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Bright
Helpline:Are
we on theright track?
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| Siladitya
Bandyopadhya |
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Strategic
Marketing Research Team
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Mr. Prashant Rane, the C.E.O. of Bright Paints (I) Ltd., had
just heard a rumour — that Wal-Mart Inc. was entering the
Indian retail market with decorative paints as its first offering.
He had also heard that the entry was to be within a year. Though
the news was sensational, it was still a rumour. Prashant felt
that this was the right time to take stock of the position and
strategy of Bright Paints over the last couple of years.
The first thing that struck him was that the future success
of Bright Paints relied heavily on the success of Bright Helpline,
a one-year-old initiative of Bright Paints. He called Raj, Marketing
Manager, Decorative Paints, to discuss the performance of Bright
Helpline. Prashant was not sure whether to continue with Bright
Helpline or to terminate it.
The
History of Bright Helpline
To grow at a fast pace and realise its vision of becoming
a global player in decorative paints, the market leader of
the Indian paint industry, Bright Paints, had gone back to
thedrawing boards a year ago. It had come up with two new
and significant initiatives—Bright Colours and the Bright
Helpline. Both the initiatives were meant to build a closer
relationship with the consumer. Bright Paints realised that
enhancing the involvement of the consumers in the entire paint-buying
process would lead to an increase in the size of the organised
paint market. Bright had realised from market studies that
it was painted houses that consumers were looking for rather
than a mere can of paint.
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“Vision
2004: By leveraging our expertise in the Indian market,
we aim to be among the top five decorative paint companies
in the world“ .
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| Helpline
started with a single pager number for 22 cities across India
in April-November 1999. The service was made available from
8 a.m. to 8 p.m. everyday — for the rest of the day callers
could leave a message on the answering machine. Helpline was
meant to provide callers with help on painting problems, advice
on the kind of paint they should buy and the appropriate cost
of the paint. Bright Helpline,essentially a telemarketing service,
envisioned becoming a “personal” source of information
and hence gaining referent power in the buyer’s decision-making
process.
The
Indian Paint Industry
The Indian decorative industry is characterised by high Working
Capital requirements, Low Fixed Asset requirement, Seasonal
nature of demand, and High Entry barriers in the form of a
Distribution network.
Bright Paints is the leader with a share of 41 per cent in
the organised segment, followed by Hero Paints and MCM paints
respectively. Bright Paints and MCM are mainly decorative
paint producers; Hero has a major share in the industrial
paints segment whereas Coloursnow is almost a generic name
for cement paints. There are an estimated 2,500 small-scale
producers, accounting for 40 per cent of the total paint market.
The global demand for paint is estimated at over 21 MTPA and
valued at about $60bn. The industry is expected to grow at
3 per cent over the next few years. The Indian organised sector
has a market share of 60 per cent valued at Rs 26 bn. The
Indian demand for decorative paints has grown at 10 per cent
for the last five years. Demand for decorative paints will
be led by the household construction industry, which is expected
to grow at almost 8 per cent over the next five years.
Several reports indicate that large international players
are likely to either enter India or enhance their presence
in India in view of the growing market. Thus, joint ventures
and strategic alliances will be the order of the day. Studies
suggest that Indian companies will also need to tie up with
international majors to have access to the latest technology.
In the C.E.O. ‘s chamber
Prashant:
Come in, Raj. Why don’t you take a seat? Raj, have you
heard of the Wal-Mart entry into India?
Raj:
Oh, that’s interesting news. Do you have any more
details?
Prashant: It’s important
for us, because Wal-Mart is entering the Indian retail sector
with decorative paints as its first offering
Raj: Oh! That really would
be competition after a few years.
Prashant:
Yes, Raj. And I am sure you realise that this won’t
be easy. Wal-Mart has deep pockets. Also, the government has
removed the import restrictions on paints. So we need to pull
up our socks, look into our strategy and prepare for the future.
Specifically, Raj, what’s the state of our Helpline?
How viable a solution do you feel it is?
Raj: Sir, I’ll tell
you an experience I had on my last trip to Jaipur. Bhairav
Paint Stores is our largest paint store in Jaipur. I was speaking
to its proprietor, the 55-year-old Ramanuj Bhairavi. He was
very happy that his shop was being recommended on Helpline.
He was very optimistic about the success of Helpline and felt
that it was like an award for the long-time loyal dealers
of Bright.
But then I met another small dealer of ours, one who stocks
brands of various companies and also sells hardware from his
shop. He was rather upset because he feels that this way Bright
is only earning the wrath of the non-exclusive dealers. He
even went on to warn me that the non-exclusive dealers would
stop promoting Bright products—and even go ahead and
ask painters to use competition brands.
Prashant (shocked): Oh!
That is a worrisome development! Okay, tell me Raj, what’s
the state of the Helpline operations? Why don’t you call
Ritu in?
Raj: I’ve already
asked her to come over. She’ll be here any moment. I’ve
asked your secretary to let her in as soon she arrives.
(Just then there is a tap on the door and Ritu, the 28-year-old
Brand Manager at Bright and in-charge of Helpline, enters.
She is an enthusiastic lady who has been associated with Helpline
right from its inception. Before taking up this assignment
a year and a half ago, Ritu, an engineer-cum-MBA, had worked
in Sales for another one and a half years.)
Prashant: Ritu, could
you brief us on the operational performance of Helpline?
Ritu:
Sir, the response to Helpline in certain cities like
Mumbai and Ahmedabad has been really overwhelming. But in
other cities like Calcutta, Bhubaneswar, Cochin and Jaipur,
the utilisation per cent is abysmally low—it’s growing
at a snail’s
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pace.
In fact, the utilisation per cent is above 50 per cent in only
five cities. The highest peak utilisation is in Mumbai, which
is about 80 per cent. We find that the call frequencies peak
around weekends, especially on Saturdays. Interestingly, that
is also the day when our weekly advertisement is published in
the national dailies. |
Prashant:
We also have a Helpline advertisement being aired currently,
don’t we? Correct me if I’m wrong, but I think every
TV commercial of Bright carries the Helpline phone number at
the end, right?
Raj: That’s right,
Sir. In fact, we have been advertising heavily on the afternoon
sports channel slots, because we had some free slots there.
Prashant: Ritu, why do you
think Helpline isn’t picking up in a big way?
Ritu (after a slight pause):
Well, Sir, there are a few problems on the service delivery
front. I have analysed that around 60-70 per cent of the callers
to Helpline first ask for an official to visit their place and
help them in making paint-related decisions. Around 50 per cent
of consumer callers look for painter services. They are, in
fact, disappointed when they realise that Helpline does not
offer such services. Again quite a few ask for shade cards.
But as you know Sir, the complete shade card is extremely expensive,
so we cannot |
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usually
meet this customer need either. Sir, can’t we arrange for
an official visit to all consumer callers? This would go a long
way in increasing customer satisfaction. It would also help
the word of mouth about Helpline to spread faster.
Raj: But Ritu, you would appreciate that it involves
very high costs. It also sounds a little impractical.
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Ritu:
I’m aware of the fact. But you would also understand
that Bright is the only player offering such a service to the
customer. None of our competitors have come up with such a service.
To that extent, we are leading the market.
Raj: While that is true,
Ritu, you must realise that our competitors have also been in
the market for long. So, why is it that they are not offering
this service? Have we really taken a wise decision in offering
this service? What is it that we stand to gain out of it? How
do we develop a competitive advantage out of it? Or is there
any to achieve? Are we on the wrong track? |
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Prashant:
One moment, Raj! You appear to be having doubts about the
decision to initiate Helpline. When we started Helpline we
wanted to leverage the Bright brand, which has an over 80
per cent brand recall, to transform the paint process from
a “dirty affair” to a memorable experience. The
purpose was to tilt the consumer’s decision in favour
of the organised sector. After the dealer paint-tinting system,
Helpline was the next strategy to get close to the consumer.
And as Ritu was mentioning, we had found quite a few consumers
who were looking for a range of services from a single source.
We had envisioned ourselves being that single node.
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Analysts
say, “With the introduction of the dealertinting
systems, mid and small paint companies stand to lose.
The dealer-tinting system helps consumers to generate
around 1,000 different shades by computer graphics as
per their own desire. They can go through an iterative
process to decide upon a colour.”
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Ritu:
Sirs, I need to provide a relevant input, which I think you
aren’t aware of. It so happened that a recommended dealer
in Hyderabad referred a large consumer to a particular painter.
Now the Area Manager of Hyderabad tells me that around 25 per
cent of the members of the painter association are up in arms
against Bright. The antagonised painters are demanding an immediate
withdrawal of Helpline services. They have threatened to downplay
Bright products and promote the competitor brands. The Hyderabad
office is very concerned about this development. This information
has also killed the morale of the telemarketers, as they feel
they are being made the scapegoats.
Prashant: Ritu, it is expected
that in the initial phase, the painters, who have such a commanding
position in the paint-buying process, will go against Helpline.
After all, Helpline is directly stepping into their arena. But
I don’t understand why consumers aren’t using Helpline.
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According
to analysts, improvement in cement offtake in urban
areas and increasing housing loan disbursement figures,
both in retail and institutional segments, indicate
immense opportunities in the paint industry
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Ritu:
Though the number of callers in certain cities is not increasing,
consumers who have used Helpline see it as quite a favourable
initiative by Bright. In fact, a week ago, a lady called up
from Delhi to congratulate us on the wonderful service that
we are providing. She said she had really benefited from the
price and colour shade information help provided by Helpline.
She said she would recommend it to all her relative and friends.
Raj
(breaking the silence after long): That’ s fine.
The problem is that not many people feel that way.
Prashant: I was thinking
about the value proposition of Helpline. What does it have in
it that will ward off competition? As of now I don’t see
anything in it. But if Helpline is to be our future, it has
to have something distinct and pre-emptive in it.
Raj: But Prashant, if we
can’t build in any such feature into it, shouldn’t
we discontinue Helpline? It is eating away into our resources,
antagonising our dealers and painters and no benefits are in
sight. |
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Comparison
of Dealer Networks
Company name Number
of Dealers in India
Bright Paints 15000
Hero Paints 6000
MCM Paints 4500
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Ritu:
But Sir, if we draw from international paint giants, we observe
that all of them provide such services. Of course, there exists
a ‘do-it-yourself’ segment in European countries and
USA that is non-existent in India. I feel that we should really
go back to the drawing boards and think again. We should not
give up so easily, because if this is successful, maybe we can
set the rules of the game, five years from now.
Prashant: I think Ritu has
a point. Ritu, why don’t you do some research and get back
to us about the real state of affairs at Helpline—and Raj,
why don’t you help her with it?
That day was a Friday in the month of May. Prashant gazed at
the shimmering sea on Marine Drive from his 13th-floor office
in Mumbai. He was trying to reason out the decision to continue
with Helpline or to terminate it. Raj and Ritu had given him
a lot of information. But though the information was conflicting,
he had to reason it out and take a stand. If he went with Helpline,
then he had to decide on the communication strategy and the
value package of Helpline. He had to take a decision fast. |
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