Let's learn about the development of the strategy of the Sinteplast paint chain in Argentina.
by Esteban Ortega*
Towards the end of the 90s and the beginning of 2000, the Argentine market entered a strong political and economic crisis that determined the early departure of the then president De la Rua and later a strong devaluation of the currency. All this caused a significant drop in economic activity that began to resurface from 2002 - 2003.
At that time the great changes in the paint market occurred in the retail channel with the start of home depot operations, the direct introduction with own and associated retail stores of the Alba brand, the market leader, by acquiring the Centro chain and launching the Alba Net program, and the growth of chains such as Prestigio and Rex. The market was beginning to show a concentration of sales in large customers and a segmentation of the channel by paint brand. (note: see INPRA vol.11/nro.5).
To grow in this scenario Sinteplast developed its Colorshop brand to give an alternative retail brand to its customers. The first store of the chain was inaugurated at the end of the 90s; the objective was clear, the greater the concentration of the market, their customers would need a brand that differentiates them and allows them to compete in the new scenario.
The chain was growing until 2008, when after having reached 120 points of sale, it began with a slight decline in them. It was at that moment when he decided to work on a repositioning of the Colorshop image.
The business scheme of Colorshop is that of franchising with some differences from the traditional system, which was necessary to introduce to adapt the business to the needs of the market. One of these characteristics, with respect to the traditional franchise, is that Sinteplast, by policy, does not have any premises of its own, "we do not want to compete with our own customers", is the definition of a manager of the company.
This business development worked very well the first 10 years of life, from there the company detects a stagnation, even a fall in its points of sale. On the other hand, during this time, and in parallel to the development of the franchise business, Sinteplast faced the launch of its new industrial plant in the city of Ezeiza, a model at the regional level that affected the availability of resources to maintain the level of investment in the retail channel.
With the new factory finished and a wide line of products for the different markets: architectural, industrial and automotive repainting, now the challenge was to reposition Colorshop. At the beginning of 2009 the company faced internal changes and hired the Argentine firm Venmark, specialized in the development of businesses and brands in the paint market.
The starting point
For many industrial companies, such as Sinteplast, managing the retail channel is not easy. Typical retail times and variables differ significantly from the culture of an industrial company. "Creating a retail business unit was vital so that this project does not fail," said Claudio Fazzone, a consultant at Venmark. For this reason the company creates the Colorshop business unit, which although it works together with the sales and marketing areas, has independence in the management of the business.
For this new area, a person in charge of the business, Ezequiel Reilly, is appointed, who leads a department with a clear objective: "to transform Colorshop into the leading chain in the retail of paints under the format of franchises".
The first actions
The first major objective, today considered by the managers and the consultancy, as "key", was to change the perception of the then franchisees, called "associates" dissatisfied with the situation of the chain. For this, a series of actions were thought of that should generate motivation and greater commitment, making clear the real objective of Sinteplast: to grow with Colorshop from a better functioning of the existing points of sale.
As a starting point, the consultant held meetings with all the partners where it was possible to deduce, through their opinions, the priority aspects to be developed. With this material and the analysis of quantitative variables and market studies, the company together with the consulting firm determined the initial action plan that was based on relationship with the associates, change of image, computer support, training and development of differential actions. The marketing actions would be segmented by the different target audiences: individuals, professionals (architects, masters-painters) and companies.
Relationship with partners
Being closer to associates was a clear priority in the company. Fazzone said that "the great challenge of this project was to have the commitment and motivation of all the associates to implement actions in a unified way, operate and give a chain image."
To meet this objective, two zonal meetings per year and a national convention were implemented. In addition, visits by officials to the points of sale were intensified. "We accompany the associate from the development of the premises, we provide them with training, we propose promotional actions and we are making adjustments until they reach adequate sales levels," says Ezequiel Reilly.
The makeover
The change of the logo and the retail proposal was reflected with the new store in the city of Temperley, Buenos Aires, and then continue with the reform of the existing premises. The central points of the change were the development of a modern brand that is close to the public, owning a color in points of sale that allows the identification of the chain, a modern lay out where the application of products and circulation through the premises are priority aspects, development of a brand architecture and communication guide that homogeneously replicates the defined brand image.
Each new point of sale, or the reforms of the existing ones, are developed by the consultant, thus guaranteeing the unification of the image as the correct implementation of all the elements that make up the premises. "Our big challenge is to maintain a homogeneous brand regardless of the characteristics of the store," said Adrián Lorenzo, director of Venmark.
When touring the points of sale you can see the good lighting, order, exhibition of applied products, variety and uniformity of image.
It support
Sinteplast provides with the franchise the computer support of the business. This soft, developed to measure for the chain, in addition to being a service for associates, is essential for the implementation of marketing actions. In this sense, loyalty systems linked to the purchase of product are implemented through the allocation of points for purchase made. In turn, the system interacts with the Web platform, as well as with mobile marketing actions.
Training
Training actions are a central part of the marketing strategy, but not only of Colorshop but also of Sinteplast. In this sense, the actions focus on the associates who in the company are trained in technical issues and through the consulting firm Venmark in the management of their companies and in sales. These trainings are also intended for professional customers of the stores.
Differential actions
The development of marketing actions has become the great engine of the differentiation of the chain in the regional market. To make a summary of them, the company and the consultant agree to segment them by audience:
- Private audience: Co-branding alliances with banks and credit cards, today there are more than 12 agreements in force with financial companies. Environment simulation system. Magazines of zonal offers, attention and advice in the store, home deliveries, technical support; creation of the magazine "Colorear" with information on decoration trends and other notes of general interest; carrying out periodic promotions, and other actions that seek to generate traffic to the stores.
- Professional audience: The loyalty program for professionals was fundamental for the growth of this segment of clients. For each purchase they add points that can then be exchanged for prizes. The professional can see online the details of their points and the prizes for which they can redeem. In addition, with the mobile marketing system, you are informed of the points you add for each purchase, maintain constant communication about training activities, exclusive promotions for the segment, greetings on holidays and other communications.
- Associates: To improve the differentiation of the store and generate better margins for the associates, the development of lines with own / exclusive brands was a success. With the communication channels created: mobile marketing, magazine "Colorear", Web and other digital media, the positioning and dissemination of these lines was guaranteed.
The results
These last 3 years have marked a very important growth in the chain. Colorshop is today the chain with the most paint stores in Argentina and with a presence in different countries of the region. The success of this change is not only marked by the number of stores but also by the great individual growth that the associates who have premises of the brand have had. A very important factor of this growth was the new openings of existing partner stores among which there are already some that have 10 Colorshop stores.
Colorshop in figures
- Number of stores: 215
- Stores in Argentina: 176
- Shops in Uruguay: 10
- Shops in Paraguay: 2
- Shops in Bolivia: 27
- Number of franchisees: 87 (Argentina)
- Average number of points of sale per franchisee: 2 (there is already one associated with 10 branches).
- According to data from the Argentine Franchise Association Colorshop is one of the three fastest growing franchises in 2012 (Argentina) and one of the four companies with the largest number of franchised stores (Argentina).
Note: The Argentine consultancy Venmark led by Claudio Fazzone has developed other cases in the paint market, for 5 years he worked for Pinturerías Prestigio in Argentina, for Red Color de Industrias Vencedor in Peru, they repositioned the Universo chain in the city of Santa Fé and have recently developed the new concept store of Color Centro of the Qroma group in Peru. For these works they have received the Mercury Awards of the Asoc. Of Argentine Marketing, the PoP award of Peru and the Outstanding Company of the newspaper Uno. Fazzone is also a columnist for Inpra Latina and a speaker at our latest edition of Cubrecol. For more information: [email protected] / www.venmark.com.ar
* Collaborator from Argentina
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