Project Report on

dealer perception towards icon paints

Dissertation Submitted To

Amity Global Business School, Banjara Hills, Hyderabad-500034.

In partial fulfillment of the degree of Master of Business Administration. by ARJUN AGARWAL EN NO- A30601911033

DECLARATION

I PRATIK AGARWAL of Amity Global Business School, Hyderabad hereby declare that this thesis entitled as DEALER

PERCEPTION TOWARDS ICON

PAINTS has been compiled by me as an individual doing towards the partial fulfillment
of MASTER IN BUSINESS ADMINISTRATION for the academic year 2011-2013. I have not submitted this report in any other university or institution as such for the award of my degree.

Place

Date:

ARJUN AGARWAL

CERTIFICATE

This is to certify that this thesis report titled DEALER

PERCEPTION

TOWARDS ICON PAINTS

is the bonafide work of Mr. ARJUN AGARWAL

who carried out the project under my supervision. Certified further, that to the best of my knowledge the work reported herein does not form part of any other thesis report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate.

Prof. Jayanti Ramesh Faculty guide

Ketan vivek Company guide

ACKNOWLEDGEMENT

I would like to express my sincere thanks to all those who gave me the opportunity to complete this thesis and for providing this necessary support to improve my practical knowledge.

I wish to express my deep sense of gratitude and indebtedness to Mr.Ketan vivek at ICON PAINTS, Hyderabad for giving an opportunity to complete my summer internship programme (SIP).

I would also like to thank my faculty guide, Prof. Jayanti Ramesh (Sr. Faculty, Amity Global Business School), for providing me with their constant support and guidance all through the SIP.

A special thanks to all the members of ICON PAINTS and employees who made the SIP a memorable learning experience.

INDEX

Chapter. No 1 Chapter I

PARTICULARS

Page NO

Introduction Objectives of the study Research methodology Limitations of the study 2 Chapter II

Review Of Literature

Chapter III

Industry Profile Company profile 4 Chapter IV

Data Analysis & Interpretation

Chapter V

Findings, Suggestions & conclusition 6 Bibliography

Annexure

INTRODUCTION
Perception The psychological processes that allow an individual to adjust his behavior is called perception .the behavior of individual is influenced by his personality ,motives and efforts the behavior and performance provides satisfaction to employees who gets stimulated to work more and develop his personality and work quality. In the case of visual perception, some people can actually see the percept shift in their mind's eye[. Others, who are not picture thinkers, may not necessarily perceive the 'shape-shifting' as their world changes. The 'simplistic' nature has been shown by experiment: an ambiguous image has multiple interpretations on the perceptual level. The question, "Is the glass half empty or half full?" serves to demonstrate the way an object can be perceived in different ways.

It is the processes by which people organize obtain meaning form the sensory they receive form the sensory stimuli they receive form the environment. It is the process by which we sense of our world. It is not foolproof. Not two people in the same situation will perceive it in exactly the same way. Have you ever been in a class where you thought the instructor was excellent, while some of your classmates thought otherwise? And whose (if either) perception was correct?

According to udai pareek and others perception can defined as the process of receiving ,selecting, ,organizing ,interpreting ,checking and reacting to sensory stimuli or data . According to Stephen P.Robbins defines perception as a process by which individuals organiese and interpret their sensory impressions in order to given meaning to their environment Fred luthans opines that perception is an important mediating cognitive process through which persons make interpretations of the stimulus or situation they are faced which.

Perception is the process through which the information form outside environment is selected , received , organized and interpreted to make it meaningful to us.

OBJECTIVES OF THE STUDY

The objectives of this survey are:

To study the investment pattern of dealer.

To study the investment pattern of dealer in Icon Paints.

To observe the extent of the market.

To recognize the target groups.

To find out which type of product and schemes is preferred by the dealers.

To study the different facilities of Paints given by different companies.

To study the risk factor involved in Paint Market.

To study which company is providing better services of Paint Industry with higher returns.

To study the behavior values and beliefs of dealer.

SCOPE OF THE STUDY

1. The study has been done for the Paint so more or less it helps in understanding the consumer preference towards the Paint market.

2. The study can help in analyzing certain weak point, improving on which a company can overcome the low sales of its Paints.

RESEARCH METHODOLOGY

Research methodology is used to search answers of the research questions. An attempt has been made to describe the nature of the people of Hyderabad city by the study of the samples. Methodology in common parlance refers to a search for knowledge. The advanced learners dictionary of current English lays down the meaning of research as a careful investigation or enquiry especially through search for new facts in any branch of knowledge. Some people consider research as a movement, movements from known to unknown. It is actually a voyage of discovery. We all posses the vital instinct of inquisitiveness for, when the unknown confront us, we wonder and our inquisitiveness makes us probe and attain full and fuller understanding of the unknown. This inquisitiveness is the mother of all the knowledge and the method, which man employs for obtaining the knowledge of whatever the unknown, can be termed as research. Methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. Learning more about the consumer and about marketing is the heart of the research methodology. The research methodology has many dimensions and research methods to constitute a part of the research methodology.

RESEARCH PROCESS Problem Formulation

Research Design

Sample Design

Data Collection Technique

Field Work

Analysis and Interpretation and Research Report In the planning of the project and survey, the entire schedule of work was divided into 13 steps which are as follows1. Defining the objectives 2. Defining the population 3. Frame the sample units 4. Data collection 5. Questionnaire 6. Methods of collecting data 7. Non-respondent classification 8. Selection of proper sample size 9. Organizing the field work

10. Execution of the project 11. Summery and analysis 12. Information gathered for the further survey 13. Preparation of the report

Let us understand all the above 13 steps in detail: 1. DEFINING THE OBJECTIVE: The main objective is to find out the dealer perception of fresher and walked out dealer from Icon Paints. This survey is conducted to depict the behavior of the dealer in making investment, especially in insurance.

2. DEFINING THE POPULATION: Population refers to the total items about which the information is desired. Here in this project I have considered finite population that is we are taking one single individual as single unit which is fixed the 100 questionnaires, each separately by the single individual.

3. FRAME THE SAMPELING UNITS: The elementary units or the group of such units may form the basis of sampling process, which are called as sampling units. A list containing all such sampling frames consists of a list of items from which the sample is to be drawn. It is often impossible to draw a sample directly from the population. In case of this project I simply located the different areas of Hyderabad and conducted a survey by taking the information in the form of questionnaire.

4. DATA COLLECTION: There are several ways of collecting the data which differ considerably in context of money, cost, time and other resources. In this project the data which was required gave details about the behavior of dealer who make investments in Paint Industry and Construction Industry, etc.

5. QUESTIONNAIRE: To develop an effective questionnaire following points should be kept in mind: a. Keep in view the problem to be studied. b. Questions should be appropriate and simple and must be constructed with a view to their forming a logical part of a well thought out tabulation plan. c. Proper sequencing of questions. d. Should be examined properly and if error found, should be removed. e. Pre-testing of questionnaire is necessary.

6. METHODS OF COLLECTING DATA: Normally there are 2 methods of collecting the data: Primary data Secondary data

In this project we require data which is necessary to obtain the secondary data. We have collected the information by directly communicating with the respondents through questionnaires.

7. NON-RESPONDENT CLASSIFICATION: It is very necessary to classify the respondents from the sample who didnt give proper reply while conducting the research. The reason for doing this is that it may create a systematic bias.

8. SELECTION OF PROPER SAMPLE SIZE: A sample design is a definite plan for obtaining a result from the given population. In this project the sample size is of 100.

9. ORGANISING THE FIELD WORK: Fieldwork is done in this project individually with no biasness. The field work comprises of filling of questionnaire by different sector individuals.

10. EXECUTION OF THE PROJECT: Proper execution of the project is important. Steps should be taken to ensure that the survey is under statistical control so that the collected information is in accordance with the pre-defined standard of accuracy.

11. SUMMARY AND ANALYSIS OF DATA: Once the data is collected the next task is to analyze it. The raw data should be classified into some purposeful usable categories. For example: tabulation, coding, etc. Analysis work, after tabulation, is generally based on the computation of various percentages, coefficients, etc. by applying various well defined statistical formulae. Here in this report it is found that the investment pattern of people in private insurance companies is not satisfactory.

12. INFORMATION GATHERED FOR FUTURE SURVEY: The information gathered for further survey is summarized as under: Very less number of Dealers is interested to invest in Icon Paints in comparison to Berger Paints Company. Very less number of dealers, in Hyderabad city, knows about Icon Paints and its working style and schemes and rewards. Maximum number of dealer expect low risk with high profits while investing in any paint related product.

13. PREPARATION OF THE REPORT: Final report is prepared according to the work done. Following points must be kept in mind in this regard: The layout Report should be concise and simple. Proper graphs and charts must be used for the explanation. Limitations in the report should be clearly mentioned.

LIMITATIONS
The respondents of the questionnaire are very busty and could not afford more time to answer. The average time to response was 5-6 minutes only.\

A limited sample size of 100 customers was considered because of time constraint. An assumption is made that the sample represents the whole population. It will not carry the total reflection of the copier market. Total sample size is comparatively less to represent the entire population.

A time period of only 45 days was allowed for the completion of this product. So considering all the consumers for the study was not possible.

The data was of primary nature. So the degree biases were relatively high as the sample was randomly selected.

Study restricted to geographical territory of Hyderabad city only.

INTRODUCTION TO PORTFOLIO MANAGEMENT

Perception:
The Meaning of Perception:

According to Stephen P.Robbins defines perception as a process by which individuals organiese and interpret their sensory impressions in order to given meaning to their environment

Perceptions vary from person to person. Different people perceive different things about the same situation. But more than that, we assign different meanings to what we perceive. And the meanings might change for a certain person. One might change one's perspective or simply make things mean something else.

A. This is a famous picture. What does it look like to you?

Some people see a young lady looking away. Others see an old lady looking down. Depending on how you look at it, part of the picture might be the young woman's nose and eyelash, or it might be a wart on the old woman's nose. What is the young woman's ear might be the old woman's eye. What is the young woman's necklace might be the old woman's mouth. The picture hasn't really changed. You just emphasize different parts of it and assign them different meaning. B. Look at these two arrows. Which horizontal line is the longest?

They are exactly the same size. However the top one looks longer than the bottom one. It is on optical illusion tricking us into assigning a different meaning to what we see. Two types of consciousness are considerable regarding perception: phenomenal (any occurrence that is observable and physical) and psychological. The difference everybody can demonstrate to him- or herself is by the simple opening and closing of his or her eyes: phenomenal consciousness is thought, on average, to be predominately absent without sight. Through the full or rich sensations present in sight, nothing by comparison is present while the eyes are closed. Using this precept, it is understood that, in the vast majority of cases, logical solutions are reached through simple human sensation. The analogy of Plato's Cave was coined to express these ideas

Perception and Reality:

In the case of visual perception, some people can actually see the percept shift in their eye. Others, who are not picture thinkers, may not necessarily perceive the 'shape-shifting' as their world changes. The 'simplistic' nature has been shown by experiment: an ambiguous image has multiple interpretations on the perceptual level.

The question, "Is the glass half empty or half full?" serves to demonstrate the way an object can be perceived in different ways. Just as one object can give rise to multiple percepts, so an object may fail to give rise to any percept at all: if the percept has no grounding in a person's experience, the person may literally not perceive it. The processes of perception routinely alter what humans see. When people view something with a preconceived concept about it, they tend to take those concepts and see them whether or not they are there. This problem stems from the fact that humans are unable to understand new information, without the inherent bias of their previous knowledge. A persons knowledge creates his or her reality as much as the truth, because the human mind can only contemplate that to which it has been exposed. When objects are viewed without understanding, the mind will try to reach for something that it already recognizes, in order to process what it is viewing. That which most closely relates to the unfamiliar from our past experiences, makes up what we see when we look at things that we dont comprehend. Businesses shape the perceptions of the public in order to get the desired behavior and purchase patterns from consumers. The best medium for businesses to affect the perceptions of the public is through marketing. To get people to buy products, marketers must create a need and manage the perception of the public so that they feel the product will fulfill that need. This is not the same thing as manipulation, where businesses create something people don't need, and marketers convince them that they do need it. Good perception management is to the benefit of the consumer, as it fulfills more of their needs, and to the benefit of the business, as it increases their revenue. The decision making process in relation to the future is an element of business that has a great effect on the company's future. If the company is too risky, this leads to underperformance, and a missed opportunity.

If the company takes too many risks, it is likely that there will be a large amount of losses. Ultimately if this amount of risk taking leads the perception of the company to exceed the boundaries of logic and fact, the companies will most likely fail based on their poor perception

Customer Loyalty Concepts:

Reviewing research, it becomes obvious that the notion of customer loyalty is blurred. At its core, customer loyalty deals with relationships between suppliers and their customers and can be distinguished from other loyalty aspects, such as brand loyalty, which refer to a more abstract attachment, such as that towards a brand. Within German customer loyalty literature, the notion of customer loyalty is even more faceted, encompasses both customer loyalty and customer retention distinguishes an active, supplier-focused component and a passive, customer focused component of customer loyalty.

In the supplier-focused perspective, customer loyalty is seen as a bundle of measures that aim at improving relationships with customers. The supplier is in the center of attention and the customer is only regarded as the factor at which success of customer loyalty becomes manifest. Here it becomes clear that this approach contains a conceptual deficit. It is the customer who eventually decides on whether customer loyalty management is successful or not, because all activities undertaken by a supplier can only be geared at influencing customers to be loyal. A customer-focused perspective therefore has to be added to evaluate the success of customer loyalty management.

Within the customer-focused perspective, customer loyalty is conceptualized taking into account customers complex characteristics. These can either be approached as customers directly observable actions and/or take into account their attitudes and intentions. Since customers actions are directly influenced by their attitudes and intentions, it is obvious that these have to be scrutinized to understand and manage loyalty. A third perspective is a

synthesis of the former two approaches. The relationship-focused perspective directly examines the relationship between suppliers and customers. Accordingly, the objects of study in this perspective usually are buying behavior in retail contexts and long-term relationships marked by frequent interaction between suppliers and buyers in industrial contexts.

It is clear that the supplier-focused perspective with its instrumental approach is significantly different from the other two approaches. Distinguishing the customer- and the relationship-focused perspective, however, is difficult, because both focus on the customer.

Behaviorist customer loyalty concepts

Behaviorist concepts of customer loyalty have been at the core of early marketing research and focus on customers observable behavior, as e.g. in purchasing behavior. Accordingly, customer loyalty is established, when customers demonstrate consistency in their choice of supplier or brand. Hard-core loyalty, when one product alternative is exclusively repurchased and of reinforcing loyalty, when customers switch among brands but repeat-purchase one or more alternatives to a significant extent. Similarly, customer loyalty as the proportion of times a purchaser chooses the same product or service in a specific category compared to the total number of purchases made by the purchaser in that category. Pegging customer loyalty to purchasing behavior, however, is very critical, there can be a multitude of factors affecting purchasing behavior, such as product availability or special deals, which are not grasped by looking at purchases alone. A main deficit of the behavioristic approach thus is that it does not look at the drivers behind purchasing behavior. Another disadvantage of behavioristic customer loyalty concepts is their ex-post approach. When loyalty is only expressed through purchases, information on customers actual loyalty status in between purchases is not available. Consequently, decreasing loyalty is only recognized after it manifests itself through changed purchasing behavior. Only in relationships with frequent interaction can a supplier integrate further aspects, such as complaints, into customer loyalty management. The reason, why behavioristic concepts may

still be valuable, is because the measurement of customer loyalty in this approach does not necessitate involvement by the customer. The assessment of attitudes and intentions would always imply customers cooperation through participation in surveys. By simply recording purchases, e.g. through delivery records in the industrial context or customer cards in a consumer context; the assessment of customer loyalty poses little difficulty. Particularly in areas, where most purchases can be easily ascribed to individual customers, as is the case with mail-ordering or book-stores on the internet, the behavioristic approach is useful for identifying different customer groups and their characteristics. Such firms, however, can only assess purchases of their own products, while purchases of competing products go unnoticed. Firms can therefore neither draw conclusions about relative changes of purchasing behaviors, nor evaluate their comparative market position.

Neo-behaviorist customer loyalty concepts

These narrow technical definitions do not adequately capture the richness and depth of the loyalty construct implicit in a relational framework. Consequently, neo-behavioristic customer loyalty concepts start at the shortcomings of the behavioristic approach by examining the causes of loyalty. As early as 1969, Day concluded that loyalty should be evaluated with both attitudinal and behavioral criteria otherwise accidental repeat -purchases, merely resulting from situational exigencies, would be regarded as indicators of loyalty. There is no agreement, however, on the question, whether attitudes are part of customer loyalty or merely an antecedent of it. Some authors propose that only positive attitude can lead to true customer loyalty. If attitude then is a necessary prerequisite of customer loyalty, some drivers of loyalty cannot be explained. Transaction cost theory, for instance, provides the concept of asset specificity. Relationship-specific investments create economic switching barriers and therefore increase customer loyalty. However, the mere repeat purchase of goods or services for reasons of economic constraints would not qualify as loyalty, as positive attitudes are not involved. In order to avoid the outlined problem, it is useful to abstain from defining positive attitude to be a necessary antecedent of loyalty. Instead, researchers usually

consider intentions and observable behavior to be the constituting elements of customer loyalty.

Determinants of Customer Loyalty: In order to be able to gear marketing activities towards the creation of customer loyalty, its determinants and their precise effects have to be known. Accordingly, many researchers have investigated this topic. In order to gain an overview of the determinants identified in these works, they can be structured in three dimensions:

(1) Company-related determinants refer to the supplier itself or to the goods or services offered. It is a prerequisite for the existence of customer loyalty that the offered goods or services create utility for the customer and that they are available. In this respect, an assessment is usually performed by examining quality. In order to evaluate the priceperformance ratio, customers will pay attention to prices. Customer loyalty will also be influenced by the reputation a company has and ultimately by customer loyalty programs offered.

(2)

Relationship-related determinants play a significant role in long-term relationships.

Factors regarding the interaction between supplier and customer, such as relationship quality, previous experiences, and trust are important. Commitment, which provides evidence of emotional closeness and moral or normative feelings of obligation, takes a central role in relationships. Specificity and dependence can lead to economic, psychological and social switching barriers.

(3)

Customer-related determinants are mainly influenced by customers characteristics. In

this respect, affect and involvement, and consequently also the importance of the good or service to the customer, are important. In addition to the above delineated areas, the effects of

the market environment and competition are researched, as is the link between satisfaction and loyalty, which plays an important role in the research of customer loyalty and is often placed in one of the three dimensions. However, as most other determinants influence satisfaction, it cannot be clearly separated and should therefore be listed as a distinct category

PAINT INDUSTRY
INTRODUCTION: Industry origin and growth:-

The earliest paint factory in India dates back to 1902, when Shalimar Paints, Colour & Varnish Company, A Pinchin Johnson unit, was established at Calcutta. Growing industrialization, expansion of the railways and introduction of electric power a couple of years earlier had all kept business confidence soaring high. However, this did not provide a ready and expanding market for the nascent paint industry then. Imports from Britain continued to swarm the market and raw materials were not easy to come by. The industry still consisting of one lone unit went through a rather prolonged period of infancy, till the World War II brought in dramatic opportunities. With the stoppage of imports owing to war conditions, the domestic market at last became almost the exclusive reserve of the domestic industry. European manufacturers, hitherto exporting to India, readily saw the advantages of setting up manufacturing facilities here. The period between the wars thus saw the greatest ever influx of foreign paint companies into India- Goodlass Wall (1918), Elphant Oil Mills (1917) in Bombay, and British Paints, Jenson & Nicholson and Macfarlances in Calcutta. Macfarlanes was brought over by the Poddars and became a completely Indian company, while the other three: Shalimar Paints (Pinchin Johnson), British Paints and Jenson Nicholson continued as British operated units. While talking about the post independent development of the Paint industry in India, mention must be made of Asian Paints, a completely Indian unit which started on a very small scale, grew so big and so beyond recognition over the years that it is today not only the largest unit in India but way ahead of the second largest, Kansai (Goodlass) Nerolac Paints Ltd., formerly a unit of Goodlass Wall (UK). Besides Asian Paints, numerous factories, wholly Indian in ownership and with rare exceptions in technology as well were set up in Calcutta, Kanpur and Bombay. The British units, though a few in number, were technically strong and financially sound and, with the active support and patronage of the Government, controlled a vastly higher share of the market. The post independence period witnessed a steady growth in the paint industry. From

a mere Rs.200 million turnover in 1950, the paint industry crossed the Rs.14000 million mark in 1990-91. But even in this period, paints were considered a luxury item. Only people with high incomes were expected to decorate their houses with the use of paints. Paints, as a protective element, were totally unheard of. The industrial segment, which was traditionally a low user of paints, vis--vis its counterparts in the decorative segment, too contributed to this notion. In line with this misconceived notion, the government drastically increased duties on paints in the early nineties with an aim to bolster exchequer revenues. The result was obvious. This inevitably brought about a downturn in the fortunes of the industry. The products, which are highly price elastic, saw a negative growth rate of 20 % in 1991-92. The next year was also not good, registering a growth of only 2%, bringing it back to the 1990-91 level, thus corroborating the fact that the industry needed lower excise levels to grow. The industrial slowdown during that periodalso did not help matters. In line with the liberalized policies and the realization that paints are not necessarily a luxury item, duties were progressively reduced from 1993-94. This squared growth as most companies passed on duty reductions. Further, the entry of world majors in the automobile and white goods market in India since 1993 helped the market to expand. Demand for auto paints shot up suddenly. Form a modest 8% growth rate in 1993-94, paint demand touched 12% in 1995-96. Rapid industrialization and improvements in the infrastructure such as transport, energy and communication during the last decade gave a further fillip to the growth of the paint industry. Aided by Governments liberal policy of technology import, the automotive and consumer durable segments expanded phenomenally, with a flurry of foreign collaboration. Increased demand for decorative, protective and functional coatings was a natural fall out, which brought, in its stride, a host of indigenous developments as well as the injection of new technology.

History:Paint has been used by mankind since its origin. The evidence can be found in the cave paintings. The Chinese are considered to be the pioneers of manufacturing paints

thousands of years ago. In modern times paint is made artificially and is used in many different ways. There are three basic things required to make paint. You need a Pigment to get the exact color you wantBinder to hold the paint together Thinner so that it can be applied easily. Types of Paints there are different types of paints available today. Till the 19th century the word paint was used to describe oil-bound types only. The paints bound with glue were called distemper. For farmhouses and cottages an alternative was found and was called lime wash or color wash. Different things need different paints. The interior of the house is painted by different type of paint than the exterior of the house. Automobiles use different type of paint. The industrial paint is different than marine paint. Now colors are made by using different ingredients for specific surfaces. For example enamel paint, when dries it becomes especially hard and usually has glossy finish. The term enamel paint today means hard surfaced paint and usually it is used in reference to paint floor coatings of a gloss finish or spray paints. It can be used for concrete, stairs, porches and patios. Fast dry enamel is ideal for refrigerators, counters and other industrial finishes. High-temp enamel may be used for engines, brakes and exhaust. Enamel is also used on wood to make it water resistant. The Indian Paint IndustryIn India, Indian Paint industrys total market size is US$1400 million. The organized sector of the industry is 55%. The 45% unorganized sector has about 2500 units. The big players and their market share-value of the organized sector are Asian Paints 37% Goodlass Nerolac 15.9% Berger Paints 13.8% ICI 11% Jenson &

Nicholson 5.7% Shalimar 4% Others 12%The market segment is divided into two sectors. Architectural 70% Industrial 30%The total volume of the market is 600,000 MT.

INDUSTRY ANALYSIS The Indian Paint industry has a size of about US $2 billion. Surprisingly, the industry has no public sector manufacturing unit and complete ownership is vested in the hands of the private sector. This may be indicative of the fact that in the past, the government perceived paints to

be a luxury product as mentioned before and taxed the industry heavily, thereby relegating this industry to a non-core status. The classification of the paints industry can be made either product-wise or sector-wise. In the sector-wise segmentation, this industry can be classified into the organized and unorganized sectors. The sectoral share is shown in the following pie chart:

FIGURE 3.1

Sectoral Size of Paint Industry (in $billion)

0.6, 30%

Organized sector Unorganized sector

1.4, 70%

The Organized sector is dominated by six large players and in the unorganized sector there are about 2500 units manufacturing various categories of paints. The total volume of the market is about 717,000 MT and the industry is growing at 14% approximately. It can be seen from the graph that though the organized sector controls 70% of the market, the unorganized sector with 30% of the market share is still a force to reckon with.

The organized sector can itself be divided into two distinct segments (Product wise): Industrial segment which is growing at 15% approximately and the Decorative segment which is growing at 8% approximately. As shown in the graph on the next page, most of the sales are accounted for primarily by the decorative segment

FIGURE 3.2

Distribution of Sale

30%
Industrial segmannt

70%

Decorative segment

In contrast to global trends, wherein industrial paints with a share of nearly 60 per cent take prime importance, the domestic industry is dominated by decorative paints with an imposing share of nearly 70 per cent of the paints market. A major portion of demand for decorative paints is from fresh coats on existing wall finishes. Thus, the fortune of this segment is closely linked to the construction activity in the country.

DECORATIVE SEGMENT: The Decorative paints cater to the housing sector. Premium decorative paints are acrylic emulsions used mostly in the metros. The medium range consists of enamels, popular in smaller cities and towns. Distempers are economy products demanded in the sub-urban and rural markets. The distribution network is the key for the success of this segment. Brand image and the range of products is the other basis for competition. These features also act as entry barriers in the decorative segment. As sophisticated technology is not a prime requisite for manufacturing decorative paints, the industry is flooded with a number of small players catering to the lower-end of the market by supplying low value unbranded products in small quantities. In this segment both the organized and the unorganized sectors have a share of nearly 50 per cent each.

Within the Decorative segment the composition of the paints can be seen in the graph on the next page

FIGURE 3.3

12%

2%
Enamels Distemper

17% 50%

Emulsions Exterior Coatings Wood Finishes

19%

This graph shows that nearly three fourths all decorative paints sold in India are either Enamels or Distemper. Among paint majors, Asian Paints produces all types of paints excepting cement paints. Berger Paints, ICI and Jenson & Nicholson (J&N) manufacture synthetic enamels and emulsions while Goodlass Nerolac (currently known as Kansai Nerolac) makes synthetic enamels. In the organized sector, Snowcem (India) specializes in cement paints. One of the notable features of this industry is that each major player has a specialty product in its portfolio of decorative paints. Currently, Enamels are showing a steady growth but there is a gradual shift from Enamels and Distempers to Emulsions. So Emulsions is also a high growth area. There is a high growth in low priced low quality Distempers also as consumers are upgrading from lime wash. Moreover, Exterior Emulsion is the fastest growing segment in the Indian paint market.

INDUSTRIAL SEGMEENT: In terms of volume, though the industrial paints segment has made significant gains, it still trails behind decorative paints. As against the Decorative segment, the share of the unorganized sector in industrial paints is limited to roughly 35 per cent. This is because technology is the overriding factor in this segment and industrial paints require constant upgradation and servicing. In contrast to the decorative paint business, tapping the industrial paint segment is not by brand-building or establishing a distribution network but through getting the right foreign partner (for technology) and captive customers. While decorative paint manufacturers need to offer variety and have a wide reach to stay ahead of competition, industrial paint producers need to be competitive in terms of technology and service. Industrial paints comprise automotive paints, high performance coating, marine paints, powder coatings and coil coatings. Goodlass Nerolac is the market leader in this segment. The user industries are automobiles, engineering and consumer durables. The industrial coating segment in India has grown by 15% over the year and companies like Asian Paints have registered a growth of 48% for the same period. Automotive paints constitute a large share of industrial paints market which requires high quality standards, supplier reliability and ability to offer complete coating systems. They are used for giving high quality finish to automobiles. High performance coatings are applied in plants for fertilizers, petrochemicals and offshore oil and atomic energy installations where anticorrosion is very important. Powder coatings (water-based) are free of solvent and are used in consumer goods like washing machines, refrigerators etc. Marine paints are used for painting ships and vessels to make them water resistant and corrosion free. Within the industrial segment, the composition of the major paints is shown in the following graph.

FIGURE 3.4

5% 5% 10%

Automotive Paints High Performnace Coating Pow der Coating

50%
Coil Coating

30%

Marine Paints

Half of the Industrial paints produced in the country are Automotive paints and close to one third is the high Performance Coating. Automotive sector is a high growth sector with a number of new entrants like Mercedes Benz, Mitsubishi, Daewoo, Hyundai, Honda, and Fiat. However, recently there is some slackness in Auto demand. Two wheeler markets are booming due to demand from large India middle class. In the Powder Coatings sector, there is high growth due to increase in sales of white goods and auto ancillaries. Similarly, in the High Performance Coating sector, there is a steady growth due to higher investments in Refinery Segment and power sector, especially Thermal and Nuclear.

Industry Present & Future Trends:

The Indian paint and coatings industry is riding high on the growth in the Indian automobile industry, new construction in the housing segment and improving infrastructure throughout the country. Thirty percent of the paint business is comprised of new construction projects. GDP growth projections of six to 6.5% in the current year mean a growth of nine to ten percent in Indian paint business. The growth will be 12-13% in the industrial segment and eight to nine percent for decorative paint. The Indian automobile industry has been

performing remarkably well and will benefit the market leader in the segment, Goodlass Nerolac.

As for the future, the industry has predicted a CAGR of eight to nine percent for the next five years compared to last years growth levels of 27.4% for cars and 8.9% for two wheelers. The Indian housing industry is likely to do well in the current year as well, recording a growth rate of 35% last year. As a result of the overall health of Indias economy, it is safe to predict a nine to ten percent growth rate for the Indian paint industry in the next five years.

Consumers can look forward to new product launches, some for application in special areas. Companies will be increasing the value added services available to customers by offering a variety of finishes through specialized and trained applicators. There will be more options like ranges of colors/finishes for wood applications through the tinting machines. Additionally, the trend towards water-based coatings is likely to set in both for industrial and decorative applications. While India has not yet embraced the DIY concept as cheap labor is still available, exclusive retail chain stores sponsored and run by Indian paint companies will become a reality. The Indian paint industry has progressed well and moving ahead is likely to be influenced by several factors including new technologies, new innovative products, new associations, consolidation of industry and poor performers getting out of the market. Ultimately, in the years ahead there will be only four or five key players operating in the Indian paint market.

Major firms in an industry :The Indian Paint Industry: In India, Indian Paint industrys total market size is US$1400 million. The organized sector of the industry is 55%. The 45% unorganized sector has about 2500 units. The big players and their market share-value of the organized sector are

Asian Paints 37%

Goodlass Nerolac 15.9%

Berger Paints 13.8%

ICI 11%

Jenson & Nicholson 5.7%

Shalimar 4%

Others 12%

The market segment is divided into two sectors:

Architectural 70%

Industrial 30%

The total volume of the market is 600,000 MT.

COMPANY PROFILE

ICON PAINTS manufacturers offers painting services for all your interiors and exteriors for your office and home. We come to you with the color psychology that suits your mood. We offer professional services from selecting ranges of shades and be with you assisting through the painting. We give one year of warranty assuring the service quality. Please give details at our email address, our sales associate contact you by prior appointment for an enduring radiance Our Customers: We manufacture, distribute and market decorative and protective surface coatings to 'Do it Yourself' customers and professional painters, as well as stockists, hardware chains and retailers Where we are Heading: At Icon Paints our vision is summarised in a broad statement of what we want to achieve as a business. It helps to guide what we do and helps us work together with a common purpose. Our Strategic Intent (or Vision) "Making a good business great" Great businesses Never injure anyone ever Delight their customers Deliver their promises Have the best people Are good corporate citizens Are professional in everything they do

Our Mission Statement: Orica consumer products will be the preferred partner in the supply of branded coating systems, services and hardware products for use in construction and home improvement, through innovation and a profound understanding of our customers and consumers.

Our Values:

Ensure all our activities ultimately add value to shareholder returns Achieve outstanding levels of customer satisfaction Be a world competitive & innovative company Develop our technology to secure and expand our market position Appoint leaders who create an environment which encourages our people to perform to their potential

Operate to the highest standards of ethical behaviour and honesty and with full regard to the safety and health of employees, customers and the environment

Ensure cooperation and teamwork across the company for the benefit of the corporation as a whole

Build a relationship of mutual cooperation and teamwork with our customers and suppliers, for mutual benefit

Health & Safety Practices: "No injuries to anyone, ever" is our safety vision statement. We are committed to providing safe workplaces and knowledgeable employees. From the time you enter reception at any Icon site you are aware of the company concern with safety. Many areas may not be entered without safety glasses, safety shoes, protective clothing and/or hard hats. Other visible signs of safety concern are first aid and emergency equipment strategically located around the site. These include fire extinguishers, fire alarm buttons, first aid boxes, eyewash bottles and emergency eyewash stations and safety showers ( for emergency use only), to wash major spillage's of chemicals resins and solvents off the body.

Acrylic Paints: Icon Paints development of environmental-friendly water-based paints as a replacement for many solvent-based paints. Icon Paints is now the largest manufacturer of water-based paints. The benefit to the environment is obvious. When solvent-based paint dries, a large quantity of solvent evaporates into the atmosphere, contributing to air pollution levels. On the other hand, water-based paint emits mainly harmless water vapor into the air. Icon Paints will continue to introduce the latest developments in environmental friendly paint.

Waste Management: Correct waste disposal is an essential and important part of safe working practice. Every endeavor is made to minimize the quality of waste generation and hence reduce the associated problem of waste disposal. A thorough and environmental friendly strategy for dealing with chemical waste has been in operation for a number of years. In general the following options are available:1. Recycle within company operations, e.g. reclaiming solvent through Waste Plant or Brighton still. 2. Attempt to rework or convert to a safer material for disposal 3. Off-site disposal by Approved Licensed waste contractors for incineration on land or approved land fill areas

Transportation with Safety:

The safe transportation of Icon products from plants to wholesale and retail outlets and then by consumers has long been one of the company's high priorities. In recent years, Government Dangerous Goods regulations have meant even safer transportation of domestic and industrial paints and other liquids, especially those which are

flammable. For instance, the possibility of spillage and its environmental impact has been decreased by improving the design of paint drums so they can survive a 1.5 metre fall from the back of a truck without spilling. When leaving our factories, Icon products are usually packed in shrink-wrapped palletised cartons and delivered on enclosed vehicles, further minimising the potential for spills.

Range of Products:
The new advanced formula for Icon Wash and Wear 101 Advanced contains AquaSmart technology, that repels stains before they sink in. This makes 101 Advanced 'more washable' and 'more stain resistant', so walls are easier than ever before to clean. Icon Paints offers an extensive range of products to meet your needs. Select from the following categories to find out more:

All paints are available through most leading paint and hardware retailers, and independents.

My Colour: Icon Paints is continuing to lead the way in colour visualization software with the release of Icon My Colour the software to include a Mask less colour visualizer, meaning the program instantly recognises the difference between a wall and a picture on that wall and paints around it. There is also a masking function on the program that allows sections of the same area to be painted in different colours if desired. This easy-to-use decorating tool allows consumers to upload an image of an existing room, and see how different colours will look with the click of the mouse. MyColour also takes into account light and shade that naturally occurs in any room by shading the painted area according to how the light falls. The result is a more true to life representation of how a colour will look in situ. This colour visualiser also gives users the opportunity to see how a change in colour can work with existing furnishings. With updated Icon Colours and the inclusion of the new Exterior Colour and Texture range, consumers can now see how their outdoor spaces can be transformed. MyColour has a brand new contemporary look and feel, with an easy to use functionality, that will help position Icon as colour leaders. Available on CD rom or live over the Internet, MyColour makes choosing colour both easy and fun, all in the comfort of your own home.

Products: RICH - Super Acrylic Emulsion Paint: ICON RICH is an acrylic emulsion paint specially formulated for interior and exterior walls. It is extremely durable against harsh weather and adheres well to all types of wall surfaces. Now ICON RICH breakthrough formula provides even tougher resistance against dirt, fungus, flaking and alkali.

ZAAP- Emulsion Paint: ICON ZAAP is an acrylic emulsion paint specially formulated for interior and exterior walls. It is extremely durable against harsh weather and adheres well to all types of wall surfaces. Now ION ZAAP breakthrough formula provides even tougher resistance against dirt, fungus, flaking and alkali.

Rain Guard with DUROXANE: Rain Guard as a cost effective but efficient water repellant for Masonry structures. It is used as a top coating surface treatment in all buildings to impart water repellency and reduce water absorption. Rain Guard can be applied over all paints including cement paints, distemper, acrylic paints etc., It can be used on all Masonary substrates, Bricks, Sandstone and Limestone.

Acrylic Wall Putty Icon Paints Wall Putty is a hign quality Acrylic based putty with Enzyme action suitable for interior and exterior uses. It is a premium quality putty, particular used in constructions and projects where smoothness and fine finish are required. Icon Paints Wall Putty is recommended to be used for new and old surfaces , suitable for fillinf cracks , Joints, Leveling up uneven rough surfaces such as on concrete, cement walls, ceiling, asbestors boards, brick structures , GYP boards, wooden furniture and doors.

DEALER PERCEPTION AN ANALYSIS

Questionnaire:

1)

Are you dealer or sub dealer of any Paint Company in Hyderabad?

a) Yes

b) No

Yes Dealer Responses 70

No 30

70 60 50 40 30 20 10 0 Dealer Responses
Yes No

2)

If Yes then which Paint Company you have dealership?

a) Icon Paints b) Asian Paint c) Berger Paints d) ICI Paints e) Others

Companies Icon Paints Asian Paint

No. of Responses 20 40

Berger Paints 30 ICI Paints Others. 5 5

40 35 30 25 20 15 10 5 0 No.of Responses
Icon Paints Asian Paint Berger Paints ICI Paints Others.

3)

Which Facility of this Paint Company attracts you for dealership? a) Company Brand Name c) Sales Team Service e) Customer Satisfaction b) Company Market Profitability d) Better Supply of Goods f) Better Financial Transaction

g) Better Financial Transaction h) Others

Company Brand Name

25

Company Market Profitability 20 Sales Team Service Better Supply of Goods Customer Satisfaction Better Financial Transaction Better Financial Transaction Others 10 05 7 5 2 1

30 20 10 0 Company Brand Name Better Supply of Goods Better Financial Transaction

4)

Today which brand of Paint Company most of the customer preferred? a) Icon Paint b) Asian Paint c) Berger Paint d) ICI Paint e) Others

Company Icon Paints Asian Paint

No. of Responses 15 20

Berger Paints 05 ICI Paints Others. 15 20

20 15 10 5 0 No.of Responses

Icon Paints Asian Paint Berger Paints ICI Paints Others.

5)

Which Paint Company has more market share in comparison to other Paint Company? a) Icon Paints b) Asian Paint c) Berger Paints d) ICI Paints e) Others. Company Icon Paints Asian Paint No.of Responses 20 10

Berger Paints 12 ICI Paints Others. 18 20

90 80 70 60 50 40 30 20 10 0 No.of Responses 3rd Qtr

ICI Paints Others. Asian Paint Berger Paints Icon Paints

6)

Is Your Companies provide better Scheme and Reward on completion of Target? a) Yes b) No

Yes Dealer Responses 43

No 33

45 40 35 30 25 20 15 10 5 0 Yes No
Dealer Responses

7)

Is your Company provides all types of categories of Paint to the customer? a) Distemper c) Interior Emulsions e) Interior & Exterior Primer g) Wall Paint b) Exterior Emulsions d) Putty f) Plastic Paint h) Others

Distemper Exterior Emulsions Interior Emulsions Putty Interior & Exterior Primer Plastic Paint Wall Paint Others

12 15 03 22 18 14 16 12

25 20 15 10 5 0

Distemper Exterior Emulsions Interior Emulsions Putty Interior & Exterior Primer Plastic Paint

8)

Is your Company provides Paint on fewer prices to Customer in the comparison to other Paints?

a) Yes b) No

Yes Dealer Responses 35

No 45

50 40 30 20 10 0 Dealer Responses
Yes No

9)

Are you satisfied from the dealership of this Paint Company? a) Yes b) No

Yes Dealer Responses 52

No 18

60 50 40 30
Dealer Responses

20 10 0 Yes No

10)

Is the Financial Transaction & delivery of goods of this Paint Company are give full satisfaction to you? a) Yes b) No

Yes Dealer Responses 15

No 55

60 50 40 30 20 10 0 Yes No
Dealer Responses

11)

If you have a chance to change the dealership of this Company then which Paint Company you

prefer and why?

Yes Dealer Responses 28

No 42

50 40 30 20 10 0 Yes No
Dealer Responses

12)

Do you know about the Icon Paint? a) Yes b) No

Yes Dealer Responses 60

No 10

60 50 40 30 20 10 0 Yes No
Dealer Responses

13)

Do you know that Icon Paint is the second largest market share company in India? a) Yes b) No

Yes Dealer Responses 55

No 15

60 50 40 30 20 10 0 Yes No
Dealer Responses

14)

Do you know that Icon Paint give their dealer better scheme and reward in comparison to other paint company in the form of Foreign and India tour? a) Yes b) No

Yes Dealer Responses 68

No 02

70 60 50 40 30 20 10 0 Yes No
Dealer Responses

15)

Do you know that Icon Paint deal all categories of Interior & Exterior Emulsion, Putty, Distemper, Paints?

a) Yes b) No Yes Dealer Responses 58 No 12

60 50 40 30
Dealer Responses

20 10 0 Yes No

16)

Do you know that today most of the Customer prefer Icon Paints due to big Brand Name & big Brand Ambassador? a) Yes b) No

Yes Dealer Responses 17

No 53

60 50 40 30
Dealer Responses

20 10 0 Yes No

17)

Do you know that Icon offer less price against the better quality of paint to the Customer? a) Yes b) No

Yes Dealer Responses 62

No 8

70 60 50 40 30 20 10 0 Yes No
Dealer Responses

18) Do you know that Icon Paint is the Subsidiary Company of Kansai Paint Japan which is one of the top ten Paint Companies in the world? a) Yes

b) No

Yes Dealer Responses 44

No 23

45 40 35 30 25 20 15 10 5 0 Yes No
Dealer Responses

19)

Do you know that goodwill and fame of Icon Paint is very much high then other Paint Company? a) Yes b) No

Yes Dealer Responses 62

No 8

70 60 50 40 30 20 10 0 Yes No
Dealer Responses

20)

Do you know that Icon paint is the market leader of various types of Coating, & its quality, value and service? a) Yes b) No

Yes Dealer Responses 60

No 10

60 50 40 30
Dealer Responses

20 10 0 Yes No

21) If you are going to start the dealership with Icon paint which types of facility you want from the Company? a) Market Profitability c) Better Sales team service e) Regular Scheme & Reward b) Supply of Good d) Better Creditability System f) Others.

Market Profitability Supply of Good Better Sales team service Better Creditability System Regular Scheme & Reward Others

45 22 30 15 14 15

45 40 35 30 25 20 15 10 5 0

Market Profitability Supply of Good Better Sales team service Better Creditability System Regular Scheme & Reward Others