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ASIAN PAINTS : 100years old

Market share of 38% in decorative paints.

Market share of 33% in organised sector.

Annual sales turnover exceeds Rs.1300crs

Asian paint’s sound marketing has earned it a strong brand equity.

ASIAN PAINTS: Market Leader

Vast customer base

Wide range of products

AUTOMATED MACHINES AT DISTRIBUTORS

These machines mix paint colors and thus provide wide range of colors to the customers .

Hence, Technology played a huge role in helping Asian paints in building its brand .

A STEP AHEAD

Color differentiation feature which none of the competitors could match.

Lowest cost position DECORATIVE INDUSTRIA

LOVERALL

ASIAN PAINTS

38% 15% 33%

NEROLAC 14% 41% 18%BERGER 9% 10% 9%ICI 9% 9% 9%SHALIMAR 6% 8% 7%

ELEMENTS OF ASIAN PAINT’S DISTRIBUTION STRATEGY

Distribution was most crucial factor when AP entered paint industry.

Physical distribution and channel management was a challenge.

It was the foreign companies who dominated the distribution system through wholesale distributors.

AP’s DISTRIBUTION STRATEGY WERE AS FOLLOWS:

AP bypassed bulk buyer segment and went to individual consumers of paints.

AP focused less on urban areas and concentrated more on semi-urban and rural areas.

AP went directly to retail.

AP voted for nation-wide marketing & distribution.

THE IMPLEMENTATION PROCESS

AP Creates a Large Network of Dealers

An extensive network of dealers and a matching physical distribution infrastructure plays crucial role in the decorative paints segment.

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

AP Established a Network of Company Depots

AP established a large chain of company operated depots/stock points throughout its vast marketing territory, from where the retail dealers could conveniently pick up their requirements.

It established a network of 30 company run depots throughout the country and serviced its retailers from them.

AP creates a Marketing Organisation that Matched its Distribution IntensityEffective control of the large number of depots, each having substantial stocks of 2,000 odd distinct items necessitated a matching marketing organisation structure.

It created a very extensive structure in the consumer division to take care of the massive distribution task.

HOW AP Successfully Resolves the Cost-Service Conflict in Distribution

Effective inventory management.

A strong commitment to distribution cost

control, without compromising service level.

Effective control of credit outstanding.

IT initiatives in support of distribution cost

control.

Co-ordination & communication between

Plants, Offices & Vendors.

Effective Inventory management.

High level of service in product delivery yet inventory costs down by 45 per cent compared to the competitors.

To deliver products efficiently to customers without holding large amount of inventory.

AP’s average inventory level equals only 28 days sales, while the industry average is 51 days sales.AP’s stock of finished goods was just 7 per cent of its net sales while for the others in the industry it was nearly twice that level.

Incentive schemes to reduce inventory

A special discount of 3.5 per cent-discount for perfection in payments.

A cash discount of 5 per cent.

Control of credit outstandings

Asian Paints allowed:15-21 days credit for dealers in major towns.22-30 days credit for dealers in upcountry regions.

CO-ORDINATION & COMMUNICATION BETWEEN PLANTS,OFFICES & VENDORSEight of the company's paints plants in India, 2 chemical plants, 18 processing centres, 350 raw material and intermediate goods suppliers, 140 packing material vendors, 6 regional distribution centres, 74 depots are integrated.

SUPPLY CHAIN

800 Raw materials Suppliers300 SKU

6 Regional Offices

8 Plants 35 Branch Sales Office

15000 Dealers

IT initiatives in support of Distribution cost control

Integrated SCM Solution from i2 Technologies, and

Enterprise Resource Planning (ERP) solution from SAP.

An employee portal has also been set up.

Customer Relations Management (CRM) tools are being

used in Asian Paints Helpline and Home Solutions

Linked all sites & Depots through V-SAT technology.

Improved Processes in Distribution via Re-engineering resulted in

Reduced Finished Inventory cycle from 56 days to 30 days.

Business is currently 4 times of that before BPR.

Increase in the number of shades from 50 to 1300.

Built a competitive advantage in terms of inventory

management.

LEADERSHIP THROUGH DISTRIBUTION EXCELLENCE

THANK YOU !!