feasibility analysis for setting up a new brand of paint in the Indian decorative paint industry. market research to analyse consumer preferences about paint products.

1. Feasibility Analysis to
launch a New Paint Brand
WASIM AKRAM

2. Introduction:
India is the fastest growing paint market in Asia Pacific
• India’s paint industry size is estimated to be €3.5bn.
• The following paints are available in the market:







Acoustic Paints
Resin Paints (Alkyd)
Dripless Paints
Latex Paints
Single Coated Paints
Primary Rubber based Paints
Texture oriented Paints
• The decorative paints to industrial paints ratio is 70:30 both in value and volume terms.
• Almost half of the revenues earned by the Indian paint industry are through enamels.
• The demand in the paint industry is seasonal to some extent. While the demand dips in the monsoon season, it
is the maximum in the festive season.

3. Growth:
• Market has been growing on average 15% annually during the last five years and thus it is growing 1.5-2
times faster than GDP.
• The expected CAGR is 13-15 % for the period FY13-14.
• 30% 0f the main business is comprised of new construction projects.
The paint industry growth drivers are:
• Repainting demand fuelled by the real estate boom over the past few years
• Changing consumer preferences, from pure aesthetics to value added features
• Rising demand for industrial paints
• The organized section of the industry is growing faster than the organized sector.

4. Decorative Paints:
The key drivers of decorative paints are:
• Robust economic growth leading to higher disposable income.
• Continued growth in real state.
• Change in perception towards painting.
• Launch of affordable houses.
• Shift in demographic profile resulting in increase in number of households.
• Various innovations of market players.

5. Industrial Paints:
The Industrial Paint Segment is dominated by organized sector.
• Automotive paint form approx. 45 % of industrial paints.
• Performance coating forms approx. 25 % of industrial paints.
• Consumer durables and auto ancillary products use power coating.
• Coil coating are used in industrial constructions, electric equipment and interiors of trains & buses.

6. Major Players
The unorganized sector with about 2,000 units having small and medium sized manufacturing plants controls
around 35 % of the paint market.
Out of the rest, most is controlled by the top 5 companies and they are:
• Asian Paints (Overall market leader due to leadership in decorative segment)
• Kansai Nerolac (Market leader in automobile industrial paint segment, also into decorative segment)
• Berger Paints (Major revenue from decorative segment, also into industrial paints)
• Akzo Nobel (Major revenue from decorative segment, also into automotive paints)
• Shalimar Paints (Mainly into decorative and non-automobile industrial coatings)

7. Opportunities:
Indian GDP is expected to grow 5.5-7.0 % annually the next few years.
Because of the high correlation between GDP and paint volume growth, decorative paints are expected to grow
on the back of strong economic momentum.
• Real estate boom in the past few years will lead to strong demand for repainting.
• At the moment the per capita consumption of paint in India is merely around 1 kg (20 kg in the developed
countries, global average 15 kg) so the absolute consumption of paint in India is expected to rise.
• The paint demand in tier II and tier III cities is growing at a faster rate than the tier I cities.
• Expected decrease in the use of distemper in future.

8. Key Challenges:
All the manufacturers have their own manufacturing units to maintain the quality.
• Paints have high volume-to-value ratio and require manufacturing near the market.
• Entry barrier is very high because the top five players have maintained market share despite of entry of new
foreign players.
• Outsourcing is limited and only for the low-end paints.
• The competition in the paint industry is becoming more intense with the entry of new foreign players like
Jotun, Nippon & Sherwin Williams.
• Crude prices have been in an upswing and this is raising the cost burden of the industry players.

9. Mechanism of Paints
Major Inputs
Raw Materials
(56%)
Selling &
Administration
expenses
(23%)
Employee Cost
(12%)
Major
Products
Decorative
Products: Paint
Emulsions, Enamels,
Distempers, Wood
Finishes, Metal
Finishes etc.
Industrial Products:
Powder Coating,
Floor Coating,
Surface Coating etc.
End User
Households,
Construction
firms (70%)
Automobiles
Consumer Goods
Marine Industry
(30%)

10. Paint Industry Segmentation
INDIAN PAINT
INDUSTRY
DECORATIVE
SEGMENT (70%)
PREMIUM
RANGE
(HIGH END
ACRELYC
EMULSION)
METROS
AND
LARGE
CITIES
MEDIUM
RANGE
(ENAMEL
PAINTS)
SMALL
CITIES
INDUSTRIAL
SEGMENT (30%)
DISTEMPER
RANGE
(LOW END
PAINTS)
SUB URBAN
AND
RURAL
AREAS
AUTOMOTI
VE SECTOR
(2/3 rd
SHARE)
CONSUMER
DURABLES,
MARINE
PAINTS,
OTHER OEMs

11. Market Segmentation:
Decorative: Major segments in decorative include exterior wall paints, interior wall paints, wood finishes and
enamel and ancillary products such as primers, putties etc.
 Decorative paints account for over 70% of the overall paint market in India.
 Demand for decorative paints arises from household painting, architectural and other display purposes.
 Demand in the festive season (September-December) is significant, as compared to other periods.

12. Market Segmentation:
Industrial: Three main segments of the industrial sector include automotive coatings, powder coatings and
protective coatings.
 User industries for industrial paints include automobiles engineering and consumer durables.
 The industrial paints segment is far more technology intensive than the decorative segment.

13. Major Players in Indian Paint Industry:

14. Types of Decorative Paints
Decorative Paints
Interior Paints
Wall
-Emulsion
-Distemper
Wallpaper
Metal
-Enamel
Metal Gloss
Wood
Wood Finishes
Exterior Paints
Emulsion
Textured
Cement
paints
Distemper
Enamel

15. Interior Paints (Emulsion)
Dulux Velvet Touch
Asian Paints Royale
luxury Emulsion
Silk

16. Interior Paints (Distemper)
Tractor Distemper
Beauty Distemper
Bison Distemper

17. Interior Paints Metal & Wood (Enamel)
Synthetic Enamel
Apcolite Premium Gloss
Enamel
Gloss Premium Enamel
Luxol

18. Exterior Paints
Apex Ultima
Tartaruga (Textured)
Weather Shield MAX
Snowcem Plus (Cement)

19. Price of Products (Interior)
Segment
Walls (Emulsion)
Walls (Emulsion)
Walls (Emulsion)
Walls (Emulsion)
Walls (Emulsion)
Walls (Emulsion)
Walls (Distemper)
Product
Royal
Velvet Touch
Impression
Silk
Premium
Super Smooth
Tractor
Walls (Distemper)
Bison
Metal & Woods
Dulax Gloss
Premium Enamel
Synthetic Enamel Rs. 200-270
Luxol
Rs. 200-270
Apcolite Premium Rs. 200-270
Gloss Enamel
Metal & Woods
Metal & Woods
Metal & Woods
Price (per lt.)
Rs. 360-450
Rs. 360-450
Rs. 360-450
Rs. 360-450
Rs. 250-280
Rs. 250-280
Rs. 60-80 (per
lt.)
Rs. 65-80(per
lt.)
Rs. 200-230
Company
Asian Paints
ICI Dulux
Nerolac Paints
Berger Paints
Asian Paints
ICI Dulax
Asian Paints
Berger Paints
ICI Dulux
Nerolac Paints
Berger Paints
Asian Paints

20. Price of Products (Exterior)
Segment
Product
Price (per lt.)
Company
Walls (Emulsion)
Apex Ultima
Rs. 350-400
Asian Paints
Walls (Emulsion)
Dulux weather
Shield Max
Rs. 350-400
ICI Dulux
Walls (Emulsion)
Apex
Rs. 250-300
Asian Paints
Walls (Emulsion)
Dulux weather
Shield
Rs. 250-300
ICI Dulux
Rs. 250-300
Berger Paints
Walls (Emulsion) Weather coat All
Guard

21. Sales of Companies
Net Sales(FY2013) in Cr.
7000
6000
Quantity
5000
4000
3000
2000
1000
0
Asian Paints
Net Sales(FY2013) in Cr.
Kansai Nerolac
Berger Paints
ICI Paints
Shalimar
Paints
6607.2
2266.2
2096.2
1087.6
404.4

22. Market Shares of Companies (Contd.)
32%
35%
Asian Paints
Kansai Nerolac
Berger Paints
5%
11%
6%
11%
ICI Paints
Others
Unorganised

23. Distribution Process of Paints
Paint Manufactures
Regional Warehouses
Company Dealer
Customers

24. Factors affecting Paint Industry
•
•
•
•
•
•
Increasing level of income & education
Increasing urbanization
Increasing share of organized sector
Development of the Realty, Automobile and Infrastructure sector
Availability of financing options
Increasing Penetration in the Rural Markets

25. New concepts of Paints:
• Multi colored room concept.
• Lead free color.

26. PORTER’S 5 FORCES
High raw material
prices squeezing
paint supplier's
margins
Buyers becoming
stronger
Threat of
new
entrants
Large companies
becoming larger
Paint consumer
looking to other
alternatives to paint

27. Strengths
Indian Paint Market has very strong potential in terms of market share in the organized sector
Comprehensive nation wide coverage of the market - urban, semi-urban and rural areas.
• Different segment required by different customer and industry has its own growth area and market.
• A network of 25,000 dealers spread all over the country is available.
• The pricing strategy is oriented to middle/lower end consumers
• Paint Industry is quite strong in production-marketing coordination. Their policy Of offering
tailor-made products to suit customer need has resulted in an ever growing product range.
• In-house production, no outsourcing, high reliability in suppliers, superior in quality assurance.

28. Weaknesses
• Widening product mix puts strain on production distribution, accounting and administration;
• Innovation in developing new products is inadequate;
• Ever expanding product mix throws some strain on inventory management;
• positioning for the premium brands meant for urban markets;
• Seasonal demand and hence in off seasons it can lead to cash flow problems;

29. Opportunities
• The automobile industry accounted for 50% of the industrial paint market.
• Indian is the fastest growing paint market in Asia Pacific.
• The paint industry growth drivers are:
– Repainting demand fuelled by the real estate boom over the past few years.
– Changing consumer preferences, from pure aesthetics to value added features.
– Raising demand for industrial paints.

30. Threats
• Domination of few foreign companies.
• Since both Goodlass Nerolac (43%) and Berger's (14%) have a higher market share than AP's
(14%), it is possible that in the future, they may capture the entire industrial paint market;
• Competitors have gone in for hi-tech with instacolour spot mixing. For example, J&N's
instacolour offers 626 shades;
• Automated paint blending in retail points already there. ICI's Touch Color and Berger's Color
Bank are indicative of this;
• Competition is catching up fast, hi-tech facilities gives abundant choices.

31. Statistical Analysis

34. Descriptive Analysis of the Market research Survey

40. HALF YEARLY

75. Strategies for Consumer

76. Strategies for Urban Consumer:
• Providing innovative products & painting techniques.
E.g.: Reflective paints, Day night shade change, 3D texture, Radiance, Multiple tints, reflective color.
• Online marketing & online shopping for paints & paint related products.
• Online suggestions & makeover tips.
• Providing safe, odorless, low VOC, durable paints with all weather guard & high gloss attributes.
• Use of existing supplier network.

77. Strategies for Semi Urban & Rural Consumer:
• Paints with increased spreadability, more than of normal paints.
• High washability & durability of paints.
• Main focus on distemper & enamel paints.
• Use of hub & spoke supply chain to capture semi urban & rural market.

78. BRANDING
• Name of the Brand
• Tag Line
• Add Campaign
• Brand USP
• STP:
: Roshan Paints
: “Roshan Bharat Ka Roshan Paints.”
: Celebrity endorsement with Hrithik Roshan.
: High quality innovative ‘Desi’ Brand.
 Segment: Decorative Paints
 Target : Households of Urban, Semi-Urban & Rural Areas
 Positioning : Colors of India
• The company would base its promotion & branding strategies on consumer
ethnocentrism.

79. Identification of Opportunity for Branding:
Brand
Equity
Brand Loyalty
Brand Preference
Brand position
Brand Image
Brand Personality
Brand Identity
Brand Attitudes
Brand Familiarity
Brand Associations
Brand Awareness

80. Strategies for competitors:
• Faster Service
• Better quality & packaging than others.
• Low cost solution to their clients.
• Strong relationship with customer & suppliers.
• Investmentent in R&D to create more varieties in products.
• Introducing technological innovations maintaining CSR & sustainability.

81. Product Life Cycle:
New business Ideas
Ad
campaign, awareness
drive, Celebrity
Endorsement
MR, R&D,
Preparation for
launch, publicity
Marketing
Campaign
Tie ups, CSR, Capacity
Expansion
Promo
Offers, Innovation, Reposit
Saturation:
Conglomerate
Diversification

82. Future Strategies
• Tie up with ASI for restoration & renovation works of heritage sites.
• Entry into industrial paint segment.
• Manufacturing of roof solution products.
• Damp proof wall care products.
• Production of tiles.

83. Cost:
Project cost
Amount
Land & Site Development
2.00 cr
Building
6.00 cr
Plant & Machinery
10.00cr
Misc. Fixed Assets
50 lakhs
Contingency
86.35 lkh.
Pre-Operative Cost
27 lakhs
Total
19.62 cr.

84. Sr. No.
1.
2
3
4
5
Particulars
LAND & SITE DEVELOPMENT
Land
Cost of Development
Land Development
Levelling & Fencing
Entry Points & Guard rooms
Sub Total
BUILDING
Production Room
Colour Bank
Waste Yard
Pre-Production Area
Casing Chambers
A/C Compressor Room / DG Set room
Boiler Room
Canning Facility
Can Store Room
Store / Tool Room / Canteen
Sorting Area
Packing Room
Service Room (Underground)
Corridor
Lab
Office Block
Architect Fee
Sub Total
PLANT & MACHINERY
Casing Unit
Production Unit
Canning& Other Equipment
Sub Total
MISCELLANEOUS FIXED ASSETS
Canteen Furniture
Communication system
Sub Total
PRE-OPERATIVE EXPENSES
Administrative Exp.
Professional Charges
Interest During Construction Period
Start-up Expenses
Sub Total
TOTAL
Unit
Basis
Unit cost (Rs.)
Qty.
Acres
15,00,000
Acres
Nos.
200000
15,00,000
Cost
10
10 20,00,000
2.00
1.5 cr.
30,00,000
2.00 cr.
8
1
1
1
1
Sqft.
Sqft.
Sqft.
Sqft.
Sqft.
60x18x13
40x9x12
60x40x14
40x20
12x10x10
300
300
100
50
250
0
0
0
0
0
3.46 cr.
14.4 lkh
3.01 lkh
5.33 lkh
4.00 lkh
1
Sqft.
30x18x13
200
0
14.4 lkh
1
1
1
1
1
1
1
1
3
1
Sqft.
Sqft.
Sqft.
Sqft.
Sqft.
Sqft.
Sqft.
Sqft.
Sqft.
Sqft.
%
15x12x13
60x18x13
30x18x13
15x12x13
18x12x13
12x12x13
12x9x8
108x15x13
18x15x12
30x18x13
200
250
250
250
200
200
200
50
450
450
0
0
0
0
0
0
0
0
0
0
2.5%
4.80 lkh
36.01lkh
18 lkh
6 lkh
5.73 lkh
3.86 lkh
2.93 lkh
10.8 lkh
48.69 lkh
32.41 lkh
15,00,000
6.00 cr
2.00 cr.
7.00 cr.
1.00 cr.
10.00 cr.
30.00 lkh.
20.00 lkh.
50.00 lkh.
1.58 lkh.
3.17 lkh.
19.05 lkh.
3.17 lkh.
27 lkh.
18.77 cr.

85. Particulars
Total
%
Firm
Non Firm
Total
Total Cost
Land
1.5 cr.
0
1.5 cr.
0.00
0.00
1.5 cr.
Development / Building
6.5 cr.
5
-
6.5 cr.
32.5 lkh.
6.82 cr.
10.00 cr.
5
-
10.00 cr.
50 lkh.
10.5 cr.
50 lkh.
5
-
50 lkh.
2.5 lkh.
52.5 lkh.
27.00 lkh.
5
-
27.00 lkh.
1.35 lkh.
28.35 lkh
Sub Total
86.35 lkh
22.
Plant & Machinery
Miscellaneous Fixes Assets
Pre-Operative Expenses
Total
19.62 cr.

86. Profit Calculation:
PARTICULARS
Rs.
Sales
30 cr.
Total cost
19.62 cr.
Gross Profit
10.38 Cr.
Depreciation (@5% on 18.77Cr.)
9385000
Interest (@10% on 4.62 cr.)
4620000
PBT
89795000
Tax (@ 10%)
8979500
PAT
77815500
Production capacity =3000 TPA
Avg. Selling Rate = Rs.100/Ltr.
Loan = 4.62 Cr.

87. CSR Initiatives
• For the CSR activities the company would tie up with “Aravind eye hospital” and provide them with
financial assistance and help them in setting up eye check up camps in the remote areas.
• The philosophy behind this CSR activity is that ours being a paint company which helps in decorating
and bringing colors to peoples life we should also do something for those whose life just has the shades
of black and white.

88. References
•
https://www.facebook.com/l.php?u=https%3A%2F%2Fwww.google.co.in%2Fsearch%3Fq
%3Didentification%2Bof%2Bopportunity%2Bfor%2Bbranding%26biw%3D1517%26bih%3
D692%26source%3Dlnms%26tbm%3Disch%26sa%3DX%26ei%3DjoKwUtPLGc2Ergfn9IGY
DQ%26ved%3D0CAcQ_AUoAQ&h=YAQG-l8Kd
• http://www.uniassignment.com/essay-samples/marketing/strategic-analysis-of-indianpaint-industry.php
• http://www.studymode.com/essays/Supply-Chain-Management-Paint-Industry198939.html
• https://www.google.co.in/search?q=product+life+cycle+images&tbm=isch&tbo=u&sourc
e=univ&sa=X&ei=OYOwUsXHCIi3rAfbvIDwCg&ved=0CCoQsAQ&biw=1517&bih=692&dpr
=0.9#facrc=_&imgdii=_&imgrc=8Av669ZNSqeXCM%3A%3Bza8AnRtF9uv4M%3Bhttps%253A%252F%252Ffigures.boundless.com%252F11565%252Flarge
%252Fproduct-lifecycle.png%3Bhttps%253A%252F%252Fwww.boundless.com%252Fmarketing%252Fintegr
ated-marketing-communication%252Fselecting-the-promotion-mix-for-a-particularproduct%252Fstages-in-the-product-lifecycle%252F%3B507%3B300

89. THANK
YOU… 