Using colour in new product development
An Akzo Nobel case study

Below is a list of Business Case Studies case studies organised alphabetically by company. To view more companies, please choose a letter from the list below.

Page 3: External influences

Akzo Nobel 5 Image 3The market for all DIY products in general, and paint in particular, is highly competitive at both the manufacturing and retailing stages. The coatings industry has to deal with an ever-changing environment and is subject to several important external influences.

Economics

One of the key factors affecting the total DIY UK market, now worth nearly £8bn a year, is the state of the economy and in particular the health of the housing market. The level of disposable income directly influences the demand for houses. There are around 24 million households in the UK, of which two-thirds are owner-occupied. Approximately one in ten of these will move house each year. This provides a core market interested in home decoration and improvement. The markets for houses and DIY products can therefore be seen as an example of complementary demand.

Akzo Nobel 5 Diagram 1The 1980s housing boom encouraged many big retailers to enter the DIY market and saw the emergence of big, out of town superstores, offering wider ranges, at highly competitive prices, with easy parking and loading. However, the recession in the early 1990s, with high interest rates, led to a slow-down in the housing market and subsequently in superstore openings, as it appeared the DIY market was becoming over-saturated. 1993 and 1994 saw intense price wars among the large retailers.

Akzo Nobel 5 Diagram 2In the past two years, the DIY market has grown; up seven per cent in 1997 and five per cent in 1998. The specialist stores have been re-grouping and re-positioning their products, i.e. some have broadened their target market and stock a wider range of products, while others are becoming more targeted towards particular customer categories.

Social changes

A number of factors are responsible for this recent upswing in home improvements: consumers have become more sophisticated and more demanding, DIY is no longer perceived as a ‘man’s job’ or a mere necessity, and the growth in media interest in the home improvement market reflects this shift in consumers’ attitudes. Recent television programmes, such as ‘Home Front’ and ‘Changing Rooms’, have  emphasised effects that can be achieved simply and more cost-effectively by being imaginative, often encouraging short-term change of colours. The focus is on creative makeovers rather than major rebuilds. Viewing figures for these programmes, broadcast at peak times, have doubled and they follow the trend set by home interest magazines which were first on the scene. Sales of these magazines have more than doubled in the last ten years, combined circulation has more than quadrupled and there has been an increase in advertising.

Environment

Akzo Nobel 5 Image 6The market for paint has also been affected by concerns about environmental issues from the public as well as the legislator. Akzo Nobel puts a strong emphasis on product stewardship: the company designs or modifies its coatings with health and safety in mind and to minimise the environmental impact over their complete life cycle, from the choice of raw materials, through manufacturing, distribution, use and disposal. Water-borne, radiation curing, or powder coatings as well as high solids contain fewer solvents than conventional paints or even none at all, at the same time they provide a high functionality.

Akzo Nobel is committed to constantly improving its performance in the field of safety, health and environment. To this end, the company has joined the chemical industry’s Responsible Care and the coating industry’s Coatings Care programmes. The purpose of these voluntary initiatives is to integrate permanent health, safety and environmental management (HSE) procedures into the company’s everyday activities through the use of a consistent set of management practices.

Akzo Nobel | Using colour in new product development
lock