final presentation berger
TRANSCRIPT
Berger Paints
18%
82%
GWP contribution
Chemical
Others
[source:chemicals.org]
Sectorial information
Sectorial information
13%
87%
GDP contribution
Chemical
Others
[source:ibef.org]
Historical growth
• Rising level of income
• Consumers being more brand conscious
• Increasing urbanization
• Increasing share of organized sector
• Development of real estate
• Increasing penetration in rural areas0
5000
10000
15000
20000
25000
30000
1 2 3 4
[source:aceanalyzer.com]
Poter’s five forces
Competition
[low]
Potential Entrants
[Low]
Substitutes
[Very low]
Buyer
[Medium]
Suppliers
[Medium]
Company information
• Founded 1760 U.K and in India 1923
• Starting out as Hadfield's (India) Limited, it had just one factory in Howrah, West Bengal
• By the close of 1947, Hadfield's was acquired by British Paints (Holdings) Limited, UK and
came to be known as British Paints (India) Limited
• Head quartered in Kolkata.
• Berger Paints has come a long way since its inception in 1923.
• Lewis Berger was the founder of Berger Paints.
• 2nd largest paint company in India, next to Asian paints
• Fastest growing paint company in India.
• Its annual sales turnover is `3600 crore
National presense
Global presense
Promoters
Board of Directors
• Mr. Kuldip Singh Dhingra (Chairman)
• Mr. Gurbachan Singh Dhingra (Vice-Chairman)
• Mr. Abhijit Roy (Managing Director)
• Mr. Subir Bose (member in the Board of the Company.)
• Mr. Anil Bhalla
• Mr. Gerald Kenneth Adams
• Mr. Gurcharan Das
• Mr. Kamal Ranjan Das
• Mr. Pulak Chandan Prasad
• Mr. Srijit Dasgupta
• Mrs. Rishma Kaur
• Mr. Kanwardeep Singh Dhingra
Market share of company in India
41%
15%
10%
9%
8%
17%
Market Share of Indian Paint industry
Goodlass Nerolac Paints Ltd. Asian Paints (India) Ltd. Berger Paints (India) Ltd.ICI India (Ltd.) Shalimar Paints Ltd. Others
[2010]
Latest corporate announcements
• 30th January 2015 company announced interim dividend of 60%
• 30th December 2004 stock split from `2 to `1
• 4th November 2014, have appointed Mrs. Rishma Kaur and Mr. Kanwardip Singh Dhingra as
Directors in whole time employment
• 30th November 2014, Berger Paints India Ltd has informed BSE regarding the details of
Voting results of Postal Ballot, under Clause 35A
Exterior coating products
• Super protective 100% acrylic latex paint
specially formulated for tiles and bricks.
• protects tiles/bricks from dampness,
algae and fungi caused by lashing/heavy rain
• Premium Plus Exterior Wall Paint
• First paint in the industry to use the Silicon Technology
• Water rolls of it keeping your house 100% rain proof
• Comes with a warranty of 7years
• Withstand extreme weather conditions
• It has a unique feature called "one way barrier" which enables
the wall to breathe out moisture
• It keeps your house up to 5 degrees cooler
Emulsions
Exterior coating products
• Premium plus acrylic paint for exterior walls with its
Elastomeric property
• The paint film stretches to cover hairline cracks
• Built for high rainfall areas where water seepage
occurs through hairline cracks
• It is formulated with 100% Acrylic Elaslomeric Polymers that expand and
contract with the substrate and prevent development of hairline cracks
over a long period of time
• It reflects Visible Radiation and infrared rays
• it helps trapped water molecules to easily evaporate
• Berger's Walmasta is a-100% water based paint. Made of
suitable pigments, it is ideal for dry climates. It has higher
resistance to cracking and its matt finish makes it a less
expensive alternative to cement paint.
Emulsions
Exterior coating products
Weather coat texture- Its fine colourants and chemical inertness
guarantee longevity and fine texture. WeatherCoat Texture also
contains controlled quartz particle size distribution which
enables the paint to spread over uniformly.
Texture
Tartaruga Hi - Build Texture Coating provides a thin-layer decorative and
protective plaster coat for the interiors and exteriors of building.
Tartaruga -With a high-build acrylic formulation (200-300 microns), it
is water-resistant, includes aggregates like quartz, mica, silicon and
cobalt, as well as IN resistant inorganic pigments and other additives to
enhance its durability.
P.E.S.T.E.L
• POLITICAL FACTORS:-
– India, the largest democratic country in the world
– The political situation is more or less stable in nature
– Export oriented Economy
• ECONOMIC FACTORS:-
– Market based economy
– Second fastest growing economy in the world
– India is the third largest in term of purchasing power
– Introduction of FDI in paint sectors
• SOCIAL FACTORS:-
– India is the second largest populated economy in the world
– Rise in price of raw material
– Import of raw material
P.E.S.T.E.L
• TECHNOLOGICAL FACTORS:-
– Emerging of IT sector
– Modernization of paint like (waterproof paints, Teflon coating, creating colors shops etc.)
– Lead free paints
• ENVIRONMENTAL FACTORS:-
– Impact of volatile organic compounds (VOCs)
– Lead free paints
– Season and climate changes
• LEGAL FACTORS:-
– Pollution Control Law
– Health and Safety Law
– Environmental Law
S.W.O.T analysis
Strengths:-
• Berger Paints has excellent brand perception and brand awareness amongst its potential
customers.
• It provides with high quality products and has very high market space both in terms of
visibility and sales.
• With nearly one-fifth market share and is ranked 2nd in India.
• Its industrial and automotive coating is used by the best automobile companies like
Mercedes.
Weakness:-
• Dependence on Decorative Segment where competition is intense.
• High levels of lead found leading to negative publicity.
• Limited liquidity options.
S.W.O.T analysis
Opportunities:-
• New product launches and innovation with changing trends.
• Strong growth potential in Indian owing to urbanization.
• Business diversification.
• Product diversification.
Threats:-
• New entrants in the industry and local companies.
• Fluctuations in raw material prices.
• Stiff competition.
Segmentation, Target & Positioning
S
• Middle class and upper class segment.
T
• Home owners, professions and industry users.
P
• Fulfill your imagination of colours.
Market planning
Berger is way behind its competitor Asian paints who enjoys a share of 49% while the former
enjoys 17% which less than half of its immediate competitor.
Therefore Berger has come up with several plans to increase their market share which are as
follows:
• Increase sales network
• Boost deliveries of the fastest growing emulsions for higher profit margins
• Bought the local unit of Sherwin Williams Co., a Cleveland-based paint maker for southern
and western markets of the country
• Focusing on emulsions
• Improving supply chain in village, towns and small cities
• Adding retail outlets
• The industry is forecast to grow $12.4 billion in 2017 from $5.9 billion in 2012
• Going premium by focusing more on decorative segment and Gala
• Berger will invest `200cr in water-based plant in Hindupur in the state of Andhra Pradesh
[Source: Bloomberg interview with the managing director of Berger Abhijit Roy]
Product Life Cycle
Introduction Growth
Maturity
Decline
B.C.G Matrix
Promotion
• In-Store Displays: Point-of-Purchase, Berger paints Banners, Demonstrations of color on
wall, etc
• Contests: Dealer to dealer contest is kept to promote push strategy and best dealer gets the
reward
• Sampling: Allowing the dealer to experience the product or service by providing free samples
so as he can promote word of mouth
• Television advertisements
• The company comes out with many different sales promotion schemes on the larger packs.
Coupons and free gifts are offered on packs of more than 10 kgs
0
5
10
15
20
25
30
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Sa
les in
cro
res
Months
Paint shows maximum growth before festive seasonYEAR 2003
YEAR 2004
Consumer survey in Delhi 2012
Brands ICI Asian
Paints
Berger
Paints
Nerolac Shalimar
No Of Respondent 2 7 4 0 0
15%
54%
31%
Green Quality PaintsICI Asian Paints Berger Paints Nerolac Shalimar
Interpretation:
• In the Breathe Easy Emulsion category the maximum market
share is enjoyed by Asian Paints comprising of 54%
• Berger Paints enjoy the 2nd most market share of 31% and
• ICI enjoys the 3rd most market share 15 % .
So it can be interpreted that Asian Paints is the market leader
followed by strong competitors like Berger Paints and ICI.
[source: ccrm.in]
Growth drivers
• Increasing level of income and education – The increasing proportion of young
population along with increasing disposable incomes is leading to a change in
consumer habits.
• Educated consumers are more brand conscious and seek value in what they consume.
Thus, paint companies offering value-added features like non-toxicity, weather
protection, texture, eco-friendly production, etc. will attract more demand.
• Increasing Urbanization: Urbanization is leading to a shift from temporary houses to
permanent houses. Urban houses are well-designed in its interior as well as exterior
aspect.
• Increasing share of organized sector: Decrease in taxes on key raw materials will
improve the position of the organized players. The Organized sector is expanding its
distribution network and adopting the installation of tinting machines at retail outlets.
Growth drivers
• Development of the Real estate, Automobile and Infrastructure sector -
The growth of the paint industry is largely dependent on the development of the realty and housing
sector, as decorative segment generates about 70% of the total paint demand from this
sector. The Automobile segment generates more than two-third of the demand for Industrial
paints, and hence is the growth driver for Industrial Paints.
• The growth potential in the above 3 sectors is immense, the paint industry being dependent on
these 3 sectors is expected to grow along with them.
o Availability of financing options: Easier housing finance and auto finance is expected to favour more
people to buy houses and travel in personal vehicles.
o Increasing Penetration in the Rural Markets: Paint usage in rural areas is generally in the distemper
segment, hence dominated by the unorganized players. Demand in rural areas is dependent on
agriculture, which is dependent on the monsoons.
Comparative study of advertisements
Berger Paints :
Product Name Weather Coat All Guard Exterior Paints
Description A girl child standing in the window and experiencing the reverse effect of rain i.e water
moving up back to the sky, resembling the same in case of the exterior walls where water
will not percolate and damage the construction after the rains.
Attention Factor Slogans like “Reverse the effect of rain” and “7 years of warranty” are good for gaining the
attention of the viewers.
Memorizing Factor “Reverse the effect of rain” is said a numerous times within the add which will stay in mind
easily.
Sentimental Appeal Keeping the walls fungus free and spotless
Education Factor Presence of silicon pushes water away leaving the walls spotless, fungus free, and rain
proof
[source: youtube.com]
Comparative study of advertisements
Asian Paints :
Product Name Asian Paints Ultima
Description Features or key advantages are not shown directly to the customers but through
expressions and acts it is made understandable that year after year the exterior paint of
the house stays without losing its color and glamour, starting from the birth of the child till
marriage.
Attention Factor “7 years warranty with colour stay” this slogan which means that year after year the
conditions of the exterior walls remain unchanged is good in attracting the attention of the
viewers.
Memorizing Factor 4 to 5 times when the owner of the house tries to tell about the qualities of his son to the
different visitors, the visitors without giving attention to his son starts praising or
complementing the paint which he has used for his exterior walls.
Sentimental Appeal No such sentimental stuffs are related to this advertisement
Education Factor No such educating stuffs are related to this advertisement
[source: youtube.com]
Comparative study of advertisement
Kansai Nerolac :
Product Name Nerolac Exel Exterior Paint
Description Son was trying to take a rotten apple then mom comes up and says which is rotten from outside its
even rotten from inside, now the brand ambassador SRK comes up and says that the same is the
case with the house (directing towards their house which presents a shabby look from outside) so
put nerolac paints to keep ur house safe from outside which will automatically keep it safe from
inside, using the key words like anti germs, anti allergy and anti pollution.
Attention Factor Ati Germs
Anti Allergy
Anti Pollution
No Harmful Fumes
Memorizing Factor The comparison shown between the rotten apple and the house.
Sentimental Appeal The bollywood star Shah Rukh Khan giving promotion to any product will itself have a sentimental
appeal for a major section of the Indian population.
Education Factor Tagged as Healthy home paints (low VOC and Lead Free)
Distribution network
Manufacturing Unit Manufacturing UnitManufacturing Unit
Depot Depot Depot Depot
DealerDealer Dealer Dealer
Dealer Dealer Dealer
Depot
BERGER
Depots
Direct dealers
Retail
Wholesale
Customer
Customer
Feed back
Feed back
Feed
bac
kFe
edb
ack P
rod
uct
Pro
du
ct
[source: pirangut paint shop Nandini Hardware]
Hybrid channel
BERGER
Customer
CustomerDirect
dealer
Direct channel
Indirect
channel
[source: pirangut paint shop Nandini Hardware]
Importance of packaging in ‘berger’
• Hard core container big in size are used for domestic sale
• The color of the container should match with the color inside
• During export the paints are packaged in jars of tons and the sku containers are
travelled stand alone
• Big plastic jars are used for 30lt to 50lt and are used for toiletries in rural and semi
urban areas
• Small sku’s are sold in metal containers
• Packaging cost is more because the container must be chemical resistant
• Packaging is similar among competitors too
Branding & positioning
In 2005, Berger Paints repositioned itself on the lifestyle platform. It adopted a new branding
strategy, positioned Lewis Berger as the master brand and included the premium decorative
range under it. The strategy seems to have done wonders for the brand. Today, the
country's second-largest decorative paint player, which has a distribution network of 82
stock points and 12,000 plus retailers, has more than doubled its sales growth in the
premium water-based paint segment.
[source:timesofindia.com]
Demographic study
Emulsion- Weather coat premium plus
Texture- Tartaruga
[ source:ex-faculty Suzzeer Ahmed Sir]
Demographic survey
Emulsion- Wall masta
Texture- Weather coat texture
[source : Ex-faculty Suzzeer Ahmed Sir]
Demographic study of sale
60% of its business is generated
from Eastern India
[source : annual report of berger]
Gross profit margin
9.50%
10.00%
10.50%
11.00%
11.50%
12.00%
12.50%
1 2 3
Series1 10.62% 11.02% 12.42%
10.62%
11.02%
12.42%
Gross Profit Margin
2012
2013
2014
[source :aceanalyser.com]
Net profit margin
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
1 2 3
4.05%
6.27%6.92%
2012
2013
2014
[source :aceanalyser.com]
Direct cost
Interpretation:
It’s raw-material costs are always high since paint
industries require 300-400 raw-materials to
manufacture different kind of paints
Most of its stuffs are imported
Other costs remaining almost same throughout the
year
[source :aceanalyser.com]
0
500
1000
1500
2000
2500
Raw Materials Power & Fuel Cost Employee Cost
Mar' 14 (Rs. In cr.) 2084.7 33.61 158.74
Mar' 13 (Rs. In cr.) 1919.93 28.04 139.96
Direct cost
Indirect cost
0
100
200
300
400
500
600
700
800
Misc. Expenses Interest Depreciation
Mar' 14 (Rs. In cr.) 745.32 34.26 48.27
Mar' 13 (Rs. In cr.) 641.45 27.67 46.28
Indirect cost
[source :aceanalyser.com]
0
50
100
150
200
250
1 2 3
Series1 177.39 209.8 234.25
Fixed assets added
2012 2013 2
014
[source :aceanalyser.com]
Working capital requirement
Current Assets 1292.99
Current Liabilities 627.09
Working Capital 665.9
[source :aceanalyser.com]
Debt to equity ratio
0
50
100
150
200
250
1 2 3
Series1 177.39 209.8 234.25
Debt to equity ratio
2012 2013 2014
[source :aceanalyser.com]
Top line & bottom line
0
50
100
150
200
250
1 2 3
Series1 177.39 209.8 234.25
Top line
0
50
100
150
200
250
1 2 3
Series1 177.39 209.8 234.25
Bottom line
[source :aceanalyser.com]
Du Pont analysis
Description Mar 2014 Mar 2013 Mar 2012
PBIT / Sales 9.68 9.69 9.32
Sales / Total Assets 632.91 961.81 992.21
Return on Assets 16.75 17.45 17.91
Interest to debt 11.31 9.13 13.17
Debt to Assets 87.69 84.33 76.19
ROA (After Interest) 22.21 23.01 22.68
Assets to
Shareholders' funds1.90 1.84 1.74
ROE before Other 28.76 29.27 28.67
Other inc to
shareholders' funds2.70 3.12 3.62
ROE after Other
income31.46 32.40 32.29
Tax rate 28.52 28.43 28.52
ROE After Tax% 22.49 23.19 23.08
[source :aceanalyser.com]
Organizational structure
[source :annual report berger]
Career opportunities in berger
• Sales and Marketing- They operate in a regional and national level and are quick to respond
to the evolving and expectations of the clients, distributors and end users.
• Supply Chain Management- The smooth functioning and running of the supply chain is
essential at every point as its plays a huge role in the day to day operation of the business.
• Paint Engineering- The paint engineers not just design and select the correct paint depending
on the project, but also have to study in depth the surfaces involved, the environmental
factors involved, ease of application, levels of adherence, corrosiveness and much more, to
ensure the durability and optimization of the paint.
[source : job description in naukri.com]
Bibliography
• Chemicals.org
• Ibef.org
• Berger.com
• Annual report of berger 2013, 2014
• Timesofindia.com
• Aceanalyser.com
• Mbaskool.com
• Philip Kotler, Marketing management
• Naukri.com
• Youtube.com
• Nandini hardware Pirangut
