What should AP be doing to ensure the loyalty of the top set of its retailers, and stem the threat

from competition? Would breaking the decades old open network policy create more of a negative impact than positive? Top retailers are the heart of Asian Paints distribution channel. They complete the essential chain between end consumer and manufacturer. The industry ails from the issues of low involvement and high reliance on contractors. And for a product which is sourced mostly through influencers like contractors, the role of middlemen becomes all the more important. Also, the most important of them are the top retailers which play on very high volumes.

Asian Paints recognizes there essentiality and has hence built the strongest chain of dealers in India. Despite low margins, competitive advantage of Asian Paints comes from a. Operational efficiency i) High Dealer inventory turnover ii) Low inventory replenishment time b. High volumes Hence it is of utmost importance to handle these top retailers carefully. After doing primary research and reaching out to some of the top retailers in Delhi NCR region, we came up with some suggestions to ensure their loyalty. a. Special awards/rewards program i) For the dealers who have been company exclusive dealers for more than 10 years ii) For supporting branding activities of AP b. Complete marketing assistance (Sales Officer) allocation to old (10+ years) dealer network, including Shade Cards, Demos and Point of Sale give away c. Helping in developing them by giving opportunities for establishing Sub-dealerships d. Organizing AP dealer meets at the local AP sales offices/ depots e. Develop dealer grievance redressal mechanism using IT support systems We also recommend a continuation of Open Network Policy, as not doing so will harm the growth of Asian Paints. We estimate that breaking the old open network policy would create a negative impact on the mindset of dealers.

Is Modern Trade the way to go for Asian Paints? Two large retail conglomerates are knocking on the door with interesting offers Modern retail presents a compelling future opportunity; however, it is unsuitable under the current market circumstances. After visiting modern retail outlets and doing secondary research, we analyzed that there were both, positives and negatives, towards entry into this channel. Some of the benefits are: a. A growing network and the new channel of shopping, a compelling reason for future entry b. Suitability for engaging women and families c. Strong brand recall among regular customers d. Potential for selling premium products But the problems outweigh the benefits: Financial: High land / rent cost Most of the organized retail in India flourishes in areas such as malls, which involve high land cost High Operating Cost Include electricity, maintenance and security expenses Incremental customer acquisition not sufficient to justify the increments in costs Sales & Distribution Network Potential unrest among the existing dealer network Large dealers may start promoting other brands Makes it easy for competitors to break-in the AP dealer network by offering lucrative deals Chances of arm twisting by large retail chains in the future for higher discounts / schemes Operations Operational efficiency Competitive edge of AP, may get affected by efficiency of modern retail Stock outs Most retailers stock multiple brands and the variety of products and shades makes it difficult to stock all products Human Resource & Decision Influencers Large retailers do not engage in selling individual brands Sales force at large retail stores do not have detailed knowledge of all products in a category Contractors are among the key influencers, who usually have loyalty towards brands due to the offerings received Consumer habits Lack of Do-It-Yourself concept in India Consumers select the brands and shades, and the product is purchased by painters / contractors as the product is voluminous Difficulties in carrying goods to parking and for those using public transport or twowheelers For reasons mentioned above, we believe that Asian Paints is well off staying away from modern retail.

And most importantly how does one increase the consumer involvement in a category like paint (especially the women consumers) to ensure consumer loyalty towards Asian Paints in the face of such stiff competition?
Each stakeholder has a spate need and different ways of transacting with Asian Paints

India, an emergent economy is witnessing a change in consumerism, and Asian Paints, operating in FMCG & FMCD landscape must track this change well. Also, we understand the need to slowly remove dependence on current influencers and bring consumers into play. Hence, by leveraging the market leadership position of the company, we suggest an evolution into community building era by educating customers. Women, have been playing a key role in the paints business they are the ones taking decision on the aesthetic front of house building. We conducted a thorough primary research by speaking to married women across Indias geography and noticed that an educated married woman now wishes to stay upbeat with the current happenings in the paints business. Accordingly, we have built a robust model showcasing Asian Paints brilliance by gathering attention, spreading awareness and generating interest in the mindset of women. a. Color Consulting at Convenience To reduce the role of contractor in color consultancy b. Educating on Ease and Effects of Paints To provide complete solutions to creating a desirable home decor c. Paint Your Home To organize competitions in malls in key cities to show the ease of painting and build a culture d. Social Impact To run contribution schemes, shows and competitions where the proceeds go towards painting municipal schools and orphanages Primary research and secondary investigations lead us towards building a closely knitted community The Asian Paints family world. We suggest the following activities to engage the consumers: a. Kids Zone : Place where children could color on walls anything they want b. Free Play : The activity spots for adults The key promotional ideas would be: a. Interactive Bill Boards : Guerilla Advertising (ex. scene where image moves in sync with customer) b. Competition Wall : An event designed to generate the competitive spirit of young adults c. Color conversations : Conclaves with designers and architects d. Digital initiatives : Mobile Applications and specialized online portals Kids Zone Color Conversation