Let us take the case of Asian Paints. Asian Paints has never held back when it comes to promoting its brands and ad spends as a share of sales and may even increase partly to deal with competition from new entrants such as Sherwin William and also because new launches require to be pushed. They need to constantly remind the consumer of the brand which they understand. Earlier in the decade, Asian Paints decided it needed a twin branding strategy and so it launched the umbrella brand through the “Har ghar kuch kehta hai” (Every home says something) campaign to build an emotional connect with consumers. The pull that the brands have created has made life that much easier for the company’s 26,000 distributors, especially in the downturn.
That apart, a brand new chain of smaller premium retail stores called “Colour Ideas” has been rolled out. At least a dozen stores should be open by the end of the year; these are called “a slice of signature store.” Again, the idea is to provide the consumer with the right ambience in which to check out all the options and get some advice, especially since not all dealers have the resources or time to educate customers.
Of late, Asian Paints has made quite a splash of its samplers. They cost just Rs 60 for 200 ml but help buyers visualise much better what the wall would really look like so that they’re not disappointed later. With all this, the business has become far less seasonal in the metros. Then there are initiatives on the company’s website from chatting with interior decorators to checking out options for colors and buying books. Asian Paints also connects with customers through the Home Solutions initiative — a home-painting service which was started in 2000. The service is used by almost 20,000 homes every year.
Asian Paints has several decorative paint brands. For exteriors, there are Apex, Ultima and Duracast. For interior distempers, there are Tractor and Utsav. In emulsions and enamels, its flagship is Royale. Given that consumers are moving up the value chain, Royale is Asian Paints’ passport to success.
In the early part of the decade, Asian Paints was not the leader in the premium space — the spot belonged to ICI’s Velvet Touch. The company felt it needed to create a campaign that positioned Royale as a lifestyle brand and if that meant spending more and using a star, it should be done. That is when it signed on film star Saif Ali Khan. They felt a star would lend aspirational quality to the brand and it seems to have worked well because they are now the leaders in the premium space. In the process, Royale, which started out as a sub-brand, is now a full-fledged brand in itself. The benefits of aspirational positioning are paying off because spending power has increased; top-end products that fetch higher margins sell more than the products in the value-for-money range. Emulsions, for instance, are outselling distempers.
In 1998, the tinting machine made its advent in the paint market, which allowed customers to mix colors to get the particular shade they wanted. This changed forever the way business was done. The tinting machine was a game changer because it made the supply chain so much more efficient. Typically, fewer SKUs (stock-keeping units) mean less choice for the customer but tinting machines allow the dealers to hold far less inventory than they would otherwise need to offer customers a choice of 1,300 colors. The machines brought more customers into the shops, the dealers became more involved in the product and that increased the awareness about the brand.
Today, more than half the dealer network of Asian Paints comprises Color Worlds, as the shops with tinting machines are known. The company’s plan is to convert the other half also over the next five years. Asian Paints scores over others in its ability to partner and hand-hold dealers. It’s not enough just to have dealers in place, it’s as important to train them about new technologies and get them more involved. So much time is spent these days teaching dealers that when a new product is launched, there can be a six-month gap between the time it hits the market in Madurai and Jalandhar.
Dealers are a key stakeholder in the company’s business model. It, therefore, tries to ensure that dealers always make enough money — they are eligible for price discounts, especially on cash purchases and during some seasons. The strategy is obviously working because otherwise the volumes wouldn’t have come through. Asian Paints is not a lethargic leader. It has grown the market, innovated with delivery mechanisms and products, and virtually managed to insulate the business from down turns. This company clearly won’t allow itself to be painted into a corner. —