CASE STUDY: How Berger’s rise as India’s second largest paints company?

09/11/2016

What you will find in this Case Study?

1) About Berger Paints
2) 250 years in the Making
3) Berger Paints’ Secret Recipe
4) Marketing & Promotional Strategy
5) Growth & Future plans

About Berger Paints

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Berger Paints was founded by Lewis Berger in 1760. In India, Berger Paints was integrated in 1923. Today, Berger Paints is the second largest paint company in decorative paints. It has a consistent track record of being one of the fastest expanding paint Company. Its headquarter is situated at Kolkata. It has 170 sales offices, international presence in 3 countries and a countrywide distribution network of 75 stock paints and 15,000+ paint retailers.

250 years in the Making

The company has come a long way to become second largest paint company. The Berger Paints of today has an enthralling history of changing ownerships.

Berger Paints having consecutively gone through further ups & downs as well as ownership changes to gain its current status wherein the majority stake is with Delhi-based Dhingra brothers.

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In 1760, Lewis Steingenberger came to London fromFrankfurt in Germany to sell a Prussian blue color manufactured by him using a secret process.He changed his name to Lewis Berger and by 1870 Berger Paints. After the death of Lewis Berger, his sons took over the business and converted the paints company into a limited company, LewisBerger and Sons Limited.

After that, ownership changes thrice – from British Paints to Berger, Jenson and Nicholson (BJN) (1969), from BJN to the Vittal Mallyas (1978) and finally from the Mallyas to the Dhingras in 1991. Berger Paints moved up the rankings in the Indian paints industry. Berger moved up the ranks from #7 in 1980 to #4 by 1991 and up to #3 by 1998.

In the year 1983, the British Paints (India) Limited, changed its name to Berger Paints India Limited. Currently, Berger is the second-largest paints company in India, after Asian Paints.

Berger Paints’ Secret Recipe

1) Focusing on the core industry

Mr. K. S. Dhingra, promoter, Berger Paints, said “We have to focus on paint and grow only in paint. It is a very competitive business. One small mistake can take us back by 3-4 months or even more vs peers. We have to tread safely. Whilst competitors wait for Berger to make a mistake, we too wait for competitors to make a mistake, so that we can cover the gap between them, faster.”

2) Intensifying the competitive channel

Berger has, in the past, focused extensively on introducing products with special features which have allowed it to create a strong brand value for such products. Berger products have enabled Berger to sustain its competitive positioning in the industry.

3) Controlled capital distribution

 “We are clear that whatever capital is available with us we will use it for our paint business and not anywhere else. This is clear. We will not go for diversification” said, Mr. KS Dhingra, promoter, Berger Paints.

Marketing & Promotional Strategy

The company’s strategy is to select the target market and position its product with the help of product segregation, service segregation, and image segregation. This helps to capture the market by providing better quality products at an affordable price.

For Diwali campaign, Berger paints collaborated creativeness, talent and colours together making their activity not only exclusive and attractive but also engaging.

Berger Express Painting: #JaldiKaro was framed to announce and endorse Berger’s new quick service paint job – Express Painting, using appealing and interactive social media activity and communication.

Social Media Marketing

Berger paints have a strong presence on social media. Berger paints have seen more than 95K followers on Twitter, 12 K followers on Instagram and massive 1.17 million fans on Facebook.

Berger paints promote its campaign on social media platforms to increase the engagement of the brand with their audience. The campaign activity also focused on promoting Berger color palettes and textures.

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Example:

The social media posts helped popularize #PickYourFavourite, #ColourChemistry on Twitter too, as the hashtag was trending in India.

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#JaldiKaro campaign was kick started on multiple social media channels including Facebook, Twitter, and Instagram with the help of a series of hilarious videos. It further stated the launch of ‘Express Painting’ with a microsite based contest to create buzz.

Leading contestants to their microsite, #JaldiKaro concerned solving a puzzle of reordering the frames of the video for a chance to win prizes by sharing their score with their contacts on social media.

It was marked at driving engagement on their microsite by offering a fun activity for their followers to join in, and also encouraging a domino effect as contestants could invite their contacts. The campaign was getting an overwhelming reaction from their followers.

TV Commercial

Television is a significant medium for promotion its products especially the high-end combinations.  It aims to an emphasis on its product range for combinations and expands its resources across towns and small cities.

Offline Advertising

Even offline the brand made a big splash on travel media on the metros, domestic flights and Volvo passage buses, etc.

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Growth & Future Plans

The company posted revenues of around INR 2,700 crore in the 2011-12 financial years. They are aiming to double their sales to around INR 5,500 crore in the next four years. The company has around 12,000 dealers across the country and the company would try to expand them further.

The company is planning to invest on expansion. Berger Paints India Ltd Managing Director & CEO Abhijit Roy said, “We are already in the process of investing on two new plants. While around Rs 220 crore is being invested in a facility near Bangalore, another plant is coming up near Pune.”

The plant near Bangalore would manufacture water based paints; the second plant near Pune would provide to industrial segment.

Even, the company is also planning to set up a plant in Assam. Assam government is expected to allot two plots of land in two distinct locations, in Guwahati and in Tezpur,

The company spent around INR 50 crore on marketing events last year. It will keep growing by 15-20% per annum.

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