rak paints finall

RAK Paints December 11, 2011

Executive Summary:RAK group of Industries,Bangladesh,is a leading private sector of business of the country.It started it s business in the year of 1994 in the name of Gentech International. In 1995,it started importing from India,Italy,Thailand and other countries.At that time it only imported stone based item. Now its imported item sets in a good number like Rice, Wheat, Red Lentils, Dry Red chili, Onion, Maize, Peas, Poultry feed, Sugar, Marble, Granite, Mobile phones etc. It emerged as a group of company named RAK Group in 2002.

In recent year,RAK has added a new sector in their business.Seeing the demand of growing construction sites,it started it s own manufacturing of different paints starting from RAK Intone Interior Plastic Emulsion to RAK Paints premium synthetic enamel.Most of them are water based paint most suitable for interior as well as paints suitable for protecting external walls from unfavorable weather and poisonous enviorment.

Its vision is to become a world class paint manufacturer and lead the paint industry by establishing itself as a producer with the finest manufacturing practices, through outstanding product quality with diversification in different areas, innovative and eco-friendly approaches in all the functions that are necessary to keep its customers satisfied.

The paint’s market size is estimated at Tk 1,000 crore and domestic production capacity of Tk 920 crore. There is a gap of Tk 80 crore in the demand suuply sector providing RAK an opportunity to grab the market.In the first year the aim is to achieve 10% of market share.

With this statistic,it not only intends to establish the largest paint industry in the country with the state-of-the-art machineries but also to provide quality branded products.

Current Market Situation:RAK paints have found that Bangladesh’s paint industry is growing very rapidly for the past

several years due to an increase in demand by the construction sector. Its market size based on

demand is estimated at Tk 1,000 crore and domestic production capacity Tk 920 crore. So

demand supply gap is Tk 80 crore, which is a good prospect for paint industry in Bangladesh.

There are six paint manufacturers operating in the market with 90% market share which

includes; Berger, Asian, Aqua, Roxy, Pailac and Elite. In current paint market Berger has the

highest market share of 48% while other competitors are far behind it with Asian paints 12%,

1


Roxy 10%, Pailac and Aqua each 7% and Elite paints 5% of market share. To gain market share

in this rapidly growing industry, RAK must target specific segments with qualities that deliver

benefits valued by each customer group.

Market Description:RAK paint’s product mix: RAK Intone Interior Plastic Illusion, RAK Clean Wash, RAK Water

Sealer, RAK Wall Putty, RAK Harmony Acrylic Distemper, RAK Surfacem Durable Cement

Paint, RAK Elegant Silk Emulsion, RAK Weather King, RAK Ocean Liner Paints, Premium

Synthetic Enamel, Glaze enamel and RAK Industrial paint.

Key products that hold the major market shares are: plastic emulsion, distemper, outer coat

(weather proof) and synthetic enamel.

RAK paint’s customers include residences, building developers, new factory builders, people

living in the rural areas and also ship and ocean liners.

Plastic emulsion and distemper are close substitute of each other. The targeted segment for

plastic emulsion is high-end residence all over the country and targeted segment for distempers

are semi-urban and rural markets as it is an economy class product.

Bangladesh has a rainy season from June to August and there are some places in Bangladesh

where rainfall is high for example Sylhet, Srimangal and Sunamganj these markets can be

targeted with outer coat (RAK Weather King),however this product is targeted for all segments

as people tend to give weather proof paint to color outside of their house.

RAK offers Industrial paints whose targeted customers are new factory builders and existing

factory owners which will let them have a suitable paint for their factories as other paints

(emulsion and distempers) might not be suitable for painting factories.

Water transport owners are another targeted segment of RAK paints. River transport is one of the

key transport systems for coastal areas of Bangladesh and there are a large number of people

who owns steamers, river liners for commercial purpose etc and they might be a substantial

market for RAK Ocean Liner.

2


Product Review

RAK paints offering twelve kinds of paints.The detail product description is given below

RAK INTONE

RAK Intone Interior Plastic Emulsion is a fine quality long lasting water based paint best suitable for the interior. It is based on a special durable acrylic co-polymer emulsion, high opacity micronized pigments and additives to give better look, protection and stain resistance properties. It provides a smooth matt finish to the walls. It is also washable and easy to maintain the new look.

Features : 1. Matt Finish 2.Washable 3.Water Based 4.Odorless 5.Excellent Stain Resistance.

Available in : 0.91 ltr, 3.64 ltr and 18.2 ltr packs.

Thinner : Water.

RAK CLEAN WASH:

Cleaning is not fun. Children like playing and make things messy wherever they play. Interior walls are the mostly liked playing area for children. So to make it easy and comfortable for the people living in it, RAK paints brings washable interior plastic emulsion. Best quality raw materials are used to make the Clean Wash Emulsion long lasting and it can be washed any time. It is smooth and made by using state of the art technology. Thus it will dazzle your walls and enhance beautification.

3


Features: 1.Washable 2.Premium quality 3.Long lasting fungus and alkali resistance 4. Excellent adhesion and water resistance 5.Water Based 6. Odorless 7.Excellent Stain Resistance.

Available in: 0.91 ltr, 3.64 ltr and for special demand 18.2 ltr packs may also be available.

RAK WATER SEALER:

RAK water sealer is a special co - polymer emulsion & is made of expandable raw materials. It is a primer which protects the walls, ceiling, asbestos & so on from water insertion & alkali. It acts as a wonderful intermediary coat & creates strong bondage with putty & finish coats for the walls. It also protects walls from fungus, moss & others.

Special Features: 1. Washable 2. Long lasting 3. Fungus and alkali resistance 4. Excellent adhesion and water resistance 5. Water Based 6. Odorless 7. Excellent Stain Resistance.

Available in: 0.91 ltr, 3.64 ltr and for special demand 18.2 ltr packs may also be available.

Thinner: Water

RAK WALL PUTTY:

4


RAK Wall Putty is a special water base ready to use putty for filling & smoothening out cracks & dents on a plastered wall or similar interior surfaces. It can be used very easily. Its acrylic bindings ensure that it retains a strong grip on the wall surface, hereby increasing the life of the paint film.

Special Features: 1. Washable 2. Long lasting fungus and alkali resistance 3. Excellent adhesion and water resistance 4. Water Based 5. Odorless.

Available in: 5 kg and 25kg packs are available.

Thinner: Water

RAK HARMONY ACRYLIC:

RAK Harmony Acrylic Distemper is water based paint for walls, ceilings and building boards. It is specially formulated by acrylic co-polymer emulsion based distemper for elegant, smooth, durable, matt finish for interiors. A value for money paint, it provides maximum coverage in its category. It is very easy to apply, saving your time and money.

Features : 1.Matt Finish 2.Water Based 3.Odorless 4.High coverage.

Available in : 0.91 ltr, 3.64 ltr and 18.2 ltr packs.

Thinner : Water.

RAK SURFACCM:

5


It with rich, moody colors and soft shades that age beautifully to a matt patina, RAK Surfacem Durable Cement Paint is the ultimate combination of aesthetic appeal and longevity. It is an economical exterior wall finish which is resistant to fungus and algae and protects buildings from varying weather conditions. This paint exceptionally resilient formula was developed with protection and performance in mind, making Surfacem a wonderful way to enhance cement render, bagging, brickwork or any dimensionally stable surface. Ideal for outdoor walls it can also be used indoors whether the tone is contemporary or traditional. It is water based paint and easy to apply.

Special Features: 1.Economical 2.Better performance for outdoor protection and decoration. 3.Has matt finish, an inexpensive way to cover large areas such as cellars and garages. 4. Maintains good look for many years despite exposure to worse environments.

RAK ELEGANT SILK EMULSION:

Your home is a heaven where your heart resides. Whether you are a king or a pauper, the peace lies at home. Peace is peace is not an illusion; it is something everybody desires strives for. To make your home a peaceful abode RAK Paints provides you “Elegant Silk Emulsion”, the paint that touches everyone’s heart with world-class beauty that comes with state of the art technology.

Beautiful, long lasting and stylish, it is the dream result of a wall finish with a soft sheen and a silky smooth finish. Its acrylic base ensures that your chosen colors retain their freshness longer. Uniquely formulated to yield more coverage and ensure a luxurious finish. It is protected by color-guard formulation with an invisible protective layer that locks color to your walls.It is ideal for your home because of its hardwearing wipe-clean formula, allowing you to wipe away spills and dirt easily, thus keeping the ‘just painted' look for longer.

6


RAK WEATHER KING:

RAK Paints Weather King Pure Acrylic Exterior Emulsion is a premium; technologically advanced water based excellent exterior wall finish. It is specially formulated to give exceptional durability in adverse climatic conditions of high rainfall, humidity and heat. It is based on tough, flexible and high quality latex emulsion

which repels water and protects the beauty of the house from the blazing sun. This latex emulsion helps prevent peeling off, dirt setting and cracking for years. It has special type of fungicides which provides protection against growth of algae, fungi and mould on exterior surface. It provides the building with a long lasting and fresh appearance. All this makes it “ALL IN ONE” paint for exterior walls.

Features : 1.Color Guard Technology that protects shade fading. 2.Unique dirt-resistant formulation. 3.Powerful anti-fungal compounds protects from black spots.

RAK OCEAN LINER PAINTS:

Ocean Liner Paints is a die-hard coating specially formulated from a combination of Synthetic Resin, Petroleum Resin & other selected materials. It protects & helps fighting the metal surface from saline, unbearable ocean & riverine water.

Special Features: 1. High coverage (compared to conventional marine paint). 2. Water resistance. 3. Washable 4. Good weathering properties 5. Good application characteristics.

7


Available in: 0.91 ltr and 3.64 ltr

Thinner: RAK Paints Thinner

RAK PREMIUM SYNTHETIC ENAMEL:

RAK Paints premium synthetic enamel is high gloss quality enamel. It gives a durable finish for metal, cement, wood and similar surfaces due to its high resistance to water and wear and tear. It is suitable for both interior and exterior areas like doors, windows, metallic frames, railings etc. The color gives you smooth and superb finish. It is technically advanced topside enamel that delivers a mirror-like finish. Loaded with UV stabilizers, it will last longer than any conventional topside finishes. It is fast drying which when brushed or sprayed gives a shiny smooth finish.

Special Features : 1.High coverage (compared to conventional enamel paint). 2.High gloss (mirror like gloss). 3.Water resistance. 4.Washable 5.Odorless 6.Good weathering properties 7.Good application characteristics.

Available in: 0.455ltr, 0.91 ltr, 3.64 ltr and 18.2 ltr packs

RAK GLAZE ENAMEL:

RAK Paints Glaze enamel is economy synthetic enamel formulated for interior and exterior application to give a glossy durable surface. It is easy to apply, durable and has good flow. A combination of economy and quality makes this product popular coating enamel. It is ideally suitable for wood and steel furniture, toys and various household items.

8


Features : 1.High coverage (compare to conventional enamel paint). 2.Water resistance. 3.Washable 4.Glossy.

Available in : 56 milliliter, 200 milliliter, 0.455 liter, 0.91 liter and 3.64 liter packs

Thinner : RAK Paints Thinner.

RAK INDUSTRIES PAINT:

To protect different industries from unfavorable weather and poisonous environment (power station, garments, chemical industries, iron and steel industries, pharmaceuticals, electronics equipment manufacturer etc.) it is required to use RAK Industrial Paint and Protective Coating. It is formulated from best standard raw materials to keep the industries active. Long durability depends on the choosing of right paint for right place and the right preparation for the place.

Special Features: 1. High coverage (compared to conventional Industrial paint) 2. Water resistance. 3. Washable 4. Good weathering properties 5. Good application characteristics.

Available in: 0.91 ltr and 3.64 ltr

Competitive Review:The paint market of Bangladesh is very competitive as each existing producers held a significant

percentage of market share. Key competitors include:

1) Berger: It is the market leader of paint industry holding the highest market share. It is the

most renowned paint brand in the country and it offers variety of products to customers.

They provide a unique service called “Berger Home Decor Service” which helps

customers who want to paint their house with several colors and this service seems to be

popular among customers. Berger mainly targets customers who can spend more after

painting.

9


2) Asian Paints: Currently it is in the second position of paint industry. Targeted segment of

Asian Paints include interior wall finishes, the exterior segment, enamel and wood

finished segment through its Apcolite and Decora brands. Asian paints targets customers

living in cities and having good income.

3) Roxy Paint: It is cheap comparing to Berger and Asian and mainly targets customer in

rural areas and people with moderate income. People think about buying Roxy when

painting gates, outside walls or where it is unfeasible to use expensive paints.

4) Pailac, Aqua and Elite Paints: These three producers hold less market share and they are

popular in rural areas and among people who are not willing to spend much after

painting.

Channels and Logistics Review:RAK Paints products will be networked through authorized dealers to retailers

everywhere in the country. There will be a RAK Paints Sales and Distribution Centre in

every metropolitan city to distribute products to dealers; they will also deal with customer

complaints regarding dealers and retailers.

Dealers: Dealership will be given to intermediaries by analyzing their years in

business, other lines carried, growth and profit record, cooperativeness, and

reputation. Dealers will be selling to retailers.

Retailers: Retailers will be buying from dealers but the company may sign

contract with large scale retailers who sell building materials (for example Fix it)

by offering them special benefits and discounts or take promotion campaign

through them. Paints will be also sold to the small retailers as well, so people can

find our product everywhere.

Online Service: Buying and selling through internet is becoming popular now

days. Online service reduces buyers time and expense of traveling. There are

many buyers who doesn’t have proper knowledge on paints and cannot fully rely

on advice of typical retailers, so they want to contact with the company directly

and our online service provide this opportunity to the customers ,they can get the

detail of the product and chose product for them. After choosing the product

customer will submit their initial order and we will send our representative to

finalize the deal, so that buyers will get the opportunity to share and discuss their

10


view and complete the deal. Therefore through online service customers can

complete a time consuming purchase by staying in their home. This service is

beneficial to busy people.

Hotline Help: There will be a hotline number where customers will ask for help

regarding paints. Through this service customers can take specialists advice, know

about our products and can also get the address and information about their

nearest retailer. Though we provide this service via online but there are many

people who are not very used to with internet.

Strengths, Weaknesses, Opportunities, and Threat Analysis:

Strengths:1) Varity of Products: We offer 12 products which makes us less dependent on each

product. If we find one product unprofitable then we can cover the loss from the most

profitable product. We offer industrial paint and ocean liner paint which are unique

products and are not offered by competitors. This will help us to gain monopoly position

in the targeted segment.

2) Quality products: Our paints will be made from best raw materials. We will use latest

machineries in our production process and we will employ Chemical Engineers who are

experienced, in order to verify our quality.

3) Pricing: We will set our product’s price in a reasonable range and will offer dealers cash

discount for prompt payment and offer trade discount for bulk buying.

Weaknesses:1) Lack of brand awareness: RAK has no established brand or image, whereas Berger and

others have strong brand recognition. We will address this issue by promotion.

2) Price setting decision: As we are using best raw materials to produce our product we are

incurring more costs which will make it difficult for us to implement more for less

promotion strategy and force us to sell at high price comparing to competitors. We will

address this issue by advertisement showing why customers should buy our product at

high price.

11


Opportunities:1) Increasing demand from construction sector: Today in Bangladesh more buildings are

constructed, housing estate projects are carrying on which increases demand for paints.

2) Un-served segments: There is a demand supply gap of Tk 80 crore which means a large

portion of market is un-served by the current competitors which might be an opportunity

for RAK to grab the market.

Threats:1) Increased competition: There are many competitors in the paint industry occupying

significant market shares and having a positive brand image in people’s mind which will

make it difficult for RAK to operate in the industry.

2) Downward pressure on pricing: Increased competition may mean to sell at lower price

than competitors which is likely to make it difficult to cover costs.

3) Bad debt problem: There are some retailers who sell building materials along with paints

but recently these types of retailers have stopped selling paints due to bad debt problem.

Our studies have found that painting work is done at the very last of all the works in a

newly constructed building. At the beginning of construction the owner is likely to have

more money and they buy a lot of building materials paying cash instantly which helps

them to have a good relationship with the retailer. But at the very end when time for

painting comes then many owners are left with less finance and therefore they ask

retailers to give them paints on credit, for example 50% credit. But later on these

customers hardly pay the money or some of them do not pay even and turn outs to be a

bad debt.

4) Government rules and regulations: In Bangladesh, Government does not allow payment

via the internet within the country. This will be a big barrier for us to implement online

payment service if government does not remove the law.

Objectives and Issues:

We have set aggressive but achievable objectives for the first and second years of market entry.

12


First-Year Objectives

In the first year we are aiming to achieve at least 10% market share. Though painting industry is very competitive market but we are investing Tk 50 crore in the factory, so we are quite confident about achieving the goal.

Second-Year Objectives

In the second year we are aiming to achieve another 10% market share, altogether 15% market share. We are expecting to reach break-even point in the middle year.

Issues

As we are aiming to achieve 15% market share in the paint industry where there are already giant competitors. So to fulfill our objectives we have to create a strong brand image of RAK among customers, we should give importance in designing the logo of our product because a logo in short can describe the product. We will have to invest heavily in marketing to create a memorable and distinctive brand image projection innovation, quality, and value. We must response quickly to adjust our marketing efforts as necessary.

Marketing Strategy

RAK’s marketing strategy is based on “Changing attitude towards painting”. Our primary consumer target is residents of every class living all over the country who will use normal quality paints to very high quality paints offered by RAK. Our secondary consumer target is factory owners and ship, river liner owners.

Our primary business target is capturing real estate companies and land development firms. This is because they are highly involved in building construction where paint is an essential item. Our secondary business target is ship and river liner manufacturers. Ship building is a new industry in Bangladesh, so we can offer this industry with RAK Ocean Liner.

Positioning

“Changing attitude towards painting” means that our aim is to change people’s attitude towards painting. This is because painting is a time consuming work, it gives out a lot of dusts and wastes people’s time speaking to painters and many people do not want to do this. In order to increase RAK’s paint market more painting works has to be done by people. Therefore our target is to make painting an interesting work by showing in advertisement that a popular actor or actress is painting his or her house with their friends and relatives in a special day and at the same time they are having a party. And in the advertisements we will also show how to reduce possible disturbances while painting so that people do not get irritated.

13


Product StrategyRAK paints all features described in earlier product review. We will introduce a lost lasting and attractive paint. Building the RAK brand is an integral part of our product strategy. The brand and logo will be displayed on the product and its packaging, and reinforced by its prominence in the introductory marketing plan

Pricing Strategy

We have a wide range of products and each have its own price. Our pricing strategy will be

based on market penetration pricing. We will set a low initial price in order to penetrate the

market quickly and deeply-to attract a large number of buyers quickly and win a large market

share. The high sales volume will result in falling costs, and is most likely to allows us to cut

prices even further.

As we are offering twelve types of paints which means each of their costs vary, their customer

group also vary so we must have to decide on the price steps to set between the different paints

in our line which means we have to follow product line pricing as well.

Distribution StrategyOur channel strategy is to use selective distribution. We will have RAK Paint dealers in every

metropolitan city who will be distributing our product to retailers. We will select dealer by

analyzing following factors; years in business, other lines carried, growth and profit record,

cooperativeness and reputation. In order to sell our product to individuals and households we

will distribute our product to dealers who will later sell to retailers, so for individuals and

households we are following indirect marketing channel.

Our another group of customers is building construction firms. A construction firm does not

construct only one building at a time but they tend to work on several buildings, therefore a

construction firm is going to buy paints at the end of their work in bulk amount which will allow

us to sell a large quantity of paints at a time so we will sign contacts with several construction

firms by offering them several benefits if they buy our paints from us. Here we will not use any

intermediaries, so we are following direct marketing channel.

Marketing Communication StrategyOur targeted audiences are typical paint consumers, new house builders and construction firms.

14


Our target audience is unaware of RAK paint brand; they have little or no knowledge about our

brand so at first we have to build awareness and knowledge our targeted audience.

After targeting audiences and making them aware of RAK brand our next task is to design a

message that should get Attention, hold Interest, and arouse Desire and obtain Action. In

message content we will use emotional appeals. For example, in Bangladesh parents consider a

lot of factors when choosing bride or bridegroom for their child. And majority parents take many

days to come to their final decision. In our advertisement we will show that a boy’s parents are

looking for a bride and they went to a girl’s house which is painted by RAK paints and the house

is looking very beautiful and that boy’s parents became very happy and started to think seriously

about this girl for their son. So we can design message content like “ar ghura ghuri noi aeibar

rong dia manush chinun”. This message is likely to make an emotional effect in consumers mind.

We will not draw final conclusion about our message content rather we will leave it to audiences.

We will carry our message in print media and in electronic media. In print media we will use

novelty and contrast; eye catching pictures and headlines; distinctive formats; message size and

position; and color, shape, and movement in order to grab attention. Also in electronic media

these elements are important plus body language and facial expression of presenter will be also

taken into account.

Since RAK is a paint manufacturing business we will select non personal communication

channels that is print media (newspaper, magazines, direct-mail), broadcast media (radio,

television), display media (bill boards, signs, posters), and online media (company web sites).

We will choose very popular actor or actress to deliver our message to audience. In our

advertisement we can show “party with paint” that is an actor or actress is painting his or her

house with their friends and having fun. We also have plans to open some paint houses around

the city, there people will go and do party by painting walls and whatever they want

After giving our message about RAK paints to our customers we will analyze the effect it made

on target audience like whether they remember the message, how many times they saw it, what

points they recall etc.

15


Marketing ResearchWe will conduct marketing research in every four months to know about the condition of RAK

paints. How people like it? And is the price a reasonable one? We can conduct survey among

paint workers; how much they feel comfortable by using RAK paints, what are the drawbacks

RAK paints have comparing to other paints in the market? By conducting market research we

can make necessary changes in our business.

Marketing OrganizationRAK’s Vice president of Marketing , holds overall responsibility for all of the companies

marketing activities. The following figure shows the structure of the marketing organization.

16

Vice President Of

Marketing


Action planning

All our planning will go for action on January 2012.Follwings are the summaries of the first six

months action program to achieve our stated objectives

January: We will start campaign for our product, will participate in different trade fairs. Go to

field and let the dealers ,retailers about our coming product.We will provide samples to the

dealers and different real estate companies.

17

Director of product Marketing

Director of Marketing Communications

Product Managers

-Product Requremrnts

-Positioning/Pricing

-Product Lifecycle

-Sales Support

-Management

Research and Competitive analysis

Corporate

Public Relations

Advertising

Analyst Relations

Creative Services

Brand Identify

Collateral

Web services

Programs

Shows/Events

Lead Generation

Channels/Partners


February: In February we will enter the market publically. We will start an integrated

Radio/Tv/Internet/Newspaper campaign targeting our customers. The purpose of the campaign

will be let the people know about our presence. They will come to know about RAK paints. We

will do heavy advertisements, send the massage of our product to people

March: In march we will focus will be reaching to consumers directly. We will arrange many

paint competition, Will sponsor many public events .We will start a different type of campaign,

Its tag line will be “party with paint” .We will give a people to people that its fun to paint your

own house .painting can be the reason of doing party.We will open some “paint house” in big

cities, where people will come and do party by doing paints

April: We will focus on Real estate sector ,we will arrange “paint fair” where all the painting

companies will come and there we will show the quality features of product to the buyers.We

will also arrange some seminars regarding real estate sector . As we are working on real estate

related events ,so our paint will get attracted by the buyers. Further time we will go to them and

offer them some interactive packages for using our paint .

May: In may we will focus on individual and industry customers .We will go to this segment

and make them aware about painting. We will train paint workers for few hours and give them

instruction about effective painting. We will go to random under-construction buildings to for

those purpose.

June: June will be the revising month of our all taken actions programs so far .In jusne we’ll do

all these activity together we have done in last five motnths.We will see the progress and if there

is any lacking in action programs, they we’ll recover it in June

Budgets

As we are new in the market and the market is already filled with strong competitors ,so we

need a heavy budget. Because we have to spend a huge amount for the promotion of our

product ,we have office ,factory and so many other expenses. So we need a big amount of

budget. The projected primary budget will be around 100 crore.we will spend 60-80 crore in

18


building factories ,buying machineries and rest of the money will spend in promotional activities,

building offices and many other expenses .Our object is capturing 5% of the current market ,so

we are hoping that we will able to make a minimum profit of 70-100 million in first year.

Controls

We are planning tight measures to closely monitor quality and customer service satisfaction. We

will maintain a quality standard in delivering our products to the consumers .We will keep our

words, will fulfill our promises given to customers, We will keep our management section

always ready to deal with every problems and possibilities.All the plans we have taken ,we will

make sure that these plans are implementing correctly .Given the market volatility ,we are

developing contingency plans to address fast moving environmental changes such as new

technology and competition

----------------------------------------------------------------------------------------------------------------

19

rak paints finall

Documents