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We continue to see a significant opportunity beyond our normal premium product and service level positioning in the mid-market. This is the fast-growing segment that is looking for a different price-value trade-off than we find in the premium segment.

In China, for example, the mid-market is expected to expand from about 120 million to 190 million households over the next ten years, introducing many tens of millions of new consumers in search of affordable, high quality goods and services as shown in the graph.

Growing mid-market households in China in millions

Growing mid-markets households (bar chart)

In some cases, the approach to addressing the mid-markets successfully is through appropriate products. A good example of this is the introduction of the Dulux All Round Guard and Forest Breath ranges of “safe for me and my family” paints to the Chinese market. These ranges meet the needs of a growing population of discerning consumers entering the home decoration market. We also have locally appropriate decorative paints mid-market ranges in India (e.g. Dulux Promise) and Indonesia (e.g. Dulux Catylac), as well as in many other countries.

Differentiated product lines are not the only solution to the mid-markets. In some cases, the solution is to have different brands, distribution and/or sales force approaches. So, for example, we have a completely different business model for the mid-market in automotive refinishes than we have for our premium brands. This includes everything from brand name, to product formulation, to technical service levels to distribution channels, to price. Of course, both business models fully and completely adhere to the same standards and techniques in terms of business principles, safety and sustainability. It is also worth noting that, while mid-market business models are often initially developed for high growth markets, there are also mid-market opportunities in the more established markets.

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