AsianPaintsthePaintingContractor

Extendingtheproductbrandtoservices

AsianPaintsagenuinelysuccessfulIndianbrand,withamarketshareofover45%.Borninthe50s,it
chalkedoutanoriginalruralmarketingstrategy,tocounterthehighurbanonlymarketfocusofthe
multinationalslikeICI,Berger,BritishPaints,GoodlassNerolacetc.Ituseddistribution,logistics,and
technologyaridproductinnovationtostayahead.Itlaunchedspecialpaintsmeantforthehornsofthe
cowsinsmalltinsasitsmarketinginformationrevealedthepracticeandtheneedinruralIndia.Its
brandslikeTractor,Royaleetc.wereeasilyrecognizablebytherespective.Targetmarkets.Itsdepots
wereconnected, muchbefore thedays ofthe Internet, witheach other through'hotlines' to keep
optimuminventoryandmanagedemand.ItsetupproductionfacilitiesinFiji,TongaandNepalmuch
beforeglobalizationwasabyword. 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:design
of the house, selection of construction materials, the building/construction process, choice and
selectionofthepainterandtheprocessofpaintapplication.

Asian Paints decided to get more involved in the total paint cycle process pointedly the paint
applicationpart.SaysK.B.S.Anand,vicepresident,salesandmarketing.Thehelplinehelpedus
realizethefactthatcustomersdidn'twanttotakethetroubleofselectingtherightcolour,deciding
whichpainttobuyandfromwhereThecompanydecidedtotakeonthegarbofaconsultanttothe
customer'offeringsolutionsforhishome'inexaminingthe'homescape',helpinghiminthechoice
ofpaintsaswellasingettingthewallspainted.

TheHelplineisnowusedasasinglecommunicationpointforHomeSolutions.Acustomercallsthe
company'shelplineandrequestsasalesmantovisithishouse.Oncethepaintischosen,thecompany
takescareoftherestofthejob,includingscrubbingandCleaning.Whileoneofitscontractorsdoes
thepaintingthecompany'ssupervisorsregularlydotheroundstocheckqualityofwork.Theservice
includesaoneyearwarranty.

Butseveralissuesarose.Onewasthat;despitethe10to15percentpremium,theservicewasnot
really exclusive. Customers often found that their 'Asian Paints expert' previously called 'paint
inspectors",andnoweither"salesassociates"or"relationshipassociates" wasoftenthesamefriendly
neighborhoodcontractor.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?