Project Report

SUMMER TRAINING REPORT

on

A Brief Study of

Distribution Channel of Paints

With particular reference to

Kansai Nerolac Paints Ltd.

Submitted in partial fulfillment of the requirements of

Post Graduate Programmer

by

Vikas Kumar
Batch: 2012-2014
Roll No. FT-12-MM- 544

IILM Graduate School of Management

Greater Noida

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ACKNOWLEDGEMENT
The project of such magnitude cannot be accomplished without the assistance and co-operation of
several people. Exchange of idea generates a new object to work in a better way. So, whenever a person
is helped and co-operation by others. His heart is bound to pay gratitude and is not merely formalities
but an expression of deep sense of gratitude and cumulative appreciation.

First of all, I wish to express my deep sense of gratitude to my mentor Mr. C.Snatanam IILM GSM,
Greater Noida. Whose support and guidance along with timely advice has helped me to complete this
project report.

I owe a special debt of gratitude to Mr. Uttam Singh (Branch Manager, Bihar) who helped me
whenever necessary, in spite of his busy schedule.

I specially wish to thanks Mr. Sanjay Singh (Sales Executive) and all KNP personnel for kind co-
operation.

At least, I cannot forget to express my great-fullness to my parents as well as my friends for providing
me technical support.

(Vikas Kumar)

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CONTENT
Chapter Page No.
1 Introduction to the Study 01 - 05
(a) Objective of the Study
(b) Scope of the Study
(c) Methodology of the Study
(d) Limitation of the Study

2 Introduction of Kansai Nerolac Paints Ltd. 06 - 40

(a) History of the Organization
(b) Organizational Structure
(c) Market Status of the Organization
(d) Competitor of the Organization
(e) Product profile

3 Distribution Channel – A Theoretical Concept 41 – 46

4 Distribution Channel of Paints in Muzaffarpur –

Practical Aspect 47 – 50

5 Data Analysis and Interpretation 51 – 57

6 Conclusion and Suggestion 58 – 63

 Bibliography
 Questionnaire

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CHAPTER – 1

Introduction to the organization

(a) Objective of the Study
(b) Scope of the Study
(c) Methodology of the Study
(d) Limitation of the study

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INTRODUCTION

Objective of the Study

This study is based on the topic “ A Brief Study of Distribution Channel of Paints with particular
reference to Kansai Nerolac paints Ltd. At Muzaffarpur”.

It comprises the survey of 100 respondents at Muzaffarpur Market. Against set a Questionnaire
which shows the fact related to the topic.

(i) Main Objective

To know the market position of Kansai Nerolac Paints in Muzaffarpur Market.

(ii) Sub – Objective :-

(a) To know the channel of distribution of paints
(b) Understanding how sales and distribution fits into the big picture of marketing and how
these aspects can be combined to achieve organizational goals.
(c) To analyze decision alternatives and planning and implementation of Sales and marketing
program.
(d) To analyze selection, motivation of channel member and managing conflict.
(e) To determine awareness of Kansai Nerolac Paints product among customers.
(f) To know the competitive service provider by different paints companies.
(g) To give some suggestions for improvement of the market share of Kansai Nerolac Paints
Limited.

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Scope of the Study

The scope of the study for management student gets to apply all their theoretical knowledge in the
company’s summer training. During training they solve the particular problem given by the company
and come to know the various things practically.

The study gives the company a true and unbiased picture of its position and standing in the Eastern Zone
especially at Muzaffarpur market and also its image in the society.

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Methodology used for the Study

For the preparation of the project report especially in case of Marketing every steps should be anticipated
closely. In this anticipation of formulation there may arise some problems, since these are two types of
information.

(i) For Primary Information :

I have used personal interview method. This survey conducted on 70 respondents across
Muzaffarpur area. I used to set a questionnaire containing some questions for respondents. These
data are expensive and time consuming but these data are most important and reliable.

(ii) The Secondary Information :

This secondary data were collected from the internal sources (Company Documents) of as well as
some external sources (paper, internet). This collection of these data is for easier and less time
consuming.

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Limitation of the Study

Limitation are always accompanied with any work. I had complete my study within short span of 6
weeks and it was not possible to understand practically all aspect of the subjects. Each and every factor
has been carried out carefully as much as possible limitation to the study is beyond control.

As all the primary data has been collected by discussion and interviews, there is a choice of error as
people hesitate in granting correct data and sometime exaggerate the information. Although I tried to
convince the respondents that the study is only meant for academic purpose, some respondents were not
ready to furnish other information like properties of the paints, lack of awareness, their busy schedule
etc.

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CHAPTER - 2
Introduction of the Organization
(a) History of the Organization
(b) Organizational structure
(c) Market status of the Organization
(d) Competitors of the Organization
(e) Product Profile

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Introduction of the Organization

Kansai Nerolac Paints was at first known as Goodlass Nerolac Paints. The Kansai Nerolac Paints Ltd
produces various kind of products that range from industrial sophisticated coating for the industries to
architectural coating for hospital, Homes and Office.

Kansai Nerolac Paints Company has manufacturing units situated in Vatva, Lote, Parshuram, Jainpur,
Bawal and Perungudi. The total production capacity of the pants of the company is around 161,100 TPA
and all the plants are technologically advanced and comparable to most state-of-the-art plants in the
world. Kansai Nerolac Paints has a very wide network of more than 11,000 dealers spread all over the
country.

Kansai Nerolac Paints is a market leader in the sector of automotive segment where it supplies more
than 90% of the required original equipment. Kansai Nerolac Paints is the second biggest company in
the coating sector in India where it has more than a 20% market share. The company has entered into
collaboration with Oshima Kogya Company , Japan and E.I. Du-pont de Nemours & Company Inc.
USA for the Manufacture of various innovative items and a brand new product line.

The total income of the Kansai Nerolac Paints Company amounted to Rs2,162.19 crore in 2011. The
net profit of the company amounted to Rs. Rs215.89 crore. Kansai Nerolac Paints Ltd. is planning an
investment of Rs 400 crore for capacity expansion by September this year, and is eyeing a double-digit
revenue growth in FY12.

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Kansai Nerolac Paints prides itself on its organizational strength such as its value,
vision, R&D, experience, strategic alliances, marketing skill and its extensive distribution network. The
various plants of Kansai Nerolac Paints have been certified by agencies such as BVQI and Intertek, ISO
14000, ISO 9000 2000, OHSAS 18000 are just some of the certification that Kansai Nerolac Paints has
received for its efficiencies in work processes and standards.

Kansai Nerolac Paints has become on e of the top most companies in the companies in the coating sector
in India due to its quality of product which are the best market. The company has a presence in several
Indian states such as West Bengal, Assam, Gujarat, Haryana, U.P, M.P, and Maharashtra. Kansai
Nerolac Paints is headed by Mr.Jamshed J. Irani. Who is the chairman of the company. Mr.
Harishchandra Bharukha is the managing director of Kansai Nerolac Paints which employs more than
2000 people.

History of the Organization

KNP emparked our journey in 1920 as Gahagan Paints and Varnish Co. Ltd at Lower parel in Bombay.
In 1930 three British companies merged to formulate lead industries group ltd. In 1933, Lead Industries
Group Ltd. Acquired entire share capital of Gahagan paints in 1933 and thus, Kansai wall (India) Ltd.
Was born.

Subsequently, by 1946, Kansai Wall Ltd. Was known as Kansai Wall Pvt. Ltd. In 1957, Kansai Wall
Pvt. Ltd. Grew popular as Kansai Nerolac Paints (Pvt.) Ltd. Also it went public in same year and
established itself as Kansai Nerolac Paints Ltd.

In 1976, Kansai Nerolac Paints Ltd. become a part of the Tata Forbes Group on acquisition of a part
of the foreign shareholder by Forbes Gokak.

In 1983, Kansai Nerolac Paints Ltd. strengthened itself by entering in technical collaboration
agreements with Kansai Paints Co. Ltd., Japan and Nihon Tokushu Toryo Co. Ltd. Japan.

In 1986, Kansai Nerolac Paints Ltd. turned into a joint venture of the Tata Forbes and the Kansai
Paints Co. Ltd., with the latter acquiring 36% of its share capital.

In 1999, Kansai Paints Company Ltd., Japan took over the entire stake of Tata Forbes Group and thus
KNP become a wholly owned subsidiary of Kansai Paint Company Ltd.

In 2006, On the 11th of July, Kansai Nerolac Paints Ltd. name hass been changed to Kansai Nerolac
Paints Ltd.

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During the journey of continuous performance excellence, we have entered into many
technical collanorations with other industry leaders such as E.I. Du-Pont de Nemours & Company Inc.,
USA and Oshima Kogya Company Ltd., Japan for our different products.

KNP’s incessant journey of successes will go on backed by our present human asset of over 2000
professional and sales turnover of Rs. 1484 Crores.

KNP are esteemed to be a subsidiary of Kansai Paints Company Limited, which is the largest paint
manufacturing company in Japan and among the top ten coating companies of the world.

KNP are the second largest coating company in India with a market share of over 20%.

KNP are the market leader in industrial/ automotive segment supplying over 90% of the OEM
requirements.

KNP are the leader in power coatings.

Vision Value and Culture

In today’s dynamic business environment, no organization can afford to survive without a well-
articulated and carefully thought vision stating the overall strategic direction and long-term future of its
business.

KNP have been at the forefront of paint manufacturing over eight decades pioneering a wide spectrum
of quality products that change the face of economy and lifestyles of people at large.

It is our vision to leverage global technology, for serving our customers with superior coating systems
built on innovative and superior product and world class solutions, to strengthen our leadership in
industrial coatings and propel for leadership in architectural coatings, all to the delight of our
stakeholders.

KNP firmly believe that it is not only the vision of where we wish to go which will form a cornerstone
of all our further growth, but also our conviction to the fact that the value based proposition has to be
ultimate foundation of our business.

To this end we consciously have internalized and been practicing these value in all our business
transactions though human beings:

 Innovation
 Entrepreneurial
 Responsive

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 Simplicity
 Team Orientation

Cultural Ethos
 Vision driven organization
 Employees feel pride in being part of the organization
 Recognition of human dignity
 Transparency and openness among employees at all hierarchical levels
 Performance- linked reward system
 Management and employee commitment to organization values is high
 Autonomy in work is high
 High commitment to quality products

The Quality Policy

It is the philosophy of Kansai Nerolac Paints Ltd., and its associates to achieve complete customer
satisfaction by providing products and services that consistently meet or exceed the customer needs and
expectations, pursuant to agreed specifications, delivery schedules and competitive prices. It is the
philosophy of the company to systematically operate its manufacturing facilities by inculcating
commitment to total quality management at all levels and on a continuous basis with a view to achieving
“First Time Right” results in manufacture, services and other operations.

It is the company’s aim to constantly reduce waste of material and effort, increase efficiencies and
ensure safety of plant and people and protection of the environment.

Open Door Policy

Working together requires that we have a friendly atmosphere based on trust and respect amongst all of
us.

At Nerolac we follow an Open Door policy. Any person is free and welcomed to share good idea,
suggestion, doubt, problem about job or work place, or uncertainties about one’s future in the
organization. An open and transparent communication is appreciated.

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Social Responsibility
The company continues to make its due contribution to community relief and development activities
and has donated both cash and kind for the beautification of some public place in Mumbai and
elsewhere. The company continued its activities directly through trusts/agencies in community
Development and social Welfare including contribution towards national defense, medical help,
education, improvement of environment etc.

Organizational Strengths
An organization is not set on pillers of brick and concrete but is set on strong inherent characteristics
that make it strong for years.

Nerolac is carrying on strong since 1920. Following are its strengths that have kept this company in
good faith.

Strong vision and values

Neralac is a company with vary clear and well- defined vision and very strong values. Clarity of vision
and strong foundation of cultural values have always kept this company in good stead. Its ethical
conduct has always guarded it against any possible traps and pit falls.

We have made sure that the distribution hurdles and the climatic vagrancies do not affect the quality of
our services. This same commitment will ensure that Kansai Nerolac will march towards its centennial
year, fully dedicated and invigorated, in step with the exciting wave of industrialization and
modernization pervading through the new India.

Organizational Structure

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A sale organization is both an orienting point for co-operative endeavor and a structure
of human relationships. It is a group of individual striving jointly to reach qualitative and bearing formal
and informal relations to one another.

Existence of a sales organization implies the existence of patterns of relationship among subgroup and
individuals established for purposes of facilitating accomplishment of the group’s aims.

A good and efficient sales organization is the foundation for execution of sales policy and sales program.

The concept of organizational structure is somewhat abstract and illusive. However it is real and effects
everyone in the organization.

According to March and Siman, “Organizational structure consists of those aspects of pattern of
behavior in the organization that are relatively stable and change only slowly”.

It facilitates the growth of the organization. It stimulate creative thinking and initiative by proving well
defined are of work with provisions for development of new and improved ways of working.

Organizational Structure

Managing Director

Vice- President, Sales

Zonal Manager Zonal Manager Zonal Manager Zonal Manager

(East) (West) (North) (South)

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R.S.M R.S.M R.S.M R.S.M
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Market Status of the Organization

Kansai Nerolac Paints is the second largest paints manufacturer in India, according for 20% of the total
paints sales. In the industrial segment, it is the undisputed leader accounting for 40% market share. It
has excellent R&D facilities and innovating products. The laboratories are well equipped with the latest
sophisticated instruments.

Kansai Nerolac Paints have six manufacturing facilities backed by excellent R&D facilities. It has
73 deposit/ distribution centers strategically located all over India and a dealer and a dealer network of
over 12,000.

Some of the biggest names in the Indian industry use Kansai Nerolac Paints for their products.
These include India’s most successful corporation like:

 Maruti Udyog Ltd.

 Bajaj Auto
 Toyto Kirlosker
 Honda Siel

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 TVS Suzuki Ltd

 Wheels India Ltd
 Telco
 Mahindra & Mahindra
 Ford India Ltd
 Hindustan Motors (For Lacer)
 Hero Honda Motor Company
 Godrej & Boyce Mfg. Ltd

Total Sales for 5 Years

Sales (Rs. In Crores)

3376
3020
2493
1665 1973

2008-09
2009-10
2010-11
2011-12
2012-13

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Total Profit for 5 Years

Profit (Rs. in crores)

Before Tax After Tax

289 305
239 305
140 166 206 216
99 214

2008-09
2009-10
2010-11
2011-12
2012-13

PROFITABILITY
PBDIT PBT PAT

13.4
12.1
11.611.6 11.2
10.1 10
9.5
9
8.4 8.4 8.3
7.1
6.4
5.9

2008-09 2009-10 2010-11 2011-12 2012-13

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SHAREHOLDER'S FUND (Rs. in crores)

1286

1063
916
773
654

2008-09 2009-10 2010-11 2011-12 2012-13

Return on Net Worth (%)

(Profit After Tax divided by Shareholder's Fund)

22.5
21.4
20.3
17.8
15.1

2008-09 2009-10 2010-11 2011-12 2012-13

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Return on capital Employed (%)

29
27.2 26.8
23.9

19

2008-09 2009-10 2010-11 2011-12 2012-13

Earnings Per Share (EPS)(Rs.)

40.1 39.8
38.2
36.6

30.7

2008-09 2009-10 2010-11 2011-12 2012-13

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Market Capitalisation (Rs. in crores)

6670

4796 4889

3516

1204

2008-09 2009-10 2010-11 2011-12 2012-13

Book Value Per Share (Rs.)

287

243 239

197
170

2008-09 2009-10 2010-11 2011-12 2012-13

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Dividend (%)

150

120
110 110
100

2008-09 2009-10 2010-11 2011-12 2012-13

Competitors of the Organization

Goodlass Nerolac Paints Ltd, is a Company of 1320 crore turnover. Company is giving its service from
more than eight decades. In the market company is prevailing with great impact in the market because
there is a large no. of competitors. In both the segment Decorative and Industrial, its competitor are as
follows:-

Decorative Industrial
Asian Paint Asian
Berger Paint Berger
ICI Paint ICI

Now, here are some of the competitors products and its brand name.

ASIAN
Premium Emulsion - Royale

Premium Exterior Emulsion - Apex

Washable Distemper - Tractor

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Exterior Plastic Paint - Ace

Synthetic Enamel - Apcolite

BEREGER PAINTS
Premium Emulsion - Luxol Silk

Premium Exterior Emulsion - Weather coat

Washable Distemper - Bison

Exterior Plastic Paint - Wall Masta

Synthetic Enamel - Luxol

Texturised Finish Exterior - Weather coat Texture

Coment Base Paint - Durocem

ICI
Premium Emulsion - Velvet Touch

Premium Exterior Emulsion - Weather Shield

Washable Distemper - Maxilite

Exterior Plastic Paint - Dulux

Synthetic Enamel - Supercoat

Texturised Finish Exterior - Dulux

Coment Base Paint - Farcocem

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Product Profile of Kansai Nerolac Paints Ltd.

Decorative Paints

Walls

Interior

Emulsion

Water Based Paints

Impression 24 Carat Premium Luxury Emulsion

Product Description

Nerolac Impression 24 carat premium Luxury Emulsion is a premium Quality

Architectural coating specially formulated by using pure acrylic latex, and high
opacity micronized pigments so as to impart smooth velvet finish, with
excellent wash ability.

Performance Features & Benefits

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 Smooth velvet Finish with sheen

 Excellent wash ability & Stain Resistance
 Very good Antifungal Resistance
 Ease of application
 Low odour

Distemper
Nerolac Beauty premium Acrylic Distemper

Premium Description

Nerolac Beauty Premium Acrylic Distemper is supplied in paste form and

it can be used for the decorative of fully matured plasterwork, concrete,
brickwork and asbestos surfaces. The paste is bound with a stable acrylic
medium.

Performance Features & Benefits

 Premium Acrylic Distemper

 Ease of application
 Good washable
 Eye soothing matt finish

Nerolac Little Master Acrylic Emulsion

Product Description

Nerolac Little Master Acrylic Emulsion, is a specially developed economical

product with a smooth Finish with good whiteness, opacity and coverage . It
is formulated by using ideal combination of pigments and extenders,
dispersed in a copolymer emulsion for smooth and pleasant matt finish.
Performance Features & Benefits

 Smooth and pleasing matt finish.

 Ease of application.
 Economical product with optimum performance.

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Exterior
Nerolac Excel Total

Product Description

Nerolac Excel Total All In One Acrylic Exterior Emulsion is a high performance
premium water based, long lasting exterior paint, with UPF (Ultimate Paint
Formula). It is formulated to suit the extreme tropical conditions of high rainfall
, humidity and heat. The product is based on Silicon modified pure Acrylic
polymer and hence it forms a tough and flexible protective film, with an excellent
bonding to the substrate, which gives Excellent Dirt Pick-up resistance and
Excellent Sheen. All n One Acrylic Exterior Emulsion contain a unique
combination of surface protestants, which are released slowly over a long period
of time. This actively helps not only to prevent the fungal and algae growth, but
also ensures constant surface activity against these irritants for a long period. It
also offers a 7 year warranty.*

Performance Features & Benefits

 Excellent out-door durability.

 Very good colour retention.
 Smooth with Sheen finish.
 Easy to apply and maintain.
 Very wide range of beautiful colours.
 Very good coverage thus good value for money.
 Warranty applicable only on a minimum purchase of 100 liters. For warranty details, Refer to the
warranty booklet available with the dealer.

Nerolac Excel Anti-Peel Acrylic Exterior Emulsion

Product Description

Nerolac Excel Anti-Peel Acrylic Exterior Emulsion is a premium water based, high
performance, long lasting exterior paint, formulated to suit the extreme tropical conditions
of high rainfall, humidity and heat. The product is based on 100% Acrylic resin and hence
it forms a tough and flexible protective film, with an excellent bonding to the substrate,
which prevents peeling off or cracking for years together. Nerolac Excel Anti-Peek Acrylic
Exterior Emulsion contains a unique combination of surface protectants, which are released
slowly over a long period of time. This actively helps not only to prevent the fungal and

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algae growth, but also ensures constant surface activity against these irritants for a long period.

Performance Features & Benefits

 Excellent resistance to fungal and algae growth.

 Very good color retention.
 Excellent out-door durability.
 Faster drying.
 Smooth & Matt to slight Sheen finish.
 Easy to apply and maintain.
 Superior wash ability & scrub resistance.
 Very wide range of beautiful colors.
 Very good coverage thus good value for money.

Nerolac Suraksha Plastic Exterior Emulsion

Product Description

Nerolac Suraksha Plastic Exterior Emulsion is an economical water thinnable

coating, specially designed for application on exterior walls in dry or moderately
humid climatic conditions. It is much superior to normal cement paint coating in
respect to exterior durability, finish, washability and resistance to fungus / algae.

Performance Features & Benefits

 Economical water thinnable coating.

 Excellent adhesion.
 Low dust pick-up.
 Better outdoor durability.
 Smooth and pleasing finish
 Performance much superior to cement paint.
 Continuous protection.

Nerolac Suraksha PLUS Acrylic Exterior Emulsion

Product Description

Nerolac Suraksha PLUS Acrylic Exterior Emulsion is an economical water

thinnable coating, specially designed for application on exterior walls in dry or
moderately humid climatic conditions. It has an unique ‘Colour Lock+ ’
technology, which locks in the colours ensuring that colours on exteriors
keeping looking like new for long. It is an ideal choice for consumers wishing
to upgrade from cement paint since it is much superior to normal cement paint
in respect to durability finish and resistance to algae.

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Performance Features & Benefits

 Superior colour retention.

 Better outdoor durability.
 Resistance to cracking and peeling.
 Resistance to algae.
 Smooth and pleasing finish with sheen.
 Performance superior to cement paint.
 No need of curing.

Enamel
Nerolac Satin Enamel

Product Description

Nerolac Satin Enamel is specially formulated to give an excellent smooth finish

resembling the smoothness of satin to masonry, wood and metal surfaces. It can be easily
cleaned to give new look to the surface.

Performance Features & Benefits

 Very smooth satin like appearance

 Good washability
 Very good flow brushability
 Hard durable film

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Nerolac Synthetic Enamel

Product Description

Nerolac Synthetic Enamel is a time tested and proven, high quality alkyd based enamel.

Performance Features & Benefits

 Excellent Water Repellency

 Good Stain Resistance
 Excellent flow characteristics to form smooth and uniform finish
 Excellent Hardness and Durability
 Excellent Gloss.

Woods
1) 1K PU
Variants - gloss, matt
Type of coat - Top Coat
Feature - Good Gloss, Easy to use, good value for money
Usage - Wood, Veneer

2) 2K PU
Variants - Gloss, Matt, Sealer, Thinner
Type of Coat - Top Coat

3) NC Thinner

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Variant - NA
Type of Coat - Thinner
Feature - Compatible with NC & Melamine based products

Industrial Paints
Automotive Coating

Kansai Nerolac Paints is the market Leader in the automotive coating segment in India with a market
share of over 60% with global technology acquired from Kansai Paints Co. Ltd, Japan. Kansai Nerolac
offers the latest technology in automotive painting systems to the Indian automotive industry.

Automotive coating of Kansai Nerolac have been tested and certified by global automotive
manufacturers who have set up base in India like:-

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Through its various strategic collaborations, Kansai Nerolac offers a total painting system to auto maker
in India with a range of products, starting from Pretreatment Chemical, Electro Deposition Primers,
Intermediate Coats/primer surface, Solid & Metallic top coats, Clear Touch- up Paints.

The product range is backed up by a strong technical service network of experts placed at customer end,
Training programs, VA/VE activities in co-ordination with customer resulting in ultimate delivery of
optimized painting solutions. Kansai Nerolac provide very specific product range these are as follow:-

Product Range

Pre-Treatment Chemicals

 High & Low Temperature Degreasing Chemicals

 De-rusting Chemicals
 Di-cationic and Tri-cationic Phosphate Chemicals
 Activation & Passivation Chemicals
 Surface Conditioners
 Pre-Treatment Chemicals for Plastics.

Electro Deposition (ED) Primers

 Polybutadine-Based Anodic Electro-Deposition Primer (AED)

 Epoxy Resin-Based Cathodic Electro-Deposition Primer (CED)
 Acrylic Resin-Based Cathodic Electro-Deposition Primer (ACED)

Intermediate Coats / Primer Surface

The Intermediate Coats are available in white, light grey, dark grey, red, blue and other specific colours as
required by OE manufacturers.

Top Coats

New technologies in top coats such as 3 Wet Coating Systems are available which are being adopted by various
automotive customers to improve productivity, reduction in costs and meeting the environmental norms. Various
types of Metallic & Mica finishes are available.

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Clear coats

 scratch resistance
 acid & alkali resistance
 UV resistance
 mar resistance

Heat resistant paints

Hea t resistant paints, both for interior & exterior surfaces of motorcycle mufflers. These are made to withstand
high temperature conditions up to 600 degree C.

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CHAPTER – 3
Distribution channel – A Theoretical Concept

The Distribution Channel

Frequently there may be a chain of intermediaries, each passing the product down the chain to the next
organization, before it finally reaches the consumer or end user. This process is know as the ‘distribution
chain’ or the ‘ channel’. Each of the element in these chain will have their own specific needs, which
the producer must take into account, along with those of the all – important end – user.

Channels

A number of alternate ‘channels’ of distribution may be available:

 Selling direct, such as with an outbound sales force or via mail order, internet and telephone sales
 Agent, who typically sells direct on behalf of the producer
 Distribution (also called wholesaler), who sells to retailers
 Retailer (also called dealer or reseller), who sells to end customers

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 Advertisement typically used for consumption goods

Distribution channels may not be restricted to physical products alone. They may be just as important
for moving a service from producer to consumer in certain sectors, since both direct and indirect channel
may be used. Hostels, for example, may sell their services (typically rooms) directly or through travel
agents, tour operators, airlines, tourist boards, centralized reservation systems etc.

There have also been some innovations in the distribution of services. For example, there has been an
increase in franchising and in rental services- the latter offering anything from televisions through tools,
there has also been some evidence of service integration, with services linking together, particularly in
the travel and tourism sectors, for example, like now exit between airlines, hotels and car rental services.
In addition, there has been a significant increase in retail outlets for the service sector. Outlets such as
estate agencies and building society offices are crowding out traditional grocers from major shopping
area.

Channel Members

Distribution channels can thus have a number of levels. Kotler defined the simplest level, that a of direct
contact with no intermediaries involved, as the ‘zero-level’ channel.

The next level, that ‘one- level’ channel, features just one intermediary; in consumer goods a retailer,
for industrial goods a distributor. In small markets (such as small countries) it is practical to reach the
whole market using just one and zero-level channels.

In large markets (such as larger countries) a second level, a wholesaler for example, is now mainly used
to extend distribution to the larger number of small, neighborhood retailers or dealers.

In Japan the chain of distribution is often complex and further levels are used, even for simplest of
consumer goods.

In IT and Telecom industry level are named “tiers”. A one tier channel means that vendor IT product
manufacturers (or software publishers) work directly with dealers and with distributor who sell to
dealers. But the most important is the distributor.

The Internal Market

Many of the market principles and techniques which are applied to the external customers of an
organization can be just as effectively applied to each subsidiary’s, or each department’s, ‘internal’
customers.

In some parts of certain organization this may in fact be formalized, as goods are transferred between
separate parts of the organization at a transfer price. To all intents and purposes, with the possible
exception of the pricing mechanism itself, this process can and should be viewed as a normal buyer-

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seller relationship. The fact that is a captive market, resulting in a monopoly price.
Should not discourage the participants from employing marketing techniques.

Less obvious, but just as practical, is the use of marketing by service and administrative departments to
optimize their contribution to their customers (the rest of the organization in general, and those parts of
it which deal directly with them I particular). In all of this the lessons of the non-profit organizations,
in dealing with their clients, offer a very useful parallel.

Channel Decisions

 Channel Strategy
 Product <> Cost<> Consumer Location

Managerial Concerns

The channel decision is very important. In theory at least is a form of trade off: the cost of using
intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods
manufacturers could never justify the cost of selling direct to their consumers, except by mail order.
Many supplier seem to assume that once their product has been sold into the channel, into the beginning
of the distribution chain, their job is finished. Yet that distribution chain is merely assuming a part of
the supplier’s responsibility and , if they have any aspirations to be market- oriented, their job should
really be extended to managing all the process involve in that chain, until the product or service arrives
with the end user. This may involve a number of decision on the part of the supplier:

 Channel Membership
 Channel Motivation
 Monitoring and managing channels

Channel Membership

1. Intensive distribution- where the majority of resellers stock the product (with convenience
products, for example and particularly the brand leaders in consumer goods markets) price
competition may be evident.
2. Selective distribution – this is the normal pattern (in both consumer and industrial markets) where
suitable resellers stock the product.
3. Exclusive distribution – Only specially selected resellers or authorized dealers ( typically only one
per geographical area) are allowed to sell the product.

Channel Motivation

It is difficult enough to motivate direct employees to provide the necessary sales and service support.
Motivating the owner and employees of the independent organizations in a distribution chain requires
even greater effort. There are many devices for achieving such motivation. Perhaps the most usual is
incentive: the supplier offers a better margin, to tempt the owners in the channel to push the product
rather than its competitor is offered to the distributors sales personnel, so that they are tempted to push

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the product. Dent defines this incentive as a channel member on the commercial merits
of doing business together. He describes this as selling business model not products.

Monitoring and Managing Channels

In much the same way that the organization’s own sales and distribution activities need to be monitored
and managed, so will those of the distribution chain.

In practice, many organizations use a mix of different channels in particular they may complement a
direct sales force, calling on the larger accounts, with agents covering the smaller customer and
prospects.

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CHAPTER - 4
Distribution Channel of Paints In Muaffarpur – Practical Aspect

Distribution Channel in Muzaffarapur Market

In the good old days. A wholesaler procures an order, acquires good and stores them in a warehouse,
supplies order based stock for a calculated amount of profits. He played a number of roles- he was an
intermediary who took care of logistics and move stock around a consolidated sales agent for suppliers,
a local customer service point and a demand buffer for manufactures.

Yes, multitasking existed even then but within a limited scope. But there were limitations of physical
kind- all these roles could be played out only within a certain geographical terrain.

A Distribution Network Today

For a dealership distribution we have done a survey. In survey we have seen the market potentiality,
customer potentiality, demand, area, location, etc. If customer is willing to take a dealership we will
provide the dealership to the customer, but first of all we need some document like VAT No. Tin no.

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and bank a/c in any bank. If document are ok then we open the customer account in
the company. We are providing goods to the dealer when he needed. We make a good contact with the
dealer. we meet with the dealer in a regular basis. We gave a reward and schemes in a regular basis. If
dealer perform well we gave colour world machine. By the help of this dealer can increase his profit.
For a ordering system we go to the shop and take the order. Dealer can give order o n a phone call. For
billing we gave a time of 7 days to the dealer.

A distributor plays a virtual role an almost invisible part of a smooth supply chain. Third- party
logistics providers help goods from one part to another in a day. While a more customer- centric
distribution chain enable direct ordering and tracking of orders over phone and regular visit.

To make these necessary shift the distributor needs to have more information about all customers, learn
to manage inventory from other distributors and have a workflow; based information system.

Effective supply chain management is an intricate loop, one that being with the customer and ends with
the customer.

Channel of Distribution in KNP Muzaffarpur

Manufacture
Unit

Depot/ Distribution Center

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CHAPTER- 5
Data Analysis & Interpretation

Data Analysis & Interpretation

In order to stydy the market strategy of a product we must get the feedback from the market
concerned. For academic purpose I choose 100 sample of the urban area about Muzaffarpur and the
town itself.

Questionnaire was prepared to study fourteen basic facts about marketing field. They were meant for
the sub-dealer concerned with the paint industry and particularly selling Nerolac Product. Questions
are listed below:

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1. Which company are you dealing with?

Nerolac 35%
Asian 30%
Berger 25%
Other 10%

10%

35%
25%
Nerolac
Asian
Berger
Other
30%

It is the evident from the above pie chart, maximum sub-dealers are selling Kansai Nerolac Products in
Muzaffarpur market.

2. What is the region for selling a particular paint companies product ?

Advertisement 15%
Quality 30%
Name of Brand 25%
Cost effectiveness 20%
Others 10%

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10% 15%

20% Advertisement
Quality
30%
Name of Brand
Cost effectiveness
25%
Others

It is evident from the above pie chart, the maximum sub-dealer like to sell paint products having good
quality, Name of brand, low cost and advertisement in Muzaffarpur market.

3. Which brand is highest selling in your counter ?

Interior 60%
Exterior 40%

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40%

Interior
60%
Exterior

Is shown the above pie chart that 60% of the sub-dealer said Interior paint and 40% said exterior paint
are highest selling.

4. What is your source of purchasing product ?

Dealer 70%
Company 25%

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Both 5%

5%

25%

Dealer
Company
70%
Both

In the above pie chart most sub-dealer i.e. 70% purchasing paint product from Dealers, 25% purchasing
direct from company and 5% purchasing both dealer and company.

5. What is your expectation for taking the dealership of any company ?

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Easy delivery 20%

% of margin 34%
Both 36%
Other 10%

10%
20%

Easy delivery
36% % of margin
Both
34%
Other

In the above pie chart 36% sub-dealer tell Easy delivery and %of margin both the expectation of
taking dealership in Muzaffarpur market.

6. Are you interested for taking dealership of Nerolac Paints ?

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Yes 60%
No 40%

40%

Yes
60%
No

In the above pie chart 60% sub-dealer wants to take dealership in Muzaffarpur market.

7. Which type of advertisement is useful ?

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Radio 5
Television 50
Poster 15
Newspaper 10
Company 5
Others 15

15% 5%

5%
Radio
10% Television
Poster
50%
Newspaper
15%
Company
Others

In the above pie chart 50% sub-dealer told television advertisement in useful.

8. Are you satisfied with Nerolac Service ?

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Yes 70%
No 30%

30%

Yes

70% No

In the above pie chart, most of the sub-dealers i.e. 70% are satisfied with Nerolac service.

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9. What is the response of Nerolac Paint amongst consumers ?

Good 10
Satisfactory 65
Excellient 25

10%
25%

Good
Satisfactory
Excellient
65%

In the above pie chart,65% consumer are said its satisfactory & 25% said excellent

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10. Does your shop gets visited by companies sales personnel ?

Yes 40%
No 60%

40%

Yes
60%
No

In the above pie chart, most of the sub-dealers i.e, 60% are the companies personnel does not visit for
sub-dealers counter.

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CHAPTER- 6
Conclusion & Suggestions

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Conclusion & Suggestions

Conclusion
To conduct the survey of Muzaffarpur Market is for knowing the prospect of paints in this area. In this
markets the immediate competitor of KNP is Asian, Berger and ICI. The research first prepared a
questionnaire containing questions for collecting information form different paint outlets. The
researcher collected the information from a sample of 70 different outlets. The researcher collected the
some of the important finding of the survey are as under:-

1) In urban Market, Nerolac paints is the largest selling brand due to the brand name and good
marketing strategy. Asian paints products are the second largest selling paints in urban areas,
berger is the third largest selling paints in this area due to lack of good advertisement appropriate
distribution channel.
2) In Muzaffarpur market when the researcher asked the name of highest selling brand from the sub-
dealers 35% respondents said Nerolac 30% Asian, 15% respondent said Berger, 10% respondent
said other paints.
3) When the researcher asked about the reason of higest selling brand, 30% said good quality, 205
said cost effectiveness, 15% said due to advertisement and 25% due to brand name.
4) When the researcher asked why they purchase paint from these dealer, they said due to good
behavior, good service and availability of the range of product.
5) When the researcher asked are you interested in dealing directly with the company ? most of them
said No due to large investment of sale of paints.
6) When the researcher asked what is your expectation for taking the dealership, approx 36%
respondent told that they want to easy delivery and % of margin both.
7) According to my finding most of sub-dealer i.e. 70% are satisfied with Nerolac Services.

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Suggestions
I offer the following suggestion which I feel it accept will certainly enhance institutional sale and
dealers, sub-dealers management.

1) Price mechanism should be controlled by allowing uniform special discount among the dealears.
2) There should be the regular visit to the institutions for getting in the mind of sub- dealers.
3) Company should not be the big- dealer oriented only, it causes discontent among dealer as well as
sub-dealer
4) Company should look after its supply positions.
5) Company should try to create harmonious relation between dealers, sub- dealers.
6) Company should use banner, hoarding at the public place mentioning the slogan quality price of
the product.
7) Apart from business activities there is something, which increase the public relation that is
behavior and it should be very cordial and affectionate.
8) There is a need to visit institution more frequently and there is a need to develop contacts with
them. Promote this segment more aggressively.
9) Nerolac should try to persuade the retailers to give more space to Nerolac product at their counters.
10) The dealer’s price must be competitive with the product of the other companies.
11) The facilities given at the time of festivals should be made throughout the years, if so then sellers
get encouraged & sale will certainly go up.

Questionnaire

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1) Name of the Dealer :

2) Address :
3) Phone No :
4) Are You dealer or sub dealer of any paints Company.
Yes No
5) If yes then which paints Company you have dealership?
Nerolac Paints Asian Paints ICI Paints Others
6) Which Facility of this paints Company attracts you for Dealership?
Company Brand Name Company Market profitability Sales Team Service Better
Supply of Goods Financial Transaction Schemes & Rewards
Others
7) Which Brand of paints Company most of the customer preferred?
Nerolac paints Asian paints ICI paints Others
8) Is your Companies provide better Scheme & Reward on completions of Target?
Yes No
9) Is your Company provides all types of categories of paints to the customer?
Distemper Exterior & Interior Emulsion Putty Plastic paints
Others
10) Are you satisfied from the dealership of this paints Company?
Yes No
11) Is the Financial Transaction & delivery of goods of this paints Company are given full satisfaction
to you?
Yes No
12) If you have a chance to change the dealership of this company then which paints company you
prefer and why?

13) Do you know about the Kansai Nerolac paints?

Yes No

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14) Do you know that Nerolac Paints is the seconds largest market share Company
in India?
Yes No

15) Do you know that Nerolac Paints give their dealer better scheme & rewards in comparison to their
paint company in the form of Foreign and India tour.
Yes No
16) Do you know that Nerolac Paint deal all categories of Interior & exterior paints, Emulsion,
Distemper, putty, paints?

Yes No
17) Do you know that today most of the Customer prefer Nerolac Paints due to big Brand name & big
Brand Ambassador?
Yes No
18) Do you know that Nerolac offer less price against the better quality of paints to the Customer?

Yes No
19) Do you know that goodwill and fame of Nerolac Paints is very much high then other Paints
Company?

Yes No
20) If you are going to start the dealership with Nerolac Paints which types of facility you want from
the Company?

Market Profitability Supply of Goods Better Sales team service

Regular Scheme & Reward Others

Date:
Dealer Signature:

BIBLIOGRAPHY

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Marketing Management : Analysis, Planning

Implementation and Control

Prentic Hall Inc., Ninth

Edition by Kotlar.

Marketing Research : Seventh Edition, Prentice Hall

Inc., By Luck, David J. and Rubin

Ronald S.

Sales Management : Eighteenth Indian Reprint,

Prentic Inc., by Still,

Edward W, Sand Govoni,

Magazine : Business India, ET

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