(EMULSIONS)

PRESENTED BY:
SIZZIL ISLAM CHOUDHURY
ABHISHEK KUMAR
VINEET SHASHIDHARAN
VINAY KUMAR REDDY KUNDURU
NARESH KUMAR N
…KYUNKI HAR GHAR KUCH KEHTA HAI…
ABOUT ASIAN PAINTS
 Asian paints was started in 1942 by four friends.
 Forbes Global magazine USA ranked Asian Paints
among the 200 Best Small Companies in the World for
2002 and 2003.
 Asian Paints was presented the 'Best under a Billion'
award. It is the only paint company to receive this award.
 "Business Today" in Feb 2001 ranked Asian Paints as the
Ninth Best Employer.
ASIAN PAINTS- TODAY
FLOW OF THE PRESENTATION
 Objective of the research
 Introduction
 Data Analysis and facts
 Elasticity
 Pricing Strategy
 Key Findings
 Conclusion
OBJECTIVE OF THE STUDY
 To analyze the demand of EMULSIONS of Asian Paints
 To forecast the future demand of Emulsions by taking in
to consideration the potential Buyers of the product.
PAINT PRODUCTS OF
ASIAN PAINTS
INTRODUCTION OF PAINT INDUSTRY
IN
INDIA
 Oligopolistic Market
 Indeterminate Demand
 Few Sellers
 Differentiated Product
 The Indian paint industry is a $2 billion sector.
 Grew at 9% rate in the last fiscal

 Market Growth of about $200 - $400 million per year

over next 5 years

 Percapita consumption of paint in India is 800-
900 grams compared to 15-25 kg in the
developed countries
CONTD…..

$ 2 b Paint Industry In India

Organised Unorganised

33
%
67
%
LEADERS IN THE INDUSTRY
 Asian Paints (India) Ltd. (APIL)
 Kansai Nerolac Paints Ltd. (KNPL)

 Berger Paints

 Jenson & Nicholson Ltd (J&N)

 ICI (India) Ltd.

ASIAN PAINTS
 Market Leader with 33% share in the organised paint
market
 Largest distribution network

 Largest Brand Equity

 Berger Group and ICI are nearest competitors with 17%

market share each

 Dominates the decorative segment with 38% market

share
 More than 15000 retail outlets
 FINANCIAL PICTURE OF
ASIAN PAINTS

Year Sales Operat- Interest Net Loans

(In ing Profits
crores) Profit
(Lakhs)
2008 3416.16 3595.53 8.27 377.89 1005.90

2007 2821.29 2953.38 6.87 269.93 851.68

2006 2319.16 2447.78 3.83 187.81 694.86

2005 1941.52 2052.28 2.75 173.82 637.27

2004 1742.46 1800.63 5.27 147.58 583

 DATA ANALYSIS AND FACTS
 3 types of consumers existing in the market divided on
basis of income groups
 Premium (Prefer Emulsion)
 Average (Emulsion + Distemper)
 Poor (Prefer Distemper)

Distribution of Consumers

Poor
22% Premiu
m
53%
Averag
e
25%
DATA ANALYSIS AND FACTS (CONTD..)

Market Share in decorative paints Industry

J &N
12%
Asian
Nerolac
16%
Paints
38%

ICI
17% Berger
17%
DATA ANALYSIS AND FACTS (CONTD..)
 Consumers rely more on Dealers & Contractors other
than ad’s
 Reasons being
 Info about Quality
 Durability

 Price

 Long Lastingness
PRICE SENSITIVITY FACTORS
 Raw material Intensive Industry
 Near half of them imported petroleum products

 Major Raw Materials:

 Titanium Dioxide
 Phthalic anhydride
 Peutarithrithol
PRICE SENSITIVITY FACTORS
(COTD….)
 Factors which influence price of paint
 Pricesof the raw materials
 Import Policies
 Global Crude oil Prices
 Govt. Policies
 Packaging Costs
ELASTICITY OF DEMAND OF PAINT
 Demand for Decorative Paints is relatively Elastic in
short term
 In Long term it depends on the overall economic growth

 Income of people also plays an important role

 Premium customers are more Quality conscious than

price sensitive.
 Average customers are more price sensitive
CROSS-PRICE ELASTICITY
 Cross Elasticity of the demand is defined as the ratio of
the percentage change in the demand for one good to
the percentage change in the price of some other goods.
 Substitute goods: Berger,Nerolac,J&N etc.
 Cross Elasticity will be positive.

 Complement goods: Distemper etc.

 Cross Elasticity will be negative
INCOME ELASTICITY
 Income elasticity of demand measures the
responsiveness of the demand for a good to a change in
the income of the consumers.

% Change in Quantity
 Income Elasticity =
% Change in Income
 ELASTICITY-EFFECT

PRICE

300

KINKED DD
CURVE

1000 QUANTITY
PRICING STRATEGY
 Owing to the fact that this is an oligopolic market, Asian
Paints adopted a policy of cost-plus pricing strategy.
 Cost-plus pricing strategy determines the price of a
product or a service by adding up all direct and indirect
costs which are related with the production and sale of
that product(service) or not.
 In this strategy, all the costs are first taken up as unit
costs per product and then a pre-determined % of these
costs are marked as MRP.
 PRICING STRATEGY(Contd…)
• ADVANTAGES:
• Easy to calculate.
• Easy to administer.
• Minimal information required.
• Drives market towards stability.
DATA ANALYSIS AND FACTS

Availibility of Different Brands

92% 90% 92%
85%

70%

Asian ICI Berger Nerolac J &N

DATA ANALYSIS AND FACTS
Sales Information of different brands as
projected by the dealers
RANK BRAND

1 Asian Paints

2 Dulux

3 Berger

4 Nerolac

5 Shalimar

6 Nitco
DATA ANALYSIS AND FACTS
 Variation in Sales in different Quarters
 Comments by the dealers:
 Sales in the third quarter is equivalent to the rest of the year
 But, now growth in the third quarter is reduced by 10%
compared with the same quarter of last year.
KEY FINDINGS
 Asian paint emulsion used for interior decoration by the
premium segment of customers.
 Dealers and Contractors : Tools for APIL to create a slot
in the customer’s mind.
 Problems with the other brands give APIL the lead in the
market.
KEY FINDINGS CONTD…
 Low profit margin a great concern
 Sales rises in the third quarter.

 Little shift in the income of the average class makes

them shift to the emulsion category.
 Bad credit terms.
SUGGESTIONS FOR STILL BETTER
DEMAND!
 Dealers should get price relaxation.
THANK YOU !!