Emerging Trends and Opportunities in the Paint industry:-
1) Technology:-The introduction of tinting machine has changed significantly changed marketing technology. These machines each costing approximately Rs 60mn are installed at dealer outlets and enable the customers to choose between any of several hundreds shades.
These are then generated by mixing colourants with the base paint, and delivered almost instantly. The two major implications of these machines are differentiation on color ranges is reduced; prior to this technology, a major competitive advantage of a company was the range of color it offered.
For instance, Asian Paints offered almost 150 shades in its synthetic enamel range, unmatched in the industry. This now stands changed as almost 2000 shades can be created in seven minutes through these machines.
Simplified logistics management: with the machines generating shades instantly, dealer can now stock only the base material and thus save almost 20-25% in the working capital cycle.
2) Expansion of product profile:- The lowering of excise has opened the high volume but low value market is semi urban and rural areas, which is currently dominated by the unorganized sector.
3) Niche marketing: - By concentrating on certain niches, some companies have earned good result. For instance, good lass Nerolac paint found a lot of its in automotive paints for maruti.Nerolac has a lions share in the industrial market segment and virtual monopoly over the automotive paints.
This however, does not mean that niche strategy is bound to succeed. ICL ended up raid in the faces with its niche marketing strategy with natural hints, a paint with a suitable fragrance. This brand received no more than lukewarm response in the market. This was sold along with a roller for the Venetian glass look. ICL is also hoping the duette will be used instead of wallpaper. The future of this brand is yet uncertain.
4) Increased thrust on brand creation and distribution: - The increase share of organized sector implies that brand awareness will be a thrust area. Also, strong brands are emerging as the most important entry barrier. The opening of rural market has also necessitated the expansion of distribution reach.
5) Industry consolidation: - The small scale industry is expected to witness a shake out as the share of organized sector increases. Also, outsourcing requirements are likely to be reduced as new capacities go on stream in the organized sector.
1) Technology:-The introduction of tinting machine has changed significantly changed marketing technology. These machines each costing approximately Rs 60mn are installed at dealer outlets and enable the customers to choose between any of several hundreds shades.
These are then generated by mixing colourants with the base paint, and delivered almost instantly. The two major implications of these machines are differentiation on color ranges is reduced; prior to this technology, a major competitive advantage of a company was the range of color it offered.
For instance, Asian Paints offered almost 150 shades in its synthetic enamel range, unmatched in the industry. This now stands changed as almost 2000 shades can be created in seven minutes through these machines.
Simplified logistics management: with the machines generating shades instantly, dealer can now stock only the base material and thus save almost 20-25% in the working capital cycle.
2) Expansion of product profile:- The lowering of excise has opened the high volume but low value market is semi urban and rural areas, which is currently dominated by the unorganized sector.
3) Niche marketing: - By concentrating on certain niches, some companies have earned good result. For instance, good lass Nerolac paint found a lot of its in automotive paints for maruti.Nerolac has a lions share in the industrial market segment and virtual monopoly over the automotive paints.
This however, does not mean that niche strategy is bound to succeed. ICL ended up raid in the faces with its niche marketing strategy with natural hints, a paint with a suitable fragrance. This brand received no more than lukewarm response in the market. This was sold along with a roller for the Venetian glass look. ICL is also hoping the duette will be used instead of wallpaper. The future of this brand is yet uncertain.
4) Increased thrust on brand creation and distribution: - The increase share of organized sector implies that brand awareness will be a thrust area. Also, strong brands are emerging as the most important entry barrier. The opening of rural market has also necessitated the expansion of distribution reach.
5) Industry consolidation: - The small scale industry is expected to witness a shake out as the share of organized sector increases. Also, outsourcing requirements are likely to be reduced as new capacities go on stream in the organized sector.