Berger initiates new strategies

The company has been filling our palettes with ravishingly colours while bonding with the environment for years. Here, Varun Jain talks to Subir Bose, MD, Berger Paints India Ltd, the right concoction behind the company’s colourful success and their future plans…

Varun Jain(VJ):What is this Berger Paint Center all about?

Subir Bose (SB): Well, the idea behind these centers is to offer a great experience to paint consumers. And for the purpose, we are opening franchise centres in Tamil Nadu and Andhra Pradesh. We want to provide a touch feel of paint to consumers through options in terms of colour schemes for their homes. We also have preview software installed in these stores by which we can show the consumers various colour options both for the interior and the exterior of his house. A colour consultant is available in these outlets, who can advice the consumers on the colour schemes. So, these are the kind of benefits we are providing our consumers through these franchise stores.

VJ:How important have these franchising stores been for Berger Lewis in India?

SB: It has indeed been very important. If you see, so far paints have been sold through the dealers. Many of these dealer shops are old fashioned, they have very little space, and their displays are not properly done. The overall experience is not very good because it’s very cramped, it’s limited and there is no one to answer the queries the consumer might have and many more. Through our new stores, we are providing different purchase experience to paint consumers. As markets become more sophisticated, the consumers become more sophisticated, there will be a need, seen not only in the paint segment but also in most other retail segment.

VJ: Any plans of coming up with a company owned retail outlet?

SB: Nobody in this segment has their own company owned outlets in the country. But in west, paint companies have their own outlets. Even the franchisees here are dealers who have set shop and are willing to do it differently from their little crammed holes which they have to use earlier.

VJ: You had a tie up with Cartoon Network and Disney to paint up their characters on the wall. How has the response to that initiative been? And did you buy the license to use them?

SB: This is a small and a very niche market and these can never be a big ticket items for any company because this is limited to children and that too to the children who are at the upper end of the strata. Most children in our country don’t even know a Cartoon Network or a Disney. It was meant for a very small niche and to that extent we are happy that it not only created a image in the minds of the children but also in the mind of the parents, who are critical and important for our business. We still sell small quantity of these kids’ products.

It is not through licensing. We paid them and borrowed these characters and hence we use them.

VJ: What will be the future investment plan?

SB: The market is growing very significantly. We are increasing our capacity by setting up a manufacturing facility in Andhra Pradesh, close to Bangalore, which will be making water based paints. Water based paints which are used in the interiors and exteriors of our houses are growing very fast as a segment. The paint demand in the southern part of the country is very high and that is the reason why we are looking to set up the facility in south. The investment will be close to Rs 150 crore. It will be a completely automated plant, we have already taken the land on 50 acres and we are in the process of getting the necessary pollution clearance from the ministry of environment. We expect to make this plant operational in the coming two years time by mid 2012. The capacity of the plant will be 1,50,000 tonnes per annum. The capacity of existing plants is close to 2,50,000 tonnes per annum.

VJ: In 2005, Berger repositioned the brand and included a lot more decorative range in their portfolio. How did that help?

SB: We were present in the home decorative segment, but earlier the brand was not positioned very strongly. What we did in 2005, we positioned specific logo for all the important brands which we have, and collectively which are known as the Lewis Berger brand. To give us a distinct identity, we came up with the tagline “Paint Your Imagination”. We ran a lot of ads for this campaign. The repositioning definitely helped us as we made rapid inroads ever since then. And we have been in the business since 1760, and these are measures to make the consumer show a degree of belief in our products.

VJ: You have consistently been on the No.2 position for long. What all measures you are taking to grab the numero uno position?

SB: That’s quite a battle, but we are launching newer products like The Breathe Easy paints, which are eco friendly paints. The leader in the category doesn’t have this kind of a product. We can do and are doing things which creates a differentiation between us and the market leader. We can’t do what the leader is doing, so we have to act differently. The new product launch shows that we think differently, we are ahead of the times, we care for the environment and we think about the India of tomorrow and therefore we are launching products for tomorrow.

Today green is a concept that is still very limited to a very small section of the people, but what it does as a company, it projects Berger as being an environment friendly company, being technically up there. This is the image we would like to be seen in. We have to be savvy. We can’t do what the leader is doing. They have a broader network, strong network of dealers, have more muscle. So what we need to do is, to do smarter things.

VJ: The festive season is approaching and the sale of paint will increase. How is Berger trying to be picked up from the shelves?

SB: We are doing some new launches to appeal to the consumers. We have already launched our new advertising campaigns of Easy Clean, which is there in the newspapers. We have re launched Luxol Silk which is a premium emulsion and we will be carrying a new ad that will come 10 days later. Some time back, we launched Weather Coat All Guard, again which our competitors didn’t have. So, these are the kind of new initiatives we are taking and they are working well.

VJ: What is the total worth of paint industry in the organised retail segment? What is your market share?

SB: I would say it is close to 15,000 crore and we have a market share of around 20%.