mined by price and this is reflected in the narrow pricing differences between top name brands (see Figure 2 on this page).
In this segment, where the do-it-yourself (DIY) con-sumer/contractor is the main customer, paint companies have
generally not succeeded in building close relationships with
customers upon which higher demand and higher prices can be
based. Consequently, these consumers see paint as “paint” and
nothing more.
In addition, sharp changes have occurred over the past 50
years, forcing paint and coatings formulators to develop VOC
compliant systems. In order to address this demand, most R&D
efforts have been focused, at least over the last few decades, on
meeting increasingly strict environmental compliance requirements (see Figure 3 on this page). This trend will clearly continue even though, in a high percentage of the cases, the performance of compliant VOC systems does not equal the original non-compliant formulations.
While there has been growing demand for paints that contain natural ingredients that do not pose concerns for human
health or the environment (low odor, low VOC, zero toxicity
components, etc.) this consumer-driven demand is negative
rather than positive. Paint companies have reacted to this
interest and introduced “greener” products, but have found
that buyers are unwilling to pay noticeably higher prices and
will reject any that do not provide equal or better performance.
For the OEM and special purpose segments, this reactive
approach has been tempered somewhat. Some paint companies have established closer relationships with customers in
many of these markets—automotive, aerospace and marine,
for example—and worked to develop products and processes
that meet the highly specific requirements for individual applications. Even so, in many cases paint and coatings producers
are not perceived as being truly involved in the discovery and
development phases of new projects.1 It is not unusual in OEM
product design projects for the coating to be an after-thought.
Many times, design projects go forward with the assumption
that a coating can be simply selected “off-the-shelf,” yet history
has proven this is not accurate.
Overall, much of the industry has failed to adapt its manufacturing, product development and marketing strategies to
meet the needs of modern world economies. This is not the
case for other industries with which the same consumers routinely interact. Customers—both consumers and businesses—
with access to the Internet and the many new social networking systems have much greater access to information (and
opinions). They now seek pre-purchase information to make
informed decisions and use these networks to share experiences, results and opinions. Yet 35% of the paint formulator
companies continue to utilize antiquated circa 1950s manufacturing, marketing and communication methods, another
45% are estimated to have updated methods slightly, while
only 20% have overhauled their manufacturing, marketing
and sales techniques completely.
INNOVATION, INNOVATION, INNOVATION
History is clear. Companies and industries that reinvent
themselves during economic downturns exit such downturns
much more robustly than those that do not. Clearly, the paint
and coatings industry needs innovation, but not innovation
for its own sake. Massaging techniques to gain minor
improvements in product characteristics or manufacturing
Figure 1: Commoditization of the Paint and Coatings Industry
Paints, Coatings & Powder Coatings Value Loss
Figure 2: Architectural Paint Price Comparisons
Figure 3: Average VOC Complaint Levels in Last 49 Years
