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GROUP MEMBER
Ramsha Sohail
Hira Jafir
Rabia Basar
Amber Manzoor
Hina Zaidi

BBA II
SEC G

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 BERGER PAINTS
(CASE STUDY)

BRIEF INTRODUCTION:
Berger paints was actually started in 1923 but in Pakistan Berger started its operation in 1950 and initially
they imported paints from United Kingdom but in 1955 a local manufacturing facility was started in
Karachi.

Berger paints became a public limited company in 1974 when 49.38% of the shares were acquired by
Pakistani inventors with the remaining 50.2% remaining being held by the UK parent company which is
Jenson and Nicholson Limited.

But soon the parent company was taken over by Hoechst who was world’s one of the major manufacturers
of chemical and allied products.

In 1991 Slotrapid Limited acquired the management of Berger Paints Limited and in 1993 Berger came into
collaboration with Nippon Pints Company of Japan which enabled it to develop automotive paints.

Berger paints has its head office in Karachi and it also has some regional offices in Lahore, Karachi and
Islamabad. Its territorial offices are in Hyderabad, Quetta, Multan, Faisalabad, Gujranwala and Peshawar.

Berger is the first paint company in Pakistan to modify its formulation for decorative paints to make sure
that they are LEAD-FREE.

Berger paints has acquired ISO 9000 certification and has upgraded to ISO 9001-2000 in the year 2004.

In the year 2006 Berger Paints Limited started its modern paint manufacturing plant in Lahore which
enabled the company to achieve the market leadership position in sales volume.

FOLLOW
ING ARE THE ANSWERS TO THE CASE STUDY QUESTIONS.

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 1) How competitive is the paint industry of Pakistan?

In the paint industry of Pakistan there are about 22 units in the organized sector and over 400 units in the
unorganized sector. Almost around 50% of market demand is met by the organized sector and the rest by the
unorganized sector.

The paint consumption per annum of Pakistan is 120ml and there are over 400 manufacturers running
behind a small piece of pie. This suggests that the paint industry of Pakistan is competitive.

Demand of paints was rising due to boom in the housing and construction sector. During July-March 2003-
04, production of solid and liquid paints and varnishes grew by 53.7% and 36.5% respectively.

The growth rate is 18% and as a general rule the growth of the paint market corresponds to the GDP growth
rate.

The major competition between paint manufacturers are on the basis of quality and price, many companies
use various different methods to attract customers and to gain a competitive advantage because there are so
many different multinationals as well as many local companies in the market which result in an increased
competition level.

But previously the market situation wasn’t that good because there was an excise duty of 10% and it had
one of the lowest per capita consumption per annum which is 0.8kgs while 4kgs of South East Asia and
22kgs of developed world.

The Pakistan paint industry was one of the least developed due to taxes and lack of education but soon in the
budget of 2004 the government removed the 10% excise duty and reduced the taxes which resulted in a
gradual increase in the healthy competition.

There is also some work going on in order to produce raw material locally that is required by the paint
industry and it is expected that it will be available in next 4 years and this would result in further growth in
the industry.

It is also expected that the demand for paints would also rise in the next two to three years by 20 percent and
this will also result in more highly competitive market.

Some of the major players in the paint industry of Pakistan include the following:
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MULTINATIONALS:

• ICI/AKZO NOBEL
• BERGER PAINTS
• KANSAI PAINTS
• NIPPON

NATIONAL PLAYERS:

• BUXLY PAINTS
• DIAMOND PAINTS
• MASTER PAINTS
• GOBIS PAINTS
• NELSON PAINTS
• HAPPILAC PAINTS
• BIRGHTO PAINTS
• SILVER SAND PAINTS
• SILKY PAINTS
• BLACK HORSE PAINTS

2) What marketing activities under product, place and promotion did Berger conduct in the year
2003-2004?

Berger paints conducted lots of activities under product, place and promotion in the year 2003-2004 because
it helps them to get a competitive advantage over their customers.

The activities under product, place and promotion includes the following:

PRODUCT:

1) Berger re launched two of their products "Berger Durocem" and "all rounder matt enamel".

A. Berger Durocem was re launched by means of new tokens but the product was same
• same product

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 • new tokens
• price to be increased by the token value
• new design
• new shade and with added colors

B) All rounder matte enamel was re launched by the means of advertising as highly workable and
extremely durable.

2) Berger launched a new product "Economy Enamel"

• new shades
• market trends towards cheaper and less costlier paints so it was low priced
• second product in the portfolio of economy category of paints after economy emulsion

PLACE:

1) Model Shops:

Fully decorate shops with a complete signage reserved for Berger only. They made 1 retail shops all over
Pakistan to maximize branding and attract customers to Berger.

2) Stall Activity:

The best place to catch a paint buyer is at paint dealer. it is the most accurate place to get a customer. They
can be converted to your product at the paint at sale day dissemination of info regarding our products and
services.

Stalls: 24

Cities: Karachi, Lahore, Islamabad, Peshawar, Quetta, Hyderabad and Faisalabad

Stall per city: 3

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Time: 52days

Started: 20th Set 2003

PROMOTION:

1) Publications:
A) Newsline magazine which considered as one of Pakistan’s most prestigious magazine, Berger
has the back cover there.

B) Promotion in The Friday Times weekly issue

1) Direct mail shots:

To arouse the interest of the architects, a promotional scheme where a returnable coupon would entitle to the
architect to a round trip to Bangkok with $500 to spend there.

One flyer carries information about 2 products coupled with a unique or niche product and it is send to the
following:

• 2800 architects , engineers, and consultants

• 130 interior decorators and designers

The above were the activities which Berger paints carried out under product, place and promotion in the
year 2003-2004.

1) How has Berger segmented the paint market?

Process of defining and sub-dividing a large homogenous market into clearly identifiable segments having
similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely
matches the expectations of customers in the targeted segment.

Berger paints focuses on varying requirements of diverse groups of people or customers so its product
range is divided into 8 different parts and these divisions are further divided into 3 main segments.

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 • Upper tire
• Middle tier
• Low tier

The market segmentation of Berger paints is on the basis of price and quality that drives and determine
qualitative characteristics of a paint product.

The top tier products are those products which are made for high society people who are rich and can afford
them. They are superior in quality and their prices are also higher than the middle and low tier products e.g.
Elegance.

The middle tier product are those which are designed for people who are not so rich and these products are
a bit low in quality as well as a bit less expensive than upper tier products.

Products which fall under the category of low tier are the products with the lowest quality and are the
cheapest. These are made to cater the market demand of those people who are not at all rich.

Many companies do not use tokens for upper tier products e.g. ICI but some companies do use them and
Berger is one of them.

By dividing the market like this help Berger to cater each and every customer in the market whether rich or
poor.

The consumption per annum also differs with the tier, the top tier has the lowest consumption of 15ml
which is quite obvious because they are the most expensive ones while the low tier has the highest
consumption which is 55ml because they are the cheapest ones.

This market division is also done by many other multinational companies like ICI, KANSAI etc

As mentioned above Berger also divides its product range into eight different divisions and these are:

• Decorative division
• Buildings chemical division
• Protection products
• General industrial products
• Vehicle refinish products
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 • Berger road safety
• Automotive division

Each and every division has its own kind of products and the highest range of products fall under decorative
division which includes about 42 products.

REFRENCES:

http://www.businessdictionary.com/definition/market-segmentation.html

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