Seminars In Marketing

Case Study

ICI Dulux Resets Its Position

Presented By:

Arooj Fatima MBIIE-12-06

Madiha Khalid MBIIE-12-04

Uzma Bhatti MBIIE-12-30

Tayabba Siddique MBIIE-12-08

Presented To:

Mr. Noor-ul-Mohsin Shah

Institute Of Management Sciences

Bahauddin Zakariya University, Multan.

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Introduction:ICI Dulux is a part of AkzoNobel, the largest paints and Coatings Company in the world. It was set up as a public limited company in Pakistan in 1952. The ICI Group is a renowned international business. It employs approximately 31,000 people worldwide.In the early days of its existence, decorators and their suppliers were the main customers for Dulux, with Say Dulux to your decorator used as an advertising slogan in the 1950s. By 1953, Dulux was available in the retail market and ten years later the famous Old English Sheepdog was used in advertisements, to the point where "Dulux dog" has become a common nickname for the breed. The name Dulux is derived from the words DuPont and Luxury.

The ICI Dulux multinational company vision is to compete in the industry by emphasizing on customer needs and to build and promote a culture of continuous improvement. It aims to create superior value for ICI customers and shareholders, without compromising its commitment to safety, health, environment and the communities in which it operates.ICI believes that ICI Dulux Paints Pakistan strengths include its well-established brands and theGlobal nature of the business which allow ICI Paints to use its resources, expertise and experience to offer the best solution for each local market and the needs of the end users. Great presence in places that the brand is better recognizedICI Dulux has maintained an image of being the most expensive in the category along with providing the best quality among its competitors. With the help of a lot of promotional activitiesFor its dealers as well as consumers, it has earned a great amount of goodwill over the years. While its competitors concentrate more on variety and mass production and a lot of other different strategies, the company is essentially a quality centric company.ICI DULUX Company is having production setup in more than 55 countries, More than 80 years of experience in the paints industry, offering wider range of products and Wider dealer network

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as compared to its competitors. Business volume of ICI Dulux is very high as compared to the competitors and it focuses on safety, security, health and environment as a corporate social responsibility.The ICI Paint business can be divided into three categories Industrial Automotive DecorativeAll the three business have embarked on programs which focus on the consumer and customerneeds. The focus is to understand the needs of the major stakeholders.

Market Analysis: ICI WeathershieldThe decorative paint market can be divided into two broad categories, interior and exterior. TheInterior market as the name suggests refers to the paints being used for indoor decorations.Similarly the exterior market corresponds to the paints being used to decorate the outdoors.The exterior market of paints in Pakistan is of 7 Million Liters. ICI dominates the market shareWith 4.2 Million Liters with its Weathershield.n LitersCurrently ICI has a 60% market share with its major competitor being Berger. Berger has a 20%Market share followed by a 20% share by smaller brands which include Berger, Blackhorse,Silversand, Master, Nippon, Gobi, Hapilac etc.Challenge:

In 1973, ICI launched its Weathershield technology in UK. The Weathershield technology reached Pakistan in 1984.but after this, Dulux has not done any innovation for a long time till 2005. In 2005 ICI Paints appointed its first chief marketing officer (CMO). Until then the organization had been run as a multi-local organization, with each of the 50 countries including Pakistan determining its own marketing strategy. There were examples of local success but performance was patchy, the company struggled to leverage good ideas and, more importantly, growth was slowing.

A pivotal question the company asked it was whether it could win against its competitors through simply building local capability and leveraging best practice. Or was there actually an opportunity to create advantage through building a global brand? Because The Dulux name was present in many markets but it was far from being a global brand.

Being one of the oldest and the globally trusted brand it has not changed with time. This change which is very cardinal for every company to grow over the years is nonexistent in Dulux. Dulux has not launched variants and did not plan on it as well. They believed in providing quality and not variety with mediocre quality. The brand has become just a traditional brand. In fact the product is always successful because of its awareness among the customers. Despite of holding a strong position in the market Dulux Paint has not been able to aware the customers fully about the three new products. The knowledge among consumers is very less resulting in uncertainty of the product among them. This is a result of less promotional schemes. There is a high degree of uncertainty about the Dulux paints new products in Market because a large market share was captured by competitors.

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Among the many challenges to cope with competition there is one more which is the most important one for the brand, it is keeping brand awareness at optimum levels at all times. Long term and short term goals have to be set for the brand and strategy is of utmost importance here. In the later promotional activities of Dulux there needs to be equilibrium of creating awareness even in the areas which have never tapped before. The challenge here now is to tap the niche market in a way which has never been before and to create a new category inside the existing so that an automatic niche is created. Being the first in a category gives an automatic brand standing in the eyes of the consumer.The one important thing to look at here is that the strategic advertising opportunities were not really explores well enough. The awareness of the brand has almost diminished in places where it was already low. There is no brand recognition in most rural areas what so ever. The brand is far from being recognized a paints manufacturer, it has lost its identity in most developing urban areas as well. There is no brand presence of Dulux paints in the economy brands becauseof which when middle class consumers opted for better quality and premium emulsions they did not consider Dulux, instead, they stuck to the same brand they knew very well. When it comes to media planning and placements,ICI Dulux has been far behind the requirements of the band wagon of pacting. The only thingbecause of which the brand loses out on popularity is that, consumers nowadays think that if a brand is out of sight it is out of function and so they tend to deviate from it.Competitors:

Direct Competitors

Berger paints

Master

Diamond

Marvell

Silky

Tiles

Wood peeling

Wall papers

Rockwall

Paint puree

Because of these competitors, ICI Pakistan is facing a serious problem in attracting the new customers and retaining their existing customer. In order to meet the competitors ICI paint

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Direct Competitors

Indirect Competitors

Pakistan has to spent more money on advertising , promotional activities and area coverage for their customer satisfaction. Recently, new competitors are coming in the industry, which is the sign of growth of paint industry. According to industry analysts, this tough competition , high promotion strategies and increasing trend toward paint industry are the clear chances of the high growth in paint industry.

Discussion Questions: What are the opportunities to create advantage through building a global brand? What are the marketing strategies they must be used to create awareness and reposition

the brand? Who are the competitors and how they are threat for ICI Dulux?

Strategies for brand promotion and recognition in Pakistan:ICI Dulux took many strategies to become more recognizable among market and target customers. Some strategies are as follows:

Lets Colour’ Strategy The mission was to spread colour all over the world – a bold and immense task. ‘Lets Colour’ was launched as an initiative to makeover targeted drab looking buildings with the help of local communities. By launching a campaign,  Dulux hoped it would inspire audiences to regenerate anything – big or small, inside or out, with colour paint.

To get local communities interested in taking part, momentum was built around a social media campaign. The project started with the launch of a ‘Lets Colour’ project blog – with blogs being the channel that the brand saw as the most open and direct way to start sharing its project with the public.

ICI Dulux started this compaign to increase the awareness in people mind so that they can build the brand equity.they held different events and increase the customer brand resonnannce. The events include in this project are:

IAPEX 2011 “Building Materials Exhibition” :

ICI Dulux sponsored the “Building Materials Exhibition” held at the Expo Centre Karachi in May 2011.  The event was organized by the Institute of Architects Pakistan (IAP) to provide one-stop solutions for homeowners, builders and interior designers on the latest products, ideas and emerging architectural techniques in the field of building and construction. The event attracted 250 architects from all over Pakistan, 400 architectural students from various universities and around 10,000 general visitors.

IAPEX Karachi 2012: Institute of Architects Pakistan, Karachi Chapter organized its seventh international exhibition of building products in which more than 100 exhibitors displayed their stalls.  The ICI Dulux stall won the 1st prize at IAPEX Karachi 2012.

CSR Activities

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Lets Colour Mayo Hospital: On 9th April, volunteers from ICI Dulux along with students from National College of Arts and employees from BF Bioscienes enthusiastically participated to add a splash of colour to the cancer ward at Mayo Hospital

PIID Road Show Lahore 2011 PIID Road Show Karachi 2011 Own a Color Lets Colour Layton Rehmatulla Benevolent Trust PIID Road Show Lahore 2011 ICI Dulux Stall wins at IAPEX 2012 Transition Event held at ICI Paints Business AkzoNobel Pakistan wins the "Most Colorful Workspace" contest globally! Let’s Color Week:

Color Week was about celebrating the transformative power of color and how it can improve lives around us.  Running from October 10 to 14, the “Let’s Color Week” helped employees worldwide discover what they know about color and how they can bring to life the shared ambition of “Adding color to people’s lives.” The purpose of Color Week was to enable employees to experience color, joy, engagement and a sense of community. There were workshops, contest, e-learning modules, on-ground activities, workspace painting, community painting and many more interested activities to spread the color around.

Content was uploaded in real time to the blog and to You Tube, Twitter, Facebook and Orkut.

The content was quickly picked up upon by other blogs and online newspapers all over the

Pakistan, building momentum ahead of the city visits.

ICI Dulux Thematic Campaign -

A Theme for Every Dream 2011:

This campaign centered on the tagline ‘A Theme for Every Dream’, and reinforced the ICI Dulux brand personality as the leading innovative one-stop shop decorative solution provider in Pakistan. The campaign subtly introduced AkzoNobel as the new parent company and highlighted ICI Dulux groundbreaking services such as Customer contact center (0800-Dulux), color consultancy/interior decoration advice service and color studios. All communication

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platforms including television, radio, newspapers and outdoor exemplified an assortment of colorful themes nationwide.

ICI Dulux weathershield vs their competitors: ICI Weathershield dictates prices in the exterior market. All the competitors including thesmaller players follow the same pricing strategies. The price of ICI Weathershield is 5% morethan that of Berger’s Weathercoat.Berger has still to come-up with a product to compete with the new Weathershield Fresh whichcomes with an added feature to repel dust. The new ICI Weathershield is also available in a lotmore colors than any other exterior paint in the market. Thus Berger is lagging behind in itsproduct development strategies.Recently, all the other paint providers besides ICI dulux have developed a new strategy to giveincentives to painters and contractors by offering them discount-tokens. These tokens vary froma discount of Rs. 50 – Rs. 300. As these painters and contractors have a significant influenceover the consumer in choosing which paint to use, this token scheme has helped boost up theirsales significantly.However ICI Weathershield believes in focusing on the end-consumers instead of giving tokensto contractors. It believes that this will help develop long-term loyalty from its consumersresulting in repeat sales.

Sale Of Fake Paint: All personnel interviewed expressed their firm opinion that at least 20% of the paint sold in thelocal market is “fake paint” sold under popular brand names. Since ICI Weathershield is themost popular brand for the exterior paint, the percentage of fake paint sold under its brand nameis even higher. Although ICI dulux Paints has a large number of authorized dealers and most of these dealers are loyal to the company, however the general public was not completely aware of how to differentiate the genuine dealers. Also some of these authorized dealers are not quite as loyal and ICI Paints has occasionally received complaints in this regard, which ici dulux have dealt with increasing the incentives of dealers. In addition the ICI paint products including the Weathershield is also being sold by other shopkeepers who are not authorized dealers. Paint purchased through these shops has even lower credibility.So ICI dulux established their own Point of Sale Tinting and its own Model Shops.ICI Weathershield is supplied in metal containers, which are not sealed in any foolproof fashion.

Point of Sale Tinting (POST ) ICI Dulux Point of Sale Tinting (POST) offers over 2000 shades available all over Pakistan at designated dealer outlets. Colour consistency and quality is our forte and our customers can be confident that the colour they bring home is exactly what they paid for. 

Repositioning: Dulux weathershield and its enhancing attributes which are known but never emphasized on would be a good positioning turn for the brand. After lets color project ,Dulux has captured 70-80%share in paint market and the sales of each brand increased till 2012 .

Weathershield Sun Reflect :

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Innovation has been the key driver behind the success of Dulux in creating the brands and initiative for sustainability.Dulux SunReflect was launched in March 2011.  This latest launch, ICI Dulux Weathershield Sun Reflect is a revolutionary exterior paint that reduces the temperature of walls by up to five degrees!Dulux says: For us, innovation begins with great insight into our customers’ needs and with Pakistan facing its worst energy crisis ever.

Other products it came up with, include:

1. ICI Dulux Woodcare Shades2. Dulux Super Gloss finish Enamel3. Dulux Metallic Finish Enamel4. Dulux Matt Finish Enamel5. Dulux Synthetic Enamel Fan Finish White6. Dulux Pentalite Special Plastic Emulsion (Acrylic Based): Now a days the Television

commercial of the ICI Dulux plastic emulsion can be watched which emphasizes the6134 shades it has.

7. Dulux Pentalite Natural White Special Plastic Emulsion with Added 8. Fragrance (Acrylic Based)9. Dulux Contractor‟s Plastic Emulsion10. Dulux Weather Shield (Acrylic Based)11. Dulux Prime-on12. Dulux Water Repellent13. Dulux Once…It is a new breakthrough in paint technology as it completes the job in just one coat. This special emulsion saves time has a high coverage and therefore is highly economical. Coverage: 7-8 m2 /ltr/coat (Only one coat needed)

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14. Paintex Duraguard15. Paintex Star Emulsion etc.

Oil base paint which has no smell; is odourless or has fragrance. It is available in DuluxMatt Enamel, Dulux Enamel and Dulux Pentalite Classic. It would be an achievement tohave the same quality available in ICI Weathershield.

Positioning By Price:

The wide range products is positioned according to customer needsas customers are always in need of the varied products. ICI isacquainted with flexible product as it has an extensive range of 52 two-tonecolour paints. Consumers can be offered any colour scheme according totheir needs and on reliable prices in comparison to the competitors.

Positioning By Promotion Strategy:  As ICI Dulux has a diversified market it has to use a number of promotional Tools.

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Radio Advertisement

Print Advertisement

Point Of Purchase Advertisement (e.g. color cards, brochures and other informative materials at dealers shops etc.)

Out Door Advertisement e.g Sign boards at busy areas for maximum people to see.

Sales Promotion:  Sales promotion is also a very important promotional tool used by ulux in which different short term and long term incentive schemes are offered to the dealers.Sometimes the company provides the dealers with extra discount if they sell upto or more than a target amount preciously decided.Dealers are sometimes also given small incentives like T-shirt, wall clocks, folders, brochures, pen holders etc in return of the sales promotion.

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ICI Dulux has increased customer awareness of typical painting problems and develop their ability to understand the causes and offer solutions for how they can be rectified. All solutions are available on ici dulux website.dealers also help and give advices to their customers. This service has solved mainly the problems of customers working in fine arts and fashion industry as well as painters.

CONCLUSION & RECOMMENDATIONS:From the above discussion it is concluded that ICI Paints has a lot of resources and well equipped. It is true to say that ICI Paints is Market leader and it is fully applying all of its resources on Quality Practices, Customer Retaining & Satisfaction, Research & Development and Environmental Control, but it needs to show some management commitment to retain its position, because one of its competitors is penetrating in the market.Recommendations:

Raising public awareness through advertisement about the fake paint sold in the market. Taking suitable measures whereby ICI Paints official Dealers are easily recognizable –

perhaps by displaying a sign board. Forward integration: ICI at the moment is depending on dealers for the sale of their

products. The dealers store company’s products, retailers have to get ICI products fromthe dealers & then offer customers for sale.If ICI instead of depending on dealers use their own on distribution to supply products toRetailers then they can increase the sales of their products by giving products to everypossible retailers and in this way they can get acceptance of every retailer to get theirproduct and offer it to customer for sale.

Backward integration: Presently ICI Pakistan is purchasing its raw material fromBoth local as well as foreign suppliers. About 75% material is purchased from foreigncountries and 25% is purchased locally.As such as huge quantity of raw material is purchased from foreign countries that’s why

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change in government import duties have a great impact on prices of raw material whichalso increases the prices of finished products.Therefore if ICI acquires local suppliers to start making its own raw material then it canSave itself from such fluctuations in prices, which could result in the stabilization ofprices, and customers can purchase the products at low prices.If ICI gains control over their local suppliers by ownership and take charge of theiroperations then a significant cost cutting is possible. After getting ownership if ICI startmanufacturing all or most of the required raw material locally then they can significantlyreduce the volume of import thus avoiding the heavy import duties imposed by the govt.It will result in decrease in cost of product and ICI would be able to offer its product at a relatively cheaper price.

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