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DULUX GROUP Business Report

RAWMI FAIZA (45333823)

Contents Introduction...........................................................................................................2 Competitor Analysis.............................................................................................2 Customer Analysis:...............................................................................................5 Suppliers:..............................................................................................................5 Secondary Data:....................................................................................................6 Macro Environmental Trends:..............................................................................6 Marketing Mix......................................................................................................7 Conclusion:...........................................................................................................8 References:...........................................................................................................9

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Introduction An industry that is persistently demonstrating growth and development alongside the profits and income within the business of Australian markets is the coating and paint industry. Such a business, Dulux Group have been steadily meeting their customer’s needs and demands with high quality products that appear the best without any corrosion on the surfaces of its aesthetics (DuluxGroup 2020). Since 1918, they have maintained their image of being the leading manufacturers and marketers of high quality branded paints and products that protect and maintain the enhancement of the aesthetics in not only Australia but also New Zealand before going global afterwards. The DuluxGroup stands by their mission and vision to provide their customers with the latest innovations and designs that ensures a comfortable living with their households being of premium colours and textures to appeal to them (DuluxGroup 2020). Their products range is vast to meet different needs of the customers, some are, Dulux Decorative paints, Dulux Protective coatings, Dulux Acratex, powder coatings, commercial and industrial coatings, EnviroSolutions etc. They also offer their expanded brand options to the market alongside Dulux, which are British Paints, Walpamur, Berger, Porter’s Original Paints and Cabot’s. Therefore, their line of premium brands and new range of products make them standout against their competitors with their customer focused market strategy that serves their dynamic lifestyle ensuring their demands are met accordingly (DuluxGroup 2020). Furthermore, DuluxGroup’s vast range of distribution channels help them reach their customers effectively with over 5000 outlets for retail and 230 outlets of trade distribution for their supply of products with a website for e-commerce all across Australia that increases their brand reach and awareness (DuluxGroup 2020). Their domestic and commercial market customer network is in reach due to them maintaining a good relationship with their distributors and suppliers that assist in sustainability too (DuluxGroup 2020). Their operation is not limited to a certain market, they go by both B2B (business-to-business) and B2C (business-to-consumer) markets. To also reach their customers and satisfy their expectations they are in collaboration with retail outlets as consumers and scope of wholesale trade followed by their online product offerings too.

Competitor Analysis DuluxGroup has sustained their leading paint and coating brand position by acquiring the most portion of the market share making it the top industry for paint and coating. Their collaboration with retail and business outlets with established retailers have helped them remain unparallel in the market. However, they are faced with competitions in-spite of winning the competitive aspects. Some of their main competitors being Asian Paints Ltd, Nippon Paints and Jotun that are standing to be a potential substitute in both domestic and international markets with increasing market shares and suppliers. Asian Paints Ltd

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In the paint and coating industry, Asian Paints Ltd hold a position of great dominance being technologically driven in order to achieve a competitive edge. Their main portion of market share remains in the decorative paint sector ranked to be at No.10 among its category globally (Asian Paints 2020). Their unique feature of their paints are that they are capable of no industrial discharge being one of the most attractive options to be chosen within its competitors (Gupta, 2018). Strengths: Their operation is carried in 22 countries and have 27 manufacturing unit facilities that has served in their strong presence globally with a developed brand image that advantages in their goodwill making it the top painting company with 40% market share in India alone. (Bhasin, 2018). Their business is customer focused, so they monitor their consumers with different types of research, online media, and market strategies to meet their consumer needs. Adding to that, their huge range of products make up their portfolio stronger than most brands out there with not only decorative paints but also coatings industrial, auto paints, primer, sealer etc to serve their different segmentations of market that also gained them more market share with diverse clientele (Gupta, 2018). Moreover, their relationship management with suppliers has benefitted them in their distribution and development of products making them one of the few brands with a vast Supply Chain Management using technologies and Enterprise Resource Planning being the only one as such in India (Bhasin, 2018). Their effective use of technologies has helped them cope up with innovative market trends by maximising competitive advantage and customer engagement. Lastly, their celebrity endorsements such as with Deepika Padukone, SaifAli Khan in advertising campaigns have helped them stay relevant in the market with brand name remembrance and effective exposure to create brand image (Bhasin, 2018).

Weakness: Their marketing strategies are weak in relation to their remarkable brand position that the brand’s strengths have created. They only highlight their Decorative paints line which overlooks their other line of products with a 20% less market share in industrial and auto paint sectors internationally when seen against domestic (Bhasin, 2018). Inventory, production and planning issues in regards of the changing tastes and needs of the consumers and their struggle to adapt to these perceptions accordingly with the decorative paint product line (Bhasin, 2018).

Nippon Paints: Known as the first actual paint manufacturing organization of Japan which later on expanded globally to China, South Pacific, Thailand, Singapore and India, Nippon Paint has built up its reputation in decades (Nippon Paint Annual Report, 2019). Their vision and mission remains to bring colours to the consumer’s life through innovations and be the leading industry by passionately creating value for all types of stakeholders (Nippon Paint Annual Report, 2019).

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Strengths: Ensures best quality paint from its origin, Japan, and maintains the quality throughout all global sectors they distribute to; They also offer a vast choice of colour schemes to choose from ensuring varieties for consumers; Their range of products are extensive, therefore, their supply channels go beyond a certain place to ensure premium quality; They also introduced the first ever colour creation machines across all of their outlets giving consumers the freedom of customization and unique choices (Nippon Paint Annual Report, 2019). Weakness: Poor market coverage compared to the competitor brands; there are not as many dealers, distributors, retail chains carrying the product compared to the other ones in the market; Price of the product is higher than its competitors; less marketing campaigns and promotions, as a result of which it is not widely known although it has premium products (Nippon Paint Annual Report, 2019)

Jotun: Jotun is the biggest competitor for DuluxGroup as their product line is similar and they both aspire to be the best paint and coating company in domestic and global markets. They are situated in Norway with their range of products going worldwide being a chemical company focusing on performance, protective and decorative coatings to variable customer belongings such as, furniture, houses, cars etc ensuring better durability than their competitors (Jotun Annual Report, 2019). The similar characteristics of the products such as the decorative paints, protective and marine coatings battle head to head with its competitors as they use the latest technology to their advantage to meet consumer demands with not only appearance of the paint but also avoids damages due to it (Jotun Annual Report, 2019).

Strengths: Proper market segmentation and effective innovation of the products to target each segments in order to meet consumer needs. Consumer focused products with affiliations with interior designers, real estate and architects in order to make high quality customized products (Jotun Annual Report, 2019). Competitive advantage gained through training and development programs, highly qualified employees working for them and stable financial positioning. Also, Easy-going purchase experience for consumers with exposure gained from global advertising campaigns and social media presence (Jotun Annual Report, 2019). Weakness: Ineffective mediums used for advertising caused them to have poor brand awareness such as social media and television ads which are not as effective for such products than other marketing platforms, their target market is not reached effectively in-spite of ad implementation (Jotun Annual Report, 2019). Poor communication skills within the departments within the business when the employees are inexperienced and just taught by the book, less premium products and slow to adjust with the dynamic market trends (Jotun Annual Report, 2019).

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Customer Analysis: The three major customers of the DuluxGroup are identified below1. Retail ChannelsThere are various trade and retail outlets that are a customer to the DuluxGroup as a B2B exchange, as a result of which they purchase the products in bulk in order to sell them in retail prices, some of these retailers are, Bunnings Warehouse, Sunlite, Paint Wholesalers and Carrolls (DuluxGroup Annual Report 2018), as a result of which 30%-35% of the company sales are generated through these retail outlets. This customer segment also includes hardware shops and decorative outlets. 2. ProfessionalsCustomer relationships are an integral part of any business. Dulux directly associates with trade professionals that need their products on a regular basis as it’s related to their occupation such as painters, real estate services, interior designers, architects and construction professionals (DuluxGroup Annual Report, 2018). This also denotes an establishment of B2B market as the trade professionals re-use the products in their business which reaches the final recipients. This customer relationship management helps them gain a network advantage that increases their direct sales across residential and commercial purposes which ultimately improves their brand image (Anon, 2004). 3. DIY and DIFMThis customer segment for the DuluxGroup is for the B2C market. According to the DuluxGroup Annual Report 2018, this segment consists of consumers that are creative and would like to do the work themselves alongside those that require a service that would do it for them; they are most likely to have less experience and knowledge but are keen to improve their own assets in a cost effective manner. Dulux also has a tab on their website that teaches individuals that are interested in DIY the uses and tutorials on the products and provides information to encourage these consumers.

Suppliers: The DuluxGroup has a number of suppliers that they acquire the raw materials from. Among the 3000 suppliers that the company has, the best one presently are “Scott Chemicals” that was awarded to be the supplier of the year last year as Dulux acknowledge their excellence in service and quality in their Dulux Decorative Paint sector (Scott Chemicals, 2020). The second major supplier of the DuluxGroup stands to be the “Pact Group”, within it’s 9 service categories by developing a solution that decreased manufacturing complications which is an anti-skinning innovation that utilizes both plastic and metal paint pails making the process more cost effective too (PactGroup, 2019).

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The third distinguished supplier for the DuluxGroup’s porcelain, stone panels are artedomus that are contributing in their textile section including bathwares and tiles supply (DuluxGroup 2020).

Secondary Data: There are many types of secondary data that the DuluxGroup could use in order to amplify their market research and understand their market well for their decorative paints, Acratex and protective coatings. Retail reviews, organizational reports, data collected for market researches can effectively help a brand evaluate it’s products based on the market’s needs (Schlomer and Copp, 2014).As Keller (1993) states, these will help the company have a competitive advantage with its extensive research which will furthermore increase the brand image to the customers with increased brand equity.

Fig: Traditional Decision-making Process Consumer behaviour is vastly influenced by the brand association and knowledge that one has primarily, consumers make a decision evaluating from what they already know then shortlisting to a final outcome (Mihart, 2012). The data used plays a huge role in the decision-making process, therefore, the criteria that they should acquire are it should be free from errors and accurate, the data should be relevant to the company, the format and authority of the data and lastly the reliability to make sure it’s appropriate for use (Mihart, 2012). This will help DuluxGroup to set a business direction and re-evaluate the product line according to the current market needs that would assist their decision-making process.

Macro Environmental Trends: 1. Technological DuluxGroup has different websites and online pages for each of its products, specifically Decorative paints, Acratex and Protective coatings. They contain all the information that a

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customer would require to know both from a business and consumer point of view. However, they can gain more exposure with latest marketing strategies that uses mobile applications, their range of products can be displayed there alongside their uses by also implementing ads to inform about latest discounts, new products etc (Willshire, 2012). This could be useful with their own app in addition to which they could use the partnering business’s app for exposure too. Their website has an automated chat-box that pops up when browsing, they could use such for the apps too since it will reach more people thus gaining more exposure (Fern Fort University 2019). Therefore, brand awareness will increase giving Dulux a competitive advantage. 2. Ecological DuluxGroup has a product line called EnviroSolutions that lists their products to be sustainable and following CSR that would lessen the harmful impacts their business activities to the environment. According to Dulux Specifier 2020, the company initiated public cleanups, use of recycled items to clean coatings and paints and brush wash items. As these are a good step to the environmentally friendly trend, the company should be careful about draining paints and waste management that needs disposal. They can improvise on the product packages to be more eco-friendly making them recyclable and encouraging normal public to do so by providing incentives alongside their eco extension of products (Fern Fort University 2019). Therefore, more people will choose their products as it will implement brand association differentiating them from the other brands.

Marketing Mix The 4ps of marketing mix are evaluated with the 3 DuluxGroup products, AcraTex, Decorative Paints and Protective coatings: 1. AcraTexProduct Strain-free and anticrack protection for texture coating; Used in classic and modern establishments and landmarks; Texture coat made of acrylic for long-lasting results; Largest supplier of such coatings; roof and concrete restoration, pillar and structure protection use (DuluxGroup 2020).

Price According to Bunnings pricing list, it ranges from 14L minimum to 10L maximum, priced at $50 to $250. The products vary in prices depending on their individual quality, texture and effect such as rock texture, smooth texture etc.

Place Retail outlets (Bunnings, Sunlite, Carrolls), Hardware stores (Booth and Taylor, Bay Hardwares), trading stores and their online website for purchase.

Promotion Television advertisements, website, social media, new app that identifies the color included in the acratex segment which generates a positive brand image and association.

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2. Decorative PaintsProduct Paints with different finishes, spray coat, exterior and interior coatings, oil-based and water-based paints, complementary products like weathershield, dulux professional and precision.

Price Starts from $50 for 1L ranging to $180 for 4L (Bunnings Warehouse 2020). Priced more than the competitors for superior quality.

Place Retail outlets (Bunnings, Sunlite etc), trade professionals and outlets, Dulux Paint Calculator online for bulk orders with no middlemen costs, website for customized personal order.

Promotion Television ads, social media, print media, partnership’s website and apps, leaflets and newspapers (Jelly Bean Dulux giving rewards to customers), discounts for loyal customers.

3. Dulux Protective CoatingsProduct Coatings for paint protection, leading supplier and manufacturer of premium coatings for 51 years (DuluxGroup 2020). Ensures durability and protection against UV radiation, corrosion, chemical reactions on surfaces. Products also include, metal and surfaceshield, durethane etc for different industrial needs and in eco-friendly ways.

Price $10-$200 for sprays, 2-4L containers. Depends on the type of products, metalshield costs less than protection coatings from graffiti, durethane 1L for $200 (Bunnings Warehouse 2020).

Place Retailers (Bunnings, Sunlite etc), trade stores, online website.

Promotion No particular promotional activity for protective coatings, usually connected with other products for TV ads and social media, such as an ad about stains being removed from the wall due to protective coatings.

Conclusion: DuluxGroup is dominating the paint and coating industry with their effective strategies that target the B2B and B2C markets which results in them having the majority market shares. Their huge range of products ensure style, protection and longevity which also innovates itself with the growing technologies and market demands which brings them closer to their vision and mission of establishing remarkable household, building infrastructures. The report provides an analysis and insights of one of the largest coating and paint industry worldwide depicting their product lines, company portfolio and differentiation from its competitors with future opportunities and scopes to maintain growth.

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References: Amit Kumar Gupta, 2018. Stock Watch: Asian Paints Ltd. Money Times, pp.Money Times, Oct 15, 2018.

Asian Paints (2020) Overview. About Us.

Fern Fort University (2019) DuluxGroup Limited PESTEL & Environment Analysis. http://fernfortuniversity.com/term-papers/pestel/nyse4/5194-duluxgroup-limited.php

Dulux Specifier (2020) Envirosolutions. https://www.dulux.com.au/specifier/products/envirosolutions

Dulux Protective Coatings (2020) Product Data Sheets. https://www.duluxprote...