1.0 INTRODUCTION
Berger is one of the oldest names in the paints industry and the country’s major specially paints business with products and ingredients dating back more than 200 years to 1760. Louis Berger, a German national founded dye and pigment making business in England. Louis Berger and Sons Limited grew rapidly with a strong reputation for innovation and entrepreneurship culminating in perfecting the process of making Prussian blue a deep blue dye , a color widely used for the uniforms of many European armies .Production of the dye and pigments evolved into production of paints and coatings ,which till today ,remains the core business of Berger .The company grew rapidly by establishing branches all over the world and through Berger and acquisitions with other leading paint and coating manufacturing companies.
Berger’s mission in 2008 was to increase its turnover by 100% with the next five year. To accomplish this Berger promotes its sales department to increase the gross sales through direct selling and developing substantial number of new dealers and projects. The company can increase its sales by 35% in 2010. The company recently introduced a manual production system called ‘ ‘ for the production of 27 slow moving shades of Robbialac Acrylic Plastic Emulsion, 10 shades if Robbialac Synthetic Polyvinyl Distemper and 15 shades of Weather Coat. As the averages monthly sales of these 52 shades are less than their batch sizes, these are consider as slow moving items. So production of these shades from factory increase the stock level which finally fixes the working capital and increase the product cost per unit. The objectives of this system was to reduce the pressure on factories production capacity by ensuring the production of these slow moving shades from depot and by guarantees the spot delivery against customer demand.
Berger’s one of the prime objectives is to provide best customer support-connecting consumers to technology through specialized services like free technical advice on surface preparation, color consultancy, special color schemes etc. To bolster customer satisfaction, Berger has recently launched Home Decor Service from which once can get an array of services pertaining to painting.
1.1 Back Ground of the Study
1.2 Origin of the Study
This research paper has been prepared as a part of the Internship Program of Master of Business Administration of UIU University Bangladesh. The report title “A Study on 4 p’s of Berger paints Bangladesh Ltd The report topic was assign ed by the respectable supervisor of the host organization and was approved by the faculty supervisor to satisfy both organizational requirement as well as the fulfillment of internship program. This report has been prepared under both of their direct supervision.
The Berger paints Bangladesh Ltd is literally as colorful as the business it is in. It has different categories products like Decorative Top Coat finishes, Color Bank product, Primers, Thinners, Industrial Finishes, Jensolin products, High protective Coatings, Industrial Primers, Marine Top Coat finishes, Marine special coatings. Etc.
1.3 Significance of the Problem
During my Internship program at Berger paints Bangladesh Ltd, I worked in the Dhaka sales office. For the last few years others paint industries growth is very remarkable. In the absence of Romana paints, some paints company like Asian Paints, Roxy paints, Elite paints etc, try to capture this position. Also those companies taking new strategies to grow its market share. So it is necessary for the Berger to arrange a successful operation for hold and create the greater position of the market. All those information will help the management to identify various scopes and limitations. This is the basic rational behind the study. Besides, it would be a great opportunity for me to get familiar with this innovative production system. So this study is very significant for both the company and me.
1.4 Scope of the study
Through a full proof demands an effective comparison between different companies in different zones, this could not be materialize due to paucity of time. How ever an exhaustive is taken by studying different segments of consumers, in Dhaka city. To some extend the study also cover buyers of different locations out side the Dhaka city.
1.5 Objective of the study
Without having proper knowledge regarding the consumer preference towards paints, Berger paints is in great challenge in paints market.
1.5.1 Broad Objective
To analyze and find out the overall paints product in Bangladesh.
1.5.2 Specific Objective
- To identify the existing brands, different categories, sources and distribution networks.
- To identify the existing promotional strategies of the existing brands.
- To identify the substitution availability for customers product.
- To identify the consumers perception about the existing brand.
- To anticipate market development for the previous years.
- To find out the problems of the paints market.
- To identify the factors that influence paints market.
- To identify the quality of the all products.
- To identify the level of stocks of the products.
- To identify the production capacity of factory and delivery rate of the products.
1.6 METHODOLOGY
1.6.1 Nature of the report
The nature of this research is exploratory and both quantitative and qualitative methods are used. After formulating the problem statement, a detailed background study has conducted. This back ground helped me to determine the necessary broad objectives. As the whole process id not structured enough, the background study is doe through exploratory research, using literature survey and experience survey.
This report is descriptive in nature and developed mainly by survey research methods. Its tries to identify various scope and limitations of the system and then find out potential opportunity for the improvement of this system.
1.6.2 Sources of Data
The necessary of data for this study is collected from both primary and secondary sources. Primary sources include dealers of Berger paints and employees.
Secondary sources include the internal documents like annual report, company bulletin, other research reports and proprietary data.
1.6.3 Data Collection Method
The needed primary data is collected through questionnaire. Both the structured and nonstructural format of questionnaire developed to collect information. Besides, some data collected by conducting in depth interview with the proper authority.
1.6.4 Types and sources of information
Every source of information of this research is given importance according to Sensitivity, Reliability, Validity, and Accessibility.
Accessibility
Accessibility of any source is very important issue to be considered in research. If the source is not accessible no information will be collected and research will be undone.
Validity
It defines the degree of relevancy of the information being sought regarding the nature of research .It signifies the essentiality of any information in any research.
Reliability
It deals with the nature of the respondents of sources. It defines the stability the source of information. Reliability of a source is high when that particular source gives the same answers over and over when it has been asked the same question over and over. Reliability is low when a source responds in a different way to the same question over and over.
Sensitivity
The degree of precision of the information needed for the research is the basis to measure the sensitivity of information. Here, sensitivity mainly deals with the accuracy of the information drawn from the source.
1.7 LIMITATIONS
In the research I faced some obstacles that hindered me from obtaining the objective of my project. In brief the problem that I faced is;
A major limitation of the report was that only dealers were selected as the respondents.
Most of the traders are very much afraid of disclose the information about sales.
Time and cost constraints also other limitations regarding this research.
Most of the traders of paints are illiterate or little educated.
Every organization ha some rules and regulation regarding its privacy policy. So does Berger paint Bangladesh Ltd. Moreover financial information is regarded more sensitive. That is why I failed to collect some market share related information in different months which would have proved very effective in preparing the report. However this limitation is not very unnatural.
Lack of experience of the researcher.
As the report is based totally on personal observation, personal bias might have hampered the findings. I might have unintentionally missed any important point that I should have covered in my project work.
In my survey I drop some Berger’s dealers as I want to focus on the traders who sales more than one company’s paints.
2.1 BACKGROUND OF THE ORGANIZATION
Berger is one of the oldest names in the paints industry and the country’s major specially paints business with products and ingredients dating back more than 200 years to 1760. Louis Berger, a German national founded dye and pigment making business in England. Louis Berger and Sons Limited grew rapidly with a strong reputation for innovation and entrepreneurship culminating in perfecting the process of making Prussian blue a deep blue dye , a color widely used for the uniforms of many European armies .Production of the dye and pigments evolved into production of paints and coatings ,which till today ,remains the core business of Berger .The company grew rapidly by establishing branches all over the world and through Berger and acquisitions with other leading paint and coating manufacturing companies.
Berger Paints began its painting in Bangladesh since independence. And this has been a footstep to bring more than 230 years of global paint industry experience into Bangladesh. Over the decades, Berger has evolved to becoming the leading paint solution provider in this country and has diversified into every sphere of the industry – from Decorative Paints to Industrial Coatings, from Marine Coatings to Powder Coating and what not.
To give a comprehensive and sustainable painting solution to the need of the industry, Berger has invested more on technology and Research & Development (R & D) than any other manufacturer in this market. It selects the raw materials from some of the best known names in the world: MITSUI, MOBIL, DUPONT, HOECHST and BASF are a few to name. The superior quality of Berger’s products has been possible because of support from its advanced plants and an international-standard of strict quality.
Investment in technology and plant capacity is even more evident from the new factory of Berger Paints Bangladesh Limited at Savar. The state-of-the-art factory is an addition to Berger’s capacity to make it the paint-giant in Bangladesh. Not to forget about the first Double Tight Can manufacturing unit in its Chittagong factory. All, together with devotion into R & D to make it the reputed center of Basic & Applied Research in paint and Resin Technology, proof the commitment that Berger has for this industry.
With its strong distribution network, Berger has reached almost every corner of Bangladesh. Nationwide Dealer Network, supported by 7 Sales Depots strategically located at Dhaka, Chittagong, Rajshahi, Khulna, Bogra, Sylhet and Comilla has an unmatched capability to answer to paint needs at almost anywhere in Bangladesh.
The sheer innovation and development drive is reflected on the various products Berger has so far launched in this market. The product range includes, specialized outdoor paints protective of the worst weather conditions, Color Bank, superior Marine Paints, Textured Coatings, Heat Resistant Paints, Roofing Compound and Epoxies. In each of the product category, Berger has always been the pioneer and will continue to do so proudly.
Berger’s one of the prime objectives is to provide best customer support-connecting consumers to technology through specialized services like free technical advice on surface preparation, color consultancy, special color schemes etc. To bolster customer satisfaction, Berger has recently launched Home Decor Service from which once can get an array of services pertaining to painting.
With world class range and durability, Berger is always ready to answer to all weather condition
2.2 HISTORY OF THE ORGANIZATION
Berger is one of the oldest names in paint industry tracing back to 1760.
Lewis Berger, a German national, founded dye & pigment making business in England.
Lewis Berger & Sons Limited grew rapidly with a strong reputation for innovation and entrepreneurship culminating in perfecting the process of making Prussian Blue, a deep blue dye, a color widely used for many European armies’ uniform.
Production of dyes & pigments evolved into production of paints & coatings, which till today, remains the core business of Berger.
Berger grew rapidly by establishing branches the world over and through merging with other leading paint & coating companies.
Berger has been involved in paint business since 1950 in Bangladesh when paints were first imported from Berger UK and then from Berger Pakistan.
In 1970, Berger Paints Bangladesh Limited (BPBL) erstwhile Jenson & Nicholson had set up its paint factory in Chittagong at an estimated investment of TK.4 million. The shareholders were Jenson & Nicholson (J& N), Duncan Macneil & Co Ltd and Dada Group.
Duncan Macneil subsequently sold their shares to majority shareholder J& N group. The Dada group’s share ultimately vested with the Government of Peoples’ Republic of Bangladesh after the independence.
The name of the company was changed from J& N (Bangladesh) Limited to Berger Paints Bangladesh Limited on 1st January 1980. In August 2000, J& N investment (Asia) Ltd purchased Government shareholding. Now, Berger Paints Bangladesh Limited is 100% owned by J& N Investment (Asia) Limited, UK. With the passage of time Berger has unfolded its kaleidoscopic wings into all kinds of paint solution be it Architectural paints or Industrial coatings, Marine paints or Powder coatings. Berger has it all
2.3 THE COMPANY PROFILE
Origin : United Kingdom
Registered Office : 43/3, Chtteeswari Road
Chittagong- 4000, Bangladesh.
Email:bergerbd@spnetctg.com
Web:http//www.bergerbd.com
Corporate Headquarter : Berger House
P#-08, R#-02, Sector#03,
UttaraModelTown, Dhaka.
Email:info@bergerbd.com
Web:http//www.bergerbd.com
Factory : Dhaka factory- Nabinagor, Savar.
Chittagong factory—27D, FIDC Road,
Kalurghat, Chittagong.
Date of Incorporation : 6th July, 1973.
Commercial Production : 1973
Business Line : Manufacturing and Marketing of High Quality Paints.
Status : Public Limited Company, Enlisted in both Dhaka And Chittagong Stock Exchange
Position of the Industry : 1st.
Percentage of Market Share : 55%
Special Achievement : ISO 9001:2000.
2.3.1 Vision
The vision of the company is to remain as the benchmark in the Paint industry by
Being an innovative and technology driven Company consistently delivering world-class products ensuring best consumer satisfaction through continuous value added services provided by highly professional and committed team.
2.3.2 Mission
The company mission is to increase our turnover by 100% in the next five years. By being socially committed ethical Company.
2.3.3 Objectives
Berger paints Bangladesh Ltd is committed to add value to life to out performs the peers in terms of longevity, customer service, revenue growth, earnings and cash generation. Besides the company will be the employer of choice for all existing and future employers. But it also tries to do best in the conjunction with activating the ultimate objective of a business organization –Wealth Maximization.
2.3.4 Focus of BPBL
Berger paints Bangladesh Ltd focuses on the following things;
Commitment to achieve total customer satisfaction.
Commitment to project the company as an ethical and socially responsible one.
Commitment to continue as the market leader through consistent sales growth, increasing productivity and developing new products befitting customer needs.
Ensuring continuous improvement in operation through utilization of highly professionals and dedicated team, proper process management and participation of the stakeholders.
Setting measurable target at appropriate stages and continuously monitoring them.
2.3.5 Spirit
Berger paints Bangladesh Ltd under takes its quest with the enthusiasm of entrepreneurs, excited by the constant search for innovation. The company value performance achieved with integrity. It will attain success as a world class leader with each and every one of its people contributing with passion and an unmatched sense of urgency.
2.3.6 Strategy
Berger paints Bangladesh Ltd believes in the practice of market oriented Planning, developing, and maintaining a viable the organization s objectives, skills and resources. The aim of such approach id to build long term partnerships with the customers. And with their support .Berger aim to maximize thee potential of its business through a combination of enhanced quality of product, service, creative marketing competitive pricing and cost efficiency. The strategic planning of Berger paints Bangladesh Ltd involves repeated cycles of corporate and business planning as well as launching new product and marketing offerings.
2.4 Organizational Structure
Like all other manufacturing organizations, BPBL has a conventional organization structure. Generally six board meeting are called in BPBL during a year where chairman of the board of Directors presided over the meeting .In BPBL several committees like the Audit committee, Risk committee, Remuneration committee, Executive committee and the Purchase committee are formed along with Managing Director (MD) and other Executive & non-Executive Directors. These committees sit at least once a month to approve various proposals brought by the management prior to implementation. All the proposals are initiated by the mid level managers and then forwarded to the Managing Director (MD) through the head of the divisions or departments. The company has also a legal problems faced by the company and external auditors to conduct audit activities of BPBL.
There are four Non-Executive Directors, two Executives Director and ten Managers work under the Managing Director (MD) of the company. Among the ten managers three directly report to the Executive directors and other report to the Managing Director. The Managers of each department monitor the work activities of subordinates, convey top management decisions and provide necessary feed back to reach organizational goals and objectives. In response the bottom level managers perform their responsibilities sincerely and report regularly to their immediate superiors.
2.4.1 Future Prospect
The demand pattern of paints is department on economic growth of the country and Government spending on infrastructure development .Being an election year Government on spending on infrastructure development may be low due to potential uncertainty. However, the booming situation in real Estate sector is expected to continue.
2.4.2 Major Competitors of BPBL
Berger paints Bangladesh LTD operates its business in a competitive environment with both local and multi-national organizations. At present the company holds 55% market share where as the rest of 45%market share holds by the other multi-national and local companies. It’s clearly indicated that Berger paints Bangladesh Ltd is in the leading position among all other competitors in the paints industry .The majors participant of the paints industry are ; Asian Paints, Elite Paints, Romana Paints , Roxy Paints , Aqua Paints , Pailac Paints ,Al-karim Paints, Uzalla Paints, etc. Among this company only Asian Paints is multinational and others are all local producers. Asian Paints striates its operation in Bangladesh very recently. Already it diversifies its business with huge ranges of color and product verities.
But still Berger paints Bangladesh Ltd holds its top position with strong distribution networks, effective and efficient management team and human resource.
2.4.3 People at Berger
Berger paints Bangladesh Ltd, believe that ‘Our People’ are ‘Our Strength’.
These people who with their sheer hard work, dynamism and creative minds have made the business succeed. Their professionalism, excellent teamwork and strong commitment to their service, customers, associates and finally to the communities they live in, have enabled us to remain as the market leader in the Paint industry.
We are proud of the dedication and loyalty of many of our employees who have been with us for years. They have the in-depth knowledge of our business that only experience can bring.
We place high priority in developing our human resources. Importance is given on relevant on-the-job, in-house and external training programs, so that our people are well equipped with necessary skills. We augment those skills through appropriate use of information technology in order to maintain our productivity and competitive edge.
Berger Bangladesh’s culture encourages professionalism, stimulates teamwork and promotes innovation reinforced with highest ethical standard.
2.4.4 Working e Environment
Berger provides unarguably the best working environment in the entire painting industry. They use most modern and efficient technology in their factory as well as in the office .The physical infrastructure for their office building are well decorated and well equipped. The company provides a lot of facilities; e.g. free lunch, car facilities for woman employees and employees above manager level, house maintenance for high officials, transportation facilities for executives working in the industry. In case of leave, they enjoy what is the set as per the Government rule. The employees have the opportunity to take loan for sudden need from the company. Besides the company provides employee benefits like employees retirement, gratuity, staff provident fund, workers profit participation fund and so on. The employees with experience of few years at Berger can easily get a lift at any other local company.
2.4.5 Jobs Satisfaction in BPBL
There is a craze for being an employee of Berger group .The largest and most diversified name in the painting industry of the country. Among all the paintings companies in the Berger’s salary structure is better than other company. The accounts and finance department in the Berger gets most priories and perhaps the head of this department paid highest among all other heads of departments. The organizational culture, working environment, career path, salary package and some other things makes the craze for entry level to top level professionals to be employed here
The group as well as the company is expanding, So there s always some recruitment in procees.The environment may be either for entry level or any other position. Normally, mass recruitment occurs for the entry level positions like executives for different department .Most of the upper level positions are filled up through promotion from their junior level.
2.4.6 Corporate Social Responsibility
To encourage the young arties in their endeavor, the company has started Berger Young Painters Art Competition in 2008 and organized it the company. Over this period 3500 painting 500 unique art works including 60 awarded winning paintings were scrutinized and displayed through exhibition.
To promote and inspire the young Architects, the company has been organizing biennial competition for Young architects, since 2007 .The second event was during 2008. Besides in 2006, the company has sponsored a good number of socio culture development programs organized by different social organizations.
The company facilities interns of different academic background to let them gain first hand knowledge and experience of the corporate world and thus groom the potential leaders of the society.
2.4.7 BERGER PROLINKS –
The Building Professional’s Resource
Prolinks is Berger Paints’ response to a market environment that is increasingly driven by technology and calibrated by expertise.
Prolink is aimed at placing the initiative in the hands of Builders, Architects and Engineers to enable them to directly source innovative products and services.
Operating from Dhaka and Chittagong, the pralines team is entrusted with maintaining a seamless interface between Paint Specifies and Berger Paints’ Sales, Marketing, R& D, and Manufacturing functions.
The objective is to provide Specifies with complete basis for recommending coatings – data bases, technical services, color consultancy, site inspection etc. Pralines experts assure specific solution to specific problems, whether it is a particular shade that needs developing, special climatic factors that need providing for, or application factors that have to be observed.
From know-how to leg work, the prolinks team delivers total support.
2.4.8 Environmental Issues
Berger strives to improve the world and the environment, and to provide peace of mind to all the parties the company interacts with investors and shareholders, workers and specially customers. IT is committed to conservation of the environment, the preservation of energy, the development of manpower, and to improve living standards for employees.
As part of Berger’s on going commitment to protect the environment ,its treats the chemicals and waste water in a modern effluent treatment plant , ensuring that World Bank guidelines for standards are not only meet ,but surpassed.
Power cogeneration means waste that heat is recovered and converted into stream, which is used to provide critical production areas with chilled humidified air.
Suppliers and specialists conduct training seminars for staff in this connection.
Berger’s contributes generously to UN and local agencies to rehabilitee child workers.
2.5 INTERNATIONAL OPERATIONS
Berger Paints operates in 22 countries across the world. It has manufacturing facilities in each of these countries and is the largest paint company in ten overseas markets. Berger Paints operates in five regions across the world viz. South Asia, Southeast Asia, South Pacific, Middle East and Caribbean region through the five corporate brands viz. Asian Paints, Berger International, SCIB Paints, Apco Coatings and Taubmans. In ten markets, it operates through its subsidiary, Berger International Limited; in Egypt through SCIB Paints; in five markets in the South Pacific it operates through Apco Coatings and in Fiji and Samoa it also operates through Taubmans.
The countries that Berger Paints has presence are as follows:
South Asia: Bangladesh, Nepal, and Sri Lanka
South East Asia: China, Malaysia, Singapore and Thailand
Caribbean Islands: Barbados, Jamaica, Trinidad and Tobago
Middle East: Bahrain, Egypt, Oman and United Arab Emirates
South Pacific: Fiji, Solomon Islands, Samoa Islands, Tonga and Vanuatu
2.6 SWOT Analysis
According to the study of the organization Strengths, Weakness, Opportunity, and Threats (SWOT) analysis of Berger paints Bangladesh Ltd is described below;
Strengths
Sound profitable and growth with good internal capital generation.
Dedicated effort of experienced and efficient management team.
High quality environment pollution free products and huge range of product and color verities.
Most updated techno based production system.
Company reputation and goodwill.
Weakness
Narrow distribution network
Lack of adequate marketing and promotional efforts.
Lack of full scale automation.
Opportunity
Scope of market penetration through diversified products and increasing sales.
Online selling and automation of transaction process.
Government’s policy of encouraging infrastructure development and private sectors development.
Adding more value in products and services than the competitors.
High industry growth in the real estate sector accelerates the demanded for paints.
Threats
The new arrival of multinational and local companies in the paint industry.
Increasing prices of the raw material and global demand factors and devaluation of local currency.
National and global political unrest.
Inflationary economic conditions.
2.7 PRODUCT MIX
2.7.1 Weaving Unit
State of the art equipments at the factory can weave a variety of high-grade enamels.Leter on these enamels are converted into bars according to the formula.
2.7.2 Dying and Finishing Unit
Modern high Technology machinery solvent and water base Machine are installed for continuous dying and finishing units. The color preparation units are sent to the laboratory for color justification. Latter on they are sent to the filling section. From the wrong unit are separate and the good one consider as finished goods are sent to the distribution networks.
2.7.3 Production capacity
The minimum daily production capacity is five thousand litters, which is 280000 tk in monetary terms. The maximum capacity is 6000 liters, which is of the value of 375000 tk. The production capacity is best on three shifts a day of 8 hours each and 350 working days per year.
2.7.4 Building and others civil works
Savar factory building which houses the weaving, dyeing and finishing other utilities machinery has a covered floor space of more than three acres. The Chittagong factory office has a covered space of 2.92 acres. The number of the employees at Dhaka factory is 100 of which 81 are regular. Incase of Chittagong factory the total number of employees is 60 of which 50 is regular.
2.7.5 Technology
To ensure the smooth flow of high quality product modern software named data flex run under the UNIX system is being used in Berger. The main focus of technological implementation at factory is to
Ensure the smooth technological and ongoing process knows how.
Provide technological evaluation of the machinery for the project.
Provide basic and supervise construction of factory and ancilling buildings.
Coordinate training for personal of Berger with machinery manufacture and others.
Give production guarantees agreed set parameters.
The machinery suppliers are also providing training on these equipments to Berger’s personal. The erections and installations are supervised by respective machine supplier’s experts.
2.8 RAW MATERIALS
BPBL sources its raw materials from some of the best known names in the word: MITSUE, MOBIL, DUPONT, HOECHEST and BASF, to name a few. The basic raw materials that Berger uses for production of its products are pigment, extender, oil and resin. The other major raw materials for its production are dyes and chemicals required for the dyeing and finishing process respectively. Most of the raw materials are imported from outside the country. The external supplies come from countries like India, Pakistan, Thailand, Singapore, Malaysia, Germany, England, USA etc.
2.9 UTILITIES
Power:
The factory has total capacity power generation along with co-generation facilities.
Water:
Water is available from the factory’s own tube-well facilities.
Steam:
In order to meet the steam requirements of the project three steam boilers with a total capacity of 30 tons/hour are running.
2.10 EXPECTATION OF PAINTS TRADERS FROM THE COMPANIES
Available products and color.
Timely delivery.
Provide urgent delivery.
Flexibilities in sales system.
Reduce rigid sales target.
Optimums profit margin.
Information centre.
Provide more training for the painters.
More credit amount.
More credit time limit.
Take return of waste product.
Provide constant program.
Reward for well decorated products.
Conduct door to door visit.
Provide acquired commission after every month.
2.11 PROBLEMS EXIST IN PAINTS MARKET
Problems of Berger paints;
Shortage of delivery
Most of the customers complain that Berger paint cannot fulfill their demand well. Berger has its brand image and most of the customers want Berger. Dealers of Berger can not face their total demand.
Shortage delivery of Berger paint benefited its key competitors in following ways;
1) Due to the shortage of delivery of Berger, paints traders’ sale other companies’ products to their customers. As a result, a sale of other companies increases in the absence of Berger. Most of the paint traders confess that last year Asian paints sales was about 40 cores where as in current year by June Asian paint has already achieved about 40 cores. One of the main reasons is the shortage of delivery of Berger.
2) Due to the shortage delivery of Berger‘s customers may be shifted to other brands. It’s a great threat for Berger.
Unavailable colors
Berger paints offers various colors and shades to its customers. According to most of the dealers Berger producers white and off-white more whereas other common colors less. As a result they can not face customer’s choices. Most of the customers are flexible in brand but rigid in color. Though Berger has greater chance to optimize its sales, but it cannot do it because of unavailability of color.
Not timely delivery
Due to the lack of strong own transportation system, Berger cannot deliver of its products to the customer in time.
Imbalance between sales and distribution
Most of the dealers accuse that after preparing the invoice Berger can not deliver the ordered products. It creates dissatisfaction of dealers. This is just because of imbalance between sales and distribution.
Lower profit margin
Though Berger provides higher quality products but it offers very lower profit margin for the dealers. As a result most of the dealers lost their interest to sell Berger rather than other brands.
Error operation with blank cheques
Some of the dealers blame that due to lack of awareness, Berger sometimes conduct error operation with their blank cheques.
Other problem
Instable political situation.
Action taken by Government.
Key dealers reduced their purchase due of house to afraid of tax.
Apartment business and construction of house is about to stopped.
Dealers have to purchase products in cash but they have to sale in credit.
Credit collection of dealers from their customers is very slow.
3.1 Decorative
Berger paints Bangladesh Ltd offers both interior and exterior paints. It leads the way for introducing high quality color bank products and top coat finishes Decorative paints in Bangladesh. Interior paints like plastic and distemper are used in wall, cement plaster etc. and enamel is used for metal, wood, bamboo, hardboard etc. Those products ensure long life of metal, wood, bamboo, hardboard, cement plaster etc. as well as its beauty. Very recent Berger offers Robbialac easy clean which is high quality interior wall finishes, highly applicable for concrete wall and cleanable. It offers exterior paints like weather coat which is high quality exterior liquid and durocem is power based. Both are water, weather and fungus resistant. It also provides primers, undercoats, thinners and other decorative products.
Premium emulsions, regular acrylic emulsions, distempers, first quality enamels, exterior finishes, textured finishes, automotive refinishes- you would expect a company like BERGER, the premier paint company in Bangladesh, to have leading brands in all these categories.
The following chart shows the categories of Decorative products of Berger paints;
3.4 PLACE / Distribution
3.4.1 DISTRIBUTION NETWORK
With the distribution network, Berger has reached almost every corner of Bangladesh. The nationwide dealer network, supported by seven sales depots strategically located at Dhaka,Rajshahi,Khulna ,Bogra ,Sylhet,and Comilla has enable them to strategically cater to all parts of the country. Berger divides the entire country into 13 zones or territories to serve its dealers and customers. Among these zones seven are supervise from Dhaka sales office suited at 272, Tajgan C/A, Dhaka. Rests of the territories are monitored from each divisional sales office.
DISTRIBUTION CHANNEL
Berger paints Bangladesh Ltd maintains very short and effective channel length to distribute its products to the customers. It promotes direct selling approach and manages dealers and projects.Objectes of such approach ix to gain more control over its dealers and customers and brings close monitoring and evaluating to the top management of the organization.
Dealer
Over the years Berger strategically develop a mentionable numbers of dealers across the country. At present the company serves more than 2600 cash and credit dealers by maintaining profitable exchange relationship with them. The company provides significant financial facilities to its dealers like Discount ,Regular Payment Revenue Scheme (RPRS),Additional Target Achievement Bonus(ATAB)and Turn Over Commission(TOC).It also organizes some non financial benefits to entertain its dealers :foreign tour,lunch,art exhibition and concert to name a few.
Project
Berger directly sells its products to various projects of government and real state company through lucrative price discount. The company delivers the product to the projects sites at free of distribution cost. Besides Berger provides various gift items to its corporate customers like calendar, pen, diary etc.
Customer
Berger always focuses on total customer satisfaction. Considering this it sometimes sells its products directly to the customers who want to purchase in a bulk amount. In this case the company allows substantial discount to build long term profitable relationship with the customers.
DEPARTMENTALIZATION
Berger is one of the well structured multi-national organizations in Bangladesh which operates its business through extensive departmentalization as needed. The business activities of BPBL is directed, controlled, controlled and monitored from the head office ‘Berger house’. Being a market leader in the paint industry Berger employs good number of people in different departments to keeps its business thriving. All the responsibilities of the company are delegated to 11 different departments. The departments have a number of sections. The responsibilities of those departments have been summarized below.
Production department
This department looks after total factory operations through a number of sections, namely, production planning, different sections for production process, Administration, Stores and ware house, Power and fuel, Maintenance, Delivery, etc Production planning section prepares the plan of production that includes the amounts and specification of the product. The have to maintain tight schedule in production and delivery.
They are also responsible to prepare the list of required materials. The production of the company is under definite order. The company produces a wide range of products, So , before going to the production , even purchasing raw materials ,to know the specification is essential. The planning section prepares to a schedules for production and delivery.
The factory is running for 24 hours a day and 350 days a years. The administration maintains all the auxiliary tasks necessary to enhance the production. All sorts of control required n the factory site are done by administration section under production department. Dormitory for workers, engineers and other employees, resident for the to level employees, dining for workers, and executives, transportation for factory employees, vehicles for raw materials supply and product delivery etc. are maintained by the administration department. They also look after the securities of the factory premises. Having an it of materials in stock the administration department is responsible for receiving materials form the supplies, stock those properly, and passes those to the different sections of the production process for use. They also maintain the level of stock. They prepare a report of stock and send it to the planning section to inform them how many materials planning is to order.
The maintains of continuous power and fuel supply in the factory without distribution the continuous production in the responsibility of the power and fuel section. They use the total captive power generation along with cogeneration facilities. Gas gerators are used for captive power generation. All sorts of mechanical and electrical maintenance and repairing are doing by maintenance section under production department. The responsibilities of delivery section are to store the finished goods and delivery those against orders and in accordance with time schedule. All the section in the production process has the responsibility to do their jobs within the limited time scale. They also responsible to recorded how much they have taken from previous section and how much they have sent to the next section.
Procurement Department
The principal function of the procurement department is to source the matrials, both local and foreign as required and requested by the user department. Normally the user department identifies and forwards to the procurement department the amount and specifications of the raw materials required by them. In the case of imported materials the responsibilities of the procurement department include the establishment of letter of credit in favor of foreign venders. The department maintains shipment status of all imported materials L/C wise. The function of the department for purchasing materials from abroad by opening L/C can be shown as follows;
Figure: Functions of the procurement department for purchasing materials from abroad.
PROMOTION
Berger is the largest company in the world. They announce discount, reduce price, free product monthly, yearly for sales promotion. When a company announce it customer are lot of product order the company to get benefit.
Public Relation
Demand generation dealer development and arrangement of promotional activities are the main takes of the marketing department. A number of executive are involved in this connection. As the dealers are highly concerned in paints for their required goods, they visit the factory for satisfaction, whether the factory of the company is in that standard to procedure dealers satisfied paints. Dealers test the sample and the marketing department deals this sample testing. Price and time of delivery negotiation is another task for marketing department’s personal. An executive is responsible for the selling contract from negotiation to delivery of that lot or batch. Incase of bad production or if the color does not match with the buyer’s requirement, marketing department goes for negotiation with that particular buyer’s. Besides this department is responsible for perform various promotional activities like advertising, offering discount, scratch card and gift items.
Sales Promotion
To follow the recent management of the business word, the sales department has been completely separates from marketing department. But still their are some correlations exist between these two departments. In Berger paint Bangladesh Ltd sales department sets the forecast in coordination with marketing department and upon fixation of the sales it id the responsibility of the sales department to realize the yearly sales volume of company products. Besides order collection, dealer management, new dealer development, customer credit analysis, target fulfillment, competitor’s information collection and other traditional sales activities are performed by the sales department. It acts as a basis for collection of information regarding dealer, project and customer in accordance with marketing department
PERSONAL SELLING
With a view to bolstering consumer satisfaction, Berger Paints Bangladesh Limited has introduced “Berger Home Decor” on June 15, 2002 through which one can get an array of services pertaining to painting.
Berger Home Decor offers two-stage services
1. Free Service
2. Paid Service
Berger Home Décor is currently offering wide range of services to its prospects and existing consumers embracing:
Technical advice on surface preparation and application guideline.
Paint selection.
Dealer selection.
Painter/ Contractor selection and
Color scheme.
There is defined Telephone number, 02-9872428 for queries. By ringing simply in the number one can make query or seek available services from the company. According to the nature of query, the company provides solutions.
RECOMMENDATION
The following recommendation can be draw for the further development of the Berger paints- Berger paints should always provide emphasis on customer demand. It should always Satisfy the dealers demand and arrange product availability. It should always pay heed to the dealers growth rate , take initiative to recover gap and Always monitor their activities. Berger paint should restructure its sales system. Its can restructured through employing More sales day by day and delivery system, enrich end-user activities, frequent market Visit, better communication with distribution. Its general sales procedures like taking order, preparing invoice, categorization of invoice, preparing rout plan, lining products for loading of vehicles should be automated. Safety stocks should be maintained in the product to ensure the instant delivery against Customers demand regarding the products. It should also organize distribution system through increase space for store systematic Way, frequently update its database systems which shows products, pack size and color availability and increase the number of delivery van.
CONCLUSION
This report is an attempt to make a clear picture of paints industries of Bangladesh.The paints market is very much competitive although Berger paints holds the major market share. But the growth rate of the competitors is great challenges for Berger. Its true that Berger paints is very prominent in the market because of its high quality products, competitive price rate etc .The first choice of consumers is Berger because they can relay on it and its long lasting capabilities .Its also able to provide the consumers option of choosing variety of colors; 5000 shades with in 5 minutes through its color bank.
Berger paints is very much restricts in credit policy. It provides credit only some selected dealers where as other competitors are very much liberal in credit. Paints traders, wholesalers or retailers, are naturally very much found of huge credit. Thus they key competitors gradually grow up in the market through their vast credit policy.
With world class range and durability, Berger is always ready to answer to all weather condition And try to satisfy every corner of the country.
