Analysing The Duluxgroup

Business-to-Business Segmentation

Business-to-business segmentation will be used in this study. Just mentioning that the business-to-business segmentation puts an emphasis on the company and the specific consumers is sufficient. Business-to-business segmentation essentially consists of two tiers, or macro and micro segments. The term “macro segment” describes segments that are essential for locating subgroups across the whole market. On the other side, the micro-segmentation involves a choice based on particular purchasing characteristics.

An Open Company: DuluxGroup Limited

About 2000 companies in Australia are ranked, with the company coming in at place 254. The Australian coatings and paints manufacturing industry provides the majority of DuluxGroup’s revenue (IBSWorld, 2017). In 2016, DuluxGroup generated an estimated 2 trillion dollars including revenue and sales. The company has approximately 4000 employees in Australia plus employees in its subsidiaries that are under the control of the company. DuluxGroup is the largest coatings and paints company in the world. DuluxGroup is a multinational company with the vision of to compete in the paints and coating industry by focusing on the needs of the consumers. Additionally, the company’s vision stresses the promotion of a continuous culture of improvement (Morning Star, 2017). The company aims to produce a superior product and quality value for its shareholders and customers without compromising the community, health, safety, and the environment in which it operates. DuluxGroup has a wide range of portfolio of brands covered in the following:

Coatings

This includes Dulux, Intergram, Levene, Berger, British paints, Cabot’s, Feast Watson, and Walpamur.

Home Improvement

These brands include Hillmark, Polygaze, Poly, and Selleys.

Construction equipment and products

Concrete Plus Ltd and Construction Supplies.

Garage Openers and Doors

Comprise the brands such as the Automatic Technology, B&D Doors, Dominator, and Garador.

Garden Care

Brands comprises of Watkins, Ratsak, Yates, and Hortico.

DuluxGroup’s Recent Performance

In the past one month, DuluxGroup has reported a net profit after tax of 73 million dollars for the six months at the end of March 2017. The net profit after tax reflected an increase of 14% over the first half of 2016. The result comprised of a 3 million write-back of a tax provision that was put into place in the preceding years (Financial Times, 2017). The sales revenue went up by 3.5 to 881.2 million dollars. DuluxGroup had an increase in earnings before interest and tax of 7.8% to 106 million dollars at the end of September 2017. The operating cash flow went up by 76% as a result of higher earnings. Further, this increase was supported by improved working capital management (IBSWorld, 2017). Cash conversion of the company improved to 64% in contrast to 52% in the corresponding business period. The company has maintained a robust net debt at 1.5x.

High-Quality Outcome

DuluxGroup has had a high-quality outcome in the recent past. The quality result is backed up by strong growth in New Zealand and Australian businesses. The growth contributes to an estimated 70% of Business Earnings before interest and tax (EBIT). In the period ended 31st March 2017, the group’s profit increased by 7%. This growth was driven by the premium Dulux-branded, growth from specialty coatings portfolio, and the retail market share gains (Financial Times, 2017). The strong Dulux ANZ outcome is a reflection of strategic decisions that the group had made a few years ago with integral retail channels, long-term strategy to widen the coatings portfolio and consumer-driven preferences (Psaros and Seamer, 2015). DuluxGroup serves the needs of both business-to-consumer market and business-to-business market.

Most Significant Competitors

DuluxGroup has several main competitors in the paints and coatings manufacturing industry in the world. Competition in the industry is very high, and companies must be efficient to attain the competitive advantage. This paper will analyze two main competitors in the industry.

Berger Paints

This is a paint company that produces industrial chemicals and products. The operations of the company are guided by corporate values that include customer first, valuing people, innovation, ethical practice, and performance.

Strengths of Berger Paints

The company produces and markets a broad range of industrial paints products and decorative products under numerous brands. The company has a sizable market share.

Berger paints have proper operations and supply chain network. The well-established processes and supply chain spans throughout its subsidiaries in Bangladesh, Russia, Europe, and Nepal. Additionally, the company has several depots and manufacturing facilities (Morning Star, 2017).

The company has also developed the Green Horizon initiative. This initiative is taken to reduce waste and conserve natural resources. In effect, the company has launched energy efficient an eco-friendly products.

Berger paints enjoy impressive brand awareness and brand perception amongst its potential customers.

The company produces products with high quality and enjoys very high market space insofar as sales and visibility are concerned.

Berger paints have an international presence. The company boasts of four manufacturing plants in Europe, Bangladesh, Nepal, and Russia.

The company enjoys the latitude as a supplier of protective coatings used in nuclear power plants.

The company’s automotive and industrial coating is demanded by high ranking automobile companies that include Mercedes.

Weaknesses of Berger Paints

The company relies so much on the decorative segment in which competition is very intense.

Evidence has shown that the company’s paints have a high amount of lead. This fact leads to negative publicity among its customers and potential customers (Morning Star, 2017).

The Berger paints company has limited liquidity options hence interrupting its business operations.

Kansai Nerolac Paints

Strengths of Kansai Nerolac Paints

The company is among the most significant coatings produce and a market leader in powder coating and automotive coating.

The firm is a subsidiary of Kansai Paint Company Limited. The technological advantage of Kansai has contributed to the company’s innovation to satisfy the needs of the consumers.

Kansai Nerolac Paints have very successful innovation, R&D, aggressive branding, marketing strategies, and quality products.

The company boasts of a well-established supply chain network.

Further, the company is entering the decorative segment in remarkable with sound brand ambassadors (IBSWorld, 2017).

Weaknesses of Kansai Nerolac Paints

The tastes and preferences in the decorative paints industry change more often. The company has limited production planning to correct the challenges.

DuluxGroup’s Competitive Advantage

On the other hand, DuluxGroup has world-class technology and research centers that are guided by its global knowledge base and customer inspirations. The company can develop innovative products that delight and surprise (Marketpublishers, 2017). Further, DuluxGroup invests in large-scale production plants where implementation of innovative ideas is implemented. The manufactured products are tested rigorously to ensure that they are the highest quest in the market. Additionally, DuluxGroup has created market-leading positions. This has been achieved through the stronger company-consumer relationship for improved trust in the brands. Also, DuluxGroup has a strong and well-organized sales force (Psaros and Seamer, 2015). The company boasts of the most effective and most prominent in the business. The company supports a network of trade professionals and customers. The company has therefore been able to maintain stable earnings and sustainable competitive advantage. DuluxGroup has witnessed compelling growth because of these factors (Marketpublishers, 2017). DuluxGroup has three-pronged growth strategies to enable it to achieve above-market growth rate. The company is seeking to extend its market-leading adhesive and Selleys sealants, and Dulux paints and coatings into Papua New Guinea, Australia, and New Zealand. The company is contemplating transferring its core marketing, supply chain, and sales capabilities to another home improvement mostly in New Zealand and Australia (Psaros and Seamer, 2015). DuluxGroup is seeking to continue looking for low-risk approaches to create positions offshore including those that the company has successfully seeded in the United Kingdom and Asia.

Target Market and Customers for Main Products

Regarding customers, residential homes are the primary end-market focus with a slight bias towards improvement and maintenance of the existing homes. A smaller focus is on new and ongoing residential construction (Dulux.com.au, 2017). Most consumers have invested substantial resources in making their residential place look good. Also, a fifth of the company’s business accrues from infrastructure, industrial, and commercial markets. In a report released by DuluxGroup in 2016, the information shows customer aggregation concerning the end-market target. For instance, new housing accounted for 15% of the market, commercial and infrastructure was 15%, industrial contributed to 5%, and maintenance and home improvement accounted for 60% of the primary customers of the company. DuluxGroup products are sold via numerous trade channels. These entail a network of customers that include builders, engineers, specifiers, garage door dealers, concreters, painters, architects, facilities and project managers (Psaros and Seamer, 2015). DuluxGroup’s products are sold via several retail customer outlets. These outlets range from grocery retailers and national home improvement to specialist decorating and paint stores. Further, there is also small family owned garden centers and hardware stores.

Supplier to DuluxGroup: Viscount Plastics

One of the suppliers of DuluxGroup is Viscount Plastics. Viscount Plastics won Dulux Australia supplier award among other several companies. The company supplies plastics in which paints and coatings are packed. The Viscount Plastics has provided the 15-liter version containers for packaging paints and coatings (Marketpublishers, 2017). Viscount Plastics is an innovative company with the much-admired Paints Skinning Adhesive Technology.

Secondary Data for Marketing Purposes

DuluxGroup can access secondary information that can enrich its marketing strategies. Some of these secondary data can be obtained from online scholarly researched articles and books. There is a plethora of literature that examines business to business operations and by extension, customers. Also, the firm can use its monthly, quarterly, yearly reports to make decisions insofar as marketing is concerned for a competitive edge. There is the need to check how reliable the data to be used can be tested (Hutt and Speh, 2016). Indeed, a failure to check the reliability of the available secondary information causes poor business decisions and inaccurate analysis. Today, there is a lot of information on the internet which must be evaluated.

Criteria for Assessing the Quality of Secondary Data

The process of evaluation should include but not limited to the following: DuluxGroup Ltd should consider the purpose in the presentation of data. In some circumstances, the research data may be biased. As a result, the company ought to select secondary data that brings a hundred percent benefit. Secondly, it is imperative to interrogate who collected the data. Data reliability can be negatively impacted by the actions of who gathered it. With reports on the market, the firm should make sure that authentic sources are sought to help in making realistic decisions. Thirdly, it is essential to consider when the secondary information was collected. The time factor is integral in determining accuracy (Cahill, 2017). Outdated data are not reliable because events have overtaken them. Recent data provide accuracy and a true picture of the market trends. Thirdly, DuluxGroup Ltd ought to consider the manner in which the data was collected. More so in circumstances where such data is directly related to the opinions and needs of customers. In this case, understanding methodology and the population used in data collection is imperative. Fourth, the company should emphasize the nature of the secondary data that was collected. It suffices to point out that not all data will be useful to the company. Some data are too broad to satisfy the specific needs of the business (Baker, 2014). In this regard, it is vital to seek for relevant secondary data that addresses the particular needs of the firm. Fifth, the company ought to determine whether the secondary data to be used is consistent with data collected from other sources. The utilization of external data can be efficient when they are accurate and correct.

DuluxGroup’s Marketing Mix

Price

It is common knowledge that price determines the value of a product in the market. DuluxGroup products are priced competitively. The average cost of four litres of Dulux paint is eighteen dollars. Additionally, more than ninety percent of market value falls in the premium coatings and paints (DuluxGroup Ltd, 2017). The company exudes confidence that this market trend will not change in the near future. Pricing of DuluxGroup’s products are priced based on the market research conducted to determine consumer buying behavior and preferences.

Product

DuluxGroup has positioned its products as high quality and premium in the paints and coatings industry. The company is aiming at enhancing proper standards for the various brands in the market. Looking at the brands developed by the firm, high quality is stressed and tested rigorously to meet the needs of customers. DuluxGroup’s products have been and relied upon trusted for generations. Brands such as B&D, Cabot, Yates, and Selleys are household names. These products have high consumer awareness in the market (DuluxGroup Ltd, 2017). DuluxGroup’s range of products is market as premium and of higher quality about those of its competitors. The paints and coatings are packaged into different quantities to suit the needs of its customers. The products are made through innovative means and with state of the art manufacturing plants in Australia and beyond.

Place

Mostly DuluxGroup is into both direct and indirect supply channel (producer to consumer and producer-retailer). The company has employed an estimated 4000 people in South East Asia, Papua New Guinea, China, United Kingdom, and Australia. The company owns twenty main manufacturing sites. The distribution of products takes place in the nineteen distribution centers. Further, the company has an estimated 120 trade outlets. DuluxGroup has an extensive distribution channel for its products which are either retailed or sold directly to consumers who are the primary customers (DuluxGroup Ltd, 2017).

Macro-Environmental Trends Impacting DuluxGroup

DuluxGroup produces products that are profoundly influenced by cultural and social forces. The company must consider the needs of its customers both in Australia and elsewhere in the world. The company must strive to eliminate any aspect of the production process that can cause harm to the people (DuluxGroup Ltd, 2017). It is imperative to point out that there is the need to conserve, protect, and preserve the environment. Thus, the physical or natural forces must be put into consideration. The company must stress the concept of sustainable productivity. The operations of DuluxGroup are affected by demographic forces (Helm and Gritsch, 2014). It suffices to mention that various markets segments are typically affected by demographic forces such as education level of the consumers, age, country or region, household lifestyle, movements, and cultural characteristics. Economic factors influence DuluxGroup. This impact is felt regarding production and decision-making process of the consumers. In fact, financial constraints diminish the purchasing power of customers (Marketpublishers, 2017). Technological factors impact on the production decisions and market. There has been improved technology in the recent past. The adoption of technology by DuluxGroup will ensure that production processes are efficient (Psaros and Seamer, 2015). Additionally, the right technology positively impacts on the quality of paints and coatings. The legal and political forces affect the operations of DuluxGroup whether in Australia or New Zealand. Indeed, sound and proper marketing decision ought to be informed by the prevailing political and legal force in the country.

Conclusion

DuluxGroup Company Limited is high performing company with quality products that are recognized internationally. The company has shown sound financial management as can be deduced from its profitability. The company has, also, adopted the best technology to improve quality and production efficiency. Compared to its competitors, DuluxGroup has a well established and comprehensive supply chain and connection to numerous retail marketers in the global market.

Reference

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Dulux.com.au. (2017). Dulux - Australia’s Most Trusted Paint Brand*| Worth doing, worth Dulux. [online] Available at: https://www.dulux.com.au [Accessed 1 Nov. 2017].

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