranks a poor second after Goodlass Nerolac in the industrial segment with a 15 per cent market share. Berger and ICI are the other players in the sector with 10 per cent and 9 per cent shares respectively. Shalimar too, has an 8 per cent share.

Asian Paints enjoys leadership position in the Indian Paints industry, with nearly 55% share of the organized segment.

Major Market Player

5. COMPANY PROFILE

Incorporated in 1920, Kansai Nerolac Paints Limited (KNPL) is the second-largest coating company in India. It is a subsidiary of Kansai Paints, a Japanese company, which holds approximately 69.3% stake. KNPL operates in the decorative as well as the industrial paints segments, and is the market leader in automotive and powder coating segments. It manufactures decorative paints, automotive coatings, general industrial coatings, high performance coatings, powder coatings and speciality coatings.

Its manufacturing plants are located at Ratnagiri (Maharashtra), Kanpur Dehat (Uttar Pradesh), Perungudi and Hosur (Tamil Nadu) and Bawal (Haryana). Its employee strength is approximately 2,000.

The company has a strong distribution network of ~12,000 distributors, 5,000 colour tinting machines and 69 sales locations, as of FY10. The installed capacity for various products as of FY10 is: Paints, varnishes, enamels and powder coatings 2.08 million tonnes (MT), Synthetic resins 79,380 tonnes and pre-treatment chemicals 2,400 tonnes. Exports contributed less than 1% of FY10 revenues. The proximity of the company's plants to the customers' plant locations offers KNPL a strong logistical advantage.

Kansai Nerolac Paints Ltd.is a cognized leader in chosen fields. The company has won many prestigious awards such as National Energy Conservation Award from the Ministry of Power, Government of India for its Jainpur plant, the Golden Peacock Award for Corporate Governance in 2005, the Business Innovator of the year award in 2006 from the CTO Forum Magazine and Best Managed Company award from Business Today in 2004.

History

It is the second largest coating company in India and market leader in Industrial Coatings. Its Industrial Coatings has a wide range of products in the Automotive, Powder, General Industrial and High performance Coatings space. Nerolac paints, as it is popularly known, are an established brand in decorative paints.

Kansai Nerolac Paints Ltd is a subsidiary of Japan based Kansai Paint Company Limited, which is one of the top ten coating companies in the world. The technological edge of Kansai helps us constantly innovate and come up with products that meet consumer need gaps. Kansai Nerolac has always believed that the key to its business is:

Year 1920, a paint company was born as Gahagan Paints and Varnish Co. Ltd. in Mumbai. The journey is marked by moving from strength to strength in every sphere of business - be it product introductions through innovation, value engineering and superior technology.

1920: A company named as Gahagan Paints and Varnish Co. Ltd at Lower Parel in Mumbai, was born.

1957: Goodlass Wall Pvt. Ltd grew popular as Goodlass Nerolac Paints (Pvt) Ltd. Also, it went public in the same year and established itself as Goodlass Nerolac Paints Ltd.

1976: Goodlass Nerolac Paints Ltd. became a part of the Tata Forbes Group on acquisition of a part of the foreign shareholdings by Forbes Gokak.

1983: Goodlass Nerolac Paints Ltd. Strengthened itself by entering in technical collaboration agreements with Kansai Paint Co. Ltd, Japan and Nihon Tokushu Tokyo Co. Ltd, Japan.

1999: Kansai Paint Co. Ltd, Japan took over the entire stake of Tata Forbes group and thus GNP became wholly owned subsidiary of Kansai Paint Company Ltd.

2006: On the 11th of July, Goodlass Paints Ltd. name was changed to Kansai Nerolac Paints Ltd.

KEY HIGHLIGHTS

Capacity expansion n plans

KNPL's most recent capacity addition was a new plant at Hosur, which commenced operations in the last quarter of FY10 with a capacity of ~15,000 tonnes. The company plans to spend another ~Rs 2.5 billion (bn) to expand manufacturing capacity at Hosur to 0.28 million (mn) tonnes per annum. A further Rs 1.5 bn will be spent on increasing production capacity in other plants, taking total cost to Rs 4 bn

Strategic Alliances

Nerolac has developed strong relationships with automakers, such as Maruti, which facilitates it in maintaining its market leadership position in the industrial paint segment. Nerolac's parent company Kansai is a global supplier of paints to Suzuki - Maruti's parent company - which further strengthens the relationship. Nerolac has also taken initiatives to strengthen its existing relationship with automakers, which include placing technical teams at automakers' paint shops to provide them with services. Such initiatives have proved to be fruitful, and Nerolac has 9 out of 11 automakers as its customers. The other major a well-established client base from the automotive industry includes Tata Motors, Bajaj Auto, Ashok Leyland, Mahindra & Mahindra, etc

Targeting Rural Market

Nerolac has stepped up its efforts to increase its presence in the rural market. The company has introduced some products, such as Beauty Emulsions in the range of 80-100 rupees per litre, which cater to the price-sensitive market. It has also formed an alliance with ITC on its E-Chaupal initiative to improve its presence in the rural market. The company is also making efforts to strengthen its dealer network to improve sales.

6. KANSAI NEROLAC - MARKETING PROFILE

Marketing Strategies

Marketing defines the fact that “Customer is King” and always every management strives to identify, anticipate and satisfy their Kings'

Kansai Nerolac is the organization which works on this aspect and it's been one of the pillars behind building a successful organization. Nerolac believes that the key strength lies in understanding the consumers and communicating with them in a language they understand and relate to the best. Over the years, Nerolac has undertaken many initiatives, which have met with unprecedented success and really made people sit up and take notice of the same.

6.1. Brand -Nerolac

Nerolac commercials have been well -loved over the years and its jingle - 'Jab ghar ki raunaq badhaani ho...' is now a familiar tune in every Indian household. Many set the same jingle as their caller-tunes.

Beginning with the introduction of the new Brush stroke logo, this stands for the ‘process of painting, depicts motion, dynamism and progress through change. The signal red color, which is the color of Nerolac, is a symbol of eternal joy and hope. It has now become an integral part of Nerolac's brand identity and now appears as a sign-off on any kind of communication.

The Slogan of Brand Nerolac: “Kuch Change Kare Chalo Paint Kare”

Brand Ambassadors: Presently, Shah Rukh Khan, internationally famed Bollywood hero endorses Kansai Nerolac and has proved to give the brand a touch of glamour and the hope that a famous face will provide added appeal and name recognition in a crowded market. The famous Bollywood celebrity being the co-owner of IPL -Kolkata Knight Riders team is indeed a popular ambassador to the recall value of the brand.

Previously Mr. Amitabh Bachhan and Mr. Mohanlal were the brand Ambassadors. Amitabh had embodied Nerolac and had showed “how it touches the lives and dreams of people...no matter whom they are and where they come from”. The essence of this thought was captured in the new baseline ‘Yeh Rang hain jo har kisi ko chhoota hain'.

6.2. Product Range (Decorative segment)

Paints

Interior Range

Exterior Range

Enamels

Primer (Impressions)

Marble Finish

Ever last

Impressions High Performance

Metallic Finish

Excel Total

Disney

Excel AntiPeel

24 Carat

Impressions - Eco-clean : Ultra luxury Emulsion(odorless) - Low VOC

Popular

Beauty Emulsion

Flexi

Suraksha

Advanced, and Plus

Satin Enamel

Premium

Silver

Synthetic Enamel

Smooth finish

Beauty Distemper

Acrylic

Superior Protection

Pearl Luster Finish

Oil Bound

Premium Acrylic

Wood coatings include: Wonder wood 2k PU, Wonder wood melamine crystal Clear, Wonder wood melamine and Wonder wood 1 KPU.

6.3.Segmentation

Market segmentation represents an effort to increase a company's targeting precision.

All businesses operate in “markets” .A market is the set of all actual and potential buyers of a product or service. This definition suggests that a market is the total value and/or volume of products that satisfy the same customer need.

In defining a market, it is important not to focus only on products/services that currently meet the customer need. Thinking about customer needs first - and then identifying the products that meet those needs - is the best way to define a market.

However, it is also important not to define a market too broadly. For example, it is not particularly helpful for a marketing manager to define his or her market as the “food market” or the “transport market”. The purpose of market definition is to provide a meaningful framework for analysis and decision-making.

Bases of segmentation

It is widely thought in marketing that than segmentation is an art, not a science.

The key task is to find the variable, or variables that split the market into actionable segments. There are two types of segmentation variables:

  1. Needs
  2. Profilers

The basic criteria for segmenting a market are customer needs. To find the needs of customers in a market, it is necessary to undertake market research.

Profilers are the descriptive, measurable customer characteristics (such as location, age, nationality, gender, income) that can be used to inform a segmentation exercise.

The most common profilers used in customer segmentation include the following:

Geographic

Demographic

Psychographic

Behavioural

Demographic segmentation

Demographic segmentation consists of dividing the market into groups based on variables such as age, gender family size, income, occupation, education, religion, race and nationality.

Customer wants are closely linked to variables such as income and age. Company Kansai Nerolac Paints has manufactured paints as per customers' requirements and the products are described above.

The main demographic segmentation variables used in this are summarized below:

Income

Kansai Nerolac has targeted affluent customers with luxury products like the impressions. Various convenience services as previously mentioned are introduced for the ease of customers. Economy range products are being developed by the company and would be introduced soon in the market. Premium class impression products for children based of their interests on sports, cartoons are produced and company extends in paintings services with its well equipped painters.

Social class

Many Marketers believe that a consumers "perceived" social class influences their preferences for cars, clothes, home furnishings, leisure activities and other products & services. There is a clear link here with income-based segmentation.

Age & Lifestyle

The cultural dominance in India is targeted and paints based on Vastu are carried on to pull in prosperities with paints.Kansai Nerolac provides this with established vastu veterans and help the customers. It also works on splendid work as per the ambience with various methods like 30-60-90.

Marketers are increasingly interested in the effect of consumer "lifestyles" on demand. There are many different lifestyle categorisation systems, many of them designed by advertising and marketing agencies as a way of winning new marketing clients and campaigns!

Behavioral segmentation

Behavioural segmentation divides customers into groups based on the way they respond to, use or know of a product.

Behavioural segments can group consumers in terms of:

Occasions

When a product is consumed or purchased. Neroalc Paints launches new products near the festive seasons and promotions during those times relate to the festivals giving a slice of life touch.Plus offer varied schemes based on different occasions namely Valentine day offers,F1 fever,IPL dhamaka,etc.

Usage

Some markets can be segmented into light, medium and heavy user groups.

Loyalty

Loyal consumers - those who buy one brand all or most of the time - are valuable customers. Many companies try to segment their markets into those where loyal customers can be found and retained compared with segments where customers rarely display any product loyalty.

Importance of Segmentation:

There are several important reasons why businesses should attempt to segment their markets carefully. These are summarised below

Better matching of customer needs

Customer needs differ. Creating separate offers for each segment makes sense and provides customers with a better solution

Enhanced profits for business

Customers have different disposable income. They are, therefore, different in how sensitive they are to price. By segmenting markets, businesses can raise average prices and subsequently enhance profits. Product segmentation of Nerolac Paints has enabled each segment of the society to relate to a product within the income range.

Better opportunities for growth

Market segmentation can build sales. For example, customers can be encouraged to "trade-up" after being introduced to a particular product with an introductory, lower-priced product.

Retain more customers

Customer circumstances change, for example they grow older, form families, change jobs or get promoted, change their buying patterns. By marketing products that appeal to customers at different stages of their life ("life-cycle"), a business can retain customers who might otherwise switch to competing products and brands.

Target marketing communications

Businesses need to deliver their marketing message to a relevant customer audience. If the target market is too broad, there is a strong risk that (1) the key customers are missed and (2) the cost of communicating to customers becomes too high / unprofitable. By segmenting markets, the target customer can be reached more often and at lower cost. Advertisements relating to different paints of Nerolac Paints are on air each signifying a different target market, a different aspect of life.

Gain share of the market segment

Nerolac Paints is the market leader in the industrial market and gains due to economies of scale. Through careful segmentation and targeting, businesses can often achieve competitive production and marketing costs and become the preferred choice of customers and distributors.

6.4 Promotional Activities.

a) Advertising:

Kansai Nerolac made a beeline to cricket fever by advertising and booking ad spots on Set Max, the sub continental broadcaster for the IPL matches this summer, for IPL 4.

The company has launched ‘Healthy Home Range of Paints' that are safer lead free, odour free, low VOC (VolatileOrganic Compound) and eco-friendly. The brand ambassador endorses a wide range of advancedeco-friendlyproducts in the TV, print and outdoor commercials.

The same ads have been telecasted in Chennai (Sun Network) in the regional language - Tamil in order to remind and recall the brand value of Kansai Nerolac.

Television campaign with Irfan Khan and Konkana Sen for Nerolac Impressions was done on popular channels of West Bengal. The campaign was redone to help build the brand saliency during this period.

There were various other campaigns endorsed by Amitabh Bachhan which proved to be runaway success to name one -“Har Din Diwali “a promotional campaign aimed at the customer.

b) Public Relations

Kansai Nerolac has always been in the fore front for Public Relations, be it marketing or corporate relations. Kansai Nerolac was the first to initiate the dealers meet and painters' meet. It comes up with new product launch activity also.

Corporate relations include the famous Mumbai Marathon (17th Jan 2010) which carried an anti smoking message, with a logo on their T-shirts.

As part of corporate social responsibility, Nerolac has been conducting health camps for needy people every year.

c) Sales Promotions

This includes the dealers meet and painters meet which help regularly to build up a good rapport with the dealers and painters. Promotional offers and schemes with gifts acts as the major sales promotional methods followed by Kansai Nerolac. Incentives to painters include the token exchanges. Foreign trips are also provided for the dealers who qualify in the promotional scheme parameters. Distribution of T-shirts and caps to the paints are also done.

d) Other Services

“Nerolac Assured Paint Service”: Designed to bring the Nerolac experience right to the consumers' doorstep, is the service launched by Nerolac. Currently available in Mumbai, consumers can now relax while the Nerolac team takes over the entire paint job right from sourcing to execution. On consumer friendliness platter, the shade cards have been redesigned. The new look shade cards are not only eye catching and consistent in appearance but also try to make the process of shade selection for the consumer lot more interesting and convenient. Nerolac Home Stylers provides professional help in providing product consultancy and colour consultancy.

Kuch Change Kare. Chalo Paint Kare

6.5. Distribution Methods

The availability of a wide variety of shades and the distribution network is crucial for the success of the decorative paint business. The additional shades by the usage of Computer color dispensed (CCD) has reduced the inventory problems and creation of desired colors on requisition are an advantage. Kansai Nerolac has almost 11000 dealers. These dealers receive their supplies from the nearest company depots.

The sales representatives regularly visit the dealers and orders are taken by them who communicate the same to company depot. Company depot according to the orders placed delivers the product to the respective shops. Sales representatives, form an important information carriers pertaining to the promotional offers and schemes between the company and the dealers. They form a cordial relationship with the dealers.

The new dealer hunt program is a process to extend the distribution network of Kansai Nerolac in Chennai. The sales representatives initiate in increasing the customer base as directed by the company's area sales managers.

These dealers' orders are also taken from the respective depots telephonically regularly to help the customers in stocking the minimum quantity of paints in the shops.

Inventory management is critical in the paints industry. The majors normally carry 70-90 days of sales equivalent of inventory. Among them, Kansai Nerolac is more efficient due to more of its sales coming from the industrial sector. Kansai Nerolac is constantly working on the decorative segment also, to supply the products on time as well as maintaining limited inventories in the depots.

6.6. Competitor Product Information

Companies

Kansai NEROLAC

ASIAN PAINTS

BERGER

ICI

SHALIMAR

J & N

PRODUCT

Enamels

Satin

Nerolac Satin Enamel

AP Premium Satin Enamel

Dulux Satin Finish

Superlac Satin Soft Finish Sheen Enamel

Premium 1st Quality

Nerolac Full Gloss Hard Drying Syn. Enamel

AP Apcolite Premium Gloss Enamel

Luxol High Gloss Syn Enamel

Dulux Gloss Synthetic Enamel

Superlac High Gloss Enamel

Brolac PU Enamel

2nd Quality

---

3Mangoes Syn

---

---

---

---

3rd Quality

Goody Synthetic Enamel

Gattu General Purpose Syn Enamel

Butterfly General Purpose Syn Enamel

Maxilite Synthetic Enamel

Diamond Synthetic Enamel

Umbrella Synthetic Enamel

Economy

---

Utsav Enamel

Jaadu Enamel

---

---

---

WALL FINISHES:

Interior

Luxury Emulsions

Nerolac Allscapes 24Carat Emulsion

AP Royale Luxury Emulsion

Luxol Silk Luxury Premium Emulsion

Dulux Velvet Touch Emulsion

Hussain's Collection Premium Acrylic Emulsion

Special Effects

Premium Emulsion

Nerolac Acrylic Premium Emulsion

AP Premium Emulsion

Rangoli Super Acrylic Enamel

Dulux Acrylic Emulsion

Superlac Acrylic Emulsion

Robiolac Acrylic Plastic Emulsion

2nd Quality

Super Decoplast Plastic Emulsion

Economy Emulsion

Nerolac Plastic Emulsion

AP Tractor Emulsion

Bison Super Emulsion

---

No.1 Silk Emulsion

---

Lusture Finish

Nerolac Pearls Lusture Finish

AP Interior Wall Finish Lusture

Luxol Lusture Finish

Dulux Lusture Finish

---

---

Matte Finish

AP Interior Wall Finish Matte

BP Synthetic Interior Flat

Dulux Flat Oil Paint

Synthetic Flat Paint

---

---

Acrylic Distemper

Nerolac Premium Distemper

AP Tractor Acrylic Distemper

Bison Acrylic Distemper

Maxilite Acrylic Distemper

No.1 Premium Acrylic Distemper

J & N Acrylic Washable Distemper

Synthetic Distemper

Nerolac Washable OBD

AP Tractor Synthetic Distemper

Maxilite Synthetic Distemper

---

---

---

Economy Distemper

Nerolac Acrylic Distemper

Utsav Acrylic Distemper

Jaadu Acrylic Distemper

---

Mela Acrylic Distemper

---

Pouch Distemper

Goody Synthetic Distemper

Utsav Synthetic Distemper

Castle Dry Distemper

Farco Economy Distemper

Bahaar Distemper

---

WALL FINISHES:

Exterior

Elastomeric

---

Elastomeric HiPerformance

Weather Coat Extraa

---

---

---

Premium Smooth Emulsion

Nerolac Excel

Apex Weatherproof Exterior Emulsion

Weather Coat Smooth

Dulux Weather Shield

Xtra Xterior Emulsion

Special Effects Exterior Acrylic

Premium Texture Finish

Nerolac Mette Decorative & Protective Exterior

Apex Textured Exterior Emulsion

Weather Coat Texture Exterior Finish

---

---

---

Economy Smooth Emulsion

Surakshaa

Asian Paints Ace

Wall Masta

SuperCoat

Shaktimaan Exterior Acrylic Emulsion

Armour Quartz

Cement Paint

Nero Cem

Gattu Cem

Duro Cem

Farco Cem Waterproof Cement Paint

Maha Cem Coat

RobiaCem Super Cement Paint

WOOD FINISHES:

Premium

Nerolac PU Finish

Asian Paints PU Finish

Woodkeeeper Legend

Bell Co.

---

---

1st Quality

Wonder Wood Melamanised Wood Finish

Asian Paints Melamine Finish

Woodkeeper Melamine Finish

Dulux Timbertone Melamine Finish

Care Wood Melamine Wood Finish

---

Economy Finish

Wonder Wood

Asian Paints Touchwood

Woodkeeper

---

Care Wood

Wood Glow

PRIMERS:

Exterior

---

AP Exterior Primer

---

---

---

---

Metal Primers:

1st Quality

Nerolac Oil Primer

Tractor red Oxide Oil Primer

---

---

---

---

2nd Quality

Nerolac Red Oxide Metal Primer

AP Metal Primer

Butterfly Red Oxide Primer

ICI Red Oxide Metal Primer

Shalimar Red Oxide Metal Primer

J&N Red Oxide Primer

Economy

---

Utsav Red Oxide Primer

Berger Red Oxide Primer

---

---

---

Wood Primer

Nerolac Wood Primer

Asian Paint Wood Primer

Berger Wood Primer

ICI Wood Primer

Pink / Gery Primer for Wood

---

Cement Primer: Solvent Thinnable

Nerolac Cement Primer Solvent Thinnable

AP Deco Prime Wall Primer Solvent Thinnable

BP Cement Primer Solvent Thinnable

ICI Cement Primer Solvent Thinnable

---

Jensolen Cement Primer

Cement Primer : Water Thinnable

Nerolac Cement Primer Water Thinnable

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7. RESEARCH PROJECT

7.1. Title of the Project:

A study on “Overall Consumers' perception towards Kansai Nerolac Paints in Chennai city”.

7.2. Statement of Problem:

Kansai Nerolac Paints Ltd., being a market leader for industrial paint segment for many decades stands in second position in the decorative segment. Moreover, 70% of the decorative paint segment is owned by Asian Paints in Chennai. Thus, the competitor “Asian paints” has proved to be a threat in the decorative segment for Kansai Nerolac paints.

Therefore a market study “Customers' Overall Perception towards Kansai Nerolac paints in Chennai”

This study can help understand the perception and hence help the company to capitalize on its brand, strategize better marketing techniques and create an impact on the customers and dealers, to achieve the apex position in the decorative segment too.

7.3 Objectives of the project:

  1. To understand the products/services offered by Kansai Nerolac paints in Chennai.
  2. To interpret the overall perception of Nerolac paints in Chennai city.
  3. To study the attitudes of customers towards the products offered by the company and the other competing paint companies.
  4. To evaluate the services offered by the company to the dealers and their responses regarding the same.
  5. To draw conclusion and provide suggestions based on the analysis and interpretation of data.

7.4. RESEARCH

Research can be defined as a systematic and objective process of gathering, recording, and analyzing data that provides information to guide business decisions. Market research particularly aims at understanding and examining the marketplace in which the company operates. This helps the organization to devise effective business policies and marketing strategies. Operational research deals with application of mathematical and statistical tools to derive on a solution.

Market Research

To undertake marketing effectively, businesses need information. Information about customer wants, market demand, competitors, distribution channels etc.

Marketers often complain that they lack enough marketing information or the right kind, or have too much of the wrong kind. The solution is an effective marketing information system.

The information needed by marketing managers comes from three main sources:

(1) Internal company information

E.g. sales, orders, customer profiles, stocks, customer service reports etc)

(2) Marketing intelligence

This can be information gathered from many sources, including suppliers, customers, distributors. Marketing intelligence is a catch-all term to include all the everyday information about developments in the market that helps a business prepares and adjust its marketing plans. It is possible to buy intelligence information from outside suppliers (e.g. Mintel, Dun & Bradstreet, Mori) who set up data gathering systems to support commercial intelligence products that can be profitably sold to all players in a market.

(3) Market research

Management cannot always wait for information to arrive in bits and pieces from internal sources. Also, sources of market intelligence cannot always be relied upon to provide relevant or up-to-date information (particularly for smaller or niche market segments). In such circumstances, businesses often need to undertake specific studies to support their marketing strategy - this is market research.

Need for Market Research

A wide variety of information used to support marketing decisions can be obtained from market research. A selection of such uses are summarized below for Kansai Nerolac Paints:

Information about the market

Information about Products

Information about Pricing in the Market

Information about Promotion in the Market

Information about Distribution in the Market

In terms of data capture and analysis there are two main types of market research:

Qualitative Research

Qualitative Research is about investigating the features of a market through in-depth research that explores the background and context for decision making.

There are two main qualitative methods - depth interviews and focus groups.

Depth Interviewing

Company Depth interviews are the main form of qualitative research in most business markets. Here an interviewer spends time in a one-on-one interview finding out about the customer's particular circumstances and their individual opinions.

While interacting with dealers at the dealers place interviews helped to recognize the culture followed by the dealers in the paint market and the practices which a company should follow that enable a company to be popular among the dealers in the market.

Feedback was taken about Kansai Nerolac Paints was given through many repeated interactions between the dealers and the company.

Quantitative Research

Quantitative research is about measuring a market and quantifying that measurement with data. Most often the data required relates to market size, market share, penetration, installed base and market growth rates.

However, quantitative research for Nerolac Paints was used to measure customer attitudes, satisfaction, commitment and a range of other useful market data that can tracked over time. By way of questionnaires customer awareness and attitudes to different paint manufacturers and their overall buying behavior was judged which applies to the market as a whole

STAGES IN THE RESEARCH PROCESS:

The Business research can entail many forms, but systematic inquiry is a common thread. Systematic inquiry requires careful planning of an orderly investigation. Business research like other forms of scientific research is a sequence of highly interrelated activities. The stages in the research process overlap continuously, and it is somewhat of an oversimplification to state that every research project has the same ordered sequence of activities. Nevertheless business research often follows a general pattern.

There are five stages and the they are as shown in the above exhibit in a cyclical or circular flow process because the conclusion from the research studies usually generate new ideas and the problems that need to be further investigated.

The five stages in the project can be essayed as follows:

a) Define the problem:

Kansai Nerolac Paints Ltd. has been a market leader in industrial paint segment for many decades, but is in the second position in decorative segment. KNP is currently having less market share in comparison to “Asian Paints” in the decorative segment in Chennai city, from past few years.

b) Planning a research design:

The market share of KNP is less in Chennai from past few years and thus the research to study the same with the help of dealers' responses. This has been carried by both primary as well as secondary research methods.

This project was accomplished by primary data obtained through the questionnaire. The questionnaire consisted open ended; close ended and multiple choice questions. These questions were answered by the respondents. Open ended questions help dealers to give detailed answers and thereby help the company to note the perception of the dealers.

The secondary source of data was gathered from the information archives of the company. The data was also collected from various books, magazines, newspapers and company records. The secondary sources of data aided to enlighten the scope for more information and thus help in deriving the conclusions.

c) Planning a sample and gathering the data:

A sample size of 160 paint dealers in Chennai was considered. A method of random sampling activity was chosen, in order to obtain views and suggestions from KNP dealers in market as well as the reason from the dealers not dealing with Nerolac paints. The blend of responses surely helped in concluding the reason for KNP's current position in the market.

Questionnaire preparation:

The first and the foremost step in the project was to the design the questionnaire which was to quiz and record the responses of the paint dealers. Preparation of questionnaire involved few brainstorming sessions with Project guide and the sales executives in the organization. Ideas and suggestions were taken from college faculty guide in order to reach the set of questions to be asked. An effort was made to make sure that the questions were crisp yet sharp enough to extract detailed information from the respondent .It was also made sure that since the respondents were paint dealers the questionnaire had less number of questions as these people are very busy individuals and an elongated question set might just dilute or even in the worst case scenario hinder their intent to give honest and unprejudiced answers.

Once the questions were compiled and ordered in a manner that gave a smooth flow to the questionnaire. The questionnaires were printed and then were moved on to the next step. The next step was to discuss the approach to the respondents in order to convince them to comply which is a very important phase of the overall research. Mock drills of the approach were practiced and perfected.

The next step was the ground zero or the actual field work. Here the scope was to meet the dealers in Chennai which is quite large. It was impractical for a single person to do the entire research traversing the whole city of Chennai; hence 160 random samples were taken. Thus by the seamless segmentation of the territories a sturdy method for covering the cross section of the city was devised.

d) PROCESSING AND ANALYZING DATA:

The responses obtained were bifurcated according to the dealers currently dealing with Nerolac paints and dealers dealing with other paints. Analysis of the responses from both the groups was done independently and conclusions are derived.

Statistic tools were used to analyze and understand the feedback given by the experienced dealers of paints. Statistical analysis helped in testing the potentiality of Kansai Nerolac paints in much better way.

e)FORMULATING CONCLUSIONS AND PREPARING REPORTS:

This approach helped in devising methods for retaining the current customer (dealer) base. The group's (dealing with other paints) responses answered the reason for them to choose other brands and thus strategies for pulling new customers could be concluded. Various Excel tools and business research tools were considered to statistically prove the results. The charts and conclusions based on the analysis are added in the report.

7.5. SAMPLING TECHNIQUES

The accuracy of a research study is enhanced by the usage of statistical tools. It certainly aids in correct interpretation of both quantitative and qualitative data thus obtained from the paints dealers.

The statistical tools used for the following survey analysis include SPSS software package and the generic MS-Excel tool.

The method of percentage analysis method was chosen to conclude from myriad responses obtained from the dealers and respective charts are used to explain the same.

7.5. A. Percentage analysis Method:

A simplest statistical method used in both business and economic statistics. Simple percentages are hereby calculated and the results can be achieved.

Survey Responses analyzed using percentage method:

1. Do the dealers deal with Kansai Nerolac Paints?

Dealers

active

In-active

non-dealers

19

96

45

12%

60%

28%

2. Which promotional method would work better?

TV ads

Newspapers

Hoardings

Internet

leaflets

136

102

117

3

12

37%

27%

32%

1%

3%

3. Do the customers ask for Kansai Nerolac paints?

Active

Inactive

Non-dealers

Yes

No

Yes

No

Yes

No

6

13

10

86

16

29

4%

8%

6%

54%

10%

18%

4. Do you feel customers buying behaviour has improved after SRK has become the brand ambassador?

Active

In-active

Non-dealers

Yes

No

Yes

No

Yes

No

3

16

0

96

0

45

2%

10%

0%

60%

0%

28%

5. Low VOC - has it impacted to boost the sales?

In-active

Active

Non-dealers

Yes

No

Yes

No

Yes

No

0

96

0

19

0

45

0%

60%

0%

12%

0%

28%

6. Do you feel the scheme letters in Tamil will boost sales for the company?

In-active

Active

Non-dealers

Yes

No

N/A

Yes

No

Yes

No

N/A

36

40

20

12

7

16

0

29

22%

25%

13%

8%

4%

10%

0%

18%

7. Are the ads sufficient?

In-active

Active

Non-dealers

Yes

No

Yes

No

Yes

No

18

74

7

12

6

39

12%

47%

4%

8%

4%

25%

8. Are the schemes communicated on time?

Active

In-active

Yes

No

Yes

No

N/A

14

5

43

34

15

13%

4%

39%

31%

13%

9. Are the schemes good in comparison to other companies?

Active

In-active

Yes

No

Yes

No

N/A

16

3

45

31

26

13%

2%

37%

26%

22%

7.3. B. DESCRIPTIVE STATISTICS FROM SPSS

SPSS software, a statistical tool designed to help derive on to the conclusions required based on the survey responses as supplied as inputs. Simple derivations of mean, median, varience, etc. have been determined and finally every factor's response is pictorially represented. This clearly answers the fact of the overall degree of perception in the form of satisfaction or dissatisfaction can be judged and concluded.

SPSS Software to justify the degree of perception in the minds of dealers.

1. Rank the following in the scale of 1-5 (1- Highly satisfied and 5 - Highly dissatisfied)

Promotional offers

Gifts/Quality of gifts

Rebates

Credit period

Product Quality

Product Delivery/Replacements

Price of the product

Painters meet

Company Service and Relationship

The following represents the output from the SPSS software and the conclusions.

SPSS Output

Time Series Modeler. TSMODEL /MODELSUMMARY PRINT=[MODELFIT] /MODELSTATISTICS DISPLAY=YES MODELFIT=[ SRSQUARE] /SERIESPLOT OBSERVED FORECAST /OUTPUTFILTER DISPLAY=ALLMODELS /AUXILIARY CILEVEL=95 MAXACFLAGS=24 /MISSING USERMISSING=EXCLUDE /MODEL DEPENDENT=Promotional Offers Gifts Rebates Credit Period Product_Quality Product_Devilery Price Painters meet CRM PREFIX='Model' /EXPERTMODELER TYPE=[ARIMA EXSMOOTH] /AUTOOUTLIER DETECT=OFF.

FREQUENCIES VARIABLES=Promotional_Offers Gifts Rebates Credit_Period Product_Quality Product_Delivery Price Painters_meet CRM /NTILES=4 /STATISTICS=VARIANCE SEMEAN MEAN MEDIAN MODE SUM SKEWNESS SESKEW /BARCHART FREQ /ORDER=ANALYSIS.

Frequencies

[DataSet1] D:\Nerolac\evaluation\spss\data_final.sav

Statistics

Promotional_Offers

Gifts

Rebates

Credit_Period

N

Valid

117

117

117

117

Missing

2

2

2

2

Mean

2.2137

3.6923

2.1880

2.2051

Std. Error of Mean

.08128

.08537

.07377

.09208

Median

2.0000

4.0000

2.0000

2.0000

Mode

2.00

4.00

2.00

2.00

Variance

.773

.853

.637

.992

Skewness

.341

-.415

.165

.854

Std. Error of Skewness

.224

.224

.224

.224

Sum

259.00

432.00

256.00

258.00

Percentiles

25

2.0000

3.0000

2.0000

2.0000

50

2.0000

4.0000

2.0000

2.0000

75

3.0000

4.0000

3.0000

3.0000

Statistics

Product_Quality

Product_Delivery

Price

Painters_meet

CRM

N

Valid

117

117

117

117

117

Missing

2

2

2

2

2

Mean

1.9658

3.4957

2.0256

3.7094

3.8120

Std. Error of Mean

.07377

.09983

.06700

.06765

.08404

Median

2.0000

4.0000

2.0000

4.0000

4.0000

Mode

2.00

3.00a

2.00

4.00

4.00

Variance

.637

1.166

.525

.536

.826

Skewness

.683

-.344

.099

.113

-.247

Std. Error of Skewness

.224

.224

.224

.224

.224

Sum

230.00

409.00

237.00

434.00

446.00

Percentiles

25

1.0000

3.0000

2.0000

3.0000

3.0000

50

2.0000

4.0000

2.0000

4.0000

4.0000

75

2.0000

4.0000

3.0000

4.0000

5.0000

a. Multiple modes exist. The smallest value is shown

Frequency Table

Promotional_Offers

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1.00

26

21.8

22.2

22.2

2.00

48

40.3

41.0

63.2

3.00

36

30.3

30.8

94.0

4.00

6

5.0

5.1

99.1

5.00

1

.8

.9

100.0

Total

117

98.3

100.0

Missing

System

2

1.7

Total

119

100.0

Gifts

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1.00

2

1.7

1.7

1.7

2.00

8

6.7

6.8

8.5

3.00

37

31.1

31.6

40.2

4.00

47

39.5

40.2

80.3

5.00

23

19.3

19.7

100.0

Total

117

98.3

100.0

Missing

System

2

1.7

Total

119

100.0

Rebates

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1.00

23

19.3

19.7

19.7

2.00

54

45.4

46.2

65.8

3.00

35

29.4

29.9

95.7

4.00

5

4.2

4.3

100.0

Total

117

98.3

100.0

Missing

System

2

1.7

Total

119

100.0

Credit_Period

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1.00

28

23.5

23.9

23.9

2.00

53

44.5

45.3

69.2

3.00

24

20.2

20.5

89.7

4.00

8

6.7

6.8

96.6

5.00

4

3.4

3.4

100.0

Total

117

98.3

100.0

Missing

System

2

1.7

Total

119

100.0

Product_Quality

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1.00

34

28.6

29.1

29.1

2.00

57

47.9

48.7

77.8

3.00

23

19.3

19.7

97.4

4.00

2

1.7

1.7

99.1

5.00

1

.8

.9

100.0

Total

117

98.3

100.0

Missing

System

2

1.7

Total

119

100.0

Product_Delivery

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1.00

5

4.2

4.3

4.3

2.00

15

12.6

12.8

17.1

3.00

37

31.1

31.6

48.7

4.00

37

31.1

31.6

80.3

5.00

23

19.3

19.7

100.0

Total

117

98.3

100.0

Missing

System

2

1.7

Total

119

100.0

Price

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

1.00

28

23.5

23.9

23.9

2.00

59

49.6

50.4

74.4

3.00

29

24.4

24.8

99.1

4.00

1

.8

.9

100.0

Total

117

98.3

100.0

Missing

System

2

1.7

Total

119

100.0

Painters_meet

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

2.00

3

2.5

2.6

2.6

3.00

44

37.0

37.6

40.2

4.00

54

45.4

46.2

86.3

5.00

16

13.4

13.7

100.0

Total

117

98.3

100.0

Missing

System

2

1.7

Total

119

100.0

CRM

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

2.00

9

7.6

7.7

7.7

3.00

34

28.6

29.1

36.8

4.00

44

37.0

37.6

74.4

5.00

30

25.2

25.6

100.0

Total

117

98.3

100.0

Missing

System

2

1.7

Total

119

100.0

7.3.C. FACTOR ANALYSIS FROM SPSS

The multivariate analysis technique used in order to statistically analyze more than 2 variables in a sample of observations, simultaneously. Factor analysis falls under the mentioned multivariate analysis and can be defined as a “set of methods in which the observable or manifest responses of individuals on a set of variables are represented as functions of small number of latent variables called factors. Factor analyses are performed by examining the pattern of correlations (or co variances) between the observed measures. Measures that are highly correlated (either positively or negatively) are likely influenced by the same factors, while those that are relatively uncorrelated are likely influenced by different factors.

It's a process of data reduction and summarization. It reduces the total number of variables to a smaller set called factors.

SPSS package is used to determine the factors and the following is ht output presented.

Output from SPSS after factor Analysis

FACTOR /VARIABLES Promotional gifts Rebates CP Product_QLTY /MISSING LISTWISE /ANALYSIS Promotional gifts Rebates CP Product_QLTY /PRINT INITIAL CORRELATION SIG DET KMO EXTRACTION ROTATION /PLOT EIGEN /CRITERIA MINEIGEN(1) ITERATE(25) /EXTRACTION PC /CRITERIA ITERATE(25) /ROTATION VARIMAX /METHOD=CORRELATION.

NEW FILE. FACTOR /VARIABLES Promotional_Offers Gifts Rebates Credit_Period Product_Quality Product_Delivery Price Painters_meet CRM /MISSING LISTWISE /ANALYSIS Promotional_Offers Gifts Rebates Credit_Period Product_Quality Product_Delivery Price Painters_meet CRM /PRINT INITIAL CORRELATION SIG DET KMO EXTRACTION ROTATION /PLOT EIGEN /CRITERIA MINEIGEN(1) ITERATE(25) /EXTRACTION PC /CRITERIA ITERATE(25) /ROTATION VARIMAX /SAVE REG(ALL) /METHOD=CORRELATION.

Factor Analysis

Notes

Output Created

15-Apr-2011 20:42:46

Comments

Input

Active Dataset

DataSet1

Filter

<none>

Weight

<none>

Split File

<none>

N of Rows in Working Data File

119

Missing Value Handling

Definition of Missing

MISSING=EXCLUDE: User-defined missing values are treated as missing.

Cases Used

LISTWISE: Statistics are based on cases with no missing values for any variable used.

Syntax

FACTOR

/VARIABLES Promotional_Offers Gifts Rebates Credit_Period Product_Quality Product_Delivery Price Painters_meet CRM

/MISSING LISTWISE

/ANALYSIS Promotional_Offers Gifts Rebates Credit_Period Product_Quality Product_Delivery Price Painters_meet CRM

/PRINT INITIAL CORRELATION SIG DET KMO EXTRACTION ROTATION

/PLOT EIGEN

/CRITERIA MINEIGEN(1) ITERATE(25)

/EXTRACTION PC

/CRITERIA ITERATE(25)

/ROTATION VARIMAX

/SAVE REG(ALL)

/METHOD=CORRELATION.

Resources

Processor Time

0:00:00.499

Elapsed Time

0:00:00.715

Maximum Memory Required

11916 (11.637K) bytes

Variables Created

FAC1_1

Component score 1

FAC2_1

Component score 2

FAC3_1

Component score 3

FAC4_1

Component score 4

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.516

Bartlett's Test of Sphericity

Approx. Chi-Square

27.536

df

36

Sig.

.008

Correlation Matrixa

Promotional_Offers

Gifts

Rebates

Credit_Period

Correlation

Promotional_Offers

1.000

-.078

-.021

.127

Gifts

-.078

1.000

-.073

-.156

Rebates

-.021

-.073

1.000

-.060

Credit_Period

.127

-.156

-.060

1.000

Product_Quality

.207

.032

-.085

.117

Product_Delivery

.015

.094

-.019

-.151

Price

-.022

-.091

.006

.017

Painters_meet

.124

-.044

.109

.118

CRM

.061

.095

.097

-.005

Sig. (1-tailed)

Promotional_Offers

.203

.412

.087

Gifts

.203

.217

.047

Rebates

.412

.217

.261

Credit_Period

.087

.047

.261

Product_Quality

.013

.364

.182

.104

Product_Delivery

.438

.157

.419

.052

Price

.406

.164

.472

.430

Painters_meet

.091

.318

.121

.103

CRM

.255

.155

.150

.480

a. Determinant = .782

Correlation Matrixa

Product_Quality

Product_Delivery

Price

Painters_meet

Correlation

Promotional_Offers

.207

.015

-.022

.124

Gifts

.032

.094

-.091

-.044

Rebates

-.085

-.019

.006

.109

Credit_Period

.117

-.151

.017

.118

Product_Quality

1.000

-.010

.031

.071

Product_Delivery

-.010

1.000

.028

-.045

Price

.031

.028

1.000

-.002

Painters_meet

.071

-.045

-.002

1.000

CRM

-.033

-.106

-.006

.021

Sig. (1-tailed)

Promotional_Offers

.013

.438

.406

.091

Gifts

.364

.157

.164

.318

Rebates

.182

.419

.472

.121

Credit_Period

.104

.052

.430

.103

Product_Quality

.457

.369

.222

Product_Delivery

.457

.384

.314

Price

.369

.384

.491

Painters_meet

.222

.314

.491

CRM

.363

.127

.476

.412

a. Determinant = .782

Correlation Matrixa

CRM

Correlation

Promotional_Offers

.061

Gifts

.095

Rebates

.097

Credit_Period

-.005

Product_Quality

-.033

Product_Delivery

-.106

Price

-.006

Painters_meet

.021

CRM

1.000

Sig. (1-tailed)

Promotional_Offers

.255

Gifts

.155

Rebates

.150

Credit_Period

.480

Product_Quality

.363

Product_Delivery

.127

Price

.476

Painters_meet

.412

a. Determinant = .782

Communalities

Initial

Extraction

Promotional_Offers

1.000

.532

Gifts

1.000

.625

Rebates

1.000

.673

Credit_Period

1.000

.540

Product_Quality

1.000

.535

Product_Delivery

1.000

.684

Price

1.000

.298

Painters_meet

1.000

.445

CRM

1.000

.552

Extraction Method: Principal Component Analysis.

Total Variance Explained

Component

Initial Eigenvalues

Extraction Sums of Squared Loadings

Cumulative %

Total

% of Variance

Cumulative %

1

16.243

1.462

16.243

16.243

2

29.716

1.213

13.472

29.716

3

42.457

1.147

12.741

42.457

4

54.264

1.063

11.807

54.264

Extraction Method: Principal Component Analysis.

Total Variance Explained

Component

Rotation Sums of Squared Loadings

Total

% of Variance

Cumulative %

1

1.327

14.749

14.749

2

1.239

13.763

28.512

3

1.172

13.017

41.529

4

1.146

12.735

54.264

Extraction Method: Principal Component Analysis.

Component Matrixa

Component

1

2

3

4

Promotional_Offers

.572

.241

.301

.236

Gifts

-.399

.268

.621

-.090

Rebates

.003

-.654

.114

.482

Credit_Period

.643

-.003

-.183

-.306

Product_Quality

.473

.504

.226

.083

Product_Delivery

-.337

.424

.013

.625

Price

.083

-.017

-.423

.335

Painters_meet

.465

-.214

.202

.377

CRM

.052

-.418

.594

-.147

Extraction Method: Principal Component Analysis.

a. 4 components extracted.

Rotated Component Matrixa

Component

1

2

3

4

Promotional_Offers

.715

-.042

.136

.024

Gifts

.038

.414

-.169

.651

Rebates

-.156

.084

.798

-.065

Credit_Period

.321

-.633

-.090

-.167

Product_Quality

.706

.006

-.190

.028

Product_Delivery

.146

.785

-.041

-.211

Price

-.004

.078

.104

-.530

Painters_meet

.409

-.079

.516

-.071

CRM

-.004

-.172

.405

.598

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 6 iterations.

Component Transformation Matrix

Component

1

2

3

4

1

.735

-.613

.194

-.215

2

.507

.388

-.766

-.064

3

.354

.200

.262

.875

4

.277

.658

.553

-.429

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

Component 1 - promotional offers,

product quality

Component 2 -gifts, product_delivery

Component 3-rebates,painters_meet,

Component 4-credit_period, price, CRM

This shows the fact of segregating the factors into 4 components consisting of mentioned factors. These components state that, how the factors in each component are related and accordingly company can work on the same

Factor Analysis - Result

Problem Statement: Here the research through SPSS will probe whether the mentioned 9 factors are correlated to each other or are independent. By understanding these factors we will be able to seed whether we can combine 2 or more factors into one which would be easy for us to interpret. So the null hypothesis in this problem would be that the factors are not correlated to each other.

Objective

We are doing a research where in we analyze whether some factors(the mentioned parameters) really are correlated to attractiveness of Kansai Nerolac paints and whether those factors are related to each other or not.

Semantic Scale

Ranking was done. Hence, semantic scale was used and respondents were asked to rate the factors from 1-5. Here 1 highly satisfied and 7 being highly dissatisfied. Rating will help us to understand the importance of these factors.

Data Analysis

i) Correlation Matrix: First set of analysis that can be done is through correlation matrix. From the table, we can see that there is correlation between individual variables (e.g. “promotional offers” has 1 and correlation with promotional offers itself but it has 0.124 with painters meet). From this method we can find that correlation matrix is an identity matrix since the correlation with other variables is not 0. Hence accept the alternative hypothesis that there is a correlation between variables.

ii) KMO and Bartlett's Test: According to this case we test the significance and adequacy level of samples.KMO checks the adequacy level of samples. The condition to check the adequacy level is that if the level is greater than 0.5 it is fit. In our case the level is. 516. Hence we can say the sampling is good enough since it is more than .5. It is conducive enough to conduct factor analysis. Hence we can proceed further.

The next set of test is Bartlett's test of significance: Here the condition is if significance level is less than 0.05, we can say that there exits significant correlation between variables. In our case it was .008.Hence, there exists significant correlation between the factors.

iii) Communalities: Communalities help us to explain how much the research has explained the factors. Here we can see that some have more than 50% explanations.

E.g. Product Delivery has the maximum 68.4% explanation in this research while Painters meet has just 44.5% explained in the case. Hence we can say that more different data need to be taken in the case of painters meet because it is even less than 50%.

iv) Total Variances explained: This is the case where we analyze the variances of various factors and determine Eigen values of those factors. Eigen value explains us how much all the attitudes are been explained by individual factors. Here the condition is that Eigen value should be at least one. Otherwise it is irrelevant if it is goes to less than one. Here there is a method to calculate the number of factors to be obtained finally. When Eigen value becomes less than 1, the search needs to stop and number of factors would be equal to previous number when it was at least one. In our case till the forth factor the Eigen value is more than 1.After that it reduces to less than 1.Hence we can determine the number of factors as 4since after that the Eigen values reduces to less than 1. Cumulative here is 54.264% in case of 4 factors.

v) Scree Plot: This is another way to find the number of factors used. Scree plot is a graph where you are able to find the number of factors with the help of flatness of the graph. In our case the graph becomes somewhat flatter after 4 factors. Hence according to the condition in our case due to its flatness we can say that the number of factors here is 4.

vi) Component Matrix: Component Matrix is used for reloading. This explains how much one parameter has explained each of the 4 factors.Thus, 4 components are obtained.

vii) Rotation Component Matrix: If almost all the factors are same then we tend to rotate to get an accurate picture of the sample. Maximum rotation can be done 25 times .Here we have used Varimax method for rotation. Here we have some changes in the loading factor. Even the percentage of loading has also increased after rotation. Eg: Communality Personalization and Flirting in the previous condition was best explained by factor1 but then after rotation now it is best explained by factor 2.

viii) Component Transformation Matrix: Component transformation matrix tells us the way the overall 9 parameters have been explained by 4 components.

RESULTS:

We rejected the hypothesis that correlation matrix is an identity matrix since the correlation with other variables is not 0. Hence accept the alternative hypothesis that there is a correlation between variables.

KMO checks the adequacy level of samples. In our case the level is .542. Hence the sample was good enough, since it is more than .5. It is conducive enough to conduct factor analysis. Hence we proceeded further.

The next set of test was Bartlett's test of significance. In our case it was .008. Hence, it proves that there is significant correlation between factors mentioned.

Communalities help us to explain how much the research has explained the factors.

Then analyzed the variances of various factors and determined Eigen values of those factors. In this case, 4 components were obtained. Thus, the hypothesis can be explained.

8. LIMITATIONS:

9. PORTERS 5 FORCE MODEL

Porters Five Forces Model is used for analysis of an industry or pure competition within a market. It is likely thebest modelto be used indecisions of entry or change within a market, and should always be considered during the company's life cycle.

The Porters Five Forces model proposesthat an industry is influenced by five forces.

An executive can use the model to understand the industry competitive landscape, to determine how and where the firm should operate. The model is also used to analyze the attractiveness of an industry structure.

Threats of new entrants

In the decorative paints segment, the barriers to entry are low primarily due to the fact that sophisticated technology is not a prime requisite. The segment is flooded with players in the unorganized sector who cater mainly to the local lower end marker. However, it is difficult for small and new players to achieve a significant national presence due to the requirement of a wide distribution network. However, the cost advantage of the smaller players is slowly being nullified by the downward movement of excise duties on the organized sector.

In the industrial paints segment the entry barriers are reasonably high due to the fact that this segment requires sophisticated technology. The paint industry is not capital; intensive. However, it has high entry barriers in the form of distribution network and product branding. Thus, fresh capacity is likely to come from existing players only. In fact, low capital costs encourage manufacturers to increase capacity to cater to seasonal peaks (especially in decorative paints) rather than incur inventory-carrying costs, during lean period's timely supply of paints to the end user for whom lack of supply typical means production problems.

Kansai Nerolac is a dominant paint manufacturing company and popularly known for its industrial segment of paints. Even in decorative segment, Kansai Nerolac's brand image is huge enough and even the quality remains unmatched and hence some marketing gimmicks can lure customers even if they have high prices.

Bargaining power of suppliers

As mentioned above the local players are the ones who started as suppliers for the big companies. As the required number of raw material are more in preparation of paint if these suppliers come together and start making end products they might pose themselves as huge threats. Suppliers are the businesses that supply materials & other products into the industry. If suppliers have high bargaining power over a company, then in theorythe company's industry is less attractive.

Power of buyers

Paint industry is a very competitive industry with multinational players, national players, local players and the buyers (end customers) have a lot of options to their disposal. Switching cost is also not high. The contractors and painters also play their role, as they will tend to buy from people who give them incentives.

The rival Asian Paints has dominated in decorative segments and has huge customer base. Thus, Kansai Nerolac which initially had huge customer base for decorative segments in Chennai should always be on toes in retaining the existing buyers by some effective rewards or marketing system. Nerolac Company should also strategize methods to capture more customer base.

Availability of substitutes

The paints industry does not face any real threat of substitutes, as one cannot foresee a situation where paints will not be required but the varieties of products are more. This is where the competitors have an edge over the paint players. Differentiating factors in the form of myriad product range, color shades, introduction of new and better research and development methods, etc. has definitely benefitted Kansai Nerolac tremendously.

Competitive rivalry

The industry is characterized by intense completion. Roughly 40 per cent of the volume comes from the unorganized sector, mainly due to the low entry barriers and the history of high excise duties. The number of players in the unorganized sector is greater than 2000 making them a force to reckon with. Within the organized sectors itself the decorative paints segment witness to intense competition due to the fact that a large part of the customers perceives very little differentiation between brands. The primary determinant of success in such a scenario is the distribution strength. In the industrial paints segment, the competition is based more on the technology that goes into the products .Also because of this fact, the unorganized sector is smaller in this segment. And again Kansai Nerolac is profited, if industrial segment is considered. In decorative segments, Asian Paints poses as the competitive threat. Other competitive rivals at the peer level for Nerolac are ICI and Berger.

While the Porters Five Forces model in regards to decision making, isto collect, analyze

and present data for the decision maker, Porter identifies three generic strategies to address industry rivalry. Strategies can be formed on three levels - corporate, business unit and functional or department level.The Strategies are cost leadership, differentiation and competitive advantage. The best decision will position the firm to leverage strengths and defend against adverse effects of the five forces

10. SWOT ANALYSIS

Strengths

Reputed brand name acts as barrier to the new players

Kansai Nerolac is number one in industrial paints and second largest in the decorative segment. Market leader in industrial paints. Comprehensive nation-wide coverage for industrial paints and good strategic alliances with many automobile industries

Good Technology backup

Kansai Nerolac is known for very good technology backup and Research and development methods. The use of Cathodic Electro deposition (CED) is sufficient to back the same.

New Product innovations

Quality of the products is well appreciated and the innovation of new products with low VOC and lead free paints is well known. Continuous methods of new ideas form the crux of the company.

Weakness

Raw materials scarcity and price sensitivity issues

The major raw materials titanium dioxide, phthalic anhydride and peutarithrithol constitute 50 per cent of the total cost. Besides, this, there are other raw materials such as castor, linseed and soybean oils, turpentine. The raw materials cost sums up to a whopping 70 per cent. Any increase in the prices of these raw materials could adversely affect paint prices.

Most of the paint majors have to import nearly 30 per cent of their raw material requirements thus changes in import policies can affect the industry.

The prices of packing materials such as HDPE, BOPP and tinplate have reduced considerably. However, the decision of the Central Government to ban import of tinplate waste could lead to a spurt in the prices of the tinplate in the near future.

Requirements of high working capital

There is a constant requirement of significant amount of working capital for day to day operations of the company and therefore that shows that constant revenue and sales are very crucial.

Lower customer base in Chennai

The customer base in Chennai is less. Previously, Kansai Nerolac was dominant in Chennai market but currently number of dealers has reduced.

Lesser awareness about the products

The advertisements are less and have to flash more. The awareness regarding the products is less. The products like Eco-clean and Impressions premium brands are less known to people, and this has to be increased.

Opportunities

Threats

11. FINDINGS AND CONCLUSIONS

The research clearly identifies that the competitor Asian paints is the market leader in the decorative segment with a huge customer base. According to the study conducted, Kansai Nerolac places itself after Asian Paints in ranking. Asian Paints has attained this position mainly because of the awareness level of the products in the minds of the customers through various advertisement campaigns. Quality is also one of the facets for Asian Paints current position but promotional methods form the major criteria for its position.

Kansai Nerolac Paints still remains unmatched if product quality is concerned. Till date, hardly there exists any issues in the product quality and customers are satisfied by the color quality and resistant features of the same. Information regarding the low VOC and lead free paints are a must to claim the environment and health friendliness of the same, which is currently lacking.

The study proposes that advertisements and promotional activities are the important elements of sales which can help the company in creating the awareness about the product profile and strongly build Nerolac's position in the minds of dealers and consumers. Most previous dealers claim the reason for the current Asian Paints position in the market, to be the lack of advertisements. This has tremendously impacted the company's sales.

The study essays the fact that Kansai Nerolac is hardly addressing the issues and problems faced by the dealers. These problems include the replacements of the inferior quality products, CCD machine problems, etc. This can act as a hindrance for the growth of the company. Problem with regards to proper delivery of products is another finding. Lack of proper delivery on time because of unavailability of products in the depots when required has resulted in the creation of a bad impression about the company in the dealers' minds.

Study has revealed the necessity of better customer relationship management from the company's end. Most of the dealers surveyed have revealed that management has to improve upon the same. This includes the regular visits from the sales representatives and managers occasionally. Quality of the gifts and delivery of the same on time is also one of the concerns to be looked at.

The only concern in the present day is Nerolac paints are thinner when compared to Asian Paints. As a result, painters complain that the area coverage is not achieved as obtained from Asian Paints. The main reason is that the awareness regarding the chemical composition is absent.

Thus, the analysis reveals the important fact that the company has a good reputation in the market and the product quality as previously stated is well received and appreciated. However, the company lacks in certain areas like extending the brand promotions through advertisements, customers' complaints, etc. which if done the dominance of the company can be extended in the decorative segments and would reach the apex position in the entire Indian paint industry.

12.RECOMMENDATIONS/SUGGESTIONS

1) Promotion Mix.

i. Advertising

It's the best method to improve upon the sales and scale to the top position. It is important to improve upon the customer base. This would be possible by better marketing strategies. The important tool of public media advertising has to stressed upon .Advertisements in local language would surely make an impact in Chennai as most people are conversant in regional language Tamil. Campaigning via Sun and Vijay channels of Sun Network would surely create an impact which has been started a few weeks ago. These ads if continued would mark the brand image and awareness about the same would be regained.

Promotions using various Hoardings and signboards at popular junctions and different places of the city would attract the attention of many. Painters and dealers attention is the most important ones, as they are the ones who deal maximum in buying and pushing of the products respectively.

Radio Media should also be chosen for promoting Nerolac. Though this media has been ebbing away for the promotional usage, the current radio fever would surely help reach the Nerolac information to masses.

Thus the awareness drive can be summarized as,

KNPL has a good Brand recall but care has to be taken that the advertisements focus on all segments of the market so as to make them relate to the situation as well as the product.Having mastered advertising on the national media KNPL should create a power-communication programme inclusive of the following elements:

ii. Workshops and Painter Meets

Given the important role the painter plays and the bearing he may have on deciding the brand, he must be made aware of the product from KNPL Umbrella and how they are superior to those in the similar.The less skilled painters may be trained of application skills in Distemper and Emulsions. This shall go a long way in 'owning' the painters and creating brand loyalty in the said group. Painter Meets should be held at least every 6-months in order to ensure continuum. The following activities may be taken up during the Meetings:

iii. Sales Promotions

Currently the company is providing with decent number of sales promotional offers in the form of varied schemes. This has to continue and strategies to attract the dealers have to be devised more. Schemes pertaining to products based on bifurcations in the form of enamels and emulsions have to continue. The gifts of stated quality to the respective dealers should reach on time. The dealers would seek for quality of certain goods and quantity of others. This has to be carefully judged upon during the design of the schemes and accordingly the gifts are to be given. Local language (Tamil) should also be used to draft the scheme letters as stated by most of the dealers.

iv. Demand Stimulation

In this situation the dealer pushes a product and once visible at the dealer location and pushed by the shopkeeper, the product creates its own demand, Simulated Demand is recommended. A group of painters should be employed temporarily in order to enquire about the various KNPL products at dealer outlets. Once continued for a period of 30 days or so, it is strongly perceived that the dealers would stock the product. Once this objective starts seeing fulfillment, the number of painters hired should be gradually reduced and the dealers shall be found to be themselves pushing the product owing to the recent enquiries and a growth in demand shall be noticed.

v. Purchase-linked Painter Schemes

As per the revelations of the observations at the dealer outlets, the painters are primarily guided by benefits to self, after being assured of product quality when it comes to brand-advice or choice.

This need for gratification should be answered in the form of Purchase-linked Painter Schemes wherein gifts, tapping the aspirations of the respective socio-economic segment should be offered. As a token of appreciation and reverence, "Most Loyal Painter Award" could be institutionalized. The evaluation criteria shall remain purchase or sales generated but the recognition awarded among peers shall drive painters to use KNPL range of distempers and emulsions. "Loyalty Pays" tokens may be handed out by dealers on purchases made by the painters and the same may be used to reward gifts and identify the "Most Loyal Painter".

vi. Public Relations

Another promotional method where Nerolac can bank upon is by public relations.

Inter school painting competition

This can be done by arranging an inter school painting competition for the children (studying in the classes from 7th to 9th) across the city, area wise.

The focus lies in bringing together entire lot of schools together, encouraging them by providing them a platform for displaying their painting skills, creation on awareness about Nerolac paints at a mass level,etc. This would require permissions from Chennai government and police force. The public walls across the city can be used with the prior permissions from respective personnel for the competition.

Role of Kansai Nerolac rests in providing small tins of maximum 200gms of few colors and 3-4 painting brushes to the groups (of 6-7 children each) so formed by the school, respectively. A certain time allocation and finally the best painting can be awarded.

This initiative can create awareness on a mass scale by attracting schools in the city. This can in return gain many “repainting” assignments from various schools, which can help the project sales department of the company. Various contracts as a chain process can thus help Kansai Nerolac in a profitable way.

Extending to the Corporate World

IT sector is booming in Chennai city. All IT sectors are into the concept of “Eco-friendliness”. The launch of Eco-clean and the luxurious premium product can be promoted by using the IT sectors. Simple functions and competitions can surely help the company to reap greater benefits. This can help in 2 ways,”Stress busters' for the companies and “Awareness Spread” for Kansai Nerolac. Painting assignments for the houses of employees can also be attained. In return this initiative would again seed many contracts from companies gradually.

vii. Increasing Consumer

Consumers are not only the end customers but also the contractors and painters who are very much involved in buying decisions. The stickiness can be taken as an advantage by using it in our favor. First time users can be given gifts and then a point system can be used to judge the “Most loyal customer” and appreciations can be given as discounts in next purchases of Asian Paints products.

2) CRM

Customer Relationship Management is a very important facet for the company's success. The fact that the initiative of dealers and painters meet started by Kansai Nerolac is still well appreciated and should regularly continue. This platter should be broadened by increasing managers' visit to the shops along with the sales representatives. One visit in a month by the respective managers' or at least a telephonic conversion would suffice.

Quality of the gifts delivered to the dealers is to be checked and the responses from the dealers are to be gained and archived by the sales representatives. The archives of details related to the winners (dealers) in the schemes and their gifts with responses are to be maintained. Documentation as mentioned earlier is a very important thing; the company has to work on. Quality of the scheme letters should also be looked at.

A systematic complaint taking task from the dealers has to be taken, telephonically and recorded. This can help boost the good relationship between the company and dealers.

3) Motivation to employees

Employees form the main stakeholders of any company. The major concern from most of the dealers is that the sales representatives keep changing regularly and the dealers are unable to adjust to the sudden change working with new representatives. The company has to extend methods to motivate employees and thus retain them so as to benefit dealers, employees and finally the company. The views and ideas from the sales representatives who regularly deal with customers are to be considered. This again would help both the company and act as a motivating factor for the employees.

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