Project on Sales & Distribution

Management of Decorative
segment of Berger Paints in Delhi

CONTENTS
Indian paint industry market assessment
Future outlook
About the company
Presence in India
International presence
Role of channel partner
Channel design decision
Selection of channel member
Channel structure

CONTENTS [contd...]
Alternate channel structure
Different channels for high end customers
Distribution task
Terms of credit, payment mode and mark up
Channel pricing
Seasons and specification of inventory
Stocking norms & practices
Innovations
Trade promotions
Recommendations

INDIAN PAINT MARKETMARKET ASSESMENT

IN INDIA THE TOTAL MARKET SIZE OF THE PAINT
INDUSTRY for ORGANISED SECTOR IS 35,000 Cr AND
ORGANISED SECTOR IS ABOUT 21,000 Cr.
THE ORGANIZED SECTOR OF THE INDUSTRY IS
ABOUT 65% and UNORGANIZED SECTOR 35 % .
TOP ORGANISED PLAYERS INCLUDE ASIAN PAINTS,
KANSAI NEROLAC, BERGER PAINTS AND ICI.
IN THE UNORGANISED SEGMENT, THERE ARE ABOUT
2,000 UNITS HAVING SMALL AND MEDIUM SIZED
PAINT MANUFACTURING PLANTS.

SECTORS
ARCHITECTURAL 70%
Decorative ( housing &
construction sector )
INDUSTRIAL 30%
(Automotive & consumer
durables)

INDIAN PAINT
INDUSTRY

DECORATIVE
SEGMENT
[70%]

PREMIUM
RANGE[high
end acrylic
emulsions]

METROS AND
LARGE CITIES

INDUSTRIAL
SEGMENT
[30%]

MEDIUM
RANGE
[enamel
paints]

DISTEMPER
RANGE [low
end paints]

SMALL CITIES

SUB-URBAN
AND RURAL
AREAS

AUTOMOTIVE
SECTOR
[about 2/3rd
share]

CONSUMER
DURABLES
MARINE
PAINTS OTHER
OEMS

MARKET SHARE OF MAJOR

PLAYERS IN INDIA ( ON THE
BASIS OF SIZE )

ON THE BASIS OF
PRODUCT
DECORATIVE:
APIL Dominates the Decorative segment with 38%
market share.
GNPL the no.2 in the decorative segment with 14 %
market share.
Berger & ICI have 8% & 9% shares respectively.
J&N and Shalimar with 1 & 6 % respectively.
INDUSTRIAL :
GNPL Dominates the Industrial segment with41%
market share.
APIL has a 15% market share.
Berger & ICI have about a 10 % and 9 % market
share.

FUTURE OUTLOOK

Ratio of industrial paint to decorative paint is

expected 50:50.

Demand for paints for new housing is app. 30% ,

rest from repainting.

In decorative coating segment, growth is being

observed in exterior coating segment.

Premium product in this category are doing well

due to superior quality and durability.

ABOUT THE COMPANY

Established in 17th December, 1923.

Head Office in Kolkata.

manufactures and markets a range of decorative &

industrial paint products.

14 manufacturing facilities in India and more than

153 depots, besides 4 facilities overseas.

Workforce of over 2500 employees and a

countrywide distribution network of 20,000 dealers.

YEAR

HIGHLIGHTS

1923

Setup on a 2 acres of land in one of India's

first industrial towns close to Kolkata in
Howrah, Bengal.

1947

Mr. Alexender Vernon Nible, first managing

director bought over Hadfield's (India)
Limited and thus the name changed to
British Paints (India) Ltd.

1965

Share capital of British Paints (Holdings)

Limited was acquired by Celanese
Corporation, USA

1973

Marine and decorative segments under the

Leadership of it first Indian Managing
Director Mr. Dongargaokar Madhukar.

1983

British Paints (India) Limited, changed its

name to Berger Paints India Limited.

90S

The COLOUR BANK tinting system was

launched consumer could select from a
range of over 5000 shades.

2003-04 and in 2005

the Company ventured into Russia through a

foreign subsidiary.

2011

The Company's consolidated sales turnover

for the year wasRs 2328.12 crs.

PRESENCE IN INDIA
Howrah
Manufacturing Capacity :
11,200 MT
Berger Paints India Limited
14 & 15 Swarnamayee Road
P.O. Botanic Garden, Howrah
711 103
Phone : +91 33 2668 4706 /
4709 / 6212 / 6213, Fax : +91
33 2668 2956.
Vallabh Vidya Nagar
Manufacturing Capacity : 17,000
MT
Beepee Coatings Limited
Plot No. 433 / Part G.I.D.C.Estate
Vithal Udyognagar, Anand via
Kheda District, Gujrat
Phone : +91 2692 236140 /
6207 / 6334.

Pondicherry
Manufacturing Capacity :
18,000 MT
Berger Paints India Limited
53-56 Pandasozhanallur
Village
Nettapakkam Commune,
Pondicherry 605106
Phone : +91 431 2699143 /
9574
GoaFax : +91 431 2699171.

Manufacturing Capacity : 6,000 MT

Berger Paints India Limited
316 & 317 Kundaim Industrial Estate
Kundaim, Panda, North Goa
Phone : +91 382 2395 610 / 6407 /6212
EMAIL Id: [email protected].

PRESENCE IN INDIA
Rishra (BAICL)
Berger ICAI
103 G.T. Road, Rishra
District : Hooghly, West Bengal
712248
Phone : +91 33 2672 0641 / 0642 /
0643

Jammu
Berger Paints India Limited
SIDCO Industrial Growth Centre
Sanba, Jammu, Jammu & Kashmir
184 121
Phone : +91 1923 246451 / 6458 /
6459

INTERNATIONAL PRESENCE

ROLE OF CHANNEL PARTNER

CONVERGING PLATFORMS: Simplify and facilitate
the transactions by bringing the channel members
together.
EASIER & ECONOMICAL :Easier and economical to
work with intermediaries.
WIDESPREAD LOCATIONS: Reaching out directly to
the consumer becomes difficult due to widespread
geographical locations.
ENCASHING ON THE INTERMEDIERIES EXPERTISE : It
is easy for manufactures to encash on the
experience of the wholesaler + specialization+
infrastructure+ sales force.

CHANNEL DESIGN
DECISION
Traditionally most of the paint companies follow
manufacturer wholesaler retailer consumer
channel.
Berger eliminates one of the intermediaries
cutting down the chain, following A Direct
Marketing channel which helps you to contact the
customers directly.
Direct Marketing channel helps you to support
accurate segmentation & sharper targeting of the
market segment.

CHANNEL DESIGN
DECISION
Cost effective :as it eliminates the cost to the
various channel members.
Facilitates special attention : It allows Berger to
facilitate special attention to key accounts.
Saves time & hassle free purchase.

SELECTION OF CHANNEL
MEMBERS
BERGER chooses its channel members based on the
following criteria :
Dealer should have a sound financial record.
Dealer should have a goodwill in the market.
Dealer should have his infrastructure & logistics.
Dealers should be aware about the company
background, products and services.

CHANNEL STRUCTURE
14
MANUFACTURING
PLANTS ACROSS
INDIA

153 DEPOTS IN
INDIA/ GODOWN

RETAILER

DIRECT
CUSTOMER
DIRECT
PROJECT
INSTITUTIONAL
/ CORPORATE
BULK BUYER
( INSTITUTIONA
L DEVELOPERS

CHANNEL STRUCTURE
DELHI OR EACH STATE
MANUFACTERING UNITS
20,000 dealers all over India
1200 plus dealers on new Delhi
alone
14 products
1200 shades & depots in
Delhi, badurpur, mayapuri,
wazir gunj, mandor

DEPOTS/
STORAGE
NORT
H

SOUT
H

EAST

+300
DEALERS
FROM EACH
ZONE

WES
T

ALTERNATIVE
CHANNEL STRUCTURE

EXCLUSIVE CHANNEL : Product / service sale of

only one manufacturer/ producer showroom /
outlets / franchises.

SELECTIVE CHANNEL : product/ service sale of

different brands / products in limited locations
( done through a selected retailer by most paint
companies).

INTENSIVE / RETAIL CHANNEL : product /

service sale of FMCG / consumer goods/ wider
market coverage .

Government/ defence canteens or Subsidised

stores.

On Commission bases : with the painter.

HOW DOES BERGER PUSH ITS PRODUCTS FORWA

Time to time incentives are given by Berger according to performance of
the dealer and market demand.
IN STORE DISPLAYS: POINT OF PURCHASE , Berger paint banners,
demonstrations on colour wall etc provided by company.
TEMPORARY PRICE REDUCTION: They get margins plus incentive
promotion scheme to maintain the dealer.
CONTESTS: Dealer to dealer contests are held to promote push
strategy and best dealer gets the reward. Berger paints does the same
in various geographical areas.
SAMPLING: Allowing the dealer to experience the product or service by
providing samples of various paints.
TIEING UP WITH INSTITUTIONAL PROJECTS:A tie up with any of the
project in the near by areas.
SCHEMES: Promotional schemes and benefits such as Gift vouchers and
Seasonal discounts sponsor trips to the dealers or Giving them a chance

DIFFERENT CHANNEL FOR

HIGH END CUSTOMERS
Offering customer solution :Through customer helpline.
A MENU OF PRESET DESIGNS: Helping you to get
designer solution for your room.
A wide variety of colour palette and pre-set designs for
your room.
Insuring customer satisfaction by a before photograph
of the site and an after photograph of the site.
Offering a chance to create a customised colour palette.
Issuing a completion certificate along with a friendship
ka faida booklet.

Products for high end/low end

customer
High end

Medium end

Low end

Berger luxol
Berger silk
Luxury
emulsion

Bison
emulsion

Dis-temper

DISTRIBUTION TASK

The task of the each member of the distribution

channel is quite different but the motive is same for
every member i.e. to provide the product to the
consumer.

The manufacturers task is to provide product to the

wholesaler.

The wholesalers task is to provide the product to the

retailer.

The retailers task is to provide the product to the

consumer.

TERMS OF CREDIT
Most manufacturers give 7 to 10 days credit period to
wholesalers as company does not want block
payments more than that period.
The credit period is extended for certain wholesaler
depending upon how they meet their targets and can
be extended up to 21 days.

PAYMENT
Cheque is a preferred mode of payment by the
manufacturer however.
Payments from customer
Terms of Credit
is through cash.

MARK-UP
The typical mark up on any product by a retailer
is 7-10 % and by a wholesaler is 1-2 %.
There is less mark up on running products such
as Berger enamel.
More mark up on less running products such as
silk.
New products allow you to have a higher mark
up as the price doesnt not have an earlier price
point.
Further, a healthy competition allows you to have
a mark up on the products.

CHANNEL PRICING Berger Paints

Cost to produce =
Unknown
(As manufacturer is a
seller)

Manufactur
er

Cost to produce = Rs
220/litre

Wholesaler

Cost to produce = Rs
225-230/litre

Retailer

UNKNOWN

1-2 % Gross Margin

received by wholesaler
on sale to retailer

7-10% Gross Margin

received by retailer on
sale to consumer
Cost to produce = Rs
240/litre

Consumer
Source : 6 Direct Interviews with
the retailers

SEASONS AND
SPECIFICATION OF
INVENTORY

ypical seasons for the paint industry

After monsoon until November.
From 15th march to 15th July.
Off season is April.

Margin and discount

Dealers collect their margins at the time of sale of
products.
Margin\discount provided by company is between
3.5 to 5%.

MARGIN SHEET
PRODUCTS

Red oxide
primer(42
1)
Berger
kidz DL
Jadoo
white
Snow
white
Matt
wo(181)

Cost to

Cost to

Cost to

Mrp

manufacturer

wholesaler

retailer

(Rs.)

per meter

Per meter

Per meter

Unknown

1853.57

1890.64

2022.98

Unknown

1438.94

1467.71

1570.45

Unknown

405.03

413.13

442.04

Unknown

3894.73

3972.62

4250.70

Unknown

247.28

252.22

269.87

Source : Price list and 6 Direct

Interviews with the retailers

STOCKING NORMS AND

PRACTICES
A stock typically depends on sale: on as and when
sale happens.
The stock depends upon the group in which the paint
falls such as an average selling paint for eg. Emulsion
is kept more in stock while a distemper is stored
average.

The kind of buyer

based on geographical area.
Specification
of inventory
Inventories extended in the starting of the season.
Increased at the time of Diwali.
Terms of Credit

On as and when basis keeping a minimum stock of 20

litres of a sub category of a paint.

Selling strategies B2C

Berger paint have large area of Network of distribution.It has

almostretailoutlets through out the country situated in the
different city of India. All the customer could easily access the
product of Berger paint anywhere and any time.
First of al Berger paintis bring differentlow cost product like
Utsav group inthe rural market.
To enhancetheir sales in the market they are spending ahuge
amount ofmoneyin ad campaigns. Festive seasons includes price
discounts on the items ofBerger paints.
Theyfollowsales
demonstrationprogrammewheretheydemonstratetheirdifferent
product where a large no. of discount is given on the product,
lucky coupons, free gifts are given to the customer.
Moving vans are beingemployed to sell theirproductin
differentvillage.
Thecustomers of Berger vary froma periodto a big industry
inorderto enhance its ales it gives price discount on bulk amount
of purchase. The company give coupons inside the paint pack so
that could be taken by the customer as a gift from the company.

Selling strategies B2B

Accordingto Primary research,themaximumdealers go for200

containers for a month, this is done through average sales of the
paints by the dealers.
Dealersget 7-10% margin which accounts him their profits from
Berger. According to this, they recommend the product
accordingly and even place them at right places where the
product sales can be maximized.
Dealersget 5-10 days order cycle time margin which accounts him
their profits from Berger. According to this, it shows that they
areabout to sell almost 70%of what they have collected 10 days
back.
Dealers get trade discounts whichnot onlyattracts dealers
tocompany butit also accounts for extra added advantage in
selling the product to the customers. The word of mouth publicity
also forms an integral part of communication in this area.
Dealersget Brochures and ads which serve them a purposes of
looking and having records of variety of Berger paints. Trade
meetings and personal visit also follow the trend.
Specialtyadvertising:Giving Berger paint T-shirt, Capsand other
small things to painter for their advertisement.

INNOVATIONS

Pre painting audit of structure before painting starts. The

surfaces to be painted are checked for surface porosity,
moisture content, alkalinity, effervescence, water seepage,
undulations, micro cracks, etc.

Recommending appropriate painting systemkeeping in

mind the wall surface and climatic conditions. Suggesting
the kind of primer, topcoat, pre-primer coat (if any), etc.
that should be used.

Product and shade development along with preview

facilityso that we can provide tailor made discerning
customers having specific requirements we tailor make
products and shades as inputs for providing specific
properties. Post selection of shades we give visual print to
the building with the chosen shades through our preview
facility through which one can find out how the building will
look like before painting in virtual sphere through simulation
software.

Technical Servicesto provide solutions to overcome typical

RECOMMENDATIONS
Various schemes provided by company to the dealers
must be completely entertained by the help of
personal meetings as most of the dealers are not well
educated to understand the schemes.
Frequency of advertisements on television should
increase.
Advertising campaigns for rural segment of the
society should be targeted.
Dealers and painters should meet at a regular
interval of time as it helps to promote the brand as
well as maintain the goodwill of the company in the
market.

RECOMMENDATIONS

Asian and Nerolac paints are used to do

advertisements by painting of shops, whereas
Berger paints just provide a hoarding to the dealers.
Company should start painting ofshops for dealers.
It serves dual purpose, firstly it will attract
customers and it also provides satisfaction to the
dealers.

There must be ademarcation between target of

small dealers and big dealers, sothat small dealers
can also get motivated to complete their target.

Berger should use competitive pricing for some its

products which are competing with Asian and Elite
paint products in the market.

THANK YOU
GROUP No.1