Marketing Success: A Case of Asian Paints

Marketing, sales and customer care have always been essentials in any business or company. There is always a very thin line between the marketing and sales function in any business. Sales are a part of the marketing field which has a broader scope. And today, both these fields are becoming more customer oriented. Consecutively, the line between the sales and the customer care function is also thinning. Customers are considered as revenue generators and keep a company in business. Sales and marketing are a vital part of any business.

No business can succeed without sales and bringing in customers is the most essential facet for the survival of a company. Whether it is the fast moving consumer goods or retail segment, financial services or industrial or manufacturing segment, there is a visible demand for good sales marketing personnel. With the economic graph taking an upward curve, almost every organization is now focusing on developing their Sales and Marketing division.

The sales person is a field level brand ambassador for the organization’s product and service. A President of HR says that a sales person’s job entails acquiring new customers, maintaining and developing relationships with existing customers and continuously scouting for new developments in the market. It is very competitive, result oriented and highly rewarding. It’s about achieving high sales figures keeping in mind the interest of stakeholders. This exposure is so vivid that it helps beginners understand the market faster than any other work set up.

The case of Asian paints: Asian Paints marketing leadership over competitors

Asian Paints entered Indian markets almost as a late entry when companies like Goodlass Nerolac, Berger Paints and others were ruling the roost in the highly competitive paint industry. Their marketing Policy was to sell anything from small to big but maintain the quality no matter what. They were also constantly improvising and innovating. They were and are concentrating on household markets offering a variety of shades to the buyer more than their competitors. They also appointed dealers at key places in India and some of the dealers were even given computerized mixing for the desired shades as required by the customers.

Even small purchases can make the distinction between profit and loss, survival and extinction. Asian Paints has for a long time now sold very small cans of paint which are used to color the horns of bulls during the ‘Pola’ festival in Maharashtra and the auspicious small red and yellow stripes at the bottom of the front door of Tamil Nadu homes. This might not always be remunerative, but it has given a tremendous boost to the company’s brand recall. When the market is up, everybody makes money. But when the chips are down, only good brands stay afloat.

Small efforts like this have made Asian Paints the leader in the vast Indian market for decorative paints with a market share of 50 per cent. Companies make industrial and automotive paints also but those account for not more than a quarter of the overall market for paints in the country. These segments too have seen some improvement in sale of late. In the last one year, Asian Paints has improved its share by about 400 basis points. Rivals include Kansai Nerolac, Berger and ICI (Dulux and Velvet Touch).

A dominating market share helps in many ways. A top executive of a North-based paints company says that Asian Paints has a competitive ratio of two, its market share, in other words, is more than twice its nearest rival, which gives it a huge advantage over others in purchase of raw material as well as distribution. It can afford to participate in segments where the profit margins are not so good. It also uses it to leverage its position with the dealers.

Not just did it grab a larger chunk of the market, Asian Paints also outperformed the industry by a sizeable margin in the quarter ending June 2009. Taking away share from rivals, Asian Paints grew its sales 18 per cent, while industry revenues were up by 12 per cent. That happened in spite of the severe bind that the real estate sector found it self in. Developers have decided to go slow on new projects as real estate buyers, individuals as well as companies have turned cautious. Individuals too are not building homes at the same pace as before. Most paint companies have an eye on the current festival season. If people paint their homes in large numbers, there is still a slim chance that they could reach last year’s 18 per cent growth in sales revenue. Or else, they will have to settle for lesser growth. Asian Paints looks on course for 20 per cent growth.

The trick is to discover the right catchments, keep track of them and stay in close touch with the customer. What helped Asian Paints weather the slow down, which was more pronounced in cities such as Mumbai, Bangalore but less so in Delhi, was the brisk business that it did in the more resilient economies of smaller cities and towns. Tapping its strong dealer network, the company was able to cash in on the relative prosperity in these markets and take away the share from competing brands.

Comments are closed.