SWOT analysis of paint manufacturer Dulux

ICI Dulux paints is the worlds largest manufacturer of paints and industrial coating.ICI Dulux trade paints is one of the leading paint manufacturers in Britain and has about 130 outlets in the UK. With the increase in demand for broken colour decorative paints effect, dulux trade paints have launched three new products i.e. Duette, sonata, and acrylic scumble glaze in order to meet the demand and customer preferences. These newly launched are targeted at trade customers in the UK. In this case study we will be discussing various stages of marketing. It consists of three crucial stages, SWOT analysis, Market Segmentation and Branding.

TASK 1:

“The marketing audit is the process of taking stock of an organisation’s internal and external factors.” The marketing audit is a fundamental part of the marketing process. The marketing audit is a major exercise which ranges over all the internal and external factors. There are number of tools which can be used such as PEST, Five Forces Analyses and SWOT Analysis. The first two focuses on external environment and SWOT Analysis is used for both internal and external environment. (Brassington and. Pettitt, 2006a)

SWOT analysis is one of the best tools in marketing audit. It involves both internal and external environment. It is the overall evaluation of company’s strengths, weaknesses, opportunities and threats. The strengths and weaknesses are internal factors and opportunities and threats are external factors. SWOT Analysis enable a business to focus into those areas that present the greatest opportunities and those competencies in which it is strongest.

(Pinson, 2001)

SITUATIONAL ANALYSIS:

SWOT Analysis of Dulux Trade Paints:

STRENGTHS: It is an internally controlled factor. It enhances the performance of the company. Some of the strengths are as follows:

It has a strong brand name and positive reputation in the minds of customers so far them it’s a great strength of the company

ICI Dulux Trade Paints has well established infrastructure. It has a wide range of distribution (merchants and retailers) It has 130 outlets in the UK, the largest of any trade supplier.

It provides vide range of colours (52 two-tone colourways). All products are uniquely water-based.

WEAKNESSES: It is also an internally controlled factor. It minimizes the performance of the company. Some of the weaknesses are as follows:

The major weakness of Dulux Paints is that they don’t have their own distribution channels. They have dealers which sell their products in different cities.

The public awareness about Dulux paints is not high, mainly because of lack of advertisements and promotions.

OPPORTUNITIES: It is an externally controlled factor. Some of the opportunities are as follows:

One of the greatest opportunities for Dulux Paints is to increase awareness among the customers regarding high quality paints and newly launched products. Advertisements and promotions can play an important role in achieving it.

THREATS: It is also externally controlled factor. Some of the threats are as follows:

The biggest threat of Dulux Trade Paints is the increased number of competitors. They are other companies producing the same products; they have captured the market share. So it is a great threat for Dulux Trade Paints.

(Kotler. and Keller 2009 )

TASK 2:

MARKET SEGMENTATION

“Market segmentation is defined as the process of identifying different groups of users within a market who could possibly be targeted with separate products or marketing programmes.” It can also be defined as dividing the market into groups of potential customers with similar needs and purchase behavior.

“The idea of dividing market into various segments and targeting each segment with a distinct product is the heart of marketing theory.”

(Croft 1994.)

The main objective of market segmentation is to analyse market fully, finding opportunities and to improve company’s competitor position and serve the needs of customers. Management must segment the market according to benefit sought. In this case we will apply business to business segmentation. In B2B segmentation we can focus on organisation as well as on individual buyers within it. B2B market segmentation can involve two stages:

Macro segments: are those in which we have to identify subgroups within whole market and

Micro segments: are those in which we have to select target segments based on specific buying characteristics.

In this case we will define few market segments which are most important in this type of industry and upon which Dulux Trade Paints should consider and target.

Size of organisation: The size of an organisation is important in any organisation. As far as Dulux Trade Paint is concerned it must fully focus on large organisation because they consume large percentage of goods as compared to small organisations. Dulux is a brand name, they always come up with innovative ideas and new products like Duette, Sonata and Acrylic Scumble glaze so it will be easier to target large organisations like real estate companies, big organisations, hotels, hospitals etc as large organisations need new products time to time in order to be in competition. Dulux has 52 two tone colour ways available which they can offer to company. Dulux paints need to come up with exciting new offers and promotions so as to attract large organisations like free samples, credit facilities, better quality, discounts etc

Purchase Organisations: It can be defined as those organisations which purchase goods and services either for themselves or for other purposes. This is an important segment on which Dulux paints must work. These may include Contractors, Interior designers, Architectures.

Contractors: A contractor is an individual or group of people that constructs or renovates a building, road etc. Dulux paints must target contractors for supply of paints required for construction purposes. It covers a large area of market. As these newly launched products are very popular so these products must be in demand for contractor also. Dulux must target contractors depending upon nature size and type of contractors. They should come up with new schemes, promotions, discounts and delivery of goods on time so as to ensure demand and supply.

Interior Designers: They are professionals who decorate and organise the interior of any house, building etc. nowadays paints are important part of interiors, Dulux paints come up with decorative paints like Duette which is the latest trend in paint industry. So they must target interior designers to use their products in their projects which will increase the popularity of Duette, sonata and acrylic and helps in creating brand name.

Trade Outlets: They are important in any organisation. Dulux trade paints have 130 retail outlets in the UK known as Dulux decorator centres, largest number of outlets of any trade supplier. These outlets should be managed properly. Newly launched products such as Duette, Sonata and Acrylic must be available in those outlets so that they will be easily available as there demand is increasing day by day. Their must be proper contact between company and outlets, moreover there must be proper balance between demand and supply. Customers should be provided with proper guidance regarding colour schemes and good product knowledge. If these outlets are properly targeted and maintained it will be the strength of company and also a great threat for competitors.

Hence if all those segments are properly targeted and achieved then the company will reach ahead of its goals and will be a huge success.

( Brassington and. Pettitt,2006b)

TASK 3:

BRANDING AND POSITIONING

Once target market segmentation is selected, we have to promote the organisational offerings to its target markets in a better way. This process is called branding and positioning strategy. The organisation must have an offering that differentiates it from the competitors. It should give a clear identity in the mind of the consumers.

Branding: “A brand is a name, symbol, design or term, or a combination of them used by manufacturers to identify its products from those of competitors.” Today, a brand is the result of a synaptic process in the brain. A brand differentiates a product form those of competitors. It can simply be defined as customer’s perception about your business.

(Bed bury and fenichell, 2002)

Dulux is a market leader in the paint industry. The consumer is aware about the Dulux brand name It is much easier for Dulux to market its newly launched products like Duette, sonata and Acrylic. However there are some fundamental principles of branding are as follows:

Flexibility: Dulux trade paints are flexible with the changing demands and supply. As the demand for broken colours rise they launched new products in the market. It helped the company in achieving good brand name. The customers are aware about the Dulux brand name

Quality: The qualities of the products are fair enough as these products are manufactured by other manufacturers. This helps in maintaining good brand name and increase in sales.

Product differentiation: The products differ in price, quality and design as compared to competitors. As Duette comes in 52 two-tone colour ways. These products offer all the benefits of traditional glaze.

Consistent: Dulux maintain brand promise and brand standard. These products leave a good effect on consumers. The customer is aware about the quality standards. (Kumar and Mittal, 2002)

Positioning: “The act of designing the organisation’s image and offer so that it occupies a distinct place in the target customers.” It is about the position a brand occupies in the minds of consumers. It starts with the choosing of a segment in which to compete. (Adock, Bradfield and Ross, 1995)

Every product needs a positioning strategy so that it gives a clear position about a specific product in the minds of consumers. In this case there are some strategies which can be targeted.

Positioning Against or Associating with another product: Dulux trade paints has to position itself as the ultimate solution for achieving the luxury look with great quality. Its main customers are contractors, large organisations, retailers etc. It has to differentiate itself from other paint companies in order to achieve good name and high volume of sales.

Benefits/ Needs: Dulux paints have to provide better benefits to the purchaser so that he will stick to the company’s products like huge profit margins discounts etc.

Quality/Price: They have to provide better quality and low price as compared to their competitors in order to gain orders from large organisations.

Product Features: They have to position it as, the presenting classics. They have to identify product features and differentiate it from other products. (Kotler and Scheff, 1997)

Hence if position strategy is constructed on those bases then it will prove fruitful to the company. It will help in achieving good brand name and taking the company ahead of its competitors.

REFRENCES:

Adock, D. Bradfield, R. and Ross, C. (1995) Marketing Principles and Practice (2nd edn.), p 126-129. London, Pitman Publishing

Bedbury, S. (2002) A New Brand World: 8 principles for Achieving Brand Leadership in the 21st century, p11-12. USA, Penguin Group.

Croft, M.J. (1994) Market Segmentation. London, Solidus Limited.

Kumar, N. and Mittal, R. (2002) Advertising Management. India, Anmol Publications Ltd.

Kotler, P. and Scheff, J. (1997) Standing Room Only, p115-118. USA, Harvard Business School.

Kotler, P and Keller, K.L. (2009) Marketing Management (13th edn.). USA, Pearson International.

Pinson, L. (2001) Anatomy of a Business Plan (5th edn.). USA, Dearborn Trade.

Pettit, S. and Brassington, F. (2006) Principles of Marketing (4th edn.). London, Prentice Hall.