Direct Marketing Initiatives from Goodlass Nerolac

A Case Analysis by-

Raunak Doshi 1021327

Rojan Chacko 1021328

Sagar B S 1021329

Souvik Ghosh 1021330

INTRODUCTIONGoodlass Nerolac Paints is the wholly owned subsidiary of Kansai Paints

ltd Japan.

It is one of the largest paint manufacturers in the world.

As part of its expansion program, It decided to target the rural segment.

The company initiated a club for its dealers called the ‘core dealers club’

of Goodlass Nerolac to build stronger ties with them.

The club logo was changed and focus was shifted from sales and revenue

to building relationships.

Also took steps to improve the learning activities of the club and asked

the club members to educate the painters and consumers about using

rollers instead of paint brushes.

To motivate the dealers, company introduced the “spectrophotometer”

or “magic eye” in 2002.

In spite of these initiatives, research analysts say long term strategy

should be to influence consumers directly.

Nerolac also employed region specific advertising campaigns using

celebrity endorsements like Mohanlal, Deepa Venkat and Amitabh

Bachchan too.

SWOT ANALYSIS

STRENGTHSStrong Customer Base with market share close to 42% in India.

Regions specific advertising campaigns using celebrities.

Use of technology to help the customers choose the best shades in

various forms.

The Core Dealer Club of Goodlass Nerolac was a good platform for

interaction between the dealers and the company.

Nerolac focused on building relations instead of sales & revenue.

WEAKNESSESThose dealers who could not make it to the Club in the successive year

would feel demotivated.

Use of region based advertising might turnout to be a costly affair for the

company.

OPPORTUNITIESMarket penetration

Promotion strategies: makeovers

Use latest technology to rope in bigger, profitable clients.

THREATSUpcoming players in the market.

Unsatisfied customers.

QUESTIONS FOR

DISCUSSIONS

QUESTION 1 In order to build its brand in the decorative paints segment,

Goodlass Nerolac’s long term strategy should be to influence

customers directly. In fact, when it comes to selecting paint,

the company should adopt strategy whereby customers (and

not the painters) make their own decisions.”

How far is Nerolac right in focusing its direct marketing

initiatives on its dealers rather than on the customers?

As a part of expansion- Decorative paints segment

One such initiative was the direct marketing effort aimed at the dealers and

retailers of the co.

Dealers and contractors play an important role in the purchase decision for paints,

as they are the major influencers.

Goodlass is now making inroads into the decorative paints segment that makes up

about 70 per cent of the overall paint market in India.

.Took various steps to improve the learning

activities of the club, where in the dealers would be able to educate painters and customers on using rollers.

They wanted to change the mindset of paint application techniques.

Focusing its direct marketing initiatives on dealers was right as they contribute about 20-25% of the business.

Also they acted as company representatives and gave their advice on industry and market related issues.

QUESTION 2 Nerolac roped in Amitabh Bachchan to endorse the brand at

a time when he has already endorsed a spate of brands like

Pepsi, Wagon R, Cadburys and BPL. Do you think Amitabh

Bachchan would help Nerolac in creating a brand image for

the company’s paint products?

Objective behind the campaign:

Repositioning of Nerolac

as a larger than life brand that is

omni-present.

Target market:

The booming DECORATIVE PAINTS segment

MEANING TRANSFER THEORYExplains that a celebrity encodes a unique

set of meanings which if well used can be transferred to the endorsed product.

STAGES:ENCODING MEANINGS-celebrities encode a

set of meanings in their image e.g trustworthiness

MEANING TRANSFER-to the endorsed products

MEANING CAPTURE-consumers buy products for capturing some of the desirable meanings which celebrities have passed on to the product

Larger than life imageNEROLAC wanted to reach out to the

masses.Mr Amitabh Bachchan thus was an obvious

choice, a legend that every man identifies with...................

Embodies same values NEROLAC stands for- excellence

dynamism inspiration innovation.”“HUM KEH REHE HAI”-the last punch words

OMNI-POTENT IMAGE“Yeh Rang hai jo har Ek ki Zindagi ko

Choota hai” Colour that touches the lives and dreams of

every person.

Bachchan would definitely make a difference in terms of brand image of Nerolac & he did it

Significant increase in brand value after the campaign

VAMPIRE EFFECT & MULTIPLE PRODUCT ENDORSEMENT didn’t hold good in this case,due to suitable meaning transfer & meaning capture

CONCLUSION As a part of the expansion program Nerolac is targeting the rural markets which

account for 10% of the total market.

It initiated the direct marketing strategy by initiating a club for the dealers

called the ‘Core dealer club of Goodlass Nerolac’ where:

It accepts all the suggests given by the dealers ,

Make the products according to their needs.

The focus shifted from sales and revenues to building strong customer

relationships.

The objective is to instill confidence among the dealers and to create healthy

competition.

To motivate dealers and provide value added services and increase consumer

range of preferences, the company introduced a new product called ‘

Spectrophotometer’ or ‘The Magic Eye’ .

It provides customer satisfaction where ,they can make their own decisions.

Nerolac is adopting a long term strategy to influence customers directly.

It introduces region – specific advertising campaigns using celebrities to

endorse the products.

Hence we can conclude saying that the company is directly reaching the

customer and building strong relationships with them , so that it can be ahead

of the competitors.

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