17 Wall Paints

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PREFACE

Marketing should not be looked upon in a vacuum or in isolation. It is an

essence taking a view of the whole business organization and its ultimate objective

concern for marketing must penetrate all areas of the enterprise. Market survey in

todays competitive world is a must for every organization.

This project is a study of market potential of Wallpaints. The rational behind

this particular study is to find out the present market scenario of various brands &

to find out the corporate need and perception. It was a pleasurable experience to

conduct a research on behalf of Wallpaints pertaining to the study of the Wallpaints

Sector.

Conclusion and there by recommendation has been arrived at by proper and

justified interpretation of the result derived from the above said analytical tools and

techniques.


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ACKNOWLEDGEMENT

Preparing a project of this nature is an arduous task and I was fortunate enough to

get support from a large number o persons. I wish to express my deep sense of gratitude to

all those who generously helped in successful completion of this report by sharing their

invaluable time and knowledge.

It is my proud and previledge to express my deep regards to Respected Principal

Sir Dr.J.P.N. Pandey , Head of Department Dr. Anand Tiwari , Mrs. Shikha Urmil Khan

and Miss Deepti Patel Department of Business Management , Govt. Autonomous Girls

P.G. College of Excellence Sagar for allowing me to undertake this project.

I feel extremely exhilarated to have completed this project under the able and

inspiring guidance of Miss. Deepti Patel she rendered me all possible help me guidance

while reviewing the manuscript in finalising the report.

I also extend my deep regards to my teachers , family members , friends and all

those whose encouragement has infused courage in me to complete to work successfully.

(NARGIS KUSHWAHA)B.B.A IInd Semester

IInd Batch


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DELCLARATION BY THE CANDIDATE

Date :

I declare that the project report titled " WALL PAINTS " on Market Segmentation

is nay own work conducted under the supervision of Miss.Deepti Patel Department of

Business Management Govt. Girls P.G. College of Excellence Sagar. To the best of my

knowledge the report does not contain any work , which has been submitted for the award

of any degree , anywhere.

(NARGIS KUSHWAHA)

B.B.A IInd Semester

IInd Batch


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CERTIFICATE

The project report titled "WALL PAINTS " been prepared by Miss. Nargis

Kushwaha BBA IInd Semester , IInd Batch under the guidance and supervision of Miss.

Deepti Patel for the partial fulfillment of the Degree of B.B.A.

Signature of the Signature of the Signature of the

Supervisor Head of the Department Examiner


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CONTENTS

TOPIC TITLE

1. Preface

2.Acknowledgement

3. Declaration of the Candidate

4. Certificate

5. Introduction

6.

7.

8.

9.

10

11

12 Limitations

13 Suggestions & Recommendations

14 Conclusion

15 Bibliography

16 Questionaire

INTRODUCTION

A major focus of channel of distribution is delivery. It is only through

distribution that public and private goods and services can be made available for use or


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consumption. Producers of such gods and services are individually cWallpaints able of

generation only the form or structural utility for their products and services. They can

organize their production cWallpaints abilities in such a way that the products they have

developed can, in fact, be seen, analyzed and sold in the market. The emergence and

arrangement of a wide variety of distribution oriented institutions and agencies, typically

called intermediaries because they stand between production on the one hand and

consumption.

Intermediaries can improve the efficiency n the other, can be explained in

the following terms: of the process.

They help in the proper arrangement of routes of transactions.

They help in the searching process.

They help in the sorting process.

Marketing channels are set of interdependent organizations involved in the process

of making a product of service available for use or consumption.

According to American Marketing Association, A Channel of distribution, or

marketing channel, is the structure of intra-company organization units and extra-

company agents and dealers, wholesale and retail through which is a commodity,

product or service is marketed.

According to Phillip Kotler, Every producer seeks to link together the set of

marketing intermediaries that best. Fulfill the firms objectives. This set of

marketing intermediaries is called the marketing channel (also trade channel of

channel of distribution).


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According to William J Stanton, A channel of distribution for a product is the

route taken by the title to the goods as they move from the producer to the ultimate

consumers or industrial user.

HISTORY


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INFORMATION: Middlemen have a role in providing information about

the market to the manufacturer. Developments like changes in consumer demogr

Wallpaints hy, psychogrWallpaints hy, media habits and the entry of a new

competitor or a new brand and changes in customers preferences are some of the

information that all manufacturers want. Since these middlemen are present in the

market place and close to the customer they can provide this information at no

additional cost.

PRICE STABILITY: Maintained price stability in the market is another

function a middlemen performs. Many a time the middlemen absorb as increase in

the price of the products and continue to charge the customer the same old price.

This is because of the intra-middlemen competition. The middleman also maintains

price stability by keeping his overheads low.

PRIMITON: Promoting the products in his territory is another function a

middleman performs. Many of them design their own sales incentive programmes,

aimed at building customers traffic at the other outlets.

FINANCING: Middlemen finance manufacturers operation by providing

the necessary working cWallpaints ital in the form of advance payments for goods

and services. The payment is in advance even through the manufacturer may

extend credit, because it has to be made even before the products are bought,

consumed and paid for by the ultimate customer.

TITLE: Most middlemen take the title to the goods, services and trade in

their own name. This helps in diffusing the risks between the manufacturer and

middlemen. This also enabled middleman to be in physical possession of the


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goods, which in turn enables them to meet customer demand at vary moment it

arises.

HELP IN PRODUCTION FUNTION: The producer can concentrate on

the production function leaving the marketing problem to middlemen who

specialize in the profession. Their services can best utilized for selling the

production where the rate of return would be greater.

MATCHING DEMAND AND SUPPLY: The chief function of

intermediaries is to assemble the goods from many producers in such a manner that

a customer can affect purchases with ease. According to Wroe Alderson, The

goal of marketing is the matching of segments of supply and demand.

PRICING: In pricing a product, the producer should invite the suggestions

from the middlemen who are very close to the ultimate users and know what they

can pay for the product. Pricing may be different for different markets or products

depending upon the channel of distribution.

MARKETING SEGMENTATION :

A flow is a set of function performed in sequence by channel

members. In the flow process, producers, wholesalers, retailers and


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consumers are linked. The functions that need to be necessarily performed in

a channel system include transfer of ownership through transportation, order

processing, inventory carrying, storage, sorting negotiations and promotions.

The same function in a give channel system, may be performed at more than

one level and, in such a case, the workload for the function would need to be

shared between channel members.

A channel symbolizes the path for the movement of title, possession and

payment for goods and services.

CHANNELS OF DISTRIBUTION FOR INDUSTRIAL

PRODUCTS: Figure below Shows channels commonly used is

industrial marketing. An industrial-goods manufacturer can use its

sales force to sell directly to industrial customers. It can sell to

industrial distributors, who sell to the industrial customers, or it can

sell through manufacturers representatives or its own sales branches

directly to industrial customers, or indirectly to industrial customers

through industrial distributors. 1-1-2-level marketing channels are

quite common in industrial marketing channels.

TYPES OF INTERMEDIARIES


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SOLE-SELLING AGENT/MARKETER: when a manufacturer

prefers to stay out of the marketing and distribution task, he

Wallpaints points a suitable agency as his sole-selling agent/marketer

and entrusts the marketing job with him. A sole-selling agent or a

marketer is usually a large marketing intermediary with large

resources and extensive territory of operation. He will be having his

own network of distrinutors/stokists/wholesalers, semi-wholesalers

and retailers. He takes care of most of the marketing and distribution

functions on behalf of the manufacturer. Obviously, a sole-selling

agent/marketer will earn a large margin/commission compared to

other types of intermediaries.

C & F AGENTS (CFAs): In many cases, manufacturers employ

carrying and forwarding agent, often referred to as C & F Agents, or

CFAs. The CFAs can be describe as special category wholesalers.

They supply stocks on behalf of the manufacturer to the wholesale

sector or the retail sector. Their function is distribution. Their

distinguishing characteristic is that they do not resell products, but act

as the agent/representative of the manufacturer. They act so behalf of

the manufacturer and as his extended arm. In essence, they are

manufacturers branches.

WHOLESALER/STOKIST/DISTRIBUTOR: A wholesaler or

stokist or distributor also a large operator but not on a level

comparable with a marketer of sole selling agent, in size, resources,

and territory of operation. The wholesaler/stokist/distributor operates


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under the marketer-soleselling agent, where such an arrangement is

used by the manufacturer.

SEMI-WHOLESALERS: Semi-wholeseller are intermediaries who

buy product either from producers or wholesellers in bulk, break the

bulk or resell the goods (mostly) to retailers in assortment needed by

them. Like the wholesalers, semi-wholesellers too perform the various

wholesaling functions that are part of the distribution process. In some

cases, they may also perform the retailing functions. Their strength is

specialization by region. They assist the producer in reaching a large

number of retailers efficiently.

RETAILER/DEALER: retailers sell to the household/ultimate

consumers. They are at the bottom of the distribution hierarchy,

working under wholesalers/stokists/distributors/semi-whosalers,as the

case may be. In cases where the company operates a single-tier

distribution system, they operate directly under the company. The

retailers are also sometimes referred to as dealers of authorized

representatives. They operate in a relatively smaller territory or at a

specific location; they do not normally perform stock-holding and

sub-distribution functions. The stocks they keep are operational stocks

necessary for immediate sale at the retail outlet.

VALUE-ADDED RESELLERS: they are intermediaries that buy the

basic product from producers and add value to it or, depending on the

nature of the product, modify it and then resell it of final customers.


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MERCHANTS: They are intermediaries that assume that ownership

of the goods that they sell to customers or other intermediaries.

Marchants usually take physical possession of the goods that they sell.

RESEARCH METHODOLOGY


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The methodology used in conducting the research work on TWO-

WHEELER with major emphasis on its sales and marketing strategies

involve the following steps:

Why I have selected TWO-WHEELER only?

I have selected Two-Wheeler for my summer training because it is the

company that is growing day by day. It has maximum

market share with comparison to its competitors. And it is

the company that gives highest sales and it is also the

highest two-wheeler manufacturer.

Defining the problem and deciding research objectives:

Defining the objective is the most important part of any study process.

Proper defining of the problem is a must for proceeding further with the

research process. The type of study to be carried out, the questions to be

raised, the sampling procedure to be followed, and the data to be collected,

all depends on a correct understanding of the problem. Also, by clearly

focusing on the real problem, the research job can be simplified and

completed with the minimum cost, effort and data.

Identified problem or the objectives of the research discussed in the report

are:

1. Developing the research plan:


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In this a plan was developed about how to collect the require

information i.e. whom to contact for gathering the relevant data. Data is

the foundation of all research. It is the raw material with which a

researcher functions.

Therefore, it requires great care to select the sources of data. Data, or

facts, may be obtained from several sources. Data sources can either be

primary or secondary.

A. Secondary data:

The sources from which secondary data was collected:

Press releases of the company.

Newsletters and In-house journals.

Brochures and detailed descriptive leaflets

Magazines like Business World, Outlook, Auto India, etc.

Websites such as www.herohonda.com, www.google.com. These

were the sources from which secondary data has been gathered.

Most of the information presented in this report was extracted

from the above data sources.
http://www.herohonda.com/http://www.google.com/http://www.herohonda.com/http://www.google.com/


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B. Primary data:

Collection of primary data was conducted by visiting the people

personally for the preparation of the report.

2. Research approach:

It means the way by which the information was collected. Visiting

the various places of Delhi, getting the questionnaire filled by different

individuals.

Beside this, frequent visit to the showrooms of the company was of

great help to conduct the analysis and research work.

3. Contact methods:

Instrument or Data collected Forms: It is the

method by which data is gathered. It could be done

through various instruments like questionnaires,

observations, getting information from the staff

members of the agency, contacting to the motor

mechanics was sufficient enough to conduct the

study.

4. Collection of information :

The primary information was collected by face-to-

face and direct interviews with the peoples and the

customers. They provide the relevant information

regarding the profile of the company as compared

to the other company in the Indian market. Most


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employees suggested visiting companys web site, as

it was not possible for them to spare time from

their busy schedules.

The secondary sources of information were various

web sites of the companies, newspapers &

magazines such as The times of India, The

Hindustan Times, Business world, Auto India, etc.

5. Analyzing the information:

The data collected was carefully analyzed. The

research and analysis of the information has been

done on the basis of various sales and marketing

strategies adopted by the company during its

tenure.

6. Reporting and conclusions and recommendations:

This is the most vital part of the work undertaken.

After collection and analysis of data, it was

recorded in the form as prescribed. The major part

of the report is the findings. The finding also

includes charts, tables and diagrams etc. The

report also mentioned the limitations of the project

undertaken. Then conclusion has been drawn out

of the findings and various recommendations have


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been given at the end of the report. Certain tables

on the basis of which the findings were made have

been included in the appendices section followed by

the bibliography.


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COMPANY COMPARISON OF WALL PANTS

Asian Paints, Goodlass Nerolac, ICI (India), Berger, Jenson &

Nicholson and Shalimar are the leading companies in the organized in

the organized sector. The top six manufacturers account for about 80

per cent of the market in the organized sector in value terms.

WALLPAINTS is the industry leader, with an overall market share of

33 per cent in the organized sector. Threat of global competition is

minimal in the industry.

WALLPAINTS dominates the decorative segment, with a 38 per cent

market share. Goodlass, a Tata

Market Shares of Five Major Players

Company Market share (%)

Decorative Industrial Overall

1. Wallpaints 38 15 33

2. Goodlass Nerolac 14 41 18

3. Berger Paints 9 10 9

4. ICI Paints 9 9 9

5. Shalimar 6 8 7


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company, is number two with a 14 per cent market share. Berger and

ICI have 9 per cent and 8 per cent shares, respectively, in this segment

followed by Shalimar, with 6 per cent.

Goodlass dominates the industrial paints segment, with 41 per cent

market share. WALLPAINTS is a poor second here, with a 15 per

cent market share. Berger, ICI, and Shalimar are the other substantive

players in the sector, with 10 per cent, 9 per cent and 8 per cent shares,

respectively.

The dominance of Goodlass in industrial paints is largely the result of

its technical association with the JWallpaints anese paint major,

Kansai Paints, which has a 29.5 per cent equity stake in the company.

Goodlass has a lions share of 70 per cent in the OEM passenger car

segment, 40 per cent share of two-wheeler OEM market and 20 per

cent of commercial vehicle OEM market. Goodlass also holds 20 per

cent to the white-goods segment.

THE COMPANY

As already mentioned, Wallpaints is Indias largest paints company

and the market leader in decorative paints. WALLPAINTS

manufactures and markets a wide spectrum of coatings and ancillaries,

which include decorative, production paints and heavy-duty coatings.

The manufacturing facilities of the company for paint products are

currently spread over four locationsBhandup, Mumbai, which was

established in 1955; Taloja, Maharashtra, where WALLPAINTS


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established its second unit in 1980; Ankelshwar, Gujrat, where

operations started in 1981; and Patancheru, Andhra Pradesh, where

manufacturing started in 1985.

Wallpaints offers the widest range of paints in terms of products and

shades, as well as pack sizes, Availability of wide range of shades is

in fact, one major critical success factor in the decorative paints

business. And WALLPAINTS scores high in this factor.

WALLPAINTS manufactures and markets more then 2,800 items of

paints (SKU).

PERFORMANCE

WALLPAINTS has been consistently turning out a good

performance over the years. For more than two decades now, it has

been the market leader. Besides, the company has also consistently

proved its excellence in operating performance.

Exhibit 1 gives details of WALLPAINTS s sales performance during

the last four years.

Exhibit 1 gives some other important details of WALLPAINTS s

performance.

WALLPAINTS has set a target of gross sales of Rs 2,100 crore by

2003. It aims to be amongst the top ten decorative paints

manufacturers in the world by 2003 and among the top five by 2005.


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_____________________________________________________________

WALLPAINTS STRIKES A NEW PATH IN DISTRIBUTION

At the time WALLPAINTS entered the Indian paint business,

distribution was the most crucial task for any new entrant. Both

physical distribution and channel management posed formidable

challenges. The foreign companies and their wholesale distributors

dominated the business. The foreign companies Wallpaints pointed a

few traders as their wholesale distributors and allowed them to

perpetuate a situation of monopoly. Each distributor was assigned a

large territory and was given the right to operate the exclusive channel

of the company in the assigned territory. The trade terms were also

very liberal. The companies also extended virtually unlimited credit to

the distribution. The credit outstanding for the supplies made

throughout the year were required to be settled by the wholesales

distributors only at the year-end, at Diwali time.

These distributors had neither the compulsion nor the motivation to

invest in distributions infrastructure. They were not required to move

out to semi-urban and rural areas. They concentrated on big cities

where they could make the sales without much investment in

distribution infrastructure and market development. Also, they were

shutting the doors on any new paint company seeking an entry into the

business. In other words, these distributors controlled the paint

business and were making it impossible for a new paint company to

enter and establish itself in the business.


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WALLPAINTS sized up the scenario correctly and formulated a

unique distribution strategy. In the normal course, a firm entering the

industry in this scenario would have opted for the low risk strategy of

gaining a limited access to the wholesale traders and be satisfied with

a small share of the existing business. But WALLPAINTS went in for

a strategy that differed totally from the existing pattern.

WALLPAINTS s strategy, in fact, meant the polar opposite of the

established/existing pattern.

Chart presents the elements of WALLPAINTS s distribution strategy.

We shall see the details in the page that follow.

WALLPAINTS Bypasses the Bulk Buyer Segment and Goes to

Individual Consumers

Bulk buyer segment was the major segment of the paint business in

the earlier days and any

Chart Elements of WALLPAINTS s Distribution Strategy

WALLPAINTS bypassed the bulk buyer segment and went to

individual consumers of paints.

WALLPAINTS went slow on urban areas and concentrated on semi-

urban and rural areas.

WALLPAINTS went retail

WALLPAINTS went in for an open-door dealer policy

WALLPAINTS voted for nationwide marketing/distribution


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Paint Company needed a share of this major segment for sheer

survival. Though this segment was dominated totally by foreign

companies and their wholesale distributors, a new entrant to the

business like WALLPAINTS would normally have rushed to this

segment and tried to garner a share of it. WALLPAINTS , however,

had a totally different game plan. Seeing that this segment was not a

growth segment, though it was certainly the major segment at that

point of time, WALLPAINTS decided to ignore this segment for the

present and go to individual consumers. And that was crucial decision.

It influenced every subsequent decision WALLPAINTS took in the

realm of distribution. Over time, WALLPAINTS proved to the paint

industry that there existed a large and bottomless segment in the paint

business of India, outside the bulk buyer segment, comprising of

individual consumers.

WALLPAINTS Goes to Semi-Urban and Rural Areas

Along with the decision to go to individual consumer segment leaving

aside the bulk buyer segment, WALLPAINTS also decided that

within the individual consumer segment, semi-urban and rural areas

would constitute WALLPAINTS s priority market. Prior to

WALLPAINTS s entry, the paint business was by and large

concentrated in the urban areas. All the major paint companies and

their wholesale distributors were content with the market that was

available in the urban areas. In contrast, WALLPAINTS clearly saw

that a large market for paints was emerging in the semi-urban and


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rural areas, and felt it wise to tWallpaints this market.

WALLPAINTS also understood that a new entrant like

WALLPAINTS had also a compulsion to go to the semi-urban and

rural areas. The major companies and their wholesale distributors

were not giving any worthwhile opening in the big cities for new

entrants. WALLPAINTS found it difficult to attract the wholesalers

in the cities to deal in its products. It had to necessarily turn to the

semi-urban and rural areas for support. WALLPAINTS wisely

decided against committing all its resources on a head on collision

with the foreign companies and their big wholesale distributors in the

urban areas.

WALLPAINTS Goes Retail

Going directly to retail dealers was the next major strategic decision

of WALLPAINTS in the realm of marketing and distribution. Here

too, WALLPAINTS totally broke with the prevailing distribution

practice. As mentioned earlier, the foreign companies, who were the

main players, were practicing a wholesale distributor-dependant

marketing system. WALLPAINTS did not see any great merit in the

system. It totally bypassed the well-entrenched wholesale distributors

and went directly to the retailers. While WALLPAINTS s

competitors remained content with their linkage with a handful of

wholesale distributors, WALLPAINTS preferred direct contact with

hundreds of retail dealers.


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WALLPAINTS Goes in for an Open-Door Dealer Policy

WALLPAINTS followed an open-door policy in the matter of adding

retail dealers to its network. The prevailing trend in those days was to

limit the number of dealers to the barest minimum. WALLPAINTS

broke this trend and chose to use practically everyone in the trade,

who was willing to function as its dealer. It was a combined result to

the policy of going directly to retailers and the policy of open door to

dealership that WALLPAINTS s dealer network swelled rWallpaints

idly. Even after achieving stability and maturity in distribution,

WALLPAINTS continued to follow a policy of continuous expansion

of dealer network. By 1990, WALLPAINTS was having a 7,000

strong dealer network. By the year 2000, the number had swelled to

12,000. And even now, on an average, WALLPAINTS is adding 200

to 250 new dealers every year.

WALLPAINTS Votes for Nationwide Marketing/Distribution

WALLPAINTS took yet another important and strategic

decision in the realm of distribution. Those days, nationwide

distribution/marketing was not the standard practice in the paint

business. On the one side, there were the 1,000 odd small paint

companies who, as a class, believed in marketing their paints in

limited territories in and around their point of production. On the other

side were the big companies, who as a class, believed in limiting their

distribution to the big cities. In contrast to both these existing

practices. WALLPAINTS voted for a nationwide

distribution/marketing. It wanted to have an active presence


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throughout the country, in the geogrWallpaints hical zones, states and

territories.

THE IMPLICATION OF WALLPAINTS S DISTRIBUTION

STRATEGY

WALLPAINTS s distribution strategy described in the preceding

paragrWallpaints hs had its associated implications. WALLPAINTS

had to take due note of them and face them squarely.

Going to Individual Consumers Implied Wide Product Range and

Complex Distribution

Had WALLPAINTS concentrated on the bulk buyer segment. It

could have managed with a limited product range, at least, in the

initial years. But, WALLPAINTS s decision to turn to the individual

consumers necessarily meant a wide product range. In the nature of

things, the individual consumer segment involves a very wide choice

in terms of products, materials, shades and pack sizes. On top of this,

WALLPAINTS believed in making products based on the

preferences of consumers. It gathered feedback from the consumers

and turned out products, shades and pack sizes on the basis of such

feedback. This policy resulted in a further burgeoning of the product

range.


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Smaller Packs Proliferated the Product Depth Further

At the time of WALLPAINTS s entry, paint companies were

supplying paints in containers of 500 ml or larger. WALLPAINTS

saw that there was a felt need in the market for paints in smaller

packs. All end uses did not require a large quantity. Moreover, it was

common practice for consumers to buy paint initially in a larger

quantity and supplement it with small size purchase to complete the

job. WALLPAINTS decided to harness the business opportunity and

started supplying its paints in small packs-in 200 ml and 50 ml packs.

This proliferation in pack sizes also contributed to WALLPAINTS s

growing product range. WALLPAINTS was by now manufacturing

and marketing as many as 2,000 distinct items of paints, none of

which was strictly a substitute for the other.

Wide Product Range Implied Distribution

The policy of having the widest range of products, colurs and pack

sizes had its implication on WALLPAINTS s distribution. When

2,000 different items had to be made available to the consumers, it

automatically meant that the company had to be prepared for high

inventory holding in its various depots/retail outlets. Accounting and

sales arrangements had also to be provided for on a matching level.

Naturally, distribution was becoming more complex and expensive for

WALLPAINTS .


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Going to Semi-Urban/Rural Markets Further Enlarged

Distribution

The decision to go to the semi-urban and rural markets instead of

confining to the urban markets also meant enlargement of the

distribution function. WALLPAINTS had to go in for more dealers in

order to serve the scattered semi-urban and rural market. The decision

also meant that WALLPAINTS could not opt for a simple,

centralized distribution of its products form its factory. It had to go in

for a decentralized, field-focused distribution, with a network of

depots located all over the country/marketing territory. Without such

extensive and intensive distribution network, it would not have been

possible for WALLPAINTS to cover the semi-urban and rural

markets.

Going Retail Implied Deep Involvement in Channel Management

Through its decision to go retail, WALLPAINTS was getting deeply

involved in physical distribution and


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Chart Main Steps in the Implementation Process

WALLPAINTS s created a

large network of dealers.

It established a network of

company depots to service the

dealers.

It created a marketing

organization that matched its

distribution.

It successfully resolved the

cost-service conflict indistribution.

(i) A strong commitment to

distribution cost control without

compromising service level.

(ii) Effective inventory

management

(iii) Effective control of credit

outstanding

(iv) IT initiatives in distribution

cost control

Channel management. In the system chosen by WALLPAINTS , the

physical distribution cum channel management task was far more

demanding, compared to the wholesaler-oriented system practiced by

the other paint companies. While, for companies that embraced the

wholesaler-oriented system, it was enough to service a handful of

distributors, WALLPAINTS had to service a network of thousand of

retail dealers. Having taken the decision to go retail, WALLPAINTS

necessarily had to create and service a vast dealer network. It also hadto create the physical distribution facilities required for servicing such

a large network.

National Marketing Necessitated Nationwide Organisation

Extend of marketing territory and complexity of distribution

organization are interrelated. The moment WALLPAINTS voted for

nationwide marketing, it was getting into intensive as well as

extensive physical distribution and channel management.

WALLPAINTS thus had to create a nationwide distribution-cum-marketing organization.

DISTRIBUTION BECOMES WALLPAINTS S SHOWCASE

FUNCTION


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WALLPAINTS s strategies made distribution the most important

elements of its marketing mix. And, WALLPAINTS give to

distributions all the inputs that were demanded by it. In fact, the rest

of this case study is essentially a description of how WALLPAINTS

managed its distribution activities-how it chalked out its distribution

programmes, how it implemented them, what problem it encountered

in this task, how it tackled them and how through distribution success,

it achieved marketing and corporate success.

THE IMPLEMENTATION PROCESS

We shall see low WALLPAINTS went about the actual management

of the distribution function. The main steps in WALLPAINTS s

implementation process are shown in Chart 2.

Let us see the details.

WALLPAINTS Creates a Large Network of Dealers

An extensive network of dealers, and a matching physical distribution

infrastructure play a crucial role in the decorative paints segment. This

is essential for ensuring easy accessibility of the product to customers.

In this, Wallpaints scored over its competitors with a massive network

of 15,000 dealers spread over 3,500 towns across the country.

WALLPAINTS has the largest distribution network among all the

players. Goodlass has a network of 8,000 dealers.

WALLPAINTS Establishes a Network of Company Depots

WALLPAINTS established a large chain of company operateddepots/stock points throughout its vast marketing territory, from

where the retail dealers could conveniently pick up their requirements.

WALLPAINTS s basic strategies explained in the earlier sections

necessitated a liberal Wallpaints proach in the matter of stock

points/depots. It also meant that the depots had to be company

operated. After all, WALLPAINTS did not have any wholesale


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distributors to whom the responsibility for operating the stock points

could possibly have been assigned. As shown in Exhibit 32.4

established a network of 30 company-run depots, spread through out

the country and serviced its retailers from them. The number of depots

varied from city to city. For example, Bangalore had just one depots

while Mumbai had four depots. The depots typically supplied to about

200-300 dealers.

WALLPAINTS Creates a Marketing Organisation that Matched

its Distribution Intensity

Effective control of the large number of depots, each having

substantial stocks of 2,000 odd distinct items necessitated a matching

marketing organization structure. WALLPAINTS set up a marketingorganization consisting of four regional sales offices, 35 branch sales

offices and a large number of sales supervisors and sales

representatives spread all over the country. The marketing

organization of the company is presented in Exhibit 32.5. It can be

seen from the chart that a very extensive structure has been created in

the consumer division. It is primarily meant for taking care of the

massive distribution task involved in this sector. Each branch sales

office has its own depots and the various items are stocked in the

depots under the control of the concerned branches. The branches

service the dealers and customers in their territories.

These are supported by six regional distribution centers, which cater

to 55 depots. Each depot has a branch manager for supervision of

several salesperson who cater to more than 14,500 dealers in the more

that 3,500 big and small cities all over the country.

WALLPAINTS faced many challenges. Of these, the cost-service

dilemma was no doubt, the most important one. And, that is the aspect

in which we are mainly interested in this case study.


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Managing the cost-service conflict was the main challenge that

WALLPAINTS faced in the implementation of its distribution

strategy. WALLPAINTS met this challenge successfully.

We have seen that WALLPAINTS has over 15,000 dealers in 3,500

towns in India. WALLPAINTS caters to all of them directly. As a

result, for WALLPAINTS , the distribution task gets tremendously

extended and distribution cost becomes a significant business

parameter.

Demand for decorative paints is characterized by seasonality. Demand

drops during monsoons and picks up around a month-and-a-half

before the festive season. Major part of the sales take place in the

second half of the financial year. Manufacturers have to array huge

inventories during the lean period. As a result, distribution cost

becomes all the more significant.

Naturally, distribution cost emerged as a major hurdle that

WALLPAINTS had to cross. The strategy It went in for a very high

service level in distribution. Service level is measured in terms of the

number of stock keeping units (SKUs) available in stock as a

percentage of the number of SKUs that should have been in stock.

WALLPAINTS s service level is more than 85 per cent whereas that

of other large paint companies falls between 50 and 60 per cent. This

meant a further rise in WALLPAINTS s physical distribution costs.

WALLPAINTS had to resolve this cost-service conflict.


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In the chWallpaints ter on Physical Distribution and Logistics

Management, we had seen that a cost-service dilemma is inherent in

any physical distribution situation. A high service level in physical

distribution- in transportation, warehousing order processing and

inventories-necessarily means a high level of costs. Every firm has to

face this cost-service dilemma and work out a compromise.

WALLPAINTS voted for a high service level and without

compromising this service level, it tried to contain the distribution

costs. Interestingly. WALLPAINTS succeeded in this endeavor.

When we go in to the details as to how WALLPAINTS actually

resolved the cost-service dilemma, four factors started out:

A strong commitment to distribution cost control, without

compromising service level

Effective inventory management

Effective control of credit outstanding

IT initiatives in support of distribution cost control

Strong Commitment to Distribution Cost Control

While following a totally customer-oriented distribution strategy,

WALLPAINTS could not afford to ignore the cost angle.

WALLPAINTS was in no position to pass on any additional costs to

the consumers. WALLPAINTS s marketing philosophy demand that

the consumer price of its paint should be on the lower side, so as to


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suit the pockets of the average Indian. Moreover, WALLPAINTS s

business growth demand more and more investment in manufacturing

and distribution. WALLPAINTS had to find the resources. This

Wallpaints art, the intensity of competition had also been on increase.

Naturally, profitability was coming under greater strain in these

circumstance. WALLPAINTS had to control its distribution costs in

order to maintain its profitability and market leadership. The question

was how to control the costs without sacrificing the service level.

Effective Inventory Management

Effective inventory management is the first major component of

WALLPAINTS s strategy on distribution cost control. And,

WALLPAINTS achieved high efficiency in this regard. Actually, in

inventory cost, WALLPAINTS took the lowest position in the

industry. WALLPAINTS s average inventory level equals only 28

days sales, while the industry average is 51 days sales. This right away

provided a 45 cent edge in inventory costs to WALLPAINTS

compared to its competitors. WALLPAINTS s stock of finished

goods was just 7 per cent of its net sales while for the other in the

industry it was nearly twice that level. What is particularly striking in

this achievement is that WALLPAINTS offered customers and

dealers a high level of service in product delivery compared to its

competitors and yet kept the inventory costs down by 45 per cent

compared to the competitors.


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Control of Credit Outstanding

Large credit outstanding, running beyond two months or more, was

natural concomitant of the distribution strategy chosen by

WALLPAINTS . The dealers are required to maintain stocks of all the

SKUs that are on demand in the territory. It pushes up inventory levels

at the outlets. They need credit. WALLPAINTS allowed 15-21 days

credit for dealers located in the major towns and 22-30 days credit for

dealers in upcountry regions.

WALLPAINTS had to pull of a smart credit control strategy for

survival. It resolved the thorny problem through an innovative dealer

incentive scheme. WALLPAINTS stipulated that each of its dealers

should pay for the supplies within a specified time norm and offered

them an attractive incentive scheme for doing so. It consisted of two

components:

(a) A special discount of 3.5 per cent. This was referred to as the discount

for perfection in payments. It was passed on at the end of the year,

provided each and every payment throughout the year was made

within the stipulated time norms.

(b) A cash discount of 5 per cent. This was paid for all outright cash

purchases. It was given whenever payments were received within 24


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hours of the supply/invoice. In respect of outstation accounts, the

payments should have been made in advance by draft in order to be

eligible for the discount.

The scheme was a grand success. WALLPAINTS s credit

outstanding always stood below 25 days, while the outstanding of the

other major companies were in the range of 40 days and above.

Systematic computerization also helped WALLPAINTS maintain the

credit outstanding within limits.

IT Initiatives in Distribution Cost Control

WALLPAINTS s IT initiatives in respect of distribution-inventory

control and control of credit outstanding, in particular-helped it no

control distribution costs without lowering the service level.

WALLPAINTS went in for a fully computerized distribution system.

WALLPAINTS did this not only with an eye on distribution cost

control, but also for the sake of distribution effectiveness per se. But

for such an Wallpaints proach, WALLPAINTS s distribution

management would have gone haywire. Here was a situation where

2,000 different items of paints, manufactured at four different plants,

had to be distributed to 15,000 dealers in 35,00 towns spread all over

the country. Through 55 depots. WALLPAINTS accomplished this,

maintaining the average service level at 85 per cent, a clear 25 per

cent above that of competition. The IT initiatives also ensured prompt

billing, accurate customer accounting and effective control of credit

outstanding.


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Computerization also enabled WALLPAINTS to process recent sales

data for the 100 fastest moving SKUs. This analysis was used to

project sales of specific products, which helped plan production and

raw material purchases. With computerization, WALLPAINTS was

able to analyse past trends to arrive at a 90 per cent accurate sales

forecast. Corrections were made every month between the sales

projection and actual sales. Production was thus evened out month-to-

month. Sales statistics were maintained, classified by product, month,

salesman, branch, region and dealer. Such computerized planning and

control of production, sales and inventories helped WALLPAINTS

cut distribution costs without compromising on the high level of

service sought by it in physical distribution.

WALLPAINTS later hired from the Department of

Telecommunications, satellite time and got all its offices in the

country networked. They transmit data daily to the corporate had

office in Mumbai, which uses it for sales and production planning.

WALLPAINTS has consistently improved its IT systems over the

years. It has linked all its factories and 55 depots through V-SAT

terminals, and derived big benefits in terms of streamlined

distribution. More recently, WALLPAINTS has implemented supply

chain management software from i2 technologies. WALLPAINTS

plans to upgrade its communication infrastructure through VSAT

leased lines and ISDN lines all over India. It is also implementing an

ERP solution from SWALLPAINTS to be completed in 2001.


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WALLPAINTS Acquires a Competitive Advantage Through Its

Inventory Management and Credit Control

One can grasp the full import of WALLPAINTS s success in this

sphere only when due not is taken of the fact that WALLPAINTS has

achieved the lowest distribution cost as well as the highest

differentiated position in the industry. WALLPAINTS s Wallpaints

colite, the largest selling brand of paint in the country, is available in

different shades and in eight different pack sizes. Being in the

business of colours, WALLPAINTS utilized colour to achieve

differentiation, and none of its competitors could match

WALLPAINTS in this aspect. Simultaneously, WALLPAINTS also

achieved the lowest cost position in the industry. Normally, when a

firm consciously opts for the differentiation route with a wide product

line, it automatically point towards higher inventory levels and

consequently higher inventory and other costs. But WALLPAINTS ,

through its effective distribution management, inventory management

and control of credit outstanding, in particular, managed to retain its

inventory size and inventory costs at the lowest possible level.

WALLPAINTS actually saved so much on inventory carrying costs

that it almost earned its promotion budget through these savings. This

is again praiseworthy because WALLPAINTS spends as much as per

cent of its sales on promotion, the highest in the industry. It has to

spend so much in order to maintain its differentiation advantage. But

strikingly, it has kept its total marketing costs the lowest in the

industry. The two factors together-the lowest cost position as well as


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the highest differentiation position-has conferred a significant

competitive advantage on WALLPAINTS .


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OBJECTIVE OF THE STUDY

The study was done primarily with the following objective in mind.

To study the brands of Two-Wheeler & consumers perceptionAabout the product of Two-Wheeler.

To know why people buy Two-Wheeler and why some people

prefer other company.

To study the features of different brands that give a good idea

of various products and services offered by the company.

To understand the competitive environment in which the

company is operating and is desired to meet customer need

and satisfaction.

To provide useful information to the company about the

product features of various competing companies.


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SUGGESTIONS & RECOMMENDATION

It is clear from the report that the Two-Wheeler Motors is facing cutthroat

competition; hence the companys manager has to be fast and smart so as to

understand the customers needs. They have to come up with various new

techniques or schemes to be able to cater to different categories of people.

Customers are becoming more wise day by day and they are now willing to

know all the in and out of the things happening around them. This has led to

increased customer awareness.

We can analyze that if the brand is reputed that doesnt win the customers

delight unless its provided same value-added features or else we can say

competitive advantage.

For gaining a competitive advantage it has to continuously compare

the product and services with the competitors and find the weak area

of the rivals for gaining competitive advantage.

Surveys revealed that awareness of Two-Wheeler Motors is low

among its target segment for creativity awareness. The company has

to take some keen step for promotional activity.

The company should regularly send the sales person who have good

communication skill to the customers so that they should be aware

about the product and services in market and know the quality of the

services offered by the company.


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LIMITATIONS OF THE STUDY

As said a basic research was conducted at the company to enable the

company to assess how far the customers are satisfied with product and

services of Two-Wheeler. During the course of the study the following

limitations were observed:

The method will be unsuitable if the number of persons to be surveyed

is very less as it will be difficult to draw logical conclusions regarding

the satisfaction level of customers.

Interpretation of data may vary from individual depending on the

individual understanding the product features and services of the

company.

The method lacks flexibility. In case of inadequate or incomplete

information the result may deviate.

It is very difficult to check the accuracy of the information provided.

Since all the products and services are not widely used by all the

customers it is difficult to draw realistic conclusions based on the

survey.


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CONCULSION

LEADERSHIP THROUGH DISTRIBUTION EXCELLENCE

The story of Wallpaints is a story of distribution excellence.

WALLPAINTS achieved an enviable leadership position through the

distribution route. While WALLPAINTS did not ignore any of the

other function of marketing, it was by mastering the distribution

function that WALLPAINTS gained a distinct and powerful

competitive advantage. WALLPAINTS s distribution strategy was

truly innovative; it broke new ground in every aspect of distribution.

In the final analysis, excellence in distribution led the company to

marketing and corporate excellence.


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BIBLIOGRAPHY WALLPAINTS

Widening the Net. Business India Intelligence, Auguest 2001,p2,2p.

Anand, M Diary of Sales Associate. Business World. 21 October, 2002

Brown James R, Fern Edward F., Conflict in Management Channels: The

Impact of Dual Distribution. International Review of Retail, Distribution

& Consumer Research, Wallpaints ril92, Vol. Issue 2, p121, 12p

Moriarty, Rowland T and Moran, Ursula Managing Hybrid Marketing

Systems. Harvard Business Review, November/December 1990,

Vol. 68 Issue.

Marketing Management by Kotler / keller 2005 Edition.

Marketing Management ICFAI Center for Management Research

Marketing Management Planning, Implimentation & Control by V S

Ramaswamy / S Nmakumari

www.asianpaints.com

www.mouthshut.com/product-reviews/Asian_Paints_Royale_Luxury_Emulsion-

en.wikipedia.org/wiki/Asian_Paints

www.novWallpaints aint.org/webasia.html

www.domain-b.com/companies/companies_a/asian_paints/index.html
http://www.asianpaints.com/http://www.asianpaints.com/http://www.asianpaints.com/http://www.mouthshut.com/product-reviews/Asian_Paints_Royale_Luxury_Emulsion-http://www.mouthshut.com/product-reviews/Asian_Paints_Royale_Luxury_Emulsion-http://www.mouthshut.com/product-reviews/Asian_Paints_Royale_Luxury_Emulsion-http://www.mouthshut.com/product-reviews/Asian_Paints_Royale_Luxury_Emulsion-http://www.mouthshut.com/product-reviews/Asian_Paints_Royale_Luxury_Emulsion-http://www.novapaint.org/webasia.htmlhttp://www.domain-b.com/companies/companies_a/asian_paints/index.htmlhttp://www.domain-b.com/companies/companies_a/asian_paints/index.htmlhttp://www.domain-b.com/companies/companies_a/asian_paints/index.htmlhttp://www.domain-b.com/companies/companies_a/asian_paints/index.htmlhttp://www.domain-b.com/companies/companies_a/asian_paints/index.htmlhttp://www.asianpaints.com/http://www.mouthshut.com/product-reviews/Asian_Paints_Royale_Luxury_Emulsion-http://www.novapaint.org/webasia.htmlhttp://www.domain-b.com/companies/companies_a/asian_paints/index.html

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