In October 2001, the estimated Rs 6-7 crore media duties of ICI India's paints business were entrusted with Universal McCann, which it won in a five-way pitch. Two years on, the fourth largest paint company in the decorative and industrial segment has put its estimated Rs 7-8 crore media business under review once again. While company officials could not be contacted, sources close to agencyfaqs! confirmed that at least three agencies - including Carat India and Optimum Media Solutions (OMS), besides defending agency Universal McCann - are in the running for this prestigious account.
A senior media professional based in Delhi indicated there would be a few more shops in contention. "First, it is a prestigious account and second, few agencies have competing business," he said. For the record RKSwamy/BBDO continues to handle the creative duties of ICI.
While the exact nature of the brief to the agencies is not clear, what has emerged from conversations with agency sources is that the brief is quite "detailed" and that the competing agencies would have to go through "a rigorous process of evaluation".
To put things in perspective, the paints industry is divided into two segments - decorative and industrial. According to industry figures for the calendar year 2002, the organised sector in the decorative market is valued at Rs 4,300 crore. Asian Paints leads this market with 45.5 per cent. (In 2001, when the total market size was valued at Rs 3,300 crore, Asian Paints had a market share of 46 per cent.) Berger Paints is a distant No 2 with 12.9 per cent, while Goodlass Nerolac claims 11.3 per cent of the market. ICI Paints is ranked No 4 with a market share of 8.4 per cent. (In 2001, ICI paints had a market share of 8-9 per cent.)
However, in the premium segment of the organised decorative paints industry, which is estimated at Rs 880 crore, ICI's paint brand Dulux ranks No 2 with a market share of 13.3 per cent. Asian Paints is the leader in this segment too, with a share of 42.2 per cent. Goodlass Nerolac and Berger Paints own 11.6 per cent and 10.3 per cent of the market respectively.
Dulux is the only brand from ICI with a considerable brand recall; other brands such as Maxilite, Supercot, Farco and Ancillaries have not been pushed hard enough. Keeping in mind that just 30 per cent of the decorative paints segment is constituted by painting of new houses, with the rest being used for repaint, competing for mindspace becomes all the more tough.
The company seems ready to take the fight head on. According to the unaudited financial results for the quarter ending September 30, 2003, ICI's paints sales seem to have grown ahead of the market with key brands posting good performances. "This, together with control on costs, resulted in segment profit of Rs 723 lakh against Rs 407 lakh in the corresponding period last year," states a press release hosted on the company's official website. © 2003 agencyfaqs!