The paintings and coatings industry in Canada consists of major players in the construction industry. Players involved in this industry include manufacturers of paints, shellacs, stains, varnishes and lacquers. The industry is divided into two major subsectors: architectural coatings and paintings for construction; and industrial coatings and paintings for automotive and industrial equipment (Government of Canada 2011). Key success factors (KSFs) play a major role in determining the performance of a firm in the industry. Firms that implement key success factors such as innovative and advanced technology, marketing strategies, cost-saving strategies, distribution-related factors, excellent raw materials management and good employee management; often have a competitive edge in the industry and experience growth and increased revenue over time.
Cost drivers in the coatings and painting industry include the cost of the factors of production such as labor, land rates, cost of maintenance of machinery, cost of research and development, cost of marketing strategies, and cost of distribution. Companies that reduce cost of operations without compromising on product quality and employee satisfaction have a competitive advantage and can therefore attribute cost drivers as a success factor in production. DuPont has achieved cost-saving strategies through energy-saving strategies within its operations. The company integrated load controls, improved condensate return, reduced liquid nitrogen use and implemented a mindset and behavior change training program for its employees to encourage employees to prioritize cost-effective methods of production (Siegel 2011; John 2015).
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Companies that can access raw materials at affordable prices and high quality have an advantage because the end-products will be of higher quality for reduced production costs; thereby guaranteeing higher sales volumes and profit margins. Cloverdale Paint Company achieves high economies of scale by purchasing raw materials at very large quantities and storing them in warehouses for future use (Cloverdale Paints 2019). This is a strategic raw-material management method which counters the fluctuating costs of raw materials in Canada. Additionally, transport costs, procurement costs and time are saved when purchases are done as single orders rather than multiple orders. This ensures that Cloverdale Paints saves money on expensive raw materials and maximizes profit margins (Cloverdale Paints 2019).
Firms need to employ the use of reliable, effective and fast distribution channels that ensure products reach retail stores in time, and at reasonable price changes. Companies that use in-house distribution channels, such as PPG Inc., guarantee faster distribution of products through prioritization of its products within the process of distribution (PPG Industries 2014). The manufacturer has direct understanding of the movement of products from warehouses to retail stores. This results in less changes in cost since transportation is in bulk; elimination of middle-men and unscrupulous distributors who hike prices, and direct feedback from retail owners and final consumers. Customers enjoy products at lower costs, all-year availability of products and brand loyalty is established through close contact between manufacturers and final consumers.
Technology advancements are initiated through extensive investments in Research and Development (R&D) that results in development of modern methods of paint production, unique colors, higher quality levels of paint and increased production of paint. Technology plays a major role in industrial paint compared to architectural paint because paint used in architecture is generally similar based on end-use; and therefore offers little competitive advantage aside from color and end-quality. However, industrial paint is a key factor in technological advancements and companies have engaged extensive technology in paint design and manufacturing. BASF Coatings Inc. partnered with Sirrus Inc. to produce high quality coatings for the automotive industry (PCI 2018). The companies target the production of coatings based on methylene malonate technology that is environmental-friendly and requires less production time.
QUESTION TWO
The use of complementary products enhances customer satisfaction and high levels of consumer satisfaction through improved product performance in quality and value when used in combination with its complementary product. For instance, customers that buy architectural paints prefer buying thickening substrates to make the paint thicker; while some prefer thinners to make paint lighter depending on specific use. These category of complementary products allow for specificity of use. Complementary products may also help a product to have use value. For example, consumers who buy coats for automotive require different brushes to apply the coats. Some complementary products increase consumer satisfaction by making the product more useful, even if it can be used without the complement. For example, paints may be used in architectural designs. However, additives and adhesives make the paint more adherent to surfaces hence last longer. This improves level of usefulness of the product. Some complementary products provide the leeway for the purchase of more paint and coat products. For example, paint removal products are used to scrape off paint before applying new paint. Hence, these products create a market for new products to be purchased.
Additives are products that increase adherence of spray paints on surfaces. Additives such as Aquabond® are used to increase the adherence of non-hungry substrates on surfaces in architectural designs (PPG Industries 2014). Additives complement these substrate-based paints by making them more durable and highly adhesive. Customers tend to buy paints and coats together with additives in order to increase the use-value of the paints by offering increased durability. Companies that produce paints and coats benefit through increased sales revenue and positive customer feedback who appreciate the increased usability of the products. Disinfectants are crucial complementary paint products used in architectural designs to remove bacteria and fungus from walls and wood. The products are used in conjunction with paints to ensure painted surfaces remain brightly colored and smooth. Disinfectants are crucial to the paintings and coatings industry because they help improve the aesthetic value of paints in architectural designs and coats in the automotive industry. The use of disinfectants by customers allows them to use the same paint without a fear of rust; thereby increasing brand loyalty and value appreciation. Companies that produce paints and those that produce disinfectants enjoy higher volume sales because of shared customer bases; hence higher profit revenues.
Catalyst products complement paint products through catalyzing the process of drying and curing of paint on surfaces. These products are used in automotive spray paints and architecture paints. Anti-slip products such as Antislip Bead ® are used to avoid the slippery effect of solvent-based paints and are therefore necessary when used to paint floor surfaces. Complementary products in the paintings and coatings industry in Canada are useful to ensure that products have more overall value when used in conjunction with other products.
References
Cloverdale Paints. (2019). Product profiles. Cloverdale Paints Inc. Web.
Government of Canada. (2011). Paintings and coatings industry profile. Canadian Chemical Industry. Web.
John, P. (2015). DuPont steps up cost-cutting plan. Financial Times. Web.
PCI. (2018). Sirrus and BASF to develop new class of automotive coatings. Paintings and Coatings Industry. Web.
PPG Industries Inc. (2014). Global architectural coatings overview. PPG Industries, Inc. Web.
Siegel, R. P. (2011). Sustainability culture saves billions for DuPont. Triple Pundit. Web.
