have recently been hired by TOA Paints to identify the market potential and develop the marketing strategy. A. What benefits would TOA Paints achieve by conducting an exhaustive segmentation exercise. B. How would you segment the industrial paint market in India using macro and micro factors
TOA Paints
TOA Paints (Thailand) Co., Ltd is the largest industrial paint manufacturer in South East Asia and exporter of premium paint products. With high standard and strong product portfolio, TOA has been growing faster than the industry average and draws its strengths from the new products, best-managed behavior, and also strong sales force. During the past ten year, TOA has expanded its business to Vietnam, Laos, Cambodia, Myanmar, Malaysia, Indonesia and Middle East Zone. It now plans to enter the Indian market.
Estimated to be at about $1.9 billion, the industrial paint category constitutes 25% of the paint market and includes a broad array of segments like automotive coatings, marine coatings, packaging coatings, powder coatings, protective coatings and other general industrial coatings.Industrial paint’s lower contribution in India’s overall paint market is due to lower industrial and infrastructure development compared to other matured countries and developing countries like China, and higher technical know-how required in the industrial paint segment, which in turn leads to low involvement of unorganized players and thus a lower market size. Further, there is a gradual shift from un-organised to organised players led by better consumer awareness.
Small un-organised paint manufacturers primarily catering to the lower end of the price points still maintain a sizeable 20- 25% share in the overall paint industry.
The industrial paint segment is highly dependent on business cycles and economic conditions. Growth of the industrial paint segment is highly dependent on the automotive sector. The auto sector has been the leading consumer of industrial paints with 40-50% of the demand coming from it. The consistent downward demand conditions in the key automobile sector also exerted pressure on the automotive paint players in the industry through the year.Within the industrial paints segment, Kansai Nerolac is the leader, with the segment contributing 45% to its overall revenue.
Questions:
You have recently been hired by TOA Paints to identify the market potential and develop the marketing strategy.
A. What benefits would TOA Paints achieve by conducting an exhaustive segmentation exercise.
B. How would you segment the industrial paint market in India using macro and micro factors.
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