A Project Report on Segmentation, Targeting, Positioning (STP) and Strategies adopted in Customer Relationship Management (CRM).

At

Submitted By Abhishek Jagwani (Roll No.10) Under the Guidance Of Sidharth Arya Territory Sales Officer Asian Paints

Submitted to Prof: Rupali Rajesh

Vivekanand Education Society s Institute of Management Studies & Research (VESIMSR)

INDEX

Sr No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Introduction

Particulars

Page No.

Customer Relationship Management Competitors Analysis Customer Analysis Marketing Strategy Segmentation Targeting Positioning Role of CRM in Asian Paints Business Process Transformation and Value realized Future Road Map Learning WeBliography

INTRODUCTION
Asian Paints is Indias largest paint company and Asias third largest paint company, with a turnover of Rs 77.06 billion. The group has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 17 countries and has 23 paint manufacturing facilities in the world servicing consumers in over 65 countries. Besides Asian Paints, the group operates around the world through its subsidiaries Berger International Limited, Apco Coatings, SCIB Paints and Taubmans. The company was incorporated in the year 1942 in India. Asian paints have extensively computerized its operations in India using the cutting edge solution provided by SAP & i2. Decorative paints include wall finishes for interior and exterior use, enamels, wood finishes and ancillary products, such as primers and putties. Industrial Coatings comprise high performance coatings, powder coatings and auto refinish coatings. The automotive coating segments are catered to by the joint venture Asian PPG Industries Ltd. The Company also has chemicals businesses consisting of phthalic anhydride and pentaerythritol manufactured at Ankleshwar, Gujarat and Cuddalore, Tamil Nadu, respectively.

It also introduced many innovative concepts in the Indian paint industry like Colour Worlds (Dealer Tinting Systems), Home Solutions (painting solutions Service), Kids World (painting solutions for kids room), Colour Next (Prediction of Colour Trends through in-depth research) and Royale Play Special Effect Paints, just to name a few. Asian Paints has always been ahead when it comes to providing consumer experience. It has set up a Signature Store in Mumbai where consumers are educated on colours and how it can change their homes.

The different categories of Asian paints Ltd. are

PAINTS
Companys paint business in India consists of decorative, Industrial & Automotive coating. In 2005-06, these accounted for 79.1% of the group sales. It is estimated that the local market for all paints including cement paints & other powder products manufactured by all companies big & small would have been around Rs.95 billion in 2005-06.

1. Decorative paints Decorative paints account covers almost 75% of the overall paint market in India. In this segment Asian paint has been a leader for almost four decades. Decorative paints include wall finishes, for interior & exterior uses, examples, wood finishes & ancillary products such as primers, putties, etc. 2. Industrial coatings Industrial coatings have a moderate growth rate than decorative coating, led by the growth in automotive original equipment sector, powder coatings & protective coatings. Industrial coatings are classified into automotive & non-automotive coatings are classified into automotive & nonautomotive coatings. While Asian paints Industrial coating Ltd. (APICL) services the powder coating segment, Asian paints Ltd. caters to be remaining non-auto industrial coatings segments. 3. Automotive Coating The actual look and feel of a vehicle undergoes a sea of change over time. The paint on a vehicle loses gloss, is subjected to a lot of wear and tear and hence starts deteriorating. Asian Paints is not having a very good market share in this segment.

CHEMICALS
Asian paints have chemical business consisting of Pthalic Axhydride & pentaerythritol manufactured at Ankleswar, Gujrat & Cuddalore, Tamilnadu.

Customer Relationship Management (CRM)

It is a business strategy that aims to understand, anticipate and manage the needs of an organisations current and potential customers.
The purpose of CRM 1) The focus is on creating value for the customer and the company over the longer term. 2) When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their needs. 3) CRM enables organisations to gain competitive advantage over competitors that supply similar products or services. Why is CRM important? Todays businesses compete with multi-product offerings created and delivered by networks, alliances and partnerships of many kinds. Both retaining customers and building relationships with other value-adding allies is critical to corporate performance.

Information Technology and CRM

1) Technology plays a important role in CRM. 2) Technological approaches involving the use of databases, data mining and one-to-one marketing can assist organisations to increase customer value and their own profitability. 3) This type of technology can be used to keep a record of customers names and contact details in addition to their history of buying products or using services. 4) This information can be used to target customers in a personalised way and offer them services to meet their specific needs. 5) This personalised communication provides value for the customer and increases customers loyalty to the provider.

Benefits of CRM
1) Reduced costs, because the right things are being done (ie., effective and efficient operation). 2) Increased customer satisfaction, because they are getting exactly what they want (ie. meeting and exceeding expectations) . 3) Ensuring that the focus of the organisation is external. 4) Growth in numbers of customers. 5) Maximisation of opportunities (eg. increased services, referrals, etc.) 6) Increased access to a source of market and competitor information. 7) Highlighting poor operational processes. 8) Long term profitability and sustainability.

Asian paints limited with its three business units decorative, Industrial & International business is one of the largest paint company in India. It had a sell over 300 million liters of paint in 20092010. Significantly the group has crossed the Rs.3000 Cr turnover mark-a preset mile stone for the company. Here we will be analyzing two situations of the company (i) (ii) Competitor analysis Customer Analysis

1. Competitor Analysis
The Indian paint market is highly saturated with many paint companies with varieties of product. Asian paints ltd, Kansai Nerolac paints Ltd. Berger paints India Ltd. ICI India Ltd. Shalimar Paint Ltd, Snowcem India Ltd are the market leaders. Here we are only considering the nearby competitors of Asian Paints which are Nerolac paints Ltd, Berger paints Ltd & Indian chemical Imperial (ICI) Ltd. SWOT analysis of Asian paints & its competitors:

COMPANY Strengths

Asian Paints
1. Market leader in overall paint market & in decorative paint market in India share 40% 2. Available in urban & rural area 3. High Quality MR & MIS 4. Pricing policy oriented to all kinds of customer

Nerolac paints
1. Well ahead leader in Industrial paint market 2. Tie-up with kansai paints provides foreign technology. 3. Main supplier in the Indian Industrial & automobile market main client Maruty Udyog

Berger paints ICI paints

1. In the IInd position in the industrial paint sector. 2. Tie up with HerbertGermany valspar of US & Teodor NV of Holland 1. In the refinishing business it has one of the best quality refinish paint for cars. 2. In decorative paints it performance is good 3. recently purchased 49% share of Quest Int. India limited.

Weakness

1. Industrial paint sector only 15% share 2. No tie up with foreign manufactures. Through it has units in several countries. 3.Innovation in developing new

1. Market share in 1. Overall decorative paint market is very low. 2. Market in rural area is poor. 3. Considering overall paint market Asian paint is well ahead of Nerolac. market position is not very impressive. 2. Asian paints & Nerolac paints capturing the market buyer for behind

1. Industrial paint market existence almost 2-3% 2. Overall market conduct poor.

product. 1. Acquiring/ Increasing market share in Industrial paint sector. 2. Developing market in automobile 1. Improve its position in decorative paint segment. 2. Capturing whole industrial paint market 1. come up with new innovations to challenge Asian paints & Berger paints 1. Merger with Quest will provide to have an experience in foreign market, particularly in UK.

Opportunities

industry, which accounts for 50% of Industrial paint market. 1. Domination of few foreign countries 2. Nerolac is 1. Asian paints is coming up rapidly into the industrial paint market with its new plants & products 1. Asian Paints & Nerolac paints are well ahead & ICI paint is competing nearly 1. Berger paint & there are few new entrants in the market.

Threats

advancing rapidly in Industrial market

2. Customer analysis
Asian paint with its natural competitive advantage of size (Number 1 in India), Strong brand equity & largest distribution Network has acquired the number one position in Decorative segment in India.

There are few reasons due two which the customers in the decorative segment has been choosing Asian Paint as their brand 1. As we know brand name has its own value & Asian paint is the number one in decorative segment, so a purchaser automatically leans in purchasing it. For example, we have two different types of paints, namely Apolite glass Aenamel & Apolite care Emulsion, which are from Asian Paints, Nerolac paints, Berger paints & ICI paints. Again due to the competitive market the price is very closed for all the companies. But due to the Branch awareness of common people they mostly tend to purchase the products from Asian paints. 2. Company have provided with different varieties of product for different income groups. For e.g. UTSAV which is a low value paint, is growing at a faster rates & penetrating with high speed at the lower income group. This policy is helping the company to move from metros to small towns for branded products. 3. In India frequency of painting has still not increased, which is once is 5 years only. So consumers are normally changing over to the better quantity & branded paints. 4. In 2001, Asian Paint launched a new product Tractor Emulson, which pulled the customer who used distemper to move to emulation paints.

Accessibility of Asian paints to the customers Asian paints have started a 24 hours customer help centre at Hyderabad. It is information to consumers to answer their needs for any query related, to their products. Through this company is also getting a lot of data related to the customers need & appreciations of the products. In order to provide better consumer service, company has connected all colour world installations with Asian Paints main system through software & providing computes to dealers. This is speeding up order execution, electronic banking will speed up recovery & money transfer.

Market Share Analysis

The market share clearly shows that Asian paint is the leader in Indian paint industry. The nearest competitors of Asian paints are Nerolac & Berger paints. Asian paints has the largest sells in Decorative paints. Nerolac paints being widely used in Industry it has a greater share price value. Industries like Bajaj auto limited, Maruti Udyog & many other car manufacturing companies use Nerolac paints. The Industrial paint are priced with premium in comparison to the decorative paint which is mainly used in house hold decoration. Berger paints & ICI paints are also providing a shift competition to Asian Paints in decorative paint, but still there is no sign of threat from them. Again in the Industrial sector Nerolac paint far ahead of all its competitor. Asian paint presently building up a new manufacturing unit solely to produce Industrial paint. Asian paints annually spends on an average Rs325 Cr on its selling & marketing expenses. It givers us an idea about the effort the company put on expanding its market in all segments. When customers buy the products of Asian paints As the customers normally uses the products of Asian paints on certain occasions like. Marriage ceremony, Dewali or any other special occasions, other than normal paint in houses, customers are very choosy & brand specific. This appreciation by the customers helped Asian paints to become the number one paint company in India

MARKETING STRATEGY OF ASAIN PAINTS

STRATEGY ALTERNATIVES
The prospect of a paint company has many dependence like weather, occasions like puja, id etc. when we consider the decorative segments. So there is always a possibility of ups & downs in the business. Besides this there is another very important factor i.e. the position of the competitor. Through Asian paints is the largest paint company still under circumstances it will have to go for some strategy alternatives. Alternatives available 1. As Asian paints market is mainly the decorative segment so a downfall in that market will lead the company in trouble them it immediate focus will turn to the Industrial segment. 2. Importance on water based paints may recover a poor situation created due to sustain poor weather condition in some region. 3. As there is every possibility that conventional coatings are likely to lose some share ecofriendly coasting is going to be very good alternatives. 4. With all countries in southeast Asia beginning to adhere to the ASEAN free trade Area (AFTA) that will reduce trade barriers for paints & coatings. A reduce in domestic market share of Asian paints then will not be a constant for growth, became export of paints to the foreign countries will contribute a lot. 5. Increasing the product package & application oriented service will make company different from others. 6. A strong post sales service division will be an important factor in building customer loyalty. 7. Tie up with automobile sector with strong appearance will be effective.

Lastly but not the least price of oil is increasing day by day, which results to increase the price of paints. If this can be controlled by stocking oil or directly linking up with foreign cheap refineries so as get oil at least available price.

CUSTOMER SEGMENTATION & TARGETING

Customer segmentation is the most important part of the marketing strategy of any company. Asian paints, the market leader in the Indian paint market segmented their products mainly in three sectors. (i) Decorative (ii) Industrial (iii) Automotive. Their customers are all also segmented based on the usage of these products.

CUSTOMER SEGMENTATION
Base Decorative coating Premium Medium Popular Industrial coating High performance coating Buyer characteristic Up market High income group & Upper & Middle class rural market Used by fertilizer Used by Large & Old cars Powder coating Automotive coating Quality coating Finished coating

buyers achiever quality fashion Secker

& petrochemicals & manufacturers atomic energy of while goods & used industrial other

small scale are mainly car industrial mostly tied up companies recoloured

installations mainly

middle class mostly Socially conscious low income group

where to reduce products corrosion losses Quality & Quality & cot led

Key purchasing factor

Quality surfaces influences

Quality surfaces shades

Cost

Quality, surfaced & conting strength

Brightness & cost

utilization power

Research & Evaluation

Brand loyal

Brand loyal Cost + Cost +

Utility

Variety seeking Brand loyal

Cost+ variety seeking

variety seeking

Companys Authorised

through dealer paint

Packet or Company paint can approaches points sold

Other & manufactures directly paints can

Tie up with Old the anto vehicles send to company

dealer paints or Purchase the customer house purchasing paint 10, litre Post Purchase A warranty Limited or period for no warranty some years No warranty com

work shops or purchase

of 1,2, 5,

High scale service of warranty

Medium or no Service warranty provided for limited years

Service provided for 0-2 years.

Asian paint is the market paint leader, Nerolac is the market leader. Asian Nerolac market leader, Market with more than 50% market share. paint have only 12% market share. 50% share Nerolac, berger, ICI & Shalimar are Other players ICI there Asian paint penetrating slowly

TARGETING
Asian paints have a unique customer targeting strategy. They used to follow V tier customer Target strategy.

Tires

Tires 1

Tire 2

Tire 4

Tire 3

Tire 1 - In the recipient end there are strategic solution seekers. Company thinks of cost reductions, performance & productivity improvement for clients improving customers & share holder profitability. Tier 2 Here the Customers whom can be considered as the value or brand sensitive. Asian paints target this customers with value added VDS integration customer level service. Tier 3 These part of the consumer are price sensitive. They least bothered about the service. These are mainly middle or low income group people Asian paints have several brand like UTSAV to serve them. Tier-4 Here the company targets the small manufacturing & local companies, which can generate revenue, company utilizes its & business & telesales technology to address & satisfy their needs. Tier-5 This tier is composed of specific targeted companies that although small in size, deserve special attention because they are highly innovative in nature. Asian paints have a good prospect over here.

POSITIONING STRATEGY OF ASIAN PAINTS LIMITED

Although operating in commodity market. Asian paints have invested heavily in branding, GATTU, the Asian paints official Mascot is a familiar icon across India. The company recently augmented their web pressure. Their website, Asian paints.com is an exhaustive hub of Painting solutions. The site use Maximum interactivity to enhance user experience. There are painting lips, online shades cards, cost calculation (based on floor area and number of rooms0 dealer locator and a short of other innovative services. From the perceptual map we can understand that Asian paints, have wider range of products for all type of customers consisting of different income levels. It has a product range from Royal Emulsion, Priced 250-400 which is targeted for up market buyers. Hpcolilen is a product which is targeted for high income and upper middle class people. For lowers income group it has UTSAV, TRACTOR EMLSION which priced vary from 40-100 Rupees. These products are mainly targeted to rural customers. In Industrial segment companies position is relatively weak here Nerolac paints captured more than 50% market share. In this segment Asian paints have products like Apcomin synthetic enamel which is used for industrial coating, and Apco synthetic power which is used in automobile sector. In this segment also Asian paints faced stiff competition from Berger and ICI Paints. Bajaj automobiles is the main customer of Asian paints in automotive sector.

POSITIONING STRATEGY OF ASIAN PAINTS

PREMIUM PRICE ROYALE APCOMIN SYNTHETIC APCO POWDER INDUSTRIAL PAINTS DECORATIVE PAINTS APEX APCOLITE

UTSAV

Role of CRM in Asian Paints

Key Challenges A Fresh Approach to the Customer Experience

In 2001 Asian Paints executives realized that the firms long term growth depended on their ability to forge ever-closer ties to the end consumer. At the same time, the Asian Paints help line had received calls from these consumers expressing a need for a more complete solution to their home painting needs and Asian Paints learned that they had demanding expectations when it came to service and overall project execution. But because the company sold its products through a

network of dealers, it lacked visibility into the entire painting process and the needs of the homeowner. This situation prompted Asian Paints Executives to explore ways to establish a more direct link to the end customer.

Launching a Service Brand

With this in mind, Asian Paints made the decision to move from a strictly product-based manufacturing business to a services model. With the launch of Asian Paints Home Solutions, the firm would build a service brand by offering value-added services ranging from inperson color recommendations to feng shui consultations.. The goal was to deliver an Asian Paints signature look through the use of specific color combinations and themes.To achieve this goal, Asian Paints needed a scalable customer relationship management (CRM) system that could map the major business processes of Asian Paints Home Solutions and provide visibility into all customer interactions. First, it required state-of-the-art call center capabilities that would include activity management for customer calls and activity scheduling, as well as a lead management system that could prioritize and route leads for proper handling.

Developing a customized Solution

Standardizing the sales delivery processes and establishing financial controls would necessitate developing a custom solution. This solution required a secure Web interface enabling leads from the help line to be forwarded to a home solutions service provider for handling. This service provider might be an independent home painting firm or interior designer, for example, in the Asian Paints network. The home solutions provider is responsible for using the system to perform all major tasks associated with a job: schedule appointments, record completion of site surveys, submit job estimates, order paints through Asian Paints dealers, record progress of jobs, invoice customers, and conduct customer satisfaction surveys. The new solution would allow both the provider and Asian Paints Home Solutions to view all customer interactions and financial information in real time. This same system would also provide updates on the status of marketing rewards programs. In addition, robust reporting functionality was required to generate a variety of sales, lead, and activity analysis reports. This functionality would also be used to tabulate results of the customer surveys submitted at the completion of a job.

THE CUSTOMER EXPERIENCE GETS A NEW LOOK WITH SAP CRM

When the time came to select a new system, Asian Paints studied the functionality of the most recent release of the SAP Customer Relationship Management (SAP CRM) application very carefully. The company was already using SAP solutions and had implemented SAP CRM in its existing call centers. Asian paints determined that SAP CRM best met its criteria and opted to build on existing infrastructure. The custom solution was a separate project that would require integration with the basic CRM system. After considering other options, Asian Paints decided on the SAP NetWeaver platform. The Web Dynpro development environment allowed for rapid application development as well as custom development of the user interface. And it would integrate seamlessly with SAP CRM. The architecture called for the new solution, branded project Tantra, to retain the lead and opportunity management functionality of SAP CRM. Then, all process associated with sales delivery would be implemented through the custom solution. Integration with the SAP NetWeaver Business Intelligence (SAP NetWeaver BI) component was also a critical factor. Data from both SAP CRM and the custom solution would be uploaded to SAP NetWeaver BI to generate various reports.

Implementation Process
In launching its new service business, Asian Paintss key objective was to deepen its ties to the end consumer.As a result, the CRM system needed to offer visibility into all customer interactions and financial transactions. At the same time, this system would standardize business processes at each stage of a painting job. Thanks to the implementation of SAP CRM and the custom solution, processes were optimized in the following areas 1) Financial controls
There is now greater transparency into all financial transactions from billing and collections to contractordealer payments.

2) Sales delivery
Asian Paints standardized the sales delivery processes to be followed by each provider. Since the sales delivery process can be lengthy, the system allows Asian Paints to monitor the quality of service its customers receive from the start of a project to its completion.

3) Customer data management

Asian Paints now has one centralized system for managing all customer data, which provides greater visibility into customer needs and is now available for use in campaign management and in the development of predictability models, among other activities. And because this data is available in real time, reports can be generated instantaneously.

Customer Interaction Center

Lead Details SOA, and so on

Reports

Asian Paints Home Solutions Business Team

SAP CRM

SAP NetWeaver BI

SAP NetWeaver Platform

Web-Based System Via Internet

Relationship Associate

Applicator

Sales Associate

Close collaboration between Asian Paints and SAP resulted in adherence to tight schedules. The SAP Customer Competence Center location in Singapore developed prototype scenarios specific to Asian Paints, and SAP Labs made valuable contributions to the design and configuration of the custom solution.

Business Process Transformation and Value Realized

Moving Asian Paints closer to Customers

Asian Paints has made clear gains in achieving its long-term goals, as follows.

Faster customer acquisition

The new online system for forwarding and following up on leads improved overall response times and reduced the time required to acquire new customers.

Revenue
In the four years since the implementation went live, 17,500 persons registered for Asian Paints Home Solutions consultations, and of these, 5,000 signed up for painting jobs. Targeted revenue for the period 2006 2007 is US$8 million to $10 million, and the company crossed the 30,000 mark in cumulative number of customers.

Optimized visibility into customer needs

The new solution gives Asian Paints greater visibility into all customer interactions. As a result, the company has gained a deeper understanding of the needs of its end customers and has tailored its service business to meet these needs.

Scalability
This new solution can accommodate Asian Paints continued growth well into the future. In fact, Asian Paints doubled the number of cities covered without modifications to the CRM system.

Optimizing Crtical Processes

The implementation of SAP CRM enabled Asian Paints to establish a direct link to its end customers and to meet customers need for a home painting service. The following table illustrates the processes that changed as a result of this implementation and the impact of these changes.

Processes Area
Financial Controls

Problems
Inability to monitor financial transactions between providers and customers or between providers and contractors

After SAP Software

Ordering and accounting system used by all providers Visibility into all financial transactions between providers and customers, and between providers and contractors The same sales delivery processes used by all providers Improved visibility into all customer interactions Centralized data management capabilities Improved visibility into customer needs Ability to profile customers

Impact
Accounting transparency Optimized financial process controls Improved data transparency.

Sales delivery

Lack of consistent sales delivery processes from lead and opportunity management to job estimating and scheduling Lack of visibility into customer interactions

Improved customer satisfaction Reduced time required to service customers Created a direct channel to customer Increased employee Productivity Improved customer service Improved customer acquisition and retention

Customer data management

Inability to collect and manage customer data Inability to identify changing customer needs

Future Road Map

. Asian paints is growing rapidly throughout the world. In international market company is planning to introduce new & attractive products through its subsidiaries, like Berger, Apco coating etc. In domestic market company will concentrate on development of new products/ product systems. With improved supply chain management. Through its implementation of SAP CRM, Asian Paints has established a

direct link to its end customers, and put in place processes to ensure that their high expectations will be met. In an effort to realize an even greater return on its IT investment, Asian Paints used its SAP CRM infrastructure to develop an e-recruitment platform. This platform allows employment agencies to review openings and upload job candidate information, reducing the time required to fill open positions.

In the future, Asian Paints plans to leverage its SAP CRM investment in the following areas:

Campaign management
With improved customer intelligence, Asian Paints now plans targeted campaigns to its customers.

New market segments

Asian Paints plans to extend its CRM initiative to indirect customer influencers such as architects and interior designers.

Complaint-handling system
Asian Paints plans to develop a formal complaint-handling system to tackle customer problems with both service and paint. By having selected a scalable system such as SAP CRM, Asian Paints has laid the foundation for its long-term growth.

Learning
Asian paints have increased the capacity by setting up a plant in Rohtak Haryana. No other company has planned to increase its capacity; this has given Asian paints a competitive advantage in terms of pricing. It has widest product range in terms of products, shades , pack sizes and their pricing strategy is oriented to middle and lower end consumers. Asian Paints is a market leader with more than 50% market share. SAP CRM enabled Asian Paints to build a service brand through Asian Paints Home Solutions. With its scalable CRM infrastructure, Asian Paints is poised to continue its expansion into the services market.

WEBILOGRAPHY

1)http://www.asianpaints.com

2)http://www.sdn.sap.com