SUMMER TRAINING PROJECT REPORT(MBA-035) ON

Analysis of Horizontal Expansion Strategy Of Asian Paints in Lucknow

Submitted in Partial fulfillment of Master of Business Administration (MBA) Program: 2011-13

SUBMITTED TO
Prof.( Dr.) D.N.Kakkar HOD MBA Deprt. IET, Lucknow

SUBMITTED BY
Dhananjay Prasad Singh MBA 3rd Sem Roll No. 110527002

INSTITUTE OF ENGINEERING AND TECHNOLOGY , LUCKNOW

ACKNOWLEDGEMENT
Any fruitful work is incomplete without a word of thanks to those involved directly or indirectly in its completion. With my sincere gratitude I would like to thanks everyone who has supported me in my project. I am extremely grateful to Head of Department Prof. (Dr.) D.N.Kakkar Sir and my Project Guide Mr.Ramsingh faculty of MBA DEPARTMENT, I.E.T LUCKNOW who insight encouraged me to go beyond the scope of the project and this broadened me learning on this project. First of all, I would like to pay my heartiest thanks to entire family of Asian Paints who provided me such a wonderful opportunity to do Project Report and provided their valuable suggestions in understanding the work of Project.

DECLARATION

I hereby declare that the project report entitled Customer Profiling and Purchase Parameters for Maruti Suzuki in partial fulfillment of requirements for the degree of masters of business administration to Institute of Engineering and Technology,Lucknow is my original work and not submitted for the award of any other degree,diploma,fellowship or any other similar title or prizes. Indubhushan singh (1105270000) LUCKNOW

INSTITUTE OF ENGINEERING & TECHNOLOGY SITAPUR ROAD, LUCKNOW-21

(A Constituent College of G.B.T.U.) This is certified that Ms. Karuna Roll No. 1105270026 of MBA IIIrd (2011-13) batch has completed his Summer Training Project Report at Study on Training and Development Program at Hindustan Aeronautics Limited (Hal), Lucknow Division requirement for the award of the degree of Master of Business Administration (MBA).

Date: 18-11-12
Prof. (Dr.) D.N. Kakkar Head M.B.A Department I.E.T., Lucknow

Introduction of the Topic

What is Horizontal Expansion? Expansion of business capacity through the absorption of facilities or buildings as well as through the acquisition of new equipment to handle an increased volume in sales in which the business is already engaged.In microeconomics and strategic management, the term Horizontal Expansion describes a type of ownership and control. It is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets. Horizontal Expansion in marketing is much more common than Vertical Expansion is in production. Horizontal Expansion occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm,

For e.g. Nerolac has adopted strategy of Vertical Expansion by which Nerolac wants to improve its sale from Asian Paints monopoly outlets, means its monopoly outlets are being taken over by Asian Paints now in this condition to improve its sale Asian Paints need to open new outlets which is called Horizontal Expansion Strategy. A monopoly created through Horizontal Expansion is called a Horizontal Monopoly. This is the expansion of a firm within an industry in which it is already active for the purpose of increasing its share of the market for a particular product or service.

Reason of Horizontal Expansion The ultimate objective of Asian Paints is to acquire more customers and serve them properly. While doing Horizontal Expansion take care to the competitors strategy. The main competitor is PEPSI, who has opted Vertical Expansion to generate more sell however Asian Paints do not believe on Vertical Expansion because Vertical Expansion has limited preview so ASIAN PAINTS is great believer in Horizontal Expansion and this strategy helped to the company to maintain its leadership in the soft drink industry.

India is a big country having diversified taste and appearance and same character is reflected in their demography. Horizontal Expansion helps the company to serve the more people and more customers touch point because in the waste country many customers commute. Benefits of horizontal expansion: Provides Incremental Volume & Revenue for Business. By horizontal expansion there will be more outlets of our product In the market which will sell our product in more quantity. This will generate incremental revenue for the business. Helps Improve Route Productivity There are pre determined routes through which product is transported and delivered at the Asian Paints outlets. If we open more outlets on the routes it will increase the productivity because more outlets will be covered and more products will be delivered with a negligible increase in time and efforts. Hence it will improve productivity of the route Improves Profitability of Our Distributors Expenses on routes and delivery of product are incurred by the distributers. Opening new outlets will give more revenue to our distributors also. With the increase in route productivity will improve profitability of the distributors. Reduced Dependence on Large Customers, We know that Asian Paints products have a very good demand. To comply with this we have to provide large amount of supply. In case we have few outlets a large amount of stock is gathered at few retailers. In this case they become monopolistic and demand many things like hoardings and glowshine boards discounts margins etc. from the company. So it is very necessary to reduce dependence on large retailers by opening new outlets. Increase market visibility selling at more outlets give more market visibility of the product which gives higher product recognition and brand value to the products.

 Economies of scale Economies of scope Increase in market power over supplier and downstream market channels.

Advantage of horizontal expansion over vertical expansion:

Both expansion techniques are meant for increasing sales volumes. But in horizontal expansion company can earn more profits by spending less. Lets see the profit story of horizontal expansion

Above tables clearly indicate the importance of opening new outlets. By doing vertical expansion only growth in profit was not very effective but because of opening just 200 new outlets sales increased to a large extent. Total profit margin and return on investment also increased.

How to Do Horizontal Expansion To do Horizontal Expansion more efficiently I made a profit story and talk to the shopkeepers according to that story.

Story Salesperson hello sir, I am from Asian Paints and I have a proposal that will surely increase your income. May I present you? Shopkeeper yes please present it Salesperson - Sir if you will start to sell Asian Paints then your overall sale will be increased and it is not tough to sell Asian Paints because Asian Paints is the leader in paimting industry and a very well known brand. Shopkeeper- yes, but how it can increase my overall sale? Salesperson - Sir, you are dealing in construction material. And these products have a very good combination with paints. If a person wants to purchase any of these products then it is quite possible that he will purchase Asian Paints and vice versa. Shopkeeper But how Asian Paints can increase my profit? Salesperson Sir if you are really interested to explore through asian paints, you may be able to sell it to the customer as you know that asian paint is the leading brand of painting industry ,and it gives a good emphasis on advertising so you need not to make any extra effort to sell it to the customer. Along with all this advantages our company also provide you the promotional tools like glow shine board, hoarding. And we will also provide you the home painting guide which will help you to make a long term relationship with your customer.

10

Vertical or Horizontal Growth When growing your business you need to decide on a growth strategy Here are two examples: 1) Vertical growth - focusing on current customers to make additional purchases of your product or services. Develop new products or services to appeal to existing customer base. 2) Horizontal growth - finding new customers to buy existing products or services. Expand the geographic reach of your business as well as sell to different customers in same area.Don't limit yourself. You can combine both strategies. If you are a smaller firm, concentrate on one at a time. Communication Tip - when communicating to your target market - U.S. Mail postage, envelope, paper and labor on average will cost you $1 per person, an email about 3 cents per person. In microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies are united through a hierarchy with a common owner. Usually each member of the hierarchy produces a different product or (market-specific) service, and the products combine to satisfy a common need. It is contrasted with horizontal integration. Vertical integration is one method of avoiding the hold-up problem. A monopoly produced through vertical integration is called a vertical monopoly, although it might be more appropriate to speak of this as some form of cartel. Nineteenth century steel tycoon Andrew Carnegie introduced the idea of vertical integration. This led other businesspeople to use the system to promote better financial growth and efficiency in their companies and businesses. In microeconomics and strategic management, the term horizontal integration describes a type of ownership and control. It is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets. Horizontal integration in marketing is much more common than vertical integration is in production. Horizontal integration occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm, e.g. a car manufacturer merging with another car manufacturer. In this case both the companies are in the same stage of production and also in the same industry.

11

A monopoly created through horizontal integration is called a horizontal monopoly. A term that is closely related with horizontal integration is horizontal expansion. This is the expansion of a firm within an industry in which it is already active for the purpose of increasing its share of the market for a particular product or service. Advantages of Horizontal integration Economies of scale, in microeconomics, are the cost advantages that a business obtains due to expansion. They are factors that cause a producers average cost per unit to fall as scale is increased. Economies of scale is a long run concept and refers to reductions in unit cost as the size of a facility, or scale, increases.[1] Diseconomies of scale are the opposite. Economies of scale may be utilized by any size firm expanding its scale of operation. The common ones are purchasing (bulk buying of materials through long-term contracts), managerial (increasing the specialization of managers), financial (obtaining lower-interest charges when borrowing from banks and having access to a greater range of financial instruments), and marketing (spreading the cost of advertising over a greater range of output in media markets). Each of these factors reduces the long run average costs (LRAC) of production by shifting the shortrun average total cost (SRATC) curve down and to the right. Related Corporate Diversification When multiple lines of business are linked in a firm, the firm is pursuing a strategy of related diversification. Such a firm is conscious of leveraging its resources and capabilities beyond a single product or market into those businesses that are related to their current activities. Related diversification can happen in two ways: Related-constrained when all the businesses in which a firm operates share a significant number of inputs, production technologies, distribution channels, similar customers, etc. Related-linked when the different businesses that a single firm pursues are linked on only a couple of dimensions, or if different sets of businesses are linked along very different dimensions. Examples help in understanding the critical difference between related-constrained and related-linked types of diversification. Bic, the French Company, produces products such as disposable razors, cigarette lighters, and pens. The company pursues a related-constrained diversification strategy because all their products share significant commonalities in the areas of plastic injection
12

molding, retail distribution, and brand name. Newell Rubbermaid is a good example of a related-linked firm. After Newell Company acquired Rubbermaid, the company is organized into five segments: cleaning and organization; home and family; home fashions; office products; and, tools and hardware. All five segments share common distribution channels supermarkets (such as Wal-Mart) and office supply stores (Staples, Office Depot, etc.). The products are sold under various brand names (Sharpie, Levolor) and do not typically share common technology or inputs across segments.

13

Purpose of the study:

1. Consumption of paints has increased tremendously in India. 2. In field of marketing many kind of surveys are conducted by Asian Paint steam time to time. 3. This is end and last feedback for any kind of organization. By the specific survey, which was conducted by Asian Paints organization want to know about the right picture of Lucknow market? This work study provides extensive information about the position of companys brand in Lucknow. 4. To find out the present status of Asian Paints brands in the retail outlets.

14

Objectives of the study Primary Objective:

1. To understand & explain the Horizontal Expansion Concept with respect to HCCB operations at retail end. 2. To enlist the benefits of Horizontal Expansion for the company at retail end. 3. To enlist the roles and responsibilities for Horizontal Expansion at retail end.

Secondary Objectives:

1. To identify if there exists any training requirement for the improvement of sales to its sales team 2. To understand how to make The Horizontal Expansion Process more effective 3. To study the distribution system of the company. 4. To study the behavior of sales man and distributer towards shopkeeper. 5. To develop the business, expand the market coverage, acquisition of retailers, retention strategies and maintaining customer relations.

15

SCOPE OF THE STUDY

This study has been done at Lucknow region in Uttar Pradesh only. During the study I went through different aspects. The study would be only a drop in the ocean that can help to understand the current status of activation elements of Asian Paints in retail outlet. The study can be conduct on the national basis also with large sample size & sufficient time by taking feedback of many retailers which sell Asian Paints products. There are some important aspects of this study which are as follow

1. This project work is helpful in making a deeper analysis of the horizontal expansion strategy of Asian Paints in Lucknow. 2. This project work will be helpful in conducting higher studies regarding the overall satisfaction of Asian Paints from the dealers perspective. 3. This report work will help the company to devise further marketing & sales strategies. 4. During my project I came to know about Narolac Marketing strategy that is the biggest competitor of Asian Paints. 5. During my project I came to know about Asian Paints market share .

16

LIMITATIONS

Considering the fact that Nothing is perfect in the world, every individual is bound to make mistake at some points, and it is genuine. The study was restricted to Lucknow region only. Limited knowledge of the researcher in the field of research may lead to interpretation errors. The respondents may be biased or influenced by other factor. A busy schedule of dealers/ retailers also makes the collection of information a very difficult one. The project is purely based on observation & verbal meetings and may be influenced by unprecedented factors. Non-co-operative behavior of respondent was a big problem in this survey. . The research was based on primary collection of data through voice interview and observation so there may be chances of human error. The research was depending on the information provided by the respondents (retailers). It may insufficient. As associated with project, time and money were the major limitations with this project.

17

RESEARCH METHODOLOGY Data Collection This research involved a study, which was descriptive as well as explorative in nature it basically aims at gathering data about how the Asian Paints red element concept &scheme playing in the mind of retailer & consumers. During the research period I collected data direct from retailers by survey. For proceeding further first of all we should know something about data and what the different type data are-

TYPES OF DATA:

T HERE ARE TWO TYPES OF DATA -

1. P RIMARY DATA . 2. S ECONDARY DATA .

METHODS OF DATA COLLECTION-

Primary data collection: 1. Observation 2. Experiment 3. Survey

Primary data can be collected by three methods-

But here, only surveys method of data collection is preferred which is very suitable to reach the researcher motto. A. Research instrument: Printed Questionnaire was used as the research instrument to collect the required information.

B. Area of surveys: The survey was conducted at Lucknow.

18

SAMPLE DESIGN

Sampling unit: The retailer of construction material, hardware store and small level of builders was selected from different places of Lucknow.

Sampling size: 150 Outlets.

Type of sampling: there are two type of sampling. A. Probability sampling. B. Non probability sampling.

Probability sampling- It is also known simple random sampling. In this sampling everybody gets similar chance to select as a sample unit.

Non probability sampling- In this sampling everybody gets not similar chance to select as a sample unit. Example of non probability are cluster sampling, convenience sampling, judgment sampling e t c.

Sampling procedure: Simple random sampling procedure was followed.

Sampling method: Data were collected by retailer survey. The retailers are directly contacted and interviewed at their retail counter.

19

20

Introduction of the Company

ASIAN PAINTS

21

Paint Industry Paint industry estimated at Rs. 135bn. Unorganized sector accounts to 35% of paint market. Volume growth estimated at 15%. Indias share in the world paint market is 0.6%. Per capita consumption of paint in India is 1.2kg/annum.

22

Introduction to Asian Paints Introducing the Asian Paints Group Asian Paints is India's largest paint company and Asia's third largest paint company, with a turnover of Rs 96.32 billion. The group has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 17 countries and has 24 paint manufacturing facilities in the world servicing consumers in over 65 countries. Besides Asian Paints, the group operates around the world through its subsidiaries Berger International Limited, Apco Coatings, SCIB Paints and Taubmans. Forbes Global magazine USA ranked Asian Paints among the 200 Best Small Companies in the World for 2002 and 2003 and presented the 'Best under a Billion' award, to the company. Asian Paints is the only paint company in the world to receive this recognition. Forbes has also ranked Asian Paints among the Best under a Billion companies in Asia In 2005, 06 and 07, The company has come a long way since its small beginnings in 1942. Four friends who were willing to take on the world's biggest, most famous paint companies operating in India at that time set it up as a partnership firm. Over the course of 25 years Asian Paints became a corporate force and India's leading paints company. Driven by its strong consumer-focus and innovative spirit, the company has been the market leader in paints since 1968. Today it is double the size of any other paint company in India. Asian Paints manufactures a wide range of paints for Decorative and Industrial use. In Decorative paints, Asian Paints is present in all the four segments v.i.z Interior Wall Finishes, Exterior Wall Finishes, Enamels and Wood Finishes. It also introduced many innovative concepts in the Indian paint industry like Colour Worlds (Dealer Tinting Systems), Home Solutions (painting solutions Service), Kids World (painting solutions for kid's room), Colour Next (Prediction of Colour Trends through in-depth research) and Royale Play Special Effect Paints, just to name a few. Asian Paints has always been ahead when it comes to providing consumer experience. It has set up a Signature Store in Mumbai & Delhi in India, where consumers are educated on colours and how it can change their homes.

23

Vertical integration has seen it diversify into products such as Phthalic Anhydride and Pentaerythritol, which are used in the paint manufacturing process. Asian Paints also operates through APPG (50:50 JV between Asian Paints and PPG Inc, USA, one of the largest automotive coatings manufacturer in the world) to service the increasing requirements of the Indian automotive coatings market. Another 50:50 JV with PPG has been proposed which will service the protective, industrial powder, industrial containers and light industrial coatings markets International Presence Today the Asian Paints group operates in 17 countries across the world. It has manufacturing facilities in each of these countries and is the largest paint company in eleven countries. The group operates in five regions across the world viz. South Asia, South East Asia, South Pacific, Middle East and Caribbean region through the five corporate brands viz. Asian Paints, Berger International, SCIB Paints, Apco Coatings and Taubmans. The Group operates as:

Asian Paints in South Asia (India, Bangladesh, Nepal and Sri Lanka) SCIB Paints in Egypt Berger in South East Asia (Singapore), Middle East (UAE, Bahrain and Oman), Caribbean (Jamaica, Barbados, Trinidad & Tobago)

Apco Coatings in South Pacific (Fiji, Tonga, Solomon Islands and Vanuatu) Taubmans in South Pacific (Fiji and Samoa)

The company has a dedicated Group R&D Centre in India and has been one of the pioneering companies in India for effectively harnessing Information Technology solutions to maximize efficiency in operations. Corporate Information VISION Asian Paints aims to become one of the top five Decorative coatings companies world-wide by leveraging its expertise in the higher growth emerging markets. Simultaneously, the

24

company intends to build long term value in the Industrial coatings business through alliances with established global partners. HISTORY TODAY

Asian Paints becomes the 10th largest decorative paint company in the world Asian Paints is more than twice the size of its nearest competitor It is one of the most admired companies in India Present in 22 countries with 27 manufacturing locations, over 2500 SKU's, Integrated SAP - ERP & i2 - SCM solution

Rated Best Employer by BT-Hewitt survey, 2000 Bluest of the blue chips by Hindu Business Line; Most admired company to work for by ET-BT survey, 2000

On the recommendations of Booz, Allen and Hamilton, Asian Paints restructured itself into Growth, Decorative and International business units and adopted SCM and ERP technology

Asian Paints aims to become the 5th largest decorative paint company in the world

1967

Asian Paints emerges as India's leading paint company ahead of any international competition.

1957 - 66

The family-owned company makes the transition to a professionally managed organisation.

British company Balmer Lawrie rejects the products of a giant British paint company in favour of Asian Paints.

Asian Paints embarks on an ambitious grassroots marketing campaign, partnering with thousands of dealers in small towns all over India.

1954

25

Asian Paints mascot, Gattu, the mischievous kid, is born.

1945

Asian Paints touches a turnover of Rs. 3,50,000, with an innovative marketing strategy "to reach consumers in the remotest corners of the country with small packs."

1st February, 1942

Armed with little knowledge and great determination, Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani and Arvind R. Vakil get together to manufacture paint in a garage on Foras Road, Bombay. They name their company 'The Asian Oil & Paint Company', a name that they picked randomly from a telephone directory.

26

BOARD OF DIRECTOR

Mr. Ashwin Choksi Mr. Ashwin Dani Non-Executive Non-Executive Vice Chairman Chairman

Mr. Abhay Vakil Director

Mr. K B S Anand Managing Director & CEO

Mr. Mahendra Choksi Director

Mr. Amar Vakil Director

Mrs. Ina Dani Director

Ms. Tarjani Vakil Chairperson of Audit Committe

Mr. Dipankar Basu Mr. Mahendra Shah Director Director

Mr. Deepak Satwalekar Director

Mr. Rajendra Shah Director

Dr. S Sivaram

Mr. S Ramadorai

27

Group Subsidaries

Apco Coatings is a subsidiary of Asian Paints in the South Pacific islands. Asian Paints operates in Australia, Fiji, Tonga, Solomon Islands and Vanuatu under the brand name of Apco Coatings.

Asian Paints Industrial Coatings Limited has been set up to cater to the powder coatings market which is one of the fastest growing segments in the industrial coatings market.

Website: www.bergeronline.com Few companies can claim of a history of consistent growth for over two and a half centuries, a presence in over 35 countries and an impact on the lives of over a billion people. Berger does that with elan. Ever since it was founded in England in 1760 by Lewis Berger, who perfected a new process for making Prussian Blue the colour of most military uniforms then, Berger has never looked back. Over the years Berger expanded its operations across oceans, to cover numerous geographies. In 1994, Berger units were brought under the single umbrella of the holding company 'Berger International Limited (BIL)' with headquarters in Singapore, which was also listed on the Singapore stock exchange. In November 2002, BIL became a part of the Asian Paints Group. Today, the name of Berger is synonymous with quality and innovation. BIL has presence across three regions viz. Middle East, Caribbean and South East Asia. In the Caribbean region, Berger is a household name. And considering that the company celebrated 50 successful years in the region recently, this is not surprising.

28

Incidentally, Berger Paints Jamaica Limited, which is listed on the Jamaican stock exchange, is amongst the top ten companies in the country in terms of market capitalisation. In the Middle East too Berger is a well-respected brand. It is the largest paint company in Bahrain. Using its state-of-the-art manufacturing facilities there, and in United Arab Emirates, it exports to countries in the Commonwealth of Independent States, Gulf Cooperation Council and Africa. In South East Asia Berger enjoys a fine reputation and has operations in Singapore and Thailand.

Website: www.scibpaints.com Founded in 1979, SCIB Paints today is a reputed name and ranks amongst the top five paint companies in Egypt. SCIB Paints became a part of the Asian Paints group in August 2002

Website: www.asianppg.com Asian PPG Industries Limited, a joint venture between Asian Paints (India) Limited and PPG Industries, Inc. USA with 50:50 equity sharing was established in March 1997 with the objective of providing solutions to the paint requirements of Indian Automobile manufacturers. The joint venture brought together two leading companies with strengths in technology, manufacturing and customer insight.

Website: www.Taubmans.com.au Taubmans Paints Fiji, the fourth largest paint company in Fiji, became a part of the Asian Paints family in September 2003. Taubmans Paints is the dominant player in the project sales segment in the country and is a leader in the neighbouring Samoa Islands. It has two manufacturing facilities, one in Suva (Fiji) and the other in Samoa.

29

Asian Paints- Today

30

PRODUCTS ITS FEATURES

INTERIOR PAINTS. EXTERIOR PAINTS. WOOD FURNISHES. WOOD & METAL FURNISHES.

31

32

Product Name: Asian Paints Apex Ultima Description:Asian Paints Apex Ultima Advanced Anti Algal Weather Proof Emulsion is a water-based,modified acrylic, anti algal, high performance exterior wall finish. It incorporates the latest state-of-the-art technology to provide long-lasting exterior performance even in the most extreme tropical conditions of india. Its unique advanced anti algal chemistry ensures that exterior walls are provided with power-packed resistance aganist algae and fungi growth. Its has very good dirt pick up resistance and dirt cleaning properties

Product Name: Asian Paints Apex Description: Apex Weatherproof Exterior Emulsion is a water-based 100% acrylic, exterior wall finish. A high performance, long-lasting exterior paint specially formulated to withstand extreme tropical conditions of high rainfall, humidity and heat, Apex provides excellent resistance against the growth of algae and fungi on the walls. It offers excellent protection against alkali and UV degradation too.

33

Product Name: Asian Paints Duracast Fine Tex Description:Asian Paints Duracast Fine Tex is a 100% acrylicd water based exterior productspecially designed as an intermediate coating.It facilitates excellent adhesion of subsequent coats .Its unique texture pattern has distinctive appeal. 1.Asian Paint Duracast Fine Tex is a rollable product which will provide opacity in single coat without any sagging 2.It serves as an undercoat which will not only provide protection but also decor for a variety of exterior & interior surfaces 3.It promotes adhesion of subsequent coats 3.It hides surface undulation & fine cracks

Product Name: Asian Paints Apex Stretch Description: Asian Paints Apex Stretch Water Repellent Exterior Paint is a 100% acrylic, water-based hi-performance long-lasting exterior wall finish. This has an in built elasticity (Stretches more than 150% of its original size) which with adequate dry film thickness can bridge hairline cracks in the plaster up to 0.5mm. Due to the compactness Apex Strtech resists penetration of water caused by wind driven rain and is coupled with excellent anti-algal and anti-fungal properties.

34

Product Name: Asian Paints Royale Play Description:Asian Paints Royale Play is a water-based special effects paint designed to create a variety of special effects on interior walls.

Product Name: Asian Paints Royale Play Dune Description: Asian Paints Royale Play Dune offers a unique collection of subtle metallic textures in Gold and Silver base, in 3 different styles for your interiors.

Product Name: Asian Paints Royale Play Safari Description:Asian Paints Royale Play Safari offers rich metallic shades with unique grain texturing that resemble islands on the wall.

35

Product Name: Asian Paints Royale Play Metallics Description: Asian Paint Royale-Metallic is a water-based special effects paint that creates a variety of effects on interior walls with a Metallic Designer look.

COMPETITORS

36

International Operations

GROWTH CYCLE OF THE COMPANY

a) 1942-1967 b) 1967-1982 c) 1982-1986 d) 1987-1997 e) 1997-1999 f) 1999-

Evolution Phase Extension and Consolidation Phase The years of Excellence Moving Closer to the Consumer Changing rules of the game The new Asian Paints

Mergers & Acquisitions

a) Buys Taubmans Paints (Fiji) In September 2003. b) Acquires ICI Indias Unit (February 2007). c) Sells stake in Australian Unit (June 2007).

d) Marketing, Sales & Distribution e) Rural Marketing Initiatives since 1960. f) Distribution is one of the main strategies of Asian Paints.
37

g) Advertising & Promotional Expenditure started in 1980s. h) Advertising Methods- Radio, TVCs, Print, Internet, i) OOH, POP, Retail Outlets, Seminars, Workshops. j) Advertisements k) Promotional Expenditure grew from 15% in 2003 to 21% in 2008.

38

39

SUPPLY CHAIN MANAGEMENT Supply Chain Management to meet changing demands.

40

Market Share

41

Profit after tax

400 350 300 250 200 150 100 50 0

Profit After Tax (Rs. In crores)

269.9 173.8 187.8

376.6

147.6

Profit After Tax (Rs. In crores)

2003-04 2004-05 2005-06 2006-07 2007-08

Earnings Per Share

Return On Capital Employed

42

43

Key Strategies From Consumer goods to FMCG The Birth of Gattu Paints were usually considered to be a low involvement product. In earlier times, the decision of the brand was taken by the builder/contractor and the home owners are not involved much in the process. Asian Paints realized the need for brand building even during sixties. But at that point of time, the company had a wide range of brands/subbrands. The focus of the company was on product innovation and service network and managing quality proposition. The brand focused on mass and rural market. Asian Paints had a mascot called Gattu who was created by the celebrated cartoonist R K Laskhman. These efforts made the brand a leader during the late sixties. Celebrate with Asian Paints Although volume justified the leadership position, share of mind for the brand was very low. That was the result of the mass segmentation adopted by the brand. Rightly so because the industry was driven by channel driven promotions, building a brand was very difficult. During 1983, the company tried to reposition the brand as a premium brand. The corporate campaign Spectrum of Excellence was aimed to position them as a leader in the industry. But this campaign failed to inspire any interest in the consumers. Asian Paints undertook a consumer research aimed at understanding the perception of consumers about the product category. As per research, consumers felt that paints could change the mood of the space and it was a sign of festival and plenitude. It could make a gloomy place bright and pleasant. From this insight came the campaign of Asian Paints associating itself with festivals as customers tend to repaint their houses on the occasion of festivities. This resulted in the birth of the campaign Celebrate with Asian Paints. The campaigns were carefully crafted and there were different campaign for different regions. These campaigns effectively enhanced the brand equity of Asian Paints. Reinvention During the late nineties the brand had to be reinvented because of increase in competition during festive season and also preference to other products during festival season. The choice of color became a high involvement decision. The company went in a for a brand overhaul.

44

The logo was changed to a contemporary upmarket one designed by Enterprise IG based in Singapore. The logo/design was to convey self expression, sophistication and technology. Thus came the birth of a wonderful positioning strategy created by O&M. The insight was that the brand is about people and homes and homes reflect the people living in it. Hence Har Ghar Kuch Kehta Hai translated to Every Home has a story to tell. Their website is plays a key role in promotions. The famous hindi film actor Saif Ali Khan is the brand ambassador for their premium brand Royale.

45

Advertisements of Asian Paints Asian Paints- On the prowl It would be difficult for you to miss the paint ads on Television. They are all over the place. No genre of channels are left untapped, be it sports, news, GECs, or even Cartoon network or regional channels. Two Indian paint giants, Asian paints and Kansai Nerolac Paints are looking for one upmanship in this festival sector. No one wants to be left behind in the endeavour to increase the market share and imprint the brand awareness. This is more true than ever for these two companies with the global paint giant, Sherwin-Williams entering India. They have bought Nitco Paints in 2007 and are waiting for the opportune moment to start aggressive marketing campaigns. They have adopted the inorganic growth path to give them a firm footing from which to start attacking the Indian giants. Asian paints have 3 new ads currently broadcasted. First is the ultra sophisticated and fabulously made Royale Teflon ad with Bollywood superstar Saif Ali Khan. It wouldnt be an over praise or exaggeration if it is said to be one of the most well executed ads in India. Contract Advertising should be duly credited for this fabulous work. Second is the Apex Ultima ad and third, the Tractor Emulsion ad. The tractor emulsion competes on price. The ad says sirf dikhne mein mehenga hai (only expensive in looks). Both the ads have high recall value. Asian Paints has unveiled its new brand identity and logo which reflect a more meaningful and personalised engagement with the increasing number of interior dcor consumers in the home, retail and commercial segments. Asian Paints is now a complete dcor and design solutions company, having also launched the first branded home painting service in the world under the brand name Asian Paints Home Solutions and the colour inspiration concept store. The new identity is expected to be rolled out over the next month at all the 5,277 critical retailer stores followed by the rest of the network. The change was inspired by research insights that showed that: Upward mobility of the urban middle class has been rising quite rapidly over the past several years which has resulted in a higher involvement and willingness to invest in home aesthetics.
46

The emerging professionals group consisting of double-income professionals or younger influencers such as teenagers/young adults prefer design and dcor companies that assist the makeover process through color guidance, paint process guidance and related services. The home makeover process that includes tiling, upholstery, furniture, etc., cuts out a significant portion of the home owners budget. Hence, the paint category has immense potential to use color in an innovative and creative manner to provide more design and decor solutions than ever before.

47

48

GOVERNMENT POLICY

Accounting Policy

Year : Mar '12

Basis of preparation of financial statements

(a) Basis of Accounting: The financial statements have been prepared in accordance with Generally Accepted Accounting Principles (GAAP) in India and presented under the historical cost convention on accrual basis of accounting to comply with the accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 and with the relevant provisions of the Companies Act, 1956.

(b) Use of Estimates: The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of income and expenses during the period.

(c) Presentation and disclosures in financial statements: For the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act, 1956, is applicable to the Company, for presentation and disclosures in financial statements. The Company has reclassified the previous year''s figures in accordance with the revised Schedule VI as applicable in the current year.

Tangible and Intangible Assets

49

(a) Tangible Fixed Assets Tangible fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation and accumulated impairment. The cost of fixed assets includes taxes (other than those subsequently recoverable from tax authorities), duties, freight and other directly attributable costs related to the acquisition or construction of the respective assets. Expenses directly attributable to new manufacturing facility during its construction period are capitalized. Know-how related to plans, designs and drawings of buildings or plant and machinery is capitalized under relevant asset heads. Profit or Loss on disposal of tangible assets is recognised in the Statement of Profit and Loss.

(b) Intangible Assets Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any. Profit or Loss on disposal of intangible assets is recognised in the Statement of Profit and Loss.

(c) Depreciation and Amortisation: Depreciation on all fixed assets is provided under Straight Line Method. The rates of depreciation prescribed in Schedule XIV to the Companies Act, 1956 are considered as the minimum rates. If the management''s estimate of the useful life of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid schedule, depreciation is provided at a higher rate based on the management''s estimate of the useful life/remaining useful life. Pursuant to this policy, depreciation on following assets have been provided at rates which are higher than the corresponding rates prescribed in Schedule XIV. Information Technology Assets : 4 years Scientific Research equipment : 8 years Furniture and Fixtures : 8 years Office equipment and Vehicles : 5 years Godowns, Office and Roads situated within factory premises : 30 years For Phthalic Anhydride and Pentaerythritol plants, depreciation is provided on all eligible plant and machinery at rates applicable for continuous process plants and for other plant and equipment depreciation is provided on triple shift basis.
50

Depreciation on tinting systems except computers leased to dealers, is provided under Straight Line Method over the estimated useful life of nine years as per technical evaluation. Depreciation on computers given on lease is provided under straight line method and at rates specified under Schedule XIV to the Companies Act, 1956. Assets costing less than Rs 5,000/- are fully charged to the Statement of Profit and Loss in the year of acquisition. Leasehold land and leasehold improvements are amortised over the primary period of lease. Purchase cost, user license fees and consultancy fees for major software are amortised over a period of four years. Acquired Trade mark is amortised over a period of five years.

(d) Impairment At Balance Sheet date, an assessment is done to determine whether there is any indication of impairment in the carrying amount of the Company''s assets. If any such indication exists, the asset''s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. An assessment is also done at each Balance Sheet date whether there is any indication that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased. If any such indication exists, the asset''s recoverable amount is estimated. The carrying amount of the fixed asset is increased to the revised estimate of its recoverable amount but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss is recognised in the statement of Profit and Loss for the year. After recognition of impairment loss or reversal of impairment loss as applicable, the depreciation charge for the fixed asset is adjusted in future periods to allocate the asset''s revised carrying amount, less its residual value (if any), on straight line basis over its remaining useful life.

Revenue Recognition

51

Revenue from sale of goods is recognised on transfer of all significant risks and rewards of ownership to the buyer. The amount recognised as sale is exclusive of sales tax/VAT and are net of returns. Sales are stated gross of excise duty as well as net of excise duty; excise duty being the amount included in the amount of gross turnover. The excise duty related to the difference between the closing stock and opening stock is recognised separately as part of changes in inventories of finished goods, work in progress and stock-in-trade. Revenue from service is recognised on rendering of services tocustomers. Processing income is recognised on accrual basis as per contractual arrangements. Dividend income is recognised when the right to receive payment is established. Interest income is recognised on the time proportion basis.

Lease Accounting

Assets taken on operating lease: Lease rentals on assets taken on operating lease are recognised as expense in the Statement of Profit and Loss on an accrual basis over the lease term.

Assets given on operating lease: The Company has provided tinting systems to dealers on an operating lease basis. Lease rentals are accounted on accrual basis in accordance with the respective lease agreements.

Inventory

(a) Raw materials, work-in-progress, finished goods, packing materials, stores, spares, components; consumables and stock-in-trade are carried at the lower of cost and net realisable value. The comparison of cost and net realisable value is made on an item-by-item basis. Damaged, unserviceable and inert stocks are suitably written down/provided for.

(b) In determining cost of raw materials, packing materials, stock-in-trade, stores, components, spares and consumables, weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.

52

(c) Cost of finished goods and work-in-progress includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their present location and condition. Fixed production overheads are allocated on the basis of normal capacity of production facilities.

Investments Non-current investments are carried at cost. Provision for diminution in the value of noncurrent investments is made only if such a decline is other than temporary in the opinion of the management. Current investments are carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss. Profit or loss on sale of investments is determined on a first-in-first-out (FIFO) basis.

Transactions in Foreign Currency

(a) Initial recognition: Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction.

(b) Measurement of foreign currency items at the Balance Sheet date: Foreign currency monetary items of the Company are restated at the closing exchange rates. Non-monetary items are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising out of these translations are charged to the Statement of Profit and Loss.

(c) Forward exchange contracts: The premium or discount arising at the inception of forward exchange contract is amortized and recognised as an expense/income over the life of the contract. Exchange differences on such contracts are recognized in the Statement of Profit and Loss in the period in which the exchange rates change. Any Profit or Loss arising on cancellation or renewal of such forward exchange contract is also recognised as income or expense for the period.
53

Trade receivables Trade receivables are stated after writing off debts considered as bad. Adequate provision is made for debts considered doubtful. Discounts due, yet to be quantified at the customer level are included under the head of provision for expenses in Other Current Liabilities.

Employee Benefits

Short Term Employee Benefits: All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognised in the period in which the employee renders the related service. The Company recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.

Post-employment benefits: (a) Defined contribution plans Defined contribution plans are Employee State Insurance scheme and Government administered Pension Fund scheme for all employees and Superannuation scheme for eligible employees. The Company''s contribution to defined contribution plans are recognised in the Statement of Profit and Loss in the financial year to which they relate.

(b) Defined benefit plans

(i) Provident Fund scheme The Company makes specified monthly contributions towards Employee Provident Fund scheme to a separate trust administered by the Company. The minimum interest payable by the trust to the beneficiaries is being notified by the Government every year. The Company has an obligation to make good the shortfall, if any, between the return on investments of the trust and the notified interest rate.

(ii) Gratuity scheme The Company operates a defined benefit gratuity plan for employees. The Company contributes to a separate entity (a fund), towards meeting the Gratuity obligation.
54

(iii) Pension scheme The Company operates a defined benefit pension plan for certain specified employees and is payable upon the employee satisfying certain conditions, as approved by the Board of Directors. The Company presents this liability as current and non-current in the balance sheet as per actuarial valuations and certificate issued by the independent actuary.

(iv) Post Retirement Medical benefit plan The Company operates a defined post retirement medical benefit plan for certain specified employees and is payable upon the employee satisfying certain conditions. The cost of providing defined benefits is determined using the Projected Unit Credit method with actuarial valuations being carried out at each Balance Sheet date. Past service cost is recognized immediately to the extent that the benefits are already vested, else is amortised on a straight-line basis over the average period until the amended benefits become vested. The defined benefit obligations recognised in the Balance sheet represent the present value of the defined benefit obligations as adjusted for unrecognised actuarial gains and losses and unrecognized past service costs, and as reduced by the fair value of plan assets, if applicable. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognised representing the unrecognised past service cost plus the present value of available refunds and reductions in future contributions to the plan. The Company presents the above liabilities as current and non-current in the balance sheet as per actuarial valuations and certificate issued by the independent actuary; however, the entire liability towards gratuity is considered as current as the Company will contribute this amount to the gratuity fund within the next 12 months.

C. Other long-term employee benefits Entitlements to annual leave and sick leave are recognised when they accrue to employees. Sick leave can only be availed while annual leave can either be availed or encashed subject to a restriction on the maximum number of accumulation of leave. The Company determines the liability for such accumulated leaves using the Projected Accrued Benefit method with actuarial valuations being carried out at each

55

Balance Sheet date. The Company presents this liability as current and non-current in the Balance Sheet as per actuarial valuations and certificate issued by the independent actuary.

Research and Development (a) Capital expenditure is shown separately under respective heads of fixed assets. (b) Revenue expenses including depreciation are charged to statement of Profit and Loss under the respective heads of expenses.

Provision for Taxation Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each Balance Sheet date to reassess realisation.

Provisions and Contingencies The Company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.

56

Earnings Per Share The Basic and Diluted Earnings Per Share (EPS) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.

Proposed Dividend Dividend recommended by the Board of directors is provided for in the accounts, pending approval at the Annual General Meeting.

Borrowing Cost Borrowing cost includes Interest, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised. All other borrowing costs are expensed in the period they occur.

Measurement of EBITDA The Company has elected to present earnings before interest (finance cost), tax, depreciation and amortisation (EBITDA) as a separate line item on the face of the Statement of Profit and Loss for the year. The Company measures EBITDA on the basis of profit/(loss) from continuing operations.

c) Terms/rights attached to Equity Shares The Company has only one class of shares referred to as equity shares having a par value of Rs 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. Payment of dividend is also made in foreign currency to shareholders outside India. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in the case of interim dividend. The Board of Directors at its meeting held on 21st October, 2011 declared an interim dividend of Rs 9.50 (Rupees nine and paise fifty only) per equity share of Rs 10/- each. A final dividend of Rs 30.50(Rupees thirty and paise fifty only) per share has been recommended by
57

the Board of Directors at its meeting held on 8th May, 2012, subject to the approval by the shareholders at the ensuing Annual General Meeting. If approved, the total dividend (interim and final dividend) for the financial year 2011-12 will be Rs 40.00 per equity share; Rs 32/per equity share was paid as dividend for the previous year. The total dividend appropriation for the year ended 31st March, 2012 amounted to Rs 445.93 crores including corporate dividend tax of Rs 62.24 crores. (Previous year Rs 357.05 crores including corporate dividend tax of Rs 50.11 crores). As per the Companies Act, 1956, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in the event of liquidation of the Company. However no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

ACHIEVEMENTS AND AWARDS & RECOGNITION

Asian Paints has been included in the Forbes magazine's - Asia's Fab 50 List of companies once again. This is the second time that Asian Paints has been included in the coveted list.

In Feb 2012, Asian Paints wins the Asian Centre for Corporate Governance & Sustainability awards for the BEST GOVERNED COMPANY in 2011

Asian Paints included in Asia's Fab 50 List by Forbes Asia Magazine (Sept 2011 Issue)
58

Asian Paints ranked 13th amongst the top paint companies in the world by Coatings World - Top Companies Report 2012 (July 2012 Issue)

Mr. P M Murty, MD & CEO, Asian Paints conferred upon the 'CEO of the Year' award by Business Standard, one of India's leading business daily (March 2011)

Asian Paints receives the Best Audit Committee Award from the Asian Centre for Corporate Governance & Sustainability (Feb 2011)

Awarded the "Sword of Honour" by the British Safety Council for all the paint plants in India. This award is considered as the pinnacle of achievement in safety across the world.

Forbes Global magazine, USA ranked Asian Paints amongst the 200 'Best Small Companies of the world' in 2002 and 2003 and amongst the top 200 'Under a Billion Firms' of Asia in 2005.

The Asset - one of Asia's leading financial magazine ranked Asian Paints amongst the leading Indian companies in Corporate Governance in 2002 and 2005.

Received the Ernst & Young "Entrepreneur of the Year - Manufacturing" award in 2003.

59

60

1. Type of Channel Channel Response %

Construction material builders hardware Others

60 30 60 0

40 20 40 0

40 35 30 25 20 15 10 5 0 Construction material builders hardware Others

InterpretationThrough the above diagram we can know that out of 150 outlets how many outlets are construction, builders and hardware outlets. Thus we can conclude that 40% outlets were hardware, 20% were builders,40% were construction material outlets.

2. Type of Outlet
61

Outlets

Response

Percentage

NAROLAC Asian Paints Both Asian Paints and Nerolac Paints OTHERS

30 30 30

20 20 20

60

40

NAROLAC

Asian Paints

Both Asian Paints and Asian Paints

OTHERS

20% 40% 20%

20%

62

4. Level of satisfaction on Communication From the Company

Level of satisfaction

Responses

Percentage

Highly satisfied Quite satisfied Neither satisfied nor dissatisfied Quite dissatisfied Highly dissatisfied

18 57 24 39 12

12 38 16 26 8

InterpretationThrough the above diagram we can know the level of satisfaction on communication from the company. Out of 150 outlets,18 are highly satisfied,57 are quite satisfied,24 are neither satisfied nor dissatisfied,39 are quite dissatisfied and 12 are highly dissatisfied

63

5. What is done if a brand which preferred is not delivered properly? outcomes Responses Percentage

Go for other brand Call to distributer Call to companys sales person Stop selling that brand Other outcomes

96 0 39 15 0

64 0 26 10 0

InterpretationThrough the above diagram we can know what the retailers do if a brand they prefer is not deliver to them. Out of 150 outlets, 96 of them go for other brands, 39 of them call to the company`s sales person and 15 of them stop selling that brand.

64

6.Promotions that affect the brand mostly

promotions

Responses

Percentage

scheme Case refund Price pack Home Painting Guide Any others

63 21 12 54 0

42 14 8 36 0

70 60 50 40 30 20 10 0 scheme Case refund Price pack Home Painting Guide Any others

Interpretation:Through the above diagram we can know the promotion that affect brand mostly. Out of 150 respondents 63 replied schemes, 21 case refund,12 price pack and 54 under crown scheme.

65

7. Effect on sale of ASIAN PAINTS(in festive season).

Effect

Response

Percentage

Increase Decrease No effect Cant say

21 18 66 45

14 12 44 30

InterpretationThrough the above diagram we can know the effect on sales in the occasions of festive season( peak seasons). Out of 150 responses 21 said that the sales increase, 18 said that the sales decrease, 66 said that there is no effect on sales on festive and 45 did not answer.

66

8.Effect

on

sale

of

ASIANPAINTS.

(In non festive season)

Effect

Response

Percentage

Increase Decrease No effect Cant say

42 15 69 24

28 10 46 16

InterpretationThrough the above diagram we can know the effect on sales in the occasions of non festive . Out of 150 respondents 42 said that the sales increase, 15 said that the sales decrease, 69 said that there is no effect on sales on non festive seasons and 24 did not answer.

67

Findings 1. It is felt that outlet owner are more concern about schemes like offers on cases, and promotional schemes etc and nerolac is providing them better schemes than asian paints. 2. It is felt that distributor is not doing his work honestly, he is not sending route in the market properly. When the salespersons generate orders with retailer, due to problem like salesman is on leave, vehicle is not available etc they delay the order and retailer cancel the order with the distributer that affects the sales volume. 3. Distributer is more concern about Wholesaler rather than Retailer.

4. The distributor in its area is facilitating sales by establishing monopoly of offers and schemes that do not reach to the outlet. 5. Due to infiltration, difference in the rates for the shopkeepers has been perceived as a major problem in the market. 6. Distributor rarely keeps any interest to work and communicate with the customer which results in of the companys sales as well as image are getting adversely affected.

7. It has been found that the shopkeepers has strongly responded to the option of switching to the another brand, when it has been inquired that what will they do in order to continue trading at the time when their preferred brand is not been delivered properly

8. The shopkeepers have nodded to the view that schemes offered to them as per the policies of the company plays a significant role in increasing profitability. As per the notes taken apart from the data in the questionnaire it has been discovered that nerolac offers more schemes to the shopkeepers who are vindictive for the company.

68

9.. Some outlets are maintaining old price strips and also these are not easily visible to the customer.

10. I found that some retailer were not satisfied with our service, for that reason they stopped to sell our product and started to sell nerolac product.

11. I found that nerolac is doing aggressive advertisement in comparison with asian paints, and investing aggressively on activation like hording, glow sign board, also in terms of providing good service and free advertising equipment to the retailer.

69

70

Company should convince retailers to have promotional tools decorating with Asian Paints products and should tell them why these elements are important and how company as well as Retailers is getting benefit of using these activation elements. Company should focus more and more on builders because most of the builders dont have promotional tools of the company and overall average score of these is very less.

Company should reframe the Flange to an attractive and big size because the current look and size of Flange is not attractive and fail to draw attention of the population.

Overall service should be improved because many of the retailers are not satisfied with company service.

Company must provide free promotional equipment to the outlet where needed and also company should work out on the complain of Retailers.

The Company should measure Retailers satisfaction regularly and should maintain proper communication with them.

Company can increase the sales when it considering more on retailers, their suggestions or complaints about service or product so that necessary action can be taken.

Review meeting should be often held so that the working pattern of the executives can be checked and improved if needed.

Company representatives should visit retailers and should make a long-term relationship with retailer so that they can push the product. Distributers should be convinced to pass the incentives to the retailers so that they are motivated to promote this brand.

71

Increase the number of dealers and retailers as this will help in making high sales volume.

In Season Company should give more discount & schemes to retailers so that they sell more our product.

72

73

 No other company is planning to increase its capacity in the near future; this will give Asian Paints a competitive advantage in terms of pricing. Growth rate of two important activities i.e. repaints activity and construction activity will have direct impact on the volume of demand, thus affecting its profitability and margins. Rural markets have devloping potential. Companies that can establish a dealer network in these markets are likely to get the edge in positing above par growth rates over the next few years. As setting up distribution infrastructure is expensive, it would mean that the competition is limited to the top players. Due to substantial hike in raw material prices, Asian Paints has raised the prices of solvent based paints, thus demand would be affected to some extent.

74

75

I have used following resources to prepare this study report to make it more accurate and confidential-

Serial no

Source of information

Name

Designation

Organizations/writers name

1.

Websites

www.asianpaints.com

2.

Guidance personalities

Mr. Vivekanand pandey

Faculty

Sherwood college of management

Mr.Deepak Samal Senior leader team Asian paints pvt. ltd

3.

Books

Marketing Research Marketing Management

C.C.Berry Philip Kotler

76

77

Appendix- A (sample questionnaire) I am Buddhi Ballabh a student of Sherwood College of management undertaking a summer project on the topic Analysis of Horizontal Expansion Strategy of Asian Paints Pvt Ltd. I would like to see your views and opinions on the same. Could you kindly spend a few minutes helping me complete this questionnaire?

Personal information Name:Area:Mobile no.:(1) What Type of Channel do you hold? a) construction material c) builder (2) What Type of outlet are you in? a) Nerolac Exclusive c) Never sell oil and apints (3) What is the promotional equipment you are using? a) Glow shines board c) Own yourself hoardings e) Both (A & B). (4) Kindly rate the level of satisfaction on Communication from the company a) Highly satisfied c) Neither satisfied nor dissatisfied e) Highly dissatisfied b) Quite satisfied d) Quite dissatisfied b) Hoardings d) Banner b) Asian Paints Exclusive d) Both a & b b) hardware d)Other,Please specify .

5) If a brand which you prefer is not delivered to you properly, then what do you do?
78

a) Go for other brand c) Call to companys sales person

b) Call to distributer d) Stop selling that brand

e)Other actions, please specify __________________________________________.

(6) Which of the following promotions affect the sale mostly? a) Scheme c) Price pack b) Case refund d)Home Painting guide

j)Any Other, Please Specify ____________________________________________. (7) I. Is there any effect on sale of ASIAN PAINTS in festive season? a) Increase c) No effect b) Decrease d) Cant say

(8) Is there any effect on sale of ASIAN PAINTS in non-festive season? a) Increase c) No effect b) Decrease d) Cant say

79