Small and Medium-sized Paint Enterprises: Retreating in the Brand Competition

Fifty-six years ago, in Shunde, the hometown of paint in China, some paint companies often had dealers from across the country sending cash or cheques to manufacturers. At that time, the products of small and medium-sized paint companies sold well, and sales profit ratios of more than 50% were not high, and 70% to 80% were normal. Nowadays, although there are nearly 9,000 paint production companies in the country, and there are tens of thousands of brands, the good days for small and medium-sized enterprises seem to be gone. The position of big brands and foreign brands in the minds of consumers is becoming more and more irreplaceable, and the business of small and medium-sized paint companies is getting worse and worse. Statistics show that from January to July this year, 60% to 70% of small and medium-sized paint companies face difficulties in survival.

What are the reasons leading to the decline of the operating conditions of small and medium-sized paint companies? Analysts believe that mainly due to the state's macro-economic control, inhibiting the rapid development of real estate led to a chain reaction, restricting the sales of coated products. In addition, oversupply of paint products has caused many small paint companies to fail. The author visited the investigation to understand the true situation of the small and medium-sized paint companies and discovered some problems in the small and medium-sized paint companies themselves.

Most of the small and medium-sized paint companies have neither financial advantages nor technical strength, and their production facilities are shabby and their environmental awareness is low. In the past, they mostly depended on low-price competition to survive. With the increasing demand for safety and environmental protection from new standards in the industry, such enterprises have often become targets of pollution control throughout the country. Some of the small-scale paint manufacturing companies have opened up and stopped the production line due to the small number of orders, and some have even dried up for two days a day.

Mr. Zhang, a coating factory manager in Jiangyin City, said: “Because of the fierce competition in the paint market in recent years, our production and operation have been in a difficult situation, and companies have suffered losses every year. Together with the current environmental pressure, we have no power to support. But I think even if it is Closing down is also an opportunity. We can also achieve industrial restructuring and sustainable development through asset restructuring."

The current coating market has gone from price competition to brand competition, and the brand management awareness of small and medium-sized paint companies is generally weak, and the homogenization phenomenon has become more and more serious. The lack of personalized core product competitiveness, unclear positioning, and brand and product speculation are in vain. Others are environmentally friendly, he is also environmentally friendly, others have a net effect, he has a net effect, and even companies are not sure about the selling points of their products, and getting consumers' favor has become a luxury.

As early as 10 years ago, many first- and second-tier brand companies started flagship stores or image stores. Previously, only a few dozen square meters, and some have reached thousands of square meters, up and down several floors; previously renovated simply, now flat TV, LED display and other multi-functional demonstration means everything, and set display, sales, training, promotion functions as one. In particular, the image display of experience halls such as Dulux, Crocodile, and Bauhinia completely overturned the image of traditional boutiques. Because of the lack of ideas and funds, small and medium-sized coated enterprises have obviously lag behind in image-building.

SMEs do not pay attention to brand management. The consequence is that consumers’ choice of products is increasingly concentrated on several well-known brands. At present, the domestic primary and secondary markets have already been dominated by brands such as Nippon, China Resources, and Garbo Lili. With the congested three-and-four line brands, the market has basically become saturated. The market for small and medium-sized paint companies is only at the county-level and town-level markets.

But now it seems that the township market also seems to fall. Because manufacturers do not pay attention to brand building, dealers become disheartened. "Now that the market is becoming more and more difficult to do, I am prepared to sell the goods and sell them." This is a real-time feedback from a salesperson at a township and township distributor. At present, in the tertiary and quartile markets, especially in the township and town markets, there are often seven or eight paint distributor stores on a building material street, and the business conditions can be imagined. Some shop owners have not invested their main energy in the coatings business. They have even closed down or changed jobs, and have already become a precursor to losses and closures.

The survey also showed that the current service awareness of small and medium-sized paint companies is generally poor, and they often do not meet customer needs very well. The most obvious manifestation is that the manufacturer promises not to be honored. Once a problem arises, the reputation of the brand in customers and dealers will plummet. Taking a small coating enterprise in Fujian as an example, although the company promised that “the quality is no problem and the after-sales service package is satisfactory”, the water leakage phenomenon occurred in Jiangxi customers after using its waterproof coating. After the distributor in Jiangxi feedbacks the problem back to the manufacturer, the manufacturer will not send someone to solve the problem after delay. The company’s reputation is not good, and business will suffer afterwards.

As many small and medium sized enterprises did not set up a professional engineering sales service team, once the product or project quality problems, the business owner asked the clerk responsible for the area to deal with. The clerk can be responsible without responsibility. Second, he has no professional knowledge. The customer's complaint cannot be resolved eventually. Today's large-scale paint companies, such as Bauhinia, Garbo Li, Three Trees, Crocodile Paint, have established their own independent engineering sales teams and are strictly separated from retail sales. They are directly responsible to the general manager and build a professional engineering agency system. This service model is worth learning from SMEs.

At the same time, the sales promotion model is also backward. Today, e-commerce has become very popular, but many small and medium-sized paint companies prefer to ask 10 business people to divide the region for promotion, but they do not want to invite 5 e-commerce personnel to sell online. In contrast, companies that can use new marketing methods such as e-commerce will come to the fore. Known in the industry, Zhongshan Desert Oasis paint, through the search engine "paint" and "paint" ranking, an average of 100,000 yuan per month, the cost of investment, in exchange for a 50% increase in sales, network promotion is in place. Corporate official website construction, e-commerce website promotion, posting and advertising on professional building materials decoration websites, employing professional services, and sending special personnel to take charge of network promotion methods and methods, prompting them to sell without increasing sales staff. Accelerate growth. In addition, the rapid development of Germany's Degong Paint Foshan Co., Ltd., a well-known trademark in China, is inseparable from the company’s e-commerce advantage.

In response to the various problems exposed in the competition, people in the industry believe that in order to get rid of the predicament, small and medium-sized coated enterprises must establish a foothold in today’s brand competition, in addition to complying with national industrial policies and improving product technology, they must also be in the corporate reputation, personnel training, Product positioning, service links, marketing models, image construction efforts.