In Western Europe the decorative paints segment is mature with growth rates dependent on factors such as levels of consumer confidence, house building activity and demographic trends such as numbers of single people living alone.
On the other hand, sales of household paint continues to rise strongly in Eastern European countries because economically they are still catching up with the higher living standards of their western counterparts.
Nonetheless, in both areas of Europe, users of decorative paint are becoming segmented into distinctive categories. As a result, suppliers of paint are able to target specific groups more effectively.
"There have always been different groups in the market with different painting habits and motives," said a sales manager of one coating company. "The quality of our market research has also improved a lot so that we are more careful in classifying types of painters and can promote and distribute our products to them more efficiently."
The biggest shifts in demand have been at the top of the market among professional painters and at the lower end among the occasional or irregular DIY users.
Among the latter group are a rising proportion of women who have been extending their traditional role of choosers of colors to doing some or all of the painting themselves. In a recent survey in France, women accounted for more than two thirds of those who did small amounts of DIY, while the most active home improvers tended to be men.
To find the most appropriate distribution outlet for reaching the growing army of female painters, coatings companies have been stepping up their utilization of grocery stores and supermarket chains to sell their products.
The company has created a separate business unit called Day-System, which looks after all its paint brands and accessories outside its own high-quality Flügger label. Day-System products include the low-price paint brand Color, which is sold in only 10 shades.
The Day-System range has been launched in the Norwegian market through grocery stores, including the discount chain Europris, while it is also being introduced through supermarket outlets into Sweden and Finland. In some of the shops, Day-System will have its own labeled shelving.
"We are using grocery stores to access people who don't want the quality of paint demanded by professionals or committed DIY users," explained Tina Bruun Sjaelland, a sales manager in Flügger's international department. "We have to cater to those consumers who want a basic type of paint and don't want to pay a lot for it. Our Day-System paints can be 40% cheaper than our main Flügger brand."
"We also have to take into account that women, who are now not only buying the paint, but are doing the painting as well, can be reached more easily through grocery outlets," she added.
Flügger's strategy has been to establish uniform distribution and marketing systems in order to help it achieve a consistent operating margin of 10% over the next few years from a five percent average annual sales growth. In 2004/05, its sales were approximately $199 million.
"Day-System was established to end duplication in marketing and distribution," said Sjaelland. "We had too many people trying to sell the same product without any coordination."
Jotun of Norway, for example, is basing much of its long-term strategy on the need to become a bigger player in the sector in its main market for decorative paints in Scandinavia. It believes that professional painters will benefit the most from existing and future social, economic and demographic trends.
"In Norway recently the reverse has been happening," said Stein Peter Lunde, Jotun's marketing director for decorative paints. "Norwegian DIY sales have been expanding faster than those of the professional segment. But this is unusual, particularly in Scandinavia. We reckon that as living standards rise and people decide to do different things with their leisure time they will be spending more money on services like those of professional painters."
Jotun has been making inroads into the Danish professional market where it has introduced its Scanox range of products into retail outlets for professionals. For most professionals in Denmark, part of their business is the running of their own retail outlets, which can make entering the market easier for foreign paint makers.
Now Jotun is targeting the professional sector in neighboring Sweden. But that will be more difficult because distribution is dominated by DIY chain which also operate outlets for professionals with a system of preferred suppliers.
Caparol Group, Europe largest private company in decorative paint, has been seeking to gain a bigger share of professional sales in European countries outside its home market of Germany, where it is a market leader in the professional segment.
"One key factor favoring strong growth in the professional market across Europe is demographics," said Peter Brauer, Caparol's head of export sales. "As the number of elderly people increases, a higher proportion of the population will have their houses painted by professionals."
Caparol is not able to distribute its professional paint in most European countries in the same way as it does in Germany, where the decorative sector is dominated by national wholesale distributors with relatively few specialist retail stores run by the paint producers themselves. Each national market in Europe tends to require its own specific means of distributing to professional painters.
"You have to examine each individual market and its habits and culture carefully and then decide which distribution method will be best suited to it," said Brauer. "Neighboring countries can have very different distribution systems, which is something you have to adapt to."