Planning For A New Business Vertical With Project Sales Channel & Concrete Technologist - Business Assignment Help

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Context 

Asian Paints has enjoyed a market leadership of over 50 years in the Indian Paints market.  One of the critical success factors has been our reach and ability to service the market. In fact, our unique direct distribution network with over 48000+ directly serviced dealers means that the company directly services even the smallest of dealers in remote locations. This network reaches supported by an effective frontline salesforce has given us a clear competitive advantage. 

Beyond Paints - Push towards new products 

Over the last few years, the company made a strategic decision to diversify in products other than paints. These categories include waterproofing, Mech tools and adhesives. For many of these products, the existing dealer network of the company can be leveraged. For products like Adhesives and waterproofing, alternate network channels are also critical. These alternate network channels involve the sale of products through Distributors.  

Sales support has also been provided in terms of an extended workforce, employed through an agency. These Direct Sales Representatives (DSRs) work in Waterproofing and adhesives.  These DSRs reach out to channels beyond our existing paint network. With increasing no. of new products being launched, the manpower deployed must be continuously updated on the newer products being launched, and its capability to sell these new products must be built. 

Project Sales Channel 

While retail channel remains our core strength, to cater to the evolving market needs, over the last 15 years the company has also increased its presence in the Project Sales division. The  Project Sales business is the B2Barm (Business to Business) of Asian Paints. The focus is to sell our products to institutions like Builders, Co-operative housing societies, Government agencies, Factories, Educational institutions, Hotels, etc. The Project sales business has been growing at a healthy rate of over 20% over the last 3 years. The challenge is to continue to grow at that ambitious rate while there is pressure on the availability of manpower. 

Admixtures 

Concrete admixtures are chemicals or additives added during concrete mixing to enhance specific properties of the fresh or hardened concrete, such as workability, durability, or early and final strength. Admixtures are added to the concrete, in addition to cement, water, and aggregate, typically immediately before or during the mixing process. 

Asian Paints entered the Admixture business through its Projects Sales arm last year. This is not only because of the tremendous potential for Admixtures but also the fact that strategically it helps us get into a site right from the project conceptualization stage because concrete is used right at the beginning of the project.  

The Admixture market in India is estimated to be ~Rs. 3500 crores in size. Our objective is to do more than Rs. 100 Crores of Admixture business in our first year. In the first year, we are focusing firstly on the South and West division, followed by the North and Central division.  In the East division, Admixtures will be launched later.  

However, the Admixture space has some established players, and the challenge is for a new entrant to create an immediate impact in the market. Some of the large, organized companies are Fosroc, SIKA, MYK, BASF, Don Chemicals, Chryso, and Euclid. The organized players account for only about 30% of this market while a large chunk remains unorganized (see Annexure 1). 

Manpower capability: 

One key aspect of the Admixture business is the deployment of technically qualified manpower.  Admixturesrequires higher technical know-how is relative to the Paints products. The job starts with the formulation of concrete at each site and suggesting a custom solution to the client.  This means that the sales workforce needs to have the necessary technical expertise in this space. Finding such competent talent interested to pursue a career with a new entrant like  Asian Paint will be critical. 

The org. structure of two competing organizations is given in Annexure 2. All benchmarked organizations have a separate hierarchy for the Sales team and Technical team (formulation experts). The difference between organizations is whether the field technical structure reports to Sales or Technical function. The org. structure of the Asian Paints Project  Sales team is also provided in the same annexure. The new Admixture team of Asian Paints will be part of the Project sales hierarchy. 

There are 3 key field roles in the Admixture business – BDM (Business development manager),  Sales Engineer and Concrete Technologist. 

The concrete technologist (CT) is the technical expert, who is responsible for the custom formulation at a site level to ensure that concrete is being produced to the correct specifications. The CT also coordinates with the laboratory to ensure that the specifications can be modified as per the client’s requirements.  

This is a critical position since no site can be converted before the CT formulates the correct  Admixture. Hence, CT productivity (called throughput) is a critical determinant for the business i.e. the no. of sites the CT can visit in a day/week/month & the no. of sites converted will, to a large extent determine the overall Sales conversion per month. Both before and after site conversion a CT will have to visit the site multiple times since each formulation will need multiple iterations to be approved. A CT can visit 2-3 sites per day. The per-site value is  Rs. 4 lakhs. Since we are a new entrant, we expect our conversion rate to be 30% (i.e. if a CT  visits 10 sites then 3 will be converted for Asian Paints).  

The Sales Engineer’s (SE) role is to identify, index, and review the market potential for Admixture products in his respective geography. They create a pipeline of projects (Pvt. and govt.) for  Admixture sales. They focus on generating leads through direct project site visits and interact with various stakeholders like Project Sales Officers, Applicators, and Dealers. They coordinate with Concrete Technologist to conduct trials in time or troubleshoot issues on sites. 

The BDM is a techno-commercial role that manages the team of Sales Engineers and CTs across a division. A BDM from a reputed competitor will go a long way in generating sales for the organization by virtue of his contacts in the industry developed over a period. The industry operates to a large extent on the credible relationships built over time. The manpower mix of a competition organization has been provided in Annexure 3.  

Broadly speaking, the Area Manager in Project Sales can be considered equivalent to the BDM  in Admixture, the Project Sales officer can be considered equivalent to Sales Engineer and the  Concrete Technologist can be considered equivalent to Project Sales Technologist. The Project  Sales team works only on Paint products.  

In contrast to the Paint business where the Technologist is involved in site trials, complaints, and customer queries but is not integral to the Sales process at every client, the Concrete  Technologist is critical to every sale i.e. no sale can be finalized before the formulation is finalized by the CT.  

For the Paint business(Officer and Manager roles) Asian Paints typically recruits from Campus or hires candidates with 2-3 years of field Sales experience from the market. In the Admixture business, competition companies hire graduates with a Construction management qualification. The salary levels of Admixture competition are quite competitive. The grade and compensation levels for Asian Paints Project Sales have been given in Annexure 4. 

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