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AsianPaintsthePaintingContractor

Extendingtheproductbrandtoservices
AsianPaintsagenuinelysuccessfulIndianbrand,withamarketshareofover45%.Borninthe50s,it
chalkedoutanoriginalruralmarketingstrategy,tocounterthehighurbanonlymarketfocusofthe
multinationalslikeICI,Berger,BritishPaints,GoodlassNerolacetc,Itused.distribution,logistics,
technologyaridproductinnovationtostayahead.Itlaunchedspecialpaintsmeantforthehornsofthe
cowsinsmalltinsasitsmarketinginformationrevealedthepracticeandtheneedinruralIndia.Its
brands likeTractor, Royaleetc.wereeasilyrecognisable bytherespective. Target markets. Its
depotswereconnected,muchbeforethedaysoftheInternet,witheachotherthrough'hotlines'tokeep
optimuminventoryandmanagedemand.ItsetupproductionfacilitiesinFiji,TongaandNepalmuch
beforeglobalisatlonwasabyword. ItofferedthecustomersbothruralandurbanIndiaoneofthe
highest choices ofshades and types ofpaints, which werecommunicated with catchy campaigns
('merawalacream').ItinnovatedwithATMlikerightmixersanddispensersinselectlocationsfor
thecustomerstogettherighttypeofshades.TheChokseys,thefoundingfamily,weredecidedly
proudoftheircompany.
Asian Paints became the first company of its kind in the Whole World to set up a turnkey
paint'contractingservice.Itwasaclassic case ofextendingasuccessfulproductbrandintoservice
withmixedresults. HomeSolutionswasoriginallymeanttobearevenueearner.Today,despitea
yearonyeargrowthof30percent,thecompanyisstilllookingat waystomakeitaprofitable
venture.Theprincipleissuesaretheheavyinfrastructurecostsandoperationsmanagement.Yetit
mightbeprematuretocalltheexerciseafailure.
The ideation of Home Solutions came from the feedback generated from a helpline service the
companystartedin1998..Itturnedoutthat40percentofthecallerswerelookingforturnkeycontract
service.Thecompanywasawareofthedynamicsofpaintusage.Thepaintedhousewasthefinaleto
a complicated chain of process: Choosing a house, choosing a construction firm ('builder') or a
repairman, paints and a painter. During the acquisition of the house, the customer had no
empowerment or capability in evaluating its design and construction. The quality of painting
dependedasmuchontheapplicationtechniqueasonthepaints.Customerslikedtheendresultofthe
paintsbutknewpracticallynothingabouttheotherpartsofthewholeprocess/cycle. Theyhada
controlonthepurchasecycleofthepaintbutnotontherest.AsianPaintsalsorealizedthatthey
themselveshadcontrolonthesellingcycleofthepaintsandpracticallynoneontheotherparts:
designofthehouse,selectionofconstructionmaterials,thebuilding/constructionprocess,choiceand
selectionofthepainterandtheprocessofpaintapplication.
Asian Paints decided to get more involved in the total paint cycle process pointedly the paint
applicationpart.SaysK.B.S.Anand,vicepresident,salesamdmarketing.Thehelplinehelpedus
realizethefactthatcustomersdidn'twanttotakethetroubleofselectingtherightcolour,deciding
whichpainttobuyandfromwhereThecompanydecidedtotakeonthegarbofaconsultanttothe
customer'offeringsolutionsforhishome'inexaminingthe'homescape',helpinghiminthechoice
ofpaintsaswellasingettingthesallspainted.
TheHelplineisnowusedasasinglecommunicationpointforHomeSolutions.Acustomercallsthe
company'shelplineandrequestsasalesmantovisithishouse.Oncethepaintischosen,thecompany
takescareoftherestofthejob,includingscrubbingandCleaning.Whileoneofitscontractorsdoes
thepaintingthecompany'ssupervisorsregularlydotheroundstocheckqualityofwork.Theservice
includesaoneyearwarranty.
Butseveralissuesarose.Onewasthat;despitethe10to15percentpremium,the.servicewasnot
really exclusive. Customers often found that their 'Asian Paints expert' variously called 'paint
inspectors",andnoweither"salesassociates"or"relationshipassociates" wasoftenthesamefriendly
neighbourhoodcontractor.TheybegantosuspectthecredentialsofAsianPaintsandthecompanywas
hardputtojustifythepremium.WhileAPpassionatelyarguesthatthecontractorsundertheaegisof
thecompanyoffereditcertainstandardofservicethattheyneednotwhentheyoperatedontheirown,
somecustomerswerelessthansatisfiedwiththeservice.

The Company realized that Home Solutions were up against very high expectations from the
customers. Theyexpectedtighterdeliverablesandtimeschedulesandwereintolerantofanydelay
fromabrandedservice. TheyrefusedtoacceptthesamestandardsfromHSastheyhadforthe
contractors,keepinghigherbenchmarks
AsianPaintswasalsosufferingthepangsoftoughtransitionfrommanufacturingtoservice.Itwas
forcedtograpplewithsuchissuesasmanagingthenetworkofcontractors.Thelatterwereeffectively
the company's interface with the customer, responsible for the inevitable Moments of Truth.
Contractors'salarieswerefoundtobeinadequate,accountingforsomesubstandardwork. Service
recoverieswereattemptedbyweedingouttheunderperformers,increasingthesalariesandtyingthem
withvariablecomponentslikecommissions,equippingthecontractorswithadvancedgadgetslikethe
lasermeasuringtorchforquickerandmoreaccurateservice,etc.
Allofthismaynothaveresultedinahighconversionrate,butthecompanyclaimstohavepainted
10,000housesintwoyears.ButAsianPaintsexperts5percentofthepaintvolumestocomefrom
HomeSolutions(itisnegligiblerightnow).HomeSolutionsiscurrentlyofferedineightcities.
Questions:
1)
Whatmakesamarketerextendhisbrand?Andespecially,fromproductstoservices?Ifthe
brandextensionfromgoodstoserviceshasbeendecidedupon,thenwhataretheramifications
andchallengesinmarketingtheofferintheirpositioningandtheiroperationsmanagement?
2)Howisservicesdifferentfromproducts,especiallyinthepaintindustry?
3)DefinethemomentoftruthforthecustomerintheservicesprovidedbyAsianPaints.
4)Howwouldyougoaboutthebusinessofservicesincontextwiththeabovecase?

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