Review of Integrative Business and Economics Research, Vol.

10, Supplementary Issue 3 365

Marketing Strategy of Paid Services by Product

Manufacturer: Case Study of Angelise Paint

William Riswanto*
School of Business and Management ITB Jakarta

Agung Wicaksono
School of Business and Management ITB Bandung

ABSTRACT
Established for almost 140 years, Angelise Paint is a well-known and trusted brand for
industrial protective coating (AubreyDay, 2021). In recent years, Angelise Paint suffered
pressure from the increase of raw material price and tight competition. Therefore, a
growth initiative is designed and launched which is paid services to support painting
activities. As the company expands its product to paid service provider, the company’s
marketing strategy needs to be enhanced. This research aims to analyze the company’s
internal and external environment and propose a suitable marketing strategy for the paid
services. This research obtained primary data through interviews and the secondary data
comes through literature review. By analyzing the internal environment using
Segmentation, Targeting and Positioning (STP), marketing mix and resource-based view,
while external environment analysis was performed using Porter’s Five Forces, strategic
group mapping, and Strategy, Objectives, Assumptions, and Resources (SOAR) analysis,
then the strategy for paid service was formulated using Porter’s Generic Competitive
Strategy, enhanced STP, and improved marketing mix from 4Ps to 7Ps. This research
provides input for marketing strategy of product manufacturers in the industrial product
industry through differentiation strategy, namely by the first company that develop new
products that keep the company ahead of its competitors.

Keywords: business-to-business marketing, paint manufacturer, paid service, marketing

strategy.

1. INTRODUCTION

According to Indonesia Statistics Bureau (2020), as the fourth populated country in the
world with more than 270 million people, Indonesia has shown steady growth of the paint
and coatings market account of its population, high urbanization, and rising middle class.
Along with the government’s infrastructure and housing project has driven this industry
to keep in stable growth and unaffected by the economic slowdown and the weakening of
the Indonesian rupiah exchange rate. According to Globe News Wire (2020), data from
global business guide Indonesia shows that Indonesia, as an emerging market, grows
faster than other mature region like United States, Western Europe, and Japan. In 2010,
Indonesia’s domestic paint consumption reached 772,454 tons. In 2014, this figure soared
to 877,459 tons with a market value of 15 trillion IDR. Likewise, Indonesian paint exports
also increased from 21,742 tons in 2010 to 29,068 tons in 2015. Meanwhile, imports also
rose from 45,927 tons in 2013 to 65,392 tons in 2014. Globally, the paint and coatings
market is projected to grow from USD 147.2 billion in 2020 to USD 179.4 billion in 2025,

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Review of Integrative Business and Economics Research, Vol. 10, Supplementary Issue 3 366

at a compound annual growth rate (CAGR) of 4%.

Figure 1. Life cycle of iron in steel

Source: Training module NACE coating inspector level 1

Data from Globe News Wire (2020), Indonesia’s domestic consumption accounts for
50-60% as decorative paint, and the remaining 40-60% is industrial and automotive paint.
Paint and coatings hold two primary function which are decoration and protection. The
decorative purpose is to decorate, beautify and protect signature buildings or assets,
primarily applied in apartments, residential homes, public facilities, and factories.
Another function as protection shown in figure 1 is widely used in industrial products;
most of these products hold particular purpose to protect structures in a more aggressive
environment like in industrial plants and equipment, marine facilities, and vessels from
degradation or corrosion.
The paint and coatings industry is becoming more competitive and challenging. In
recent years, a major change has been taken place in this industry with the adoption of
new technologies. The pressure from environmentalists has also given a key driver for
this industry to change its product to more environmentally friendly coatings. Based on
Business (2019), another driver of the change is customer preference; in the decorative
sector, customers prefer a waterborne coating, and in the protective coating sector,
customers require a higher volume solid content, easier application coatings, faster back-
to-service time, and coatings that suitable with the harsher environment or operating
parameters.

2. OBJECTIVES

Paid services is a new offer from Angelise Paint (not a real name) as a coatings
manufacturer. Expanding from product manufacturer to service provider related to
painting and coatings specification development, coatings application, quality assurance,
and managing corrosion and maintenance of client’s asset. This research is conducted to
analyze the value proposition of Angelise Paint, especially in paid service product through
an external and internal analysis of Angelise Paint in the protective coatings market.

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Review of Integrative Business and Economics Research, Vol. 10, Supplementary Issue 3 367

Second objective is to formulate a marketing strategy to maximize profit with new

services throughout the asset life cycle.

3. EXTERNAL ANALYSIS

3.1 Porter’s Five Forces

Rivalry among existing firms: High
Higher competition in the industry makes a very limited space to make higher
profitability. Meaning the intensity of competition among the company provide the
same products and services is going to be high. According to Barnley and Hesterly
(2008), the competition will also be high when the are many big companies
controlling the market. Angelise Paint faces a very competitive specialty chemical
industry from other manufacturers like Jotun, Hempel, Sherwin William, and other
local manufacturers. Usually, in the owner’s specification, the choice of paint
manufacturers has been stated, and the remaining is the cost bid analysis by the EPC
company, which one is the most price competitive, shorter lead time, and warehouse
availability near EPC’s yard/ workshop. In terms of the product, competitors will try
to produce a similar generic type for Angelise Paint’s focus product at a lower price.
Based on this fact, rivalry among existing firms is considered as high.

Threat of new entrant: Low

This factor will analyze the barrier to enter the industry. The growing market makes
this sector more attractive to enter by the new company. To enter the paint and
coatings industry, the new player needs a considerable research and development
investment to produce a premium product, long period for product formulation,
development, and technical certification process by the third party. The company also
needs to have a specialized chemist in order to formulate a good product. Even
though, the production machine is considered not expensive and for generic type of
paint is easy to be made, the current market required a more reliable specialized
product rather than a generic type of product. Based on this fact, the threat of new
entrants is considered low.

Bargaining power of buyer: High

This factor will analyze from the buyer’s side. Buyers affect an industry through their
ability to influence the price. Their ability to bargain for more services or high-quality
products, comparing the product with competitors, will force the price to be lower.
According to Hitt et.al. (2011), customers are powerful when the industry’s products
are undifferentiated or standardized, and they could switch to another product at little
cost or no cost. In the paint and coatings industry, the customers are demanding and
price-sensitive due to there are many choices of manufacturers. Some knowledgeable
customers required more technical guidance and product with ease of application.
They also have the power to have a paint qualification and test prior to choosing and
purchase the product. Hence, bargaining power of buyers is considered high.

Bargaining power of suppliers: Medium

Supplier power is defined as the ability of the supplier to control the price of goods
or services of raw materials that impacted to end product price. According to Hitt

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Review of Integrative Business and Economics Research, Vol. 10, Supplementary Issue 3 368

et.al.,(2011), a supplier group is powerful when it is dominated by a few large

companies and is more concentrated than the industry in which it sells. For paint and
coatings product, some raw materials are imported from overseas, and titanium
dioxide supplier as the key pigment in the paint is supplied by a giant corporation
which has strong bargaining power, but it can be controlled through the global
contract to supply raw materials for all manufacturing sites around the globe. Some
organic raw materials price fluctuates following the oil price that can influence the
end product price, but the price at the customer cannot change all of a sudden. Based
on this fact, the bargaining power of suppliers is considered medium.

Threat of substitute: Low

Substitute products are goods or services that perform a similar function with the
product that the industry produces and come from the company from the outside of
the given industry. According to Hitt et.al. (2011), product substitute presents a strong
threat to a firm when customers face few, if any, switching costs and when the
substitute product’s price is lower, or its quality and performance capabilities are
equal to or greater than those of the competing product. For this industry, paint and
coatings are still the first in mind and the lowest cost to protect and beautify assets.
There is a substitute product called thermal spray coating, but this product required a
higher standard of surface preparation and has a higher safety concern in the
application process. Also, paint and coatings are still considered the easiest way to
protect steel from degradation. Based on this fact, the threat of substitutes is
considered low.

3.2 Strategic Group Mapping

The group map shown below is for the paint and coatings industry in three variables.
First, due to protective coating commonly is a business-to-business model. Hence,
brand awareness represented by the number of LinkedIn company page followers.
Second, the product category is the number of products that the company sells in the
marine and protective coatings area. Third, the revenue of 2019 in millions USD when
the business is working as usual. From this mapping, we can map our position
compared to other firms and competitive landscape in the paint and coatings industry,
especially in Indonesia.

Table 1. Summary LinkedIn followers, product categories and revenue

LinkedIn Company Page Product Revenue 2019
Brand
Followers Categories (mil USD)
AubreyDay 551,085 11 11,080
Jotun 78,621 10 2,324
PPG 294,889 10 15,146
Sherwin Williams 184,102 9 17,901
Hempel 60,373 10 1,792
Propan Raya ICC 10,024 8 200
Sigma Utama 1,000 7 100
Pacific Paint 4,683 1 150
Blue cell is an assumption

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Figure 2. Strategic group map for coating manufacturers in Indonesia

As shown in figure 2., Angelise Paint represented as AubreyDay as the parent

company, has the highest brand awareness among both local and global paint and
coatings players. It can be seen in the number of LinkedIn company page followers,
followed by PPG and Sherwin Williams in the second and third positions. Propan
Raya ICC as the local player has the highest followers among other local paint and
coatings manufacturers. Sigma Utama does not have a LinkedIn company page. Thus,
the number of followers is an assumption.
In product categories, global paint and coatings manufacturer holds a high number
of their product range. The first position is AubreyDay with 11 product categories and
followed by PPG, Jotun, and Hempel with 10 product categories. The product
categories offered by global manufacturers are close from one manufacturer to
another manufacturer. This number reflects how competitive the paint and coatings
industry to answer the challenge from the asset owners and to keep the compliance
with international standards and regulation.
Revenue in 2019 reflects when the companies are doing the business as usual and
shown that Sherwin Williams holds the highest nets ales among other manufacturers,
followed by PPG in the second position and AubreyDay in the third position. For local
paint and coatings manufacturers, the revenue number is an assumption.
Overall, the figure 3 shown that AubreyDay is the leader in term of brand awareness
and holds the highest number of followers among other paint and coatings
manufacturers. This number indicates that AubreyDay is the most recognizable brand
for coating professionals. AubreyDay also holds the highest number of product
categories. As stated in annual report that AubreyDay expense 255 million euro or
equal to 304 million USD for research and development in the year 2019. The new
research and innovation hub in Felling, UK, for testing marine and protective coatings
in conditions similar to those clients face in the world’s most extreme environments
will ensure product development and possible further increase of product categories.
For the revenue side, AubreyDay holds the third position. Facing this situation,
AubreyDay tries to increase the value of its business, AubreyDay focuses on Eco-
premium solutions, which will gain more margin and differ our position from
competitors.

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3.3 SOAR Analysis

According to Thompson et.al. (2020), Porter’s SOAR framework for competitor
analysis consists of four indicators which are rival’s strategy, objectives, assumptions
about the industry and itself, and their resources and capabilities. With this
framework, we can gather competitors’ strategic direction and likely moves in order
to prepare the defensive countermoves. Thus, we can craft our strategic moves about
what market maneuvers to expect from rival in response and possibly exploit any
chance created by the competitors’ missteps. In this framework analysis, the
competitor strategies of Jotun are gained from its annual report and analyzed by the
author. With this analysis, Angelise Paint can decide their countermoves and strategy.
The four indicators of competitor analysis are described below.

Table 2. Competitor’s SOAR Analysis

SOAR Analysis Competitor’s move
Strategy • Win major projects for product track record locally or
internationally. Jotun was being used for floating,
production, storage, and offloading (FPSO) vessel
fabrication in Singapore. This vessel will be deployed in the
North Sea at Johan Castberg field. In Indonesia, Jotun
supplied a prestigious project named Thamrin Nine-Tower 1
which will be the tallest building in Indonesia.
• Aggressively pursue direct sales and expand distribution
network to make the products available closer to the
customer.
• Jotun making an infrastructure and maintenance product to
reduce the risk associated with decreasing of new
construction project due to drops of global trade and oil
price.
• Make customers and its paint applicators get used to its
product.

Objectives • Increase the market share in the region, especially in

Indonesia. Jotun undauntedly gives EPC and fabricators a
price discount to win the project in order to increase the
volume sold.
• Creating the same generic type of paint or similar to
competitor’s premium product and get the system
certification for a new product.
• Creates global research and development (R&D) in Norway
and regional laboratories that focus on regional product
development, adapting or customizing existing products to
fit with local environmental conditions.
Assumptions • With almost 100 years of experience in the paint and coatings
industry, competitor holds a strong brand awareness.
• With spread regional R&D lab, a competitor could answer
the challenges from asset owner to comply with local
environmental condition.

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• High R&D budget to support product development for

maintenance and infrastructure.
• Aggressive direct sales and price discounts on project bids
will increase the market share, especially in Indonesia.
Resources and • List of product track record used for the world’s signature
Capabilities buildings and major projects
• Spread research and development lab in every region to suit
local environment regulation, supplier assessment, technical
support etc.
• Spread and certified technical service representatives.
• A well-known brand for the decorative business unit has an
impact on the awareness of its protective coatings business.

After SOAR analysis, the competitor’s likely moves are creating new product
similar to Angelise Paint’s premium product and compliance with the new
international standards. Second, competing with a low price strategy in order to be
used in a major project for track record and increase sales volume. And the third is
selling services or manpower supply to asset owners, fabricators and, applicators.

4. INTERNAL ANALYSIS

4.1 Segmentation, Targeting and Positioning Analysis

There are some characteristics of buyers for paint and coatings manufacturers. This
segmentation shall be done in strategic marketing planning. Therefore, market
segmentation must be carried out in a high-quality manner. As mention before, the
paint and coatings industry, especially in marine and protective coatings business unit,
is a type of business-to-business model. Hence, the market can be segmented into
firmographics units such as type of industry, sector, location, and structure of
organization. Second, based on behavioral units consists of buyer behavior in
choosing supplier and purchasing criteria. The segmentation before launching new
product is shown in the table 7.
The scope of Angelise Paint market is vast. In terms of targeting, Angelise Paint
chooses a potential market for paint and coatings; EPC companies, shipyards, steel
fabricators, and coating applicators need the paint either to beautify its product or
protect the product from degradation shown in figure 4. with the green color.
According to Kotler et. al. (2008), Positioning is the act of designing a company’s
offering and image to occupy a distinctive place in the target market’s mind.
Positioning is what the company does to the mind of the prospect, not what the
company does with the product, which means that what the company does to put or
position their brand in the mind of prospects to maximize the potential benefit for the
firm.. As a brand with the highest brand awareness among other paint manufacturers,
Angelise Paint offers a high-quality, reliable product with extensive certification from
a third party and a long list of track records along with the certified technical service.

4.2 Marketing Mix

Refer to Kotler and Armstrong (2012), to deliver its value proposition, the firms must
create a need-satisfying market offering (product), decide how much it will charge its
offering (price), how it will make the offering available to target consumers (place),

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and communicate with their target customers about the offering and persuade them of
its merits (promotion).

Product
The main part is the offer from the firms to the market known as product. Product is
the first element in 4Ps and the most important aspect of the marketing mix.
According to Kotler and Armstrong (2012), product is something that has a functional
value to satisfy specific customer need and demands. The benefits offered by the
product and all its features need to be understood, including value, quality, and unique
selling preposition (USP). Angelise Paint has the most diverse product among other
paint manufacturers accounting for 11 product categories. Each of the product
categories contains several product ranges that suit with customer’s needs and wants.
Every product has a specific characteristic that is needed by the customers, for
example, their project budget, fast cure coatings, high volume solid coatings, surface
tolerant coatings, a wide range of colors, etc. It is essential for Angelise Paint to
manage their products in line with Indonesia/ regional needs and plan the new product
that is suitable for this region’s climate and environmental condition. Angelise Paint
offers its product in two pack size, 20 liter and 5 liter. Customers can choose the pack
size they want, and for a special color, Angelise Paint can tint the paint in a small
amount and ready in several hours.

Price
Price is the second most important in the 4Ps marketing mix. Price is the actual
amount that the end-user needs to pay in return for the product. If there is a positive
customer value, then a product may be successfully priced higher than its monetary
value. Hence, it is important to know the perceived value of the product to the
customer. Based on Kotler and Armstrong (2012), marketers must develop an
appropriate pricing strategy considering the distribution plan, value chain costs, and
how competitors price a rival product. In terms of price, Angelise Paint pricing is
more or less the same with competitors for the same generic type product. Angelise
Paint targeted an average 44% profit margin for the year 2021. Thus, high profit
margin can be achieved by selling premium product in which there is no price
competition with other products. With the pressure of the raw material price and price
competition, it is hard to gain a high-profit margin for a generic type of paint.
Furthermore, if a competitor wants their product to be used in major and prestigious
projects, the competitor can give the prospective customer an additional 15% discount
or selling the product without profit margin in the cost bid phase.

Place
Based on Kotler and Armstrong (2012), place in the marketing mix is related to a
distribution channel that refers to an area where the product is accessible. The
placement strategy will help the company to assess the channel that is most suited to
a product. It can be either from a physical store or a virtual store. Nowadays, this
journey is more complicated because there are intermediaries on this road. Most of
them do not take the products into their possession, but thanks to various contacts and
strategies, they sell goods with profit. Several types of intermediaries are wholesalers,
and retailers are intermediaries who buy products they own and then sell them in a
way that they profit from it-another type of intermediaries, including brokers,

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manufacturers' representatives, sales representatives. The last type of intermediaries

is transport companies, warehousing organizations, banks, and advertising agencies.
To cover all over the region, Angelise Paint has to put sales representatives and
warehouses in a strategic location to cover a certain area. Currently, Angelise Paint
has 11 salesmen for protective coating and 9 salesmen for marine, these salesmen are
supported by 4 key account managers. Based on figure 3, Angelise Paint has one
manufacturing site in Jababeka, Cikarang. Six sales office across Indonesia, located
in Jakarta, Batam, Surabaya, Balikpapan, Bitung and Makassar. Angelise Paint also
has ten distributors across Indonesia.

Figure 3. Sales and manufacturing site of Angelise Paint

Promotion
The fourth marketing mix tool is promotion. Kotler and Armstrong (2012) define
promotion by the activity to make the customer aware of the existence of a product.
To deliver clear message to customers, this tool studies integrated marketing
communication through several media. This communication can be in the form of
advertisement, word of mouth, business exhibitions, catalogs, event sponsorships, and
so forth. Promotion is a part of a retailer’s sales and marketing mix that can help move
inventory and drive sales. To promote the product, Angelise Paint usually uses sales
promotion material that refers to any documents or material that aid in sales in general.
These could include a calendar, umbrella, flash disk, notebook, T-shirt, brochures, and
simple inspection tools like wet film thickness gauge. Angelise Paint also uses digital
media for advertising its product. These are including LinkedIn company page,
Angelise Paint, and Instagram advertisement that targeted coatings professionals. For
offline activity, Angelise Paint held free basic training for the applicators, fabricators,
and asset owners. In specific theme exhibition, Angelise Paint often become sponsor,
join in an exhibition stand and proposed product specialist to be a speaker in the
seminar.

4.3 Resource Based View

In this internal analysis, the author analyzed seven resources/ capabilities of Angelise
Paint so that the firm can conclude each resource’s competitive advantage. The list of
tangible assets of Angelise Paint is sales force, R&D investment, certified technical
service representative, merger and acquisition strategy, distribution network, and
premium product range, for intangible assets, are brand awareness and perceived
quality. The basis of the resources to be sustainable competitive advantage is the

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resources have to be valuable, costly to imitate, rare, and need to be organized to

capture the value. One of the pioneers of resources-based view of the firm, we call
this model the valuable, rare, inimitable and organization (VRIO) framework
according to Rothaermel (2017).

Table 4. Angelise Paint VRIO analysis

Classification Resources or Valua Rare Inimit Organi Competitive

Capabilities ble able zation Advantage
Tangible Sales Force Temporary
YES YES NO YES competitive
advantage
Tangible R&D Competitive parity
Investment YES NO NO YES

Tangible Certified Temporary

Technical competitive
YES YES NO YES
Service Team advantage
(TSR)
Tangible Merger and Sustainable
Acquisition YES YES YES YES competitive
Strategy advantage
Tangible Distribution Competitive parity
Network YES NO NO YES

Tangible Premium Sustainable

Product YES YES YES YES competitive
Range advantage
Intangible Brand Sustainable
Awareness YES YES YES YES competitive
advantage
Intangible Perceived Sustainable
Quality YES YES YES YES competitive
advantage

Salesforce showing the capability of the team on chasing the major project, consist of
a key account management team and sales team that work together to win and be used
in the project. The global key account management team will develop close contact
with the asset owner to create a higher value of their asset through quality and paint
specification. Meanwhile, the sales team will approach the local EPC company to sell
the product in accordance with the owner’s specifications.
R&D investment represents how much capital that Angelise Paint puts into
product development. Big R&D investment has been made by Angelise Paint to build
new research and innovation hub in Felling, UK. Certified TSR represents how many
TSR and their location to support the customers on how to use the product in a correct
step. 95% of Indonesia TSR holds an international professional certificate. Currently
Indonesia has three national association of corrosion engineer (NACE) coating
inspector program (CIP) 3 certified which is the highest level of qualification in
NACE CIP certification.

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Merger and acquisition strategy mean AubreyDay will merge or acquired local
products in order to create higher brand awareness and expand its market share. For
distribution network resources, currently, AubreyDay has a presence in more than 150
countries and having 125 manufacturing sites. Premium product range represents on
how many special products for a special application, with the support of big R&D
investment, several new products with series of advantages are expected to launch in
the next few years. For intangible assets, consist of brand awareness and perceived
quality, Angelise Paint is the top of mind for coatings professional that will provide a
good quality product and service.

5. BUSINESS SOLUTION

5.1 Internal and External Analysis Result

A common tool used for the internal and external condition of a firm is using SWOT
analysis. The function of this analysis is a framework that allows leaders to synthesize
insight obtained from internal analysis of the company consist of strengths and
weaknesses along with an analysis of external condition that consists of opportunities
and threats to derive strategic implication according to Rothaermel (2017). The
SWOT analysis of Angelise Paint is shown in Table 5. After conducting the SWOT
analysis, then it will be derived into TOWS matrix to gain possible strategic
alternatives. According to Heinz Weihrich (1982), Threats, Opportunities (in the
environment), Weaknesses, Strengths (in the organization) should be analyzed in this
order, as a problem-solving sequence in the process of strategy formulation. TOWS
matrix for Angelise Paint is shown in Table 5.

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Table 5. TOWS matrix of Angelise Paint

Strengths (S) Weaknesses (W)
1. Well-known and trusted brand for 1. Many business units and
specialty chemical producers. brands make it hard to
2. Spread production site and distribution control and focus on.
around the globe. 2. Premium product required
3. Center for research and development at advanced application
Felling, UK. Regional R&D center equipment.
within every region. 3. Tight payment term.
4. Wide variety of products.
Opportunities (O) SO Strategy WO Strategy
1. Ensure market growth in emerging 1. Conducting technical conferences and 1. Partnership with equipment
market like Asia. training for product introduction and manufacturers to promote the
2. New product to support environmental increase brand awareness. S1, S4, O1, O3 premium product. W2, O3, O4
awareness. 2. Acquire local specialty chemical products 2. Hire key personnel of acquired
3. Positive outlook for global construction and innovate to be higher volume solid, products. W1, O1, O4
industry and chemical industry. lower VOC, and non-toxic products. S1, 3. Expand distributor partnership
4. Strategic merger and acquisition of S2, S3, S4, O1, O2, O3, O4 to reach a new area and longer
local players to ensure a strong position 3. Selling services to asset owners, the payment term. W3, O1, O3
in a certain country. fabricators, and applicators. S1, S2, S3, S4,
O1, O3

Threats (T) ST Strategy WT Strategy

1. Competition with local brands and 1. Differentiated product development. S2, 1. Focus on selling premium
global competitors. S3, S4, T1, T3 products and in collaboration
2. Volatile raw materials price. 2. Training for the R&D team to produce with approved applicators. W2,
3. Environmental regulations. specialty product using the original T1
formula to adapt with local raw materials.
S2, S3, S4, T1, T2, T3

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5.2 Strategy Formulation

5.2.1 Porter’s Generic Competitive Strategy

Table 6. Porter’s generic competitive strategy of Angelise Paint
Target Scope Advantage
Low Cost Product Uniqueness
Broad
Cost Leadership Differentiation
(Industry
Strategy Strategy
Wise)

Narrow
Focus Strategy Focus Strategy
(Market
(Low Cost) (Differentiation)
Segment)

Based on SWOT analysis, the suitable strategy to be taken by Angelise Paint is

the differentiation strategy. With the current size of Angelise Paint, differentiation
strategy is suitable to be applied and supported by the R&D expense as shown in
2019 financial statement this expense account for 255 million euro. The focus of
the strategy rests on a broad competitive scope within an industry and offers a
unique product. Angelise Paint needs to keep in front of its competitor in
innovating its product, launch a new product with more benefit offerings than
competitors’ products.
This strategy will give the firm a dominant power because of the unique
characteristics. Differentiation strategy is found appropriate for Angelise Paint
because the target customer segment is not price-sensitive, especially for asset
owners. The paint and coatings industry is competitive or saturated, customers
have very specific needs which are possibly under-served, and the firm has all
unique capital, resources, and capabilities to satisfy customer needs in ways that
are difficult to copy. As an industrial product, Angelise Paint needs to focus on a
strong market position, have a better sales force and offer greater customization
refer to Choudhury, R.(2019). All of this strategy can be achieved through a focus
on R&D and product customization.

5.2.2 Proposed Segmentation, Targeting and Positioning

As the basic marketing strategy framework, defining and identifying market
segmentation, targeting and positioning are essential before launching a new
product. As the strategy for Angelise Paint is differentiation and shown in TOWS
matrix that product innovation is critical to be the leader in this industry, Angelise
Paint will release paid service to support coatings specification development,
coatings quality assurance, coating application, and asset preservation &
protection. With a new service offer, Angelise Paint can expand its market
segmentation both in firmographic.

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Table 7. Improved segmentation

Firmographic Existing Segment Proposed Segment

Type of Industry Fabricators Asset owners
EPC companies Fabricators
Manufacturers EPC companies
Applicators Manufacturers
Shipyards Applicators
Shipyards
Sector Power generation Power generation
Oil and gas Oil and gas
Petrochemical Petrochemical
Marine Marine
Infrastructure Infrastructure
Terminal and pipeline Terminal and pipeline
Location Coastal area Coastal area
City suburb City suburb
Remote area Remote area
Structure of Individual firms Individual firms
Organization Privately held company Privately held company
State own enterprise State own enterprise
Multinational company Multinational company
Behavioral
Buyer behavior in Through cost analysis Through cost analysis
choosing supplier only only
Through cost analysis Through cost analysis
and technical analysis and technical analysis
Through request by
operation team
Purchasing Price minded Operational safety
criteria Quality minded minded
Service minded Price minded
Lead time Quality minded
Compliance Service minded
Lead time
Compliance

After defining the market segmentation, the author will identify Angelise
Paint’s target market for the new product. Based on the interview and analysis, the
target market can be expanded to the asset owners as shown in figure 5. When the
existing business, Anglise paint communicate to asset owner in order to solve their
coatings related problem, but with the new service product, Angelise Paint’s
expertise can be seconded to the asset owners, value selling product for owners in
order to have safe operational and sells the application for coatings maintenance
program.

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Review of Integrative Business and Economics Research, Vol. 10, Supplementary Issue 3 379

Asset Owners Asset Owners

EPC Companies EPC Companies

Fabricators Fabricators

Applicators Applicators

Figure 4. Angelise Paint target market Figure 5. Improved targeting

With the new service product from Angelise Paint, it will make the company
a complete solution for all coating activities. Hence, the positioning of Angelise
Paint is changing from a high-quality, reliable product with extensive certification
from a third party and a long list of track records along with the certified technical
service to be a one-stop solution and reference in the coating industry. Anglise
paint has products to offer from the asset construction phase, operation phase until
it will be decommissioned, a complete product range for all asset life cycle.

5.2.3 Improvement of Marketing Mix

According to Gordon et. al. (1993), the successful business-to-business marketer
is the one who can provide maximum long-term value to the customers. Refer to
Korathad and Boonpattarakan (2017), customers' trust would be affected by
corporate image that largely dependent on the areas quality of the products or
services, employee uniforms, certification received, state-of-the-art laboratories.
This is critical that the firm must be able to determine the traits of service or
product that are valued highly by the individual customer.
Refer to Paurova, V., & Nadanyiova, M., (2020), the classic model of the
marketing mix 4Ps that are usually used for goods and an advanced marketing mix
7Ps is used for service. The enhanced marketing mix is extended with the physical
environment, people, and process as an addition to original elements, i.e. product,
price, distribution and marketing communications. As mentioned in TOWS
matrix, Angelise Paint’s strategy is launching a new product in the form of service.
Below is the 7Ps marketing mix for Angelise Paint.

Product
Birnerova and Krizanova (2012) define the product as the most important tool of
the marketing mix because the other tools of the marketing mix, which are pricing,
building distribution, communication, process rationalization, customer service,
and the like, depending on the nature of the product offered. As part of the growth
strategy of Angelise Paint, company releases a new service product to support all
parties in coating activity.

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Review of Integrative Business and Economics Research, Vol. 10, Supplementary Issue 3 380

Figure 6. Coating inspection on asset condition.

Source: Author collection

The service consists of AngelisePlan that offers assistance for clients in

proactively managing corrosion and the maintenance of their assets. This service
consists of asset condition, asset integrity, and passive fire proofing (PFP)
integrity. The second service is AngeliseSure. This service is a quality system offer
delivered by technical service representative who can advise, recommend and
provide third-party quality assurance and support through the many stages of
individual coating projects. The service in AngeliseSure is consists of quality
assurance and quality supervision. One of the activities of AngeliseSure is shown
in figure 6.

Price
Both internal and external factors can influence the arrangement of prices. Internal
factors affecting pricing include marketing goals, marketing mix strategy, costs,
pricing decisions. According to Kita et. al. (2017), external factors affecting
pricing include for example market competition and demand nature. The increase
of raw material price and competition in chasing the project put pressure on the
overall profit margin of Angelise Paint in recent years. By launching a paid
service, Angelise Paint does not incur any input price. The revenue from service
is 100% profit margin. Angelise Paint is in the effort to maximize its resources,
on this occasion is their technical experts. In the quotation offer, Angelise Paint’s
sales force often uses bundling as a marketing strategy for services to make perfect
economic sense, considering that the service is perishable, under-utilized services
are opportunities that are lost forever. In terms of pricing, AngelisePlan and
AngeliseSure can have a wide selection of pricing. The pricing could be different
from one project to the other projects. The price can be based on technical expert
workdays or items to be inspected. In AngelisePlan, the price is based on how
many inspection items and how details the customer wants the inspection result.
The price for AngelisePlan is $6 per inspection item. For AngeliseSure, the bigger
the project scale will result in a longer workday for TSR to finish the inspection.
Different levels of technical expert qualifications will have a different price. The
price is shown in table 8.

Table 8. Indonesia technical expert rate per qualification

Certificate Rate per day
NACE Coating Inspector Level 1 $ 100
NACE Coating Inspector Level 2 $150
NACE Coating Inspector Level 3 $ 200

Place
Place in the marketing mix is essential to reach the customers. In the improved

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Review of Integrative Business and Economics Research, Vol. 10, Supplementary Issue 3 381

marketing mix, the place is still the same as the existing place strategy with ten
distributors and six sales office representatives. Both product and service can be
delivered to all customers’ locations, even in the remote sites. The sales office and
Angelise Paint’s technical expert is spread across Indonesia and available to
mobile to remote areas.

Promotion
Promotion is the activity to make the customer aware of the existence of a product.
To communicate a new service product, the sales force usually uses direct selling
in the form of helping the customers to get a good quality final product. Aside
from direct selling, Angelise Paint could conduct a product training that involves
the advertisement of this product and join an exhibition like the Indonesia
Petroleum Association convention and exhibition to gain prospectus’ awareness
about the paid service. Help from digital advertising is also needed. To
communicate this new product Angelise Paint can use their company page on
Linkedin and company website. The activity can be posting the banner and
creating webinar series like shown in figure 7.

Figure 7. Webinar series on technical topics

Source: Author collection

Physical evidence
In order to fulfill the project requirement, customers can choose a technical expert
certification level to conduct the service for them. For AngeliseSure service,
customers will receive a copy of the certificate and curriculum vitae (CV) of the
technical expert before they seconded to the customer.

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Figure 8. NACE CIP Level 3 certificate

Source: author collection

For AngelisePlan program, customers can access the data in real-time through the
website. Clients can manage their inspection budget based on the severity of their
asset condition. This severity can be filtered on the website, as shown in figure
10. The technical expert who did the inspection will be equipped with an iPad for
data inputs and portable inspection equipment.

Figure 9. Dashboard for asset coating condition.

Source: Author collection

Angelise Paint should realize that service customers place a high degree of
importance on reliability, image, competence, and accessibility. These criteria
should be periodically assessed and improved by the service providers.

People
People are one of the important elements of the marketing mix. Customers will
contact service providers, and human touch is inevitable, and a customer-
employee relationship will be established. In Angelise Paint, all employees are
trained with mandatory training such as health and safety, compliance and code
of conduct. Other training are also required to support each employees’ function.
In service products, Angelise Paint’s employees are already professionally
certified and trained to operate the program. In AngelisePlan. Angelise Paint’s
technical experts are spread around the globe, especially in Indonesia. There are
40 technical experts, as shown in figure 10.

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Figure 10. TSR location across Indonesia

Process
The services provided to Angelise Paint’s customers are hassle-free. Customers
can see the data in real-time and could request more than one account to access
the inspection result. Once they have a technical problem, the sales and marketing
team will follow up the problem within an hour and will be handled with the right
person in charge.
As to optimize the assets condition and give more value to customers,
AngeliseSure and AngelisePlan can be combined to fulfill client’s assurance about
paint quality and corrosion condition. This service can be integrated with the
existing maintenance program and easily modified as per client’s request. This
process will also optimize the maintenance budget based on severity and urgency.
Upon completion of the AngeliseSure or AngelisePlan, customers will receive a
final presentation for project wrap-up and overall project result. Hence, the client
will have a picture of the condition of their asset and how to operate the inspection
result dashboard.

6. CONCLUSIONS
Based on the analysis and business solution formulation in the earlier chapter, here is the
conclusion to answer the research question.
1. The external analysis results shown the toughest competitor in the Indonesian
market is global paint manufacturers such as Jotun, PPG, Hempel, and Sherwin
Williams. As global manufacturers, they have the resources to increase their
product range through R&D and product development in the event to answer the
challenges from asset owners and more stringent international quality and
environment standards. The result of R&D and product development can be seen
in product categories. The global manufacturer has more product categories
compared to the local manufacturer. The key difference between local
manufacturers and global manufacturers is the product certification to comply
with international standards, making local manufacturers hard to compete with a
global manufacturer in chasing the major projects.
2. In the competitor’s strategy aspect, sales forces are equipped with a strong
technical background and the ability to give a discount on mega-size projects to
increase their product track record. As in Indonesia, the EPC company, fabricators,
and applicators are price sensitive. Different behavior is shown by asset owners

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Review of Integrative Business and Economics Research, Vol. 10, Supplementary Issue 3 384

that prefer durable products and concern about their process safety to reduce
downtime in choosing the product to be used on their site.
3. The internal analysis result shown that in the paint and coatings industry, Angelise
Paint has a good reputation and trusted brand under AubreyDay’s banner. From
two customer’s voices, Angelise Paint is in the top position among other paint
manufacturers. This position can be achieved by Angelise Paint’s resources that
can make a sustainable competitive advantage for the company, such as merger
and acquisition strategy, premium product range, brand awareness, and perceived
quality.
4. The competitive strategy that suits Angelise Paint is the differentiation strategy.
With the support of company’s R&D expense, Angelise Paint is expected to be
ahead of its competitors in inventing a new product. One of Angelise Paint’s
innovations is paid services. Angelise Paint is expected to maximize the utilization
of their resource. In this event is certified and qualified TSR that spread
throughout Indonesia to service the client to ensure the quality of painting job and
extending client’s asset life.
5. In the expansion from selling products into selling services, marketing strategy
needs to be improved. The segmentation is getting wider from EPC company,
fabricators, applicators to add end-user or asset owner as a segment of prospective
customer, from majority price minded customer to process safety-minded type of
customer and position itself as a one-stop solution and reference in the coating
industry.
6. The marketing mix of Angelise Paint is adjusted to 7Ps in order to address the
services sold by product manufacturer.

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