Asian Paints

Index.

1. Executive Summary. 3

2. Introduction. 4

3. The Company. 5

3.1. Sales and Profit trend. 5-7

3.2. Rising raw material prices. 8

3.3. Asian paints location and number of employees. 8

3.4. Market Share. 9

3.5. SWOT Analysis. 9-12

4. The Market Environment. 12

4.1. Business Environment. 12

4.2. What business are they in? 13

4.3. PEST Analysis. 13

5. The Competition. 14

5.1. Nature of competition. 14-15

5.2. Market Share. 16-17

6. The Companies Marketing Strategy. 18

6.1. Segmentation. 18

6.2. Positioning. 19

6.3. Differentiation. 19-21

6.4. Focus. 21,22

7. The Marketing Mix. 22

7.1. Product. 22

7.2. Price. 22

7.3. Place. 23

7.4. Promotion. 23

8. Evaluation of the Companies Strategy and Tactics. 24

8.1. Evaluation of the Companies Current Position. 24

8.2. Evidence of the Companies Success. 25

8.3. Prospects for future Growth/Success. 25-26

9. Conclusions. 26

Appendix. 26-31

References. 32

1. Executive Report.

APIL, India's largest Paints Company, is the market leader in decorative paints. It has remained focused

on core business and has consistently improved operating efficiencies.

Paints sector can be segmented application wise, as decorative paints and industrial paints. While low Capital costs and high working Capital intensive characterize both, the latter requires special technology. Capacities are normally set up close to markets, so as to be able to offer a multitude of shades and colors to customers. Brand building and dealer network act as effective entry barriers. Demand is seasonal in nature - low during monsoon, high during festivals.

Domestic paints sector, dominated by decorative paints (70%), is expected to undergo a structural shift towards industrial paints, as cross-border tie-ups in industrial paints are becoming order of the day. Most organized sector players are established with well-entrenched distribution network and established brands. Threat of global competition is minimal. The underdeveloped industrial paints market holds maximum growth potential, albeit on a lower base. In future the industry will witness brand competition, product innovations and a fight for superior distribution network.

Focussed on decorative paints segment, APIL is set to gain the maximum amongst the peer members from the uptrend in the housing sector. The company is restructuring its operations into three SBUs and has set target to be amongst the top ten decorative manufacturers in the world by 2003. APIL is investing heavily in dealer tinting machine "Color World" and IT technologies to keep ahead of competition. APIL has set a target of Gross sales of Rs21bn by 2003 and earnings growth of above 20%. It also has set a vision to be among the top five paint companies worldwide by 2005. On export front, the company is looking out for alliances/ takeover in the emerging markets of Asia.

2. Introduction.

Champaklal H Choksey, Chimanlal Choksi, S C Dani and A Vakil set up APIL, in 1942 as a partnership firm. In 1945, it was converted into a private limited company, under the name of Asian Oil and Paint Co Pvt. Ltd. In 1965, the name was changed to Asian Paints (India) Pvt. Ltd. In 1973, it was converted into a public limited company.

APIL's first plant came up in Bhandup in 1957. It has three other plants located at Ankleshwar (1981), Patancheru (1985) and Kasna (1990). All the plants have captive resin manufacturing facilities and are capable of producing the entire range of paints. APIL also manufactures a key raw material Phthalic Anhydride, at its Ankleshwar plant, 30% of which is captively consumed.

Capacity expansions have come in a phased manner. Productivity at the Bhandup plant has been lackluster. Investment in information technology, especially in the areas of production and distribution