Figure 1: Turnover Break-up 2003 [Source: www.indiainfoline.com]
1.2. Environment
Competition outside is largely limited to Jubilant Organosys, ICI with Woodlock brand, Century Adhesives and Vantico Chemicals. With the acquisition of Loctite, Henkel, too shall compete for the consumer and engineering adhesive segment. Also the unorganized sector and local brands remain a threat largely overlooked by Pidilite.
With respect to Raw Materials, reduction in customs duty has pulled down cost of imports but with a rise in the price of crude, Vinyl Acetate Monomer (VAM), a derivative of crude has affected the bottomline. Packaging material with annual consumption of aroundRs700-800mn is of further importance.
Though Pidilite seems to be following a premium pricing policy, lower Price Points like Rs.5 and presence across premium and economy range help it command a huge market share.
1.3. Business Model
Brand loyalty and leverage
The company has adopted two strategic imperatives to effectively leverage on its brand loyalty:
- Broadening definition of categories of `Pidilite' brand with prefix (‘Pidi'/’Fevi’).
- Swarming sales channels and geographies to maximise penetration: courses for housewives on the effective use of art material is a pointer.
Operational advantages and restructuring
With Vertical Integration wherein it manufactures intermediates for resins and pigments and sourcing of VAM from Vinyl Chemicals, a group company, Pidilite enjoys Operational advantages.
Realizing the difficulty associated with continuous innovation in industrial products, the company awaits releasing resources for the lucrative consumer products business: the restructuring could add to shareholder value.
Distribution Strength as Competitive Advantage
Covering all towns with population of over 50000+, Pidilite stand with an extensive retail distribution network in India of close to 300,000 plus outlets. The distribution network infrastructure of Parekh Marketing has been used well over the years.
Acquisitions
The company is looking at acquisitions which will strengthen its business and allow it to grow at a faster rate. Two of them are the acquisition of Ranipal, to enter the fabric care market and of M-Seal making Pidilite the dominant player in the epoxy putty market. Steelgrip in the PVC electrical insulation tape market, and Bulbond, Vitapon, Kalvyl, Tracol, Parvyl in the adhesives/resin segment are among others.
Growth
With new products like Dr Fixit and Fevicryl Hobby Ideas opening new segments, and the recent thrust on Consumer Bazaar Product exports, fuel for growth seems in place.
(2000, Pidilite Ind: Bonded to Shareholder Wealth, The Investment World, Apr 30)
1.4. Business & Managerial Challenges
- Pidilite, bent on innovation and value creation looks at creation of new capacities and expansion of capacities. There is a normal capacity expansion constantly as new products are launched. Thus, how much to invest and where are but a few areas of attention.
- Pidilite has been swift on new brands and entering new though related segments. There is a fair amount of gestation period to build new segments. How soon can the payback be and what shall it take to make each of the brands as competent as Fevicol?
- As Pidilite plans to set up ‘Dr Fixit Service Centres’ to meet the evolving needs of various segments, MNC brands such as Laticrate and Roffe & Bal continue to capture a major chunk of the market. In the wake of growing competition in this segment, what should Pidilite choose – offensive or defensive behaviour?
- Steelgrip is mostly present in the north and west and Pidilite`s marketing effort would be more inclined towards south. This would require Pidilite to gain access to electric hardware outlets which would further mean expanding the distribution network. Given the existing extensive distribution network, targeting this segment for distribution would require a balanced approach.
- The acquisition of Ranipal is yet to show outstanding results. There is intense competition in the optical-brightening agent industry both from the organised and the unorganised sectors with fairly strong brands and to fight them is a mammoth task.
- Exports serve to shield the company's revenue against domestic business cycles. Since pigments account for a majority of exports, the restructuring of businesses could adversely impact export revenues.
- Pidilite is overtly dependent on Fevicol – so much so that they recognize themselves as ‘From the makers of Fevicol’. In the long run, this may not prove healthy and also, the possibility of neglect to other brands when it comes to marketing is sighted.
2. Decorative Paints Industry: Birds Eye View
2.1. Product Classification
Decorative Paints, catering to the housing sector, can be classified into premium, medium and distemper segments. Premium decorative paints are acrylic emulsions used mostly in the metros. The medium range consists of enamels, popular in smaller cities and towns. Distempers are economy products demanded in the suburban and rural markets. Nearly 20 per cent of all decorative paints sold in India are distempers and it is here that the unorganized sector has dominance.
2.2. Critical Success Factors (CSF)
An understanding of the Critical Success Factors of the Paints Industry brings forth the following:
Marketing Network Marketing of decorative paints requires extensive dealer network to cater to far flung areas in the country. Since the user-base has no geographical boundaries, a company's ability to penetrate new markets and improve product awareness would be the key to maintaining market share. A wider distribution network would help capture larger share of the market by reaching the consumer in the semi- urban and rural areas, which could be the key drivers for future growth.
Product Portfolio A broader product portfolio catering to a broad spectrum of the consumers is instrumental in gaining a greater share of the market. The Industry has fast graduated by bridging the gap between the emulsions for the rich and lime for the poor - for that matter, even in the emulsions segment, each manufacturer tries to operate at several price points. Apart from providing scope for high visibility at outlets and the advantages of Umbrella Branding, a wide product portfolio helps consumers adhere to their chosen brand for diverse applications – beginning putty and ranging to exterior paints.
Managing inventories As the industry is highly raw material intensive, prudent inventory management is a prerequisite now in keeping costs under control thus resulting in better profitability. Chief characteristics are;
a. Working Capital Intensive
- Volumes of some SKUs are low and demand difficult to predict.
- Extensive and wide distribution networks (like FMCG’s) lead to high safety stock requirements.
b. Seasonal nature of Demand
- High Demand during Festive Seasons, low in Monsoons
- Seasonal nature of demand and high competition lead to high obsolescence and stock out costs.
Technology Technology is now the key for success in both the decorative and the industrial paints segments. Most of the companies have moved towards dealer tinting systems, therefore postponing the point of differentiation by leaving the tinting job to be done at a later stage, closer to the consumer. As a result, the inventory levels at the dealer outlets are largely reduced, resulting in lower dealer credit extension – otherwise an imperative to operate in the paints segment.
Strong Brands Since raw material costs can play a pivotal role on the margins of companies, therefore the constant and single most important agenda for companies is to devise methods to ensure that they continue to remain the brand of choice for consumers even after passing on cost increases to them. As the paint industry moves away from the tag of being in a commodity business and acquires FMCG overtones, its advertising, too, is acquiring a consumerist hue. The order of the day is investment in brand building to aid brand recall, and beyond that also promotes easy accessibility by beefing up their distribution network. The idea is to convert paint from merely a product to a service by providing a host of value added services.
(1997, Paint industry - A new face of growth, Fortune India, Oct)
3. The Research Design
3.1. Problem Identification
Having introduced the range of DDL Distempers – Synthetic, Acrylic and Contractor’s Distemper – and DDL Emulsions – Upscale Ceiling Emulsion and Wall Emulsion – in the past two years, Pidilite Industries Ltd. has been quietly making a foray into the Paints Segment. It is interesting to note that the company, famous for advertising Fevicol creatively and intensively, has decided to make little noise in the said area and is possibly, testing the waters.
Of the identified CSF, Pidilite Industries Ltd. scores positively on the Marketing Network owing to the success of DDL Synthetic Adhesive Binder for lime and the stainers – Piditint and Unitint – that have made successful penetration in the market. However, the company cannot boast of an exceptionally wide Product Portfolio, nor can it boast of exceptional investment in technology: Paint Dispensers at dealer outlets is not what Pidilite has provided as of now. Understandably, the working capital requirement should be higher owing to stocking of different SKUs and Shades. One thing Pidilite can be sure of is the brand Fevicol, on which it has been banking adequately – marketing its products as ‘From the Makers of Fevicol’. It would not be unjustified to sight the possibility of Fevicol having outgrown Pidilite as a brand.
The current level of penetration – demand – sales of DDL Distempers and Emulsions offers huge scope for expansion and it is for this purpose that Research was undertaken. The specific objectives of the Research were as under:
- To understand the Purchase Behaviour in Paints Segment
- Need Initiator
- Decider of Paint Type: Lime, Distempers, Enamels or Emulsions
- Decider of Brand
- Buyer
- Role of Dealers and Painters in Paint Purchase
- To understand Dealer Behaviour
- Dealer Influence on Consumer
- Dealer Influence on Painter
- Motivators of Brand Favour
- Drivers of New Brand Acceptance
- To understand Painter Behaviour
- Painter Influence on Consumer
- Motivators of Brand Favour
- To identify Brand Related Issues
- DDL Brand Awareness
- Brand Association (s)
- Brand Perception
- Brand Recall
- To ascertain Product Feedback on DDL Distempers & Emulsions
- To evaluate reasons behind less than optimum penetration, application and usage.
3.2. General Methodology
The nature of the information sought required a primarily Qualitative Research Approach. Hence Interviews, aided by Questionnaires, was the technique used for the study.
Sample Units:
- Dealers
- Painters/ Contractors
- Household Customers
The samples selected through the sampling plan were interviewed and the results used for the process of analysis. The preliminary questionnaire for this process has been attached. [Annexure 3, 4 & 5]
Observation Method was exercised at the dealers’ outlets in order to study the decision making process during a paint purchase.
3.3. Sampling Plan
Figure 2: Geographical Scope of Research
Stratified Non-Probability Based Sampling was used. Calcutta - divided into five (5) zones – Howrah, and seven (7) upcountry regions were considered. Dealers of Pidilite Industries Ltd., as per the information provided by the Territory Sales In-charge(s) (TSI), in and around Calcutta were probed for the purpose of analysis. A balance across regions was maintained through the above mentioned Strata-identification to ensure minimum skewness while selecting dealers.
To identify painters and contractors, reference and snowballing were applied. The dealers provided leads to painters/contractors and snowballing was availed of as the reference of contractors/painters was used to get the leads of other painters/contractors. Contractor for the purpose of study stands defined as one who engages in commercial transactions with the end consumers in order to facilitate the painting assignment on a stand-alone basis or as a part of a broader service offering.
Convenience and Judgment sampling was used to identify sample units household and business customers. Owing to wide disparity in the target customers of Distempers and Emulsions, and no clear data on the income level or painting history, dealer knowledge was considered. Also, current or past job-employers of painters or contractors were analyzed.
3.4. Sample Size*
The sample size contacted for the purpose of the study in each segment studied, viz. Dealers, Painters/ Contractors and Household Customers, was as under:
Dealers: 95
Painters/Contractors: 53
Household Customers: 64
*(Owing to seasonal nature of demand for paints – higher in festive season – and the passage of Bengali New Year, it was difficult to spot painters and customers undergoing painting. Paint outlets largely served demand for hardware and thus, the variation in the number of samples studied across categories.)
3.5. Sampling Frame
The Sampling Frame was largely limited to the information provided by the Territory Sales In-charge (TSI) and Wholesale Stockist & Supplier (WSS) in the different identified strata with respect to dealers. However, geographically proximate outlets to those mentioned in the list provided were also often considered. In case of painters/contractors and customers, information from dealers and painters/contractors was used as per the reference and snowballing method. They were accessed on-site or at dealer outlets.
3.6. Data Collection
The data collected was primarily of qualitative form. However, separate questionnaires were administered to the three categories analyzed during the study. [Annexure 2: Dealer Questionnaire, Annexure 3: Painter Questionnaire, Annexure 4: Customer Questionnaire]
3.7. Data Analysis
In order to analyze the data collected from a quantitative view point, SPSS software was used. Having entered the data, descriptive statistical tool of Frequencies and Cross-Tabs were used to understand the sample on various aspects. Data Reduction technique of Factor Analysis was also used.
The qualitative aspects of the data gathered, were analyzed carefully to understand the ramifications of maintenance of status quo.
4. Results & Conclusions
The results of the research can be summed as under:
- Purchase Behaviour in the Paints Segment
- Dealer Behaviour
- Painter Behaviour
4.1. Purchase Behaviour in Paints Segment
4.1.a. Need Initiator
The research aimed at identifying the entity first identifying the need to paint and the three observations were – Male Head, Female Head and the generic response of the Family together. The male head clearly emerged as the primary need initiator, possibly owing to the reasonably expensive nature of the painting activity.
Figure 3: Initiator (Consumer’s Response)
4.1.b. Paint Type Decider
When it comes to deciding about the type of paint to be used, four observations other than the male head, female head and the family emerged. These were the couple together, the young one, the painter and the consumer in association with the painter. Here again, the male head emerged to hold the primary responsibility in maximum cases. This can be attributed to the vast disparity between the expenses incurred in lime wash, distemper and emulsion usage.
Figure 4: Paint Type Decider (Consumer’s Response)
4.1.c. Decider of Brand
It is interesting to note the way in which the three different sample entities responded with respect to the final decision making body when it comes to choosing one brand over the other.
Maximum dealers identified the painter to be playing the pivotal role in deciding the brand. However, the painter, in turn, passed it on to the consumer and most of the painters said that their job was limited to painting as per the consumer choice. Among the consumers, different responses emerged including joint decision with the painter and the dealer. However here too, the male head emerged as the one identified by maximum consumers.
Figure 7: Paint Type Decider (Consumer’s Response)
Thus, the consumer seems to be finally deciding for himself the brand to be used – this may be attributed to the once-in-many-years nature of the painting activity. The prices of the brands, too, in many cases, vary widely and may also be one of the reasons behind high male-head involvement. Many consumers also identified the dealer, and a joint decision with the painter and dealer to be playing the key role in brand decision. The level of dealer and painter influence on the consumer has been discussed later in the report. “Both retailers and painters play critical roles in the value chain. Any new proposition would need their full support to be able to succeed – what is in it for them?” (Rajagopal B., (2004), Power of Vision, Businessworld, Apr 22)
4.1.d. Buyer
The research also brought forth the buyer – visiting the dealer outlet – and thus offering an opportunity to influence the brand choice. Though quite a few painters were identified to be making the purchase on behalf of the consumer, the male head emerged again in clear lead. Most consumers themselves came to purchase the paint – though sometimes along-with the painter. However, the same was reasonably high when studied under the Observation Method.
Figure 8: Buyer (Consumer’s Response)
4.1.e. Role of Dealers & Painters in Paint Purchase
Dealers came across as a mix of Active and Passive. While quite a few confessed introduction of a new brand only on enquiry, a reasonably good number were identified as active dealers who offered advice voluntarily. The Observation Method revealed dealers answering questions like “Which brand is better?”, “Will 10 Kg be enough for 3 coats in the house?” and the same were handled well by the dealer – thereby revealing the important role played by the dealer. Not surprising in light of the fact that the Decorative Paints Industry seems to be fast moving from a commodity-like purchase to that in FMCG Industry, wherein brands and dealers are the two CSFs.
The painter’s role, though not openly confessed by the consumer or painter, is extremely significant – as pointed out by the dealer. Owing to his experience and consumer ignorance of purchase-linked schemes offered to painters, the painter is heavily relied upon by the consumer. “Your ads may move your consumers to tears, but even before his eyes have dried he’ll be buying your competitor’s products because his painter told him to.” (Prasad Shobha, 2004, Pitching it right, Businessworld, Apr 22) The same is contrary to the findings of the quantitative results, but was brought to light during observations at the Dealer outlets.
4.2. Dealer Behaviour
4.2.a. Dealer Influence on Consumer
The consumers accepted being influenced by the dealer – a relatively small percentage may have confessed his importance in the brand selection, but the majority accepted attaching importance (moderate or immense) to the dealer suggestion. However, as observed, some of the consumers often suspect the dealer suggestion to stem from greater margins or lack of stock of the demanded brand.
Figure 9: Dealer Influence on Consumer
4.2.b. Dealer Influence on Painter
The painters appeared to be attaching moderate importance to the dealer suggestion – not many painters rated dealer suggestion as very important – and this can be attributed to the fact that the painters, who are often offered schemes by companies, are aware of the tricks of the game and would like to pursue their own interests - a bias towards the margin-oriented behaviour of dealers limits their full acceptance of the dealer suggestion.
Figure 10: Dealer Influence on Painter
4.2.c. Motivators of Brand Favor
Of the various options extended to the dealer as brand favor motivators, factor analysis revealed three clear segments of dealers;
- Demand
- Product
- Self Satisfaction: Monetary or Ego
Figure 11: Motivators of Brand Favor
The dealers motivated by demand are those who like to play it passive and not put labour in order to ‘push’ sales. They view the consumer as extremely intelligent and corruptible only by the painter views, and do not desire to be a part of “dirty playing to painters” i.e. often adopted industry practices like commission to painters.
The segment motivated by Product largely is wary about the product quality, the width and depth of the portfolio – shades and product range are of extreme importance to them. This may be understandable in light of the ease of pushing one brand across application areas in comparison to pushing products from different companies for different products.
The third segment relates to those seeking self-satisfaction: they may be motivated by the margins available or by the sheer esteem associated with dealing in a reputed firm’s products. Interestingly, such dealers are ready to forego one for the other – for example, Trilo from local manufacturer Mayur may be pushed for Margin but has little esteem associated with itself but despite offering low margins and stringent credit terms, Asian Paints offers a pride of association to the dealer. However, in case of the latter volumes may justify the lower margin.
4.2.d. Drivers of New Brand Acceptance
Of the many drivers of new brand acceptance the three that emerge from factor analysis are as under:
- Advertisement
- Benefits
- Business Rationale
Figure 12: Drivers of New Brand Acceptance
The dealers driven by advertisement can be largely said to be seeking and relying on marketing support. In their view, and rightly so, the quick turn toward an FMCG like industry requires high visibility and brand recall. “How can we push a product which has no visibility”, was the resounding refrain.
The second segment driven by the Product focuses on the functional attributed of the offering – quality, range, ease of payment, and a manufacturer that makes it easy to push the product.
The segment driven by business rationale tends to tackle the question of “Why this brand?”; exceptional quality of the product or a manufacturer famed for quality products and ease of payment or terms of credit drive the acceptance of a new brand.
4.3. Painter Behaviour
4.3.a. Painter Influence on Consumer
Figure 13: Painter Influence on Consumer
Most consumers attach immense or moderate importance to the dealer view. This can be attributed to the special nature of painting execution work and respect for experience. At dealer shops under Observation, it was witnessed that when the painters accompanied the consumers, his approval was of immense importance and remarks similar to “Only if you approve shall we take it, ultimately you have to use it” were made.
4.3.b. Motivators of Brand Favor
Though the quantitative data was skewed towards consumer want when it came to what makes painter favor a particular brand, the greater truth was revealed during interviews and observation – the painter is largely motivated by schemes and incentives – and this is what guides his brand favor. Of course, he must be assured of a reasonably good functional attribute – high square feet coverage, glaze, etc – before a manufacturer tries to push brand consideration with the painters.
4.4. Brand Related Issues
4.4.a. DDL Brand Awareness
Owing to low spends on marketing communication via audio and/or visual media, the awareness of DDL Brand has been considerably low. The results vary across the three segments, and interestingly for the different products under the DDL Brand, Synthetic distemper enjoying the highest.
Figure 14: DDL Brand Awareness (Percentage)
4.4.b. Brand Association
Not many consumers knew the association between DDL and Fevicol – a contrast from the dealers where largely all were able to trace DDL to Fevicol and also knew the association of Pidilite Industries Ltd. The fact that few consumers knew the association between Fevicol and Pidilte can be attributed to the fact that all products under Pidilite are largely promoted as not those from Pidilite but the ‘Makers of Fevicol’: thus the Fevicol Brand is quick outgrowing its manufacturer.
Table 2: Brand Association
4.4.c. Brand Perception
Owing to low level of knowledge and involvement, like a FMCG-good, the three sets demonstrated stark inability to differentiate between any two brands confidently on various attributes like Quality, Coverage and Reputation. High level of loyalty rather, stickiness was observed as each respondent was seen to rate a chosen brand the highest on all attributes with responses like, “har tarah se hi who achcha hai”. Consumers were unable to name any brand for coverage, further underlining low involvement and easily influenced nature of paint purchase. Due to the said attributes displayed by the data collected, the only conclusion that can be reached is that high levels of commitment is seen across groups and once chosen, the same is identified as the “ideal” brand. Asian Paints, followed by ICI and Berger have emerged as Best, Good and Average respectively, though the difference between Berger and ICI is marginal only. Interestingly, the responses have brought forth the fact that Tractor, Dulux and Bison have grown as brands outshining their manufacturers – Asian Paints, ICI and Berger respectively.
4.4.d. Brand Recall
Across segments, Asian Paints depicted the highest Brand Recall (69%) followed by ICI (15%) and Berger (13%). Shalimar Paints, Nerolac and DDL shared the remaining three percent. This is in agreement with the proposition sighted above that the stickiness factor comes into play when the Decorative Paints Segment is considered. Also, the high spends of Asian paints and its extension into services – Home Solutions, Gattu – the icon and an all-encompassing range – with the enamel paints in orange cans dominating the shelves at retail outlets and thus affecting visibility, can be the possible reasons for high brand recall of Asian Paints.
4.5. Product Feedback on DDL Distempers and Emulsions
Quality
To compete against majors like Asian Paints and ICI to name two, the product quality must leave no room for grievance. However, complaints with the DDL distemper and emulsions studied exist and the same have been summed hereunder:
Table 3: Product Concerns across DDL Distemper and Emulsion Brands
As suggested by the various groups, the DDL range requires active corrective action with respect to quality check – beginning from the basic formulation against “square feet coverage” to the containers and pouches against “damaged packaging”. At Burdwan, a case of peel-off of a ceiling treated with Upscale, a Burdwan dealer refusing to stock DDL Upscale after he used it himself, a dealer at Calcutta replacing an opened tin with ICI and losing face owing to suggesting DDL Distemper- these are instances that go a long way in hurting the company’s image.
Product Mix
The Product Mix of Pidilite Industries Ltd. is mammoth in all respects – width, length and depth – but the same cannot be said of the Paints Division under PIL. Expansion of the product portfolio on all counts has emerged as a common refrain across categories with respect to suggestion.
4.6. Reasons behind less than optimum penetration, application and usage
Figure 15: Penetration, application and usage
The Different reasons sighted across groups are as under:
Hurdles at dealer-level:
- Minimal Marketing Support to Dealers in the absence of advertisements
- High Level of Ignorance among Customers and Painters resulting in lack of Demand
- Product Quality (Ref: Table 3) and Limited Range Grievances (shade, SKUs, categories)
- Predetermined Sales Targets from other “Reputed” companies enjoying First Mover Advantage
- Lack of Schemes to Painters and Painter Meets
Hurdles at painter-level:
- Lack of Demand from consumer and minimal brand consideration therein
- High Level of Ignorance among Consumers as well as Painters
- Product Quality and Limited Range Grievances as in case of dealers
Hurdles at consumer-level:
- High Level of Ignorance: Never heard/ seen and seldom recommended by dealers or painters
- Existence of “Better” Brands: More of psychological barrier than a functional one
5. Recommendations
A comparative analysis of two sets of markets – Bankura, Baruipur, Diamond Harbour on one hand and Burdwan, Ranaghat and Midnapore – brings forth the following factors that reason better performance of the DDL Range in the former over the latter:
- High visibility of the product at dealer outlets
- Greater Product Awareness among Painters
- Minimal or zero competition from cheap local brands
- Few Exclusive Dealers of majors like Asian Paints and Berger
Keeping in view the findings and observation of the market, the following steps are recommended:
5.1. SWAP
The short term strategy to penetrate is proposed to be four-fold: Simulated Demand, Workshops and Painter Meets, Awareness Drive and Purchase-linked Painter Schemes.
5.1.a. Simulated Demand
In this situation that is akin to chicken-and-egg, wherein the dealer pushes a product that is in high demand 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 DDL products under the Paints Segment 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. The success of the same is of course, dependent on the product quality and the ability of Pidilite Industries Ltd. to deliver what has been promised of DDL.
5.1.b. 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 DDL Umbrella and how they are superior to those in the similar, and more often, higher price band. [Refer Annexure 6, 7]
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:
- Updates on offerings from DDL and their superior features
- Training with respect to product application and usage
- Feedback from the painters on the products to explore revision of composition of product
- Rewarding of “Most Loyal Painter” giving maximum business in six months in the area (Refer 5.1.d)
5.1.c. Awareness Drive
Low Brand recall, and the resulting low brand consideration can be checked through effective communication to the various groups. Having mastered advertising as evidenced by Fevicol, Pidilite Industries Ltd. should create a power-communication programme inclusive of the following elements:
- Advertisement on local cable channels, to begin with, is a cost-effective medium to hit the towns if not the Metro.
- In-shop Demonstrations to influence, apart from making aware, the customers at the point of purchase.
- Wall Painting in interior areas and Signboards at dealer outlets shall serve dual purpose: create awareness and increase dealer satisfaction.
5.1.d. 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 DDL 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”.
5.2. IDEA
The long term strategy, catering primarily to the consumers, shall consist of Increasing Consumer Involvement, Distribution Realignment, Expanded Product Mix and Assisting the Consumer.
5.2.a. Increasing Consumer Involvement
While most players in the Paints segment try and cater to the intermediaries – painters and dealers – Pidilite Industries Ltd. can break the clutter and challenge competition by making the consumer aware of the same. However this shall require intelligent timing and Pidilite shall have to wait for significant brand recognition before taking on the intermediaries head-on. Communication of the same may be done by underlying the interests of the two groups in a subtle manner during the commercials aired. Highlighting the strengths of DDL range over the competition shall go a long way in not only creating space for self but also prompt brand switch. The association of DDL with Fevicol Makers, Pidilite Industries should be well-communicated and creation of Do-it-Yourself segment may also be attempted in the long-run.
5.2.b. Distribution Realignment
Distribution Realignment by graduating from mass distribution to selective distribution by limiting the number of dealers on the basis of set yardsticks like sales and visibility, and issues of bypassing – wherein the WSS retails at rates equivalent to basic prices offered to the dealers - and undercutting among the dealers – wherein excessive lifting during schemes or old stock enables pricing products below the basic price offered by the WSS to the dealers, thereby leading to unfair competition – must be checked before DDL earns brand loyalty among the dealers. Also, introduction of Paint-vending machines shall help the dealer reduce inventory and make numerous shades available to both the consumer and the painter; thereby arresting yet another reason for brand switch. Additionally exit barriers for the dealers shall be created by means of part investment in the machines. FEVIWORLD or reputed outlets owned by Pidilite Industries Ltd. and stocking all offerings, across categories, from Pidilite shall add further credibility to the offerings. “Examine the possibility of taking special counters in home improvement stores and other unconventional outlets that are sprouting in the metropolitan areas.” (Bhardwaj A., 2004, Begin at the top, Businessworld, Apr 26)
5.2.c. Expanded Product Mix
As a means of expanding the product mix and ensuring quality products, the following are recommended:
- To increase the width of the Product-Mix, Cement Primers, Enamel Paints and other ancilliaries be introduced: not only shall it create greater branding and increased acceptance among the three groups but also ensure a much higher visibility at dealer locations and justify investments in marketing.
- The depth of the Product-Lines should be revised. Introduction of more colors in all and especially the Wall Emulsion Segment and ensuring perennial availability of the same shall do good to DDL.
- To standardize products further and align them with the market offerings, SKU’s of 10 Kg should be introduced in Synthetic Distemper and Acrylic Distemper, and 4 Lt pack be introduced in the Emulsions Segment.
- To nullify the suspicion on the functional attributes of the product, a comparative examination of all brands in the distempers and emulsions segments be made by an expert and the results identified as basis of revision in composition, if any. On satisfactory results, the same may be incorporated in marketing communication by means of Comparative Advertising.
- To ensure satisfaction of the various members of the Distribution Channel, prompt Damage Replacement Policy, and a check on Carton or Container Packaging be exercised.
5.2.d. Assistance to Consumer
In order to successfully survive in the long run, Pidilite Industries Ltd. must not allow itself to be caught in ‘Marketing Myopia’ and make it presence felt across the expanse of the painting activity. This would mean offering consultancy to consumers – on areas ranging from décor to shade selection. To make the experience hassle-free, the following can be undertaken:
- Identification of DDL certified painters wherein the certification ensures quality and required skills in the respective painter shall not only guarantee the consumer of quality service but also check possible grievance in the painter community as a result of high consumer involvement.
- DDL Consultancy Services shall offer complementary or on minimal charge, suggestions for décor and shade selection. Tie-ups with interior decorators and contractors shall prove helpful in implementation of the same – beginning the paint shade and furniture coordination to the wall and curtain colour synchronization – an encompassing service should be provided. Special care should be taken to limit consultancy to consumer requirements.
- Undertaking execution of the painting activity shall ensure that the consumer gets timely completion, credible supervision of the painting activity and one time post-activity payment for both, material and labour.
Annexure 1: Product Range (Consumer Products)
Annexure 2: Product Range (Specialty Industrial Products)
Annexure 3: Questionnaire for Dealer
For the purpose of Profiling
Dealer Name and Address __________________________________________________
Deals in: Synthetic Distemper • Acrylic Distemper • Acrylic Emulsion •
1. Distemper Brands Stocked ________________________________________________
2. Emulsion Brands Stocked ________________________________________________
To check Brand Awareness
3. Heard:
DDL Synth Dstmpr • Acrylc Dstmpr • Cntctr Dstmpr • Acylc Emlsn • Upscale •
4. Is DDL from Fevicol Mfr? Yes • Νο •
5. Is Fevicol from Pidilite? Yes • Νο •
To check Brand Perception
6. Please rate Paint brands as on the following attributes:
To check unstated Brand Favour
7. To paint your own house, which brand and why? ______________________________
To check Brand Success
8. Highest selling SD Brand & Reason: ________________________________________
9. Highest selling AD Brand & Reason: _______________________________________
10. Highest selling Emulsion Brand & Reason: _________________________________
To check Motivation factor for Dealer
11. What makes you favour a brand? Demand • Esteem • Margin • Range • Incentive •
To check Brand Decider in Paint Purchase
12. Who has the greatest bearing in deciding paint brand? _________________________
To check criteria for Brand Acceptance
13. Rate attributes (5=Most Important, 1= Least Important) before you accept a new brand:
Product Feature ____ Company ____ Advertisement ____ Schemes ____ Margin _____
To check Role of Dealer
14. You suggest a (new) brand: Voluntarily • On Enquiry •
To check comparative penetration of DDL Brands
15. Deal:
DDL Synth Dstmpr • Acrylc Dstmpr • Cntctr Dstmpr • Acylc Emlsn • Upscale •
To ascertain Product Feedback
16. Product Praise/Complaints: ______________________________________________
To check Reasons behind less than potential penetration
17. Reasons for not dealing in DDL Distemper/ Emulsions: ________________________
Annexure 4: Questionnaire for Painter
For the purpose of Profiling
Painter/Contractor Name and Address _________________________________________
1. Distemper Brands Used __________________________________________________
2. Emulsion Brands Used __________________________________________________
To check Brand Awareness
3. Heard:
DDL Synth Dstmpr • Acrylc Dstmpr • Cntctr Dstmpr • Acylc Emlsn • Upscale •
4. Is DDL from Fevicol Mfr? Yes • Νο •
5. Is Fevicol from Pidilite? Yes • Νο •
To check Brand Perception
6. Please rate brands as on the following attributes:
To check Brand Decider in Paint Purchase
7. Who has the greatest bearing in deciding paint brand? __________________________
To check reason for Brand Acceptance by Painter
8. Brand Choice Determinant
Quality • Customer Want • Dealer Push • Price • Company Incentive •
To check level of dealer influence on Painter
9. Dealer’s suggestion is: Very Important • Moderately important • Not Imprtant at all •
To check comparative usage of DDL Brands
10. Used
DDL Synth Dstmpr • Acrylc Dstmpr • Cntctr Dstmpr • Acylc Emlsn • Upscale •
To ascertain Product Feedback
11. Product Praise/Complaints: ______________________________________________
To check Reasons behind less than potential demand
12. Reasons for not using DDL Distemper/ Emulsions ____________________________
Annexure 5: Questionnaire for Consumer
For the purpose of Profiling
Consumer Name and Address _______________________________________________
To check Brand Recall
1. Distemper Brands _______________________________________________________
2. Emulsion Brands _______________________________________________________
To check Product Association
3. Paint/“Rang-Putai” Synonym _____________________________________________
To check Brand Awareness
4. Heard:
DDL Synth Dstmpr • Acrylc Dstmpr • Cntctr Dstmpr • Acylc Emlsn • Upscale •
5. Is DDL from Fevicol Mfr? Yes • No •
6. Is Fevicol from Pidilite? Yes • No •
To check Brand Perception
7. Please rate brands as on the following attributes:
To check Roles in Paint Purchase
8a.Who decided need for paint ________ b. Paint Type _________ c. Brand __________
To check level of dealer influence on Consumer
9. Dealer’s suggestion is: Very Important • Moderately Imprtant • Not Important at all •
To check Brand Decision Key Player
10. Brand Choice Key Role: Family or Self • Painter Opinion • Dealer Push • Price •
To check level of painter influence on Consumer
11. Painter/Cntrctr’s suggestion: Very Imprtnt • Moderately Imprtnt • Not Imprtnt •
To check Buyer in Paint Purchase
12. Who goes to buy paint? __________________
To check Usage
13. Used:
DDL Synth Dstmpr • Acrylc Dstmpr • Cntctr Dstmpr • Acylc Emlsn • Upscale •
To ascertain Product Feedback
14. Product Praise/Complaints: ______________________________________________
To check reasons behind less than potential usage
15. Reasons for not using DDL Distemper/ Emulsions ____________________________
Annexure 6: Price Comparison (Distempers)
(All figures are estimates in Rupees)
Synthetic Distemper
Acrylic Distemper
Annexure 7: Price Comparison (Emulsions)
(All figures are estimates in Rupees)
REFERENCES
- Kotler, Philip (2003), Marketing Management, Prentice Hall, India.
- Coughlan, Anne T.; Anderson, Erin; Stern, Louis V. and El-Ansary, A. I. (2001), Marketing Channels, Prentice Hall, India.
- Malhotra, Naresh K. (2004), Marketing Research: An applied orientation, Pearson Education, Singapore.
- Bucklin, C.A.; Thomas-Graham, P.A. and Webster, E. A. (1997), Channel Conflict: When is it dangerous, The Mc.Kinsey Quarterly, No. 3
- 2000, Pidilite Ind: Bonded to Shareholder Wealth, The Investment World, Apr 30
- 1997, Paint industry - A new face of growth, Fortune India, Oct
- Rajagopal B., (2004), Power of Vision, Businessworld, Apr 22
- Prasad Shobha, 2004, Pitching it right, Businessworld, Apr 22
- Bhardwaj A., 2004, Begin at the top, Businessworld, Apr 26
