Asian Paints is the leading paint company of India and primarily focuses on the manufacturing, selling, and distribution of paints, coatings, and other products related to home décor, bath fittings, and more. Asian Paints is headquartered in Mumbai, Maharashtra. It is the largest paints corporation in India and the third-largest in Asia. With a group turnover of INR 202.1 billion, Asian Paints operates in 15 countries while building shareholder equity and maintaining a reputation for professionalism and fast-track growth.
Read to know more about the Asian Paints Case study, its intriguing business model, distribution strategy, marketing startegies & successful campaigns led by Asian Paints along with a distinct global analysis of Asian Paints.
Asian Paints - Company Details
History of Asian Paints
Vision and Goals of Asian Paints
Global Analysis of Asian Paints
Marketing Strategies of Asian Paints
Asian Paints' Campaigns
Business Model and Supply Chain of Asian Paints
Target Market of Asian Paints
Asian Paints' Financials
Weaknesses of Asian Paints
Asian Paints - Company Details
| Company | Asian Paints |
|---|---|
| Headquarters | Mumbai |
| Founded | 1 February 1942 |
| Founders | Champaklal Choksey, Chimanlal Choksi, Suryakant Dani, Arvind Vakil |
| CEO | Amit Syngle (1 Apr 2020 - Present) |
| Key People | Ashwin Dani (Chairman) Manish Choksi (Vice Chairman) Amit Syngle (CEO) Abhay Vakil (Non Executive Director) |
| Revenue | INR 20,515 crores (US$2.9 billion, 2020) |
| Total assets | INR 16,154 crores (US$2.3 billion, 2020) |
| Type | Public |
| Traded as | BSE: 500820, NSE: ASIANPAINT, BSE SENSEX Constituent, NSE NIFTY 50 Constituent |
History of Asian Paints
Asian Paints was started in 1942 by four entrepreneurs: Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C.Dani, and Arvind R. Vakil. Champaklal and others initially functioned out of a garage in Bombay that was rented at INR 75 per month. Asian Paints was known as ‘The Asian Oil & Paint Company' in the beginning; the name was randomly picked up at that time from a telephone directory.
In 1945, the partnership firm turned itself into a private limited company following a turnover of INR 0.35 million that year.
During World War II and the Quit India Movement of 1942, there was a temporary ban on paint imports. As a result, companies such Shalimar Paints and Asian Paints took it up themselves to sustain the demand for paints. Asian Paints reported an annual turnover of INR 23 crores in 1952.
In 1957, Asian Paints achieved a breakthrough when its R&D department developed a process for producing international-quality phenolic and maleic acid resins in a simple coal-furnace through hand-stirring. In the same year, the company set up a plant at Bhandup, Mumbai to cater to the rising demand for paints in the urban areas.
By 1967, Asian Paints became the leading paints manufacturer in India.
Dropping The Mascot
In September 2012, Asian Paints unveiled a new brand identity and a logo made by Soha Ali Khan, dropping its iconic mascot Gattu in the process. Gattu, the impish boy, was made by famous Indian cartoonist R.K. Laxman in 1954. The new identity was conceived after the company conducted an extensive consumer survey in some major Indian cities.
Vision and Goals of Asian Paints
Asian Paints aims to be one of the top five companies in the decorative coatings industry (worldwide) by enlarging its expertise in emerging markets.
- The company is also working to assure environmental compliance and sustainability by focusing on waste minimization and water conservation at all of its plants across India.
- Its mission is to provide paints as per market demand while ensuring the desired level and quality of customer satisfaction. Asian Paints emphasizes the continuous availability of the right product mix at the right time.
- Simultaneously, the company intends to take over the industrial coatings business by forming alliances with established global partners.
Pratyusha Srivastava
Global Analysis of Asian Paints
Asian Paints runs its business in 15 countries and has 26 paint-manufacturing facilities worldwide. Besides the brand 'Asian Paints', the group operates around the world through its subsidiaries: Asian Paints Berger, Apco Coatings, SCIB Paints, Taubmans, Causeway Paints, and Kadisco Asian Paints.
Asian Paints' global setup is as follows:
- Asian Paints in South Asia (India, Bangladesh, Nepal, and Sri Lanka).
- SCIB Paints in Egypt.
- Berger in South East Asia (Singapore), Middle East (UAE, Bahrain, and Oman), and the Caribbean (Jamaica, Barbados, and Trinidad & Tobago).
- Apco Coatings in South Pacific (Fiji, Tonga, Solomon Islands, and Vanuatu).
- Taubmans in South Pacific (Fiji and Samoa).
Marketing Strategies of Asian Paints
- Unlike its competitors who concentrate only on the urban areas, Asian Paints embraces countrywide distribution through a widespread network of 13,000 dealers. The company maintains a large network of regional offices, company depots, and sales personnel to assist dealers across India.
- Along with initiatives to build customer's trust, Asian Paints also focuses on its communication and brand strategy. In 2000, Asian Paints appointed the Bangalore-based "Momentum" as consultants for a new advertising strategy meant to foster an attractive public image.
- Asian Paints reduced the cost of raw materials to bring down the price of its paints. It came up with another advertising strategy that created an emotional connection with the customers.
- Asian Paints is quite strong in production-marketing coordination. Its policy of offering tailor-made products to fulfill customer needs has resulted in an ever-increasing product range.
- Corporate reputation has been a major plus point for Asian Paints. The image is that of a successful, well-managed, and trustworthy company. Asian Paints is the recipient of several accolades and awards.
- Asian Paints placed a huge emphasis on technology and marketing in its initiatives. It implemented Enterprise Resource Planning (ERP) and Supply Chain Management (SCM) solutions for rationalizing processes.
- By partnering with PPG INC, a leading manufacturer of automotive coatings, Asian Paints seeks to meet the ever-growing requirement of automotive coating, industrial powder, protective coating, industrial light coating, and industrial container coating in India.
The above-mentioned steps resulted in a strong emotional connection between Asian Paints and its customers. The strategies lured in new customers while retaining the existing ones.
Ashutosh Roy Choudhury
Asian Paints' Campaigns
1) “Don’t lose your temper, use Tractor Distemper.” This slogan belonged to the very first campaign launched by Asian Paints. The campaign showed the popular mascot 'Gattu' with a paint bucket in his hand.
2) "Har Ghar Kuch Kehta Hai." This campaign established Asian Paints as a premium brand with an emotional touch. The idea behind the campaign was that each color had a story to tell. Asian Paints tried to encourage the initiative of painting one's home for festive occasions like Diwali, marriage, childbirth, etc.
3) “Where The Heart Is.” This campaign proved to be a masterstroke strategy for Asian Paints. It featured celebrities such as Sushant Singh Rajput, Saurav Ganguly, Radhika Apte, Mandira Bedi, and others who described the significant role Asian Paints played in their lifestyle through color and home décor.
4) #PeopleAddColour. The recent campaign created a heart-warming depiction of paying guests not being inferior to one's family. It showed how rooms refurbished with Asian Paints decals brought paying guests closer to their landlords.
5) ‘Budget wala paint’. This Ad campaign ‘Budget wala paint’ promotes Tractor Sparc Emulsion. By highlighting the budget issues faced by consumers, Asian Paints launched a pocket-friendly paint that offers a rich-looking finish at an affordable price.
Business Model and Supply Chain of Asian Paints
Asian Paints is one of the companies that started identifying the trends and of consumption quite early in its game and eventually constructed innovative and effective strategies around the same. Asian Paints boasts of a market cap of INR 2,54,125.07 crores and this would have hardly been possible had it not targeted the right section of people with quality products, powered with the right marketing mix.
Asian Paints has developed its business on the B2C business models, where the brand manufactures and distributes products direct to consumers and via retailers and distributors.
No doubt Asian Paints brainstormed amazing advertising campaigns that led to its marketing win time and again. For instance, when the company launched Gattu the mischievous kid in 1954, the mascot immediately appealed to all of the Indian consumers, especially the middle-class society.
Furthermore, the company spent around Rs 8 crores to buy a mainframe computer to become the first private company to own a computer, which was a bold move indeed. This computer was used for analyzing data and helped the company in forecasting their demands and enhancing their service levels across the supply chain, whereas the other companies continued to use computers generally for payroll and administration works even later.
Asian Paints continued with its judicious investments to improve its supply chain efficiency and always aimed to stay a step ahead of its competitors and rivals, which it did throughout the years.
The company launched its IPO as early as 1982 and used the proceedings to expand its business and launch a wide range of exciting new products. The supply chain practices that Asian Paints developed, always remained matchless in the paints industry in India. The eye for innovation with a sole focus on the consumer side of the paint industry is something that Asian Paints is distinguished for and which fueled the company to pursue with other sub-brands like Ultima, Royale, and more. All of which enjoyed their own individual successes.
The company also believed in scaling up its operations and improving its factories and their capacities of expansion with cutting-edge machinery, and a wise investment in their IT operations.
Along with being one of the most prominent and trustworthy names in the paints industry, Asian Paints also holds its presence in a wide range of products and industries including kitchen, bath fittings, and an array of other services like waterproofing solutions, color consultancy, interior designing and more.
The supply chain practices that Asian Paints developed, always remained matchless in the paints industry in India. Asian Paints distributes its products and services through retailers, wholesalers, and distributors. The company now operates in more than 14 countries and has already set up 26 paint manufacturing plants enjoying consumers from over 60 countries in total.
Berger International Limited, Taubmans, SCIB Paints, and Kadisco, and Apco Coatings are some other subsidiaries of Asian Paints that operate globally.
Target Market of Asian Paints
Asian paints targets a whole range of customers, including but not limited to homeowners, corporates, automobile companies, wholesalers and distributors.
- The retail customers of Asian Paints are usually the people of 20 years and above from middle, upper-middle and higher income groups.
- The corporate customers of the company belong from private companies, government bodies, and other institutions.
Asian Paints' Financials
The table below highlights some important financial metrics of Asian Paints extracted from the Asian Paints FY19-20 Annual Report.
**Standalone -
| Particulars | 2019-20 | 2018-19 |
|---|---|---|
| Total Income | ₹17,551.63 Cr | ₹16,676.59 Cr |
| EBITDA | ₹4,214.58 Cr | ₹3,789.62 Cr |
| Profit After Tax | ₹2,654.0 Cr | ₹2,132.17 Cr |
| EPS | ₹27.7 | ₹22.23 |
Lakshya Singh
Weaknesses of Asian Paints
- Asian Paints owns only 15% of the market share in the industrial paints segment. It lags behind Goodlass Nerolac which has a market share of 43%. Since the segment is pegged to grow massively in the future, a fallback in this category can be a disaster for Asian Paints.
- Widening product mix puts a strain on production distribution, accounting, and administration. At the same time, the company's innovation strategy for new products is inadequate.
Conclusion
Asian Paints started a revolution in India through unique color shades, themes, and refreshing patterns. It brought 'home decor', often seen as a luxury, within the reach of the Indian middle-class population.
Author: Rishita Jain
Source : https://startuptalky.com/asian-paints-case-study/
Date : 2021-07-15T15:36:00.000Z