Changing marketing strategies of paint makers

Changing marketing strategies of paint makers

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paint report-min

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You can find more marketing innovativeness in decorative painting than in automotive painting as the former involves more retailing. Further, all pan-India paint companies operate through the direct distribution model and have presence across product categories. Direct distribution has proven to be more successful than the wholesaler model in the paints sector

Rs 56,000 crore (Rs 560 billion) Indian paint industry has been witnessing steady growth despite the fact that some of its user industries are in bad shape. And more importantly, Indian paint manufacturers are optomistic about the future prospects of the industry in the coming years. Low per capita consumption, rising income level and changing habits – all bode well for the sector.

Despite having almost assured growth in the coming years due to demographic  transition impact, paint manufacturers are not sitting idle but becoming innovative – innovative not only in new products development but also in marketing strategy. Though paint makers are one of the largest spenders on advertising and publicity, gone are the days when certain percentage of revenue spending would have ensured fixed sales. Marketing strategies have evolved to suit the changing needs of the consumers and to hit right cord at the right time. Marketing strategies no longer restricted to just product portfolio, distribution network and brand building but you need to think beyond these conventional strategies for sustaining growth.

Paint manufacturers are now a days increasingly focusing on enhancement of customer experience, increased attention to service aspect and involvement of technology in marketing. You can find more marketing innovativeness in decorative painting than in automotive painting as the former involves more retailing. Further, all pan-India paint companies operate through the direct distribution model and have presence across product categories. Direct distribution has proven to be more successful than the wholesaler model in the paints sector.

Indian paint industry is unique one in the sense that here both organised and unorganised sectors co-exist. Organised paint market account for 65% of the market share and it is believed that organised players will be able to capture the rest of the market too due to recent taxation measures like GST introduced by the government. Apart from paint making, globally, paint application industry too is highly organised which is not the case in India. In advanced countries paint companies undertake complete training of painters on launch of new products and this trend is now catching up in India as paint manufacturers recognise the need to enhance customer experience. Paint makers have realised that indian consumers are influencer-driven  as they mostly consult painters, shop owners and architects for painting decisions. In order to take advantage of this tendency, manufacturers have started investing in skill development of painters. Also manufacturers have significantly increased their painter/architect engagement.

Paint manufacturers have realised that just by focusing on product portfolio, distribution network and brand building growth can no longer be achieved. Hence the focus is slowly shifting towards creation of a superior service experience, which is reducing the hassles for painting and leading to a shorter repainting cycle. It should be noted that repainting comprised 30% of the total paint demand earlier which has now increased to 70%. For example, Asian Paints has set up AP Homes, decorative lifestyle stores, which are equipped with 3D visualisation, consultancy and other ancillary services. Further, ‘Express painting’ by Berger Paints and ‘On-time’ painting by Asian Paints use automated tools such as sanding machines for dust extraction and auto-rollers which ensure professional, speedy and quality painting experience. Some paint manufacturers are also using innovative concepts such as ‘one day one room’ painting and ‘one wall’ painting which are ultimately aimed at influencing the customers’  frequency of repainting their houses. The basic objective of all these steps are to ensure reduced hassles for repainting which will ultimately lead to premiumisation and increase the frequency of repainting.

Now a days, tinting machine technology is playing an important role in the marketing strategy of paint makers. In fact, tinting machine technology which was first introduced in 1997 has played a major role in bringing down the repainting cycle. One of the greatest advantages of tinting machine is that it is not fungible and as such a company’s tinting machine can only be used for its own brands. Tinting machines, therefore, play an important role in the sale of decorative paints in India.  In fact, tinting machine growth at 12-13% has outpaced dealer network growth, though the part of the growth emerging from replacement demand of these machines. Statistics, though unconfirmed, reveal that there are 200,000 tinting machines in India today, the highest in the world, as against total dealer base of 75,000. These machines will continue to play a major role in paint marketing strategy until a superior technology evolves.

Though many new entrants have entered the paint market, none of them have been able to make any impact in the market, nor have they been able to capture the market share of established players. Most of the new entrants have tried to destabilise the market through higher dealership margins, just-in-time sales, branding and advertisement, engagement with influencers like architects and interior designers and loyalty programs. However, none of these strategies seem to be working for the new entrants as the established players have created strong entry barriers. Most importantly, established brands too are employing similar strategies and unless new entrants have some inoovative tactics up their sleeves it will be difficult for them to breach the barrier.