Case Study: Asian Paints developing and marketing green products.

 

Case Study:  Asian Paints: Going green

Asian paint is the leading paint manufacturer in the world. It is a household name in India for its durability and services. The company is known for its social responsibility by contributing to education, healthcare and sanitation. Further, Asian paint decided to show environmental sustainability. It identified water replacement, reduction in fresh water usage, use of renewable energy, and reduction of hazardous waste as concern areas and the company would like to invest in eradication of these environmental issues. Further,  the company began self certification for their products taking US green seal GS-11 as standard. As part of this initiative, Asian paints reduced lead in paints below
90 ppm. The company’s carbon emission reduced by 31%. Apart from this Asian Paints reduced volatile organic compounds in manufacturing.

Green Products: Royale and Ezycolour are chosen for green initiative by the company. Royale health shield offers infection free home paints. This is the first in India, a paint recommended by Indian Medical Association (IMA).

Launch and promotion of Ezycolour:

 

Asian paints launched Ezycolour home solution in 2015. This is a green painting service initially targeted for the rich class. However, the company had seen the aspiration of the upper middle class for environmental friendly products and extended it to that category too. To create awareness about the product Asian paints had run two different campaigns. In the first one, the company ran an offline campaign wherein it selected Mumbai city. In the Mumbai city, Shivaji park, HP petrol pump and Hindu mills compounds are taken to paint vandevi using Asian paints. These Natural murals were different ideas all together. The company wanted to show the positive and negative side of vandevi environment issues. However, experts felt that locations selected for murals
were not attractive and had suggested using an art gallery. This will suffice the goal of Asian paint to reach a niche market. On the online campaign side, Asian paint ran storytelling by artists , why they selected the art profession. These stories were marketed on Facebook and YouTube. Contrary to the expectation of Asian paints, the Facebook campaign did not have mass comments. It gathered only 86000 views in a month. In the YouTube channel too the company had less than 2000 views. Both campaigns lacked the sales orientation.

Questions:

1.    What went wrong for Asian paints green products?

2.    Suggest a plan to promote green products for Indian households particularly in Metros. 

 

Grey Marketing-Reasons, illustrations and How to reduce Grey Products Marketing

 

Grey Marketing

Definition:

Parallel markets using unauthorized channels to sell a company's products are called ‘Grey marketing’ 

Reasons for Grey markets

• Grey marketing exists due to inefficiencies in the supply chain
• The price of the product is cheaper in one country than the other and leads to parallel imports. For example: Indian consumers buy TV sets in Singapore due to price differences.
• Refurbished products are sold at cheaper prices in developing countries.
• Importing products are unavailable in a local market.
• Intermediaries ran out of stock genuinely and artificially so that a customer purchased the product in the grey market for a higher price.

Grey market illustrations:

1.     Japanese cars are sold in Russia and Australia.

2.     Range rovers were imported by US consumers before 1987.

3.     Indian consumers find websites to watch IPL on mobile by passing hotstar requirements.

4.     Purchasing products on online portals like eBay meant for some other countries.

5.     The UK government put a restriction on milk powder purchased by their consumers as a few of them purchase heavily and supplied it to Chinese markets.

6. Books published in developing countries are cheaper compared to developed countries. Therefore customers carry books in Airlines to other countries.

How to reduce Grey Products Marketing

• Take a legal action on unauthorized distribution. For example Levis stopped TESCO in the UK from selling their products by taking a legal route.
• Ask marketplace like eBay to remove products not meant for a particular country.
• Stop supplying to intermediaries who are creating scarcity.
• Reject warranties and Guarantees.
• Provide different names for the product. This will help the company to detect the grey market.
• Make alliance with other companies to stop grey markets.

Advantages of Grey marketing

1.     Grey marketing is beneficial to consumers due to reduced prices.

2.     Grey market increases product availability to retailers.

3.     Grey market brings down channel costs.

Disadvantages of Grey marketing.

• It affects big brands.
• The resources put on brand development are wasted and profit is taken by a grey marketer who has not invested in the brand.
• Brand equity will be suffered heavily as the post sales service is not given by the grey marketers.
• Grey marketers do not provide warranties and guarantees on products sold.
• Grey market leads to channel conflict and trust erosion between manufacturers and intermediaries.