Category Evolution- Luxury Paints, Wall Papers & Its Relevance to Home Decor

Authors

Dr Mallika Srivastava Assistant Professor

Bharani Ganesh MBA II Marketing Student

Mohammed Saadulla MBA II Marketing Student

Nipun Matreja MBA II Marketing Student

Institute and address for communication:

Symbiosis Institute of Business Management,Symbiosis Knowledge Village,Gram: Lavale via Sus Road,Tal: Mulshi,Dist- Pune - 412115

Email Id: mallikasrivastava@sibmpune.edu.in

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AbstractThe decorative paints segment in India has come a long way, primarily lifted out of the

commodity space by huge organized players. The home décor industry in India is trying to

imitate the paints industry where players in the segment are trying to build brands out of their

products. At the same time, the paints segment is also trying to emulate the home décor segment

to become a trendier, more fashionable product category and also to demystify the paint

purchase experience. This parallel evolution of categories compelled us to study the nature and

change of the categories in India. The project will enable us to explore the current scenario of

the premium paints and wall paper category, its pricing, distribution and marketing channel

support along with the awareness levels amongst the target audience. The aim of the project is

to understand the current progress that premium paints and wallpapers have made to be defined

as home décor products in their own right. In-depth primary research was conducted with

stakeholders from the industry to gauge the structure of the market in Pune and Bangalore, also,

factor analysis was conducted and correlation studied between the factors that affect the

purchase decisions in both categories. We found that similar factors, namely product variety,

sales support and after sales services affect the purchase decision in both categories while

advertisements and user-recommendations are factors independent to the premium paints

category.

Key words: Home décor, premium paints, wall papers, consumer behavior, purchase decision

process, perceptual mapping, factor analysis

IntroductionThe wall decorative segment has come a long way in India from being recognized as a

commodity during the 1990s to the increased involvement of end consumers in the choice of

paints and wall papers in the recent past. This is only the beginning of the journey for the

category and producers involved. A recent research by one of the leading paint manufacturer in

India found that the top 5 searches on the web related to décor did not feature its name or its

premium brand of paints. They wanted to strategically introduce the concept of “feature wall”

with the intention of painting one wall more frequently when compared to the rest of the walls in

the home.

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Given that there are more than 100 million women on the net (women being the major

influencers and deciders for home decoration) and the number expected to grow exponentially,

capturing mind share on the digital space and ensuring that premium paint brands figure as part

of the décor conversations is going to be a key challenge.

The wall paper market in India is largely unorganized with no major stronghold of a single

player. The category has been growing at a CAGR of 3-5% over the past 5 years and is expected

to grow at an improved CAGR of 7% till 2017. But with the introduction of wall papers by a

leading paint company in India in February 2014 across metros and tier I cities, the reputed

brand will play a big role in increasing category awareness and popularity, organizing the

market, attracting other major brands to enter the market and finally growth of the category.

Given the rampant ramifications that this sector is encountering, it is imperative to forecast the

future developments that the sector might encounter. Thus through this paper the trade channel

and consumers with respect to premium paints (along with wall papers) and its relevance to

Home Décor will be analyzed in detail.

Literature ReviewAccording to Ace Global, in their research conducted on the Indian Home-Décor segment, the

Indian consumer is price sensitive and is not affected by brands. The value for money received is

still considered to be the overriding factor while making purchase decisions. Other factors which

affect the consumers include celebrity endorsements, Point of Sale merchandise, advertisements

and promotional offers.

The research also states that the market is divided into three broad product categories on the

basis of price. The Lower or Economic price bands generally have a lower elasticity of demand,

this is primarily because the segment is highly competitive and manufacturers do not have the

wiggle room to charge a premium.

Higher up the pyramid as the value of the products increases, the market becomes more and

more quality oriented, while this increases the diversity of products in the category, the

increasing prices tend to make the demand more elastic than the lower segments.

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In the premium segment of the market, where the entire consumer focus is on brand value, style

and quality of the product, the market tends to be inelastic in nature.

Buying branded items has been a trend in these days and so consumers in this segment always

opt for branded products.

The luxury furnishing market, which currently stands at 2-3% of the total furnishing market in

India, has witnessed entry by various Indian and foreign players into the segment, including

Roseby’s, D’décor Home, Zara Home, Maishaa, Onset and Ishvatam. Consumers for this

category typically included industrialists, Bollywood celebrities and luxury hotels but

increasingly, CEOs of MNCs, real estate barons and socialites are also entering this pool of

consumers. It has been estimated that out of the Rs. 8,388 crore luxury segment in India, (Pierce,

2015) Home Décor accounts for 4%, and the market is expected to quadruple by volume in the

coming decade.

At the same time, it is mentioned in research conducted by Technopak Advisors that the Indian

Consumer’s consumption patterns vary across categories. This has been highlights by the slow

growth of the Indian Home Textile market as compared with other home décor segments such as

paints, furniture, floor and floor coverings and bathroom fittings category.

Author’s Study of Market Structure- Premium Paints & Wall Papers

Major players in the market, with specific focus on the leading paints manufacturer in India,

were analyzed for their current offerings, the market structure and attractiveness.

Premium Paints

a. Consumer Buying Process: Mentioned in the following figure is the author’s study of the

consumer decision making process for both mass market and premium paint category assimilated

through various stakeholders in the trade channel.

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Fig. 1: Consumer Buying Decision Process

b. Paint as a category involves a lot of people who act as influencer while making a choice of

what to buy. Depicted in following figure are influencers for mass and premium paint market

through market research conducted by the authors.

Fig. 2: Stakeholders in paint purchase decision process

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c. Market Structure in the Premium Paint industry:

Since our project typically focuses on the premium paint industry, depicted below is the value

chain of premium paint industry obtained through author’s market study:

Fig. 3: Value Chain-Premium Paint Industry

The above diagram is a representation image of the typical value chain which a leading Indian

Paint Manufacturer has. 80% of the overall sales is made to the painters and only 20% is made

directly to the consumers (from primary data).

All the stake holders interact with one another via various initiatives and hence tapping the

consumer preference directly is very difficult considering the number of intermediaries involved

in decision making.

Wall Papers

d. Dealers & AIDs (Architects and Interior Designers)

Fig. 4: Wallpaper- buying criteria and purchase benefits

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Buying Criteria

Variety in Colours, Designs

Price/Value for Money

Durability

Why Wall Papers-Benefits

Convenient

Attractive looking home

Easy application & replacement

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Each carpet and furnishing dealer on an average carries 150-200 brand catalogs. Few of the

major wall paper players include Marshalls, Eco, Arte, La Palette, De Décor but no major wall

paper brands are available across all dealer stores. In fact, end consumers have no brand

awareness at the time of purchase. It is the AIDs who are key influencers and in many cases

decision makers for wall paper purchase. (Refer Annexure Fig. 1) In the commercial segment,

many real-estate developers are preferring wallpapers to paints for wall décor because of the

following reasons (Refer Annexure Fig. 2):

a. Less time consuming

b. Lower cost option for feature walls as compared to high end paints

c. Rooms can have different design & texture for feature walls

d. Less time required, enabling fast restoration of daily operations

e. Final outcome of wallpaper is exact same as cataloged which is not so in paints

A critical insight is that consumers prefer wallpaper over high end feature wall paints when there

is only one wall to be redesigned. Another major advantage of wall papers is lower cost over

high end paints and therefore it can be changed every 2-3 years to stay updated with latest

designs and trends. In fact, the target audience is one which seeks unique designs, texture and

rich look for its walls. As one trade channel dealer put it in perspective, “Wall paper market has

the potential to replace texture paint market in future because of the advantage of variety” - The

Paint Doctors, Fatima Nagar. It was found that there is higher category awareness and demand

in metropolitan cities only, but with the entry of a wall paper brand from one of the most reputed

paint companies in India, the category is set to become organized, with increased visibility and

preference in metros & tier I cities initially and gradually growing to the tier II cities.

Fig. 5: Potential growth of wallpaper category

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Present lack of visibility

Awareness only amongst SEC A segment and commercial developers

Strong Category awareness growth

Introduction of wall paper brand from a reputed company will bring high awareness and acceptability

Category expansion- Penetration & texture

paint substitutePreference and WOM for wall paperPotential substitute for texture based paints

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Factors affecting purchase decision of consumers in the Indian Home Décor industry, including paints and wall papers, are listed below along with reference sources:

Secondary Source

S.No Factors Source

1 Price/Value for money/ Special offer Ace Global Private Limited. The Home Textile Furnishing Industry in India, 2009

2 Brand PerceptionM.Gomathi Imaya, & Dr.K.Padhmanaban. Furniture Market in India – an Overview, Volume : 3 | Issue : 9 | Sept 2013 | ISSN - 2249-555X

3 Product Quality/DurabilityM.Gomathi Imaya, & Dr.K.Padhmanaban. Furniture Market in India – an Overview, Volume : 3 | Issue : 9 | Sept 2013 | ISSN - 2249-555X

4User Reviews/ Friends/Relatives Recommendations/ Advertisements/ Promotion

Ace Global Private Limited. The Home Textile Furnishing Industry in India, 2009

5 Pre-purchase Experience / After Sales Service- Delivery & Fitting

Ace Global Private Limited. The Home Textile Furnishing Industry in India, 2009

8 Availability /Quick Delivery Ace Global Private Limited. The Home Textile Furnishing Industry in India, 2009

Primary Source: Trade Channel

S.No Factors Source

6 Appearance/Colour/Product Texture/ Product Design

Mr. Aashir, AID Channel Manager with a leading national paint manufacturer, Primary Research – In Depth Interview (Trade Channel Participants)

7Suits my needs / Matching with other home décor / Local tastes and preferences

Origami Home Improvements, Primary Research – In Depth Interview

9 Wide Choice/Variety Horizon Interiors, Primary Research – In Depth Interview

10 Easy Change/Upgrade/Easy application and replacement

Tulips & Dalan, Aundh/Baner, Primary Research – In Depth Interview

11 Fashionable/Trending The Paint Doctors, Primary Research – In Depth Interview

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Research Methodology

Trade Channel- Dealers & AIDs

Primary research involved in-depth interviews with all channel partners including paints and wall

paper dealers, AIDs (Architects and Interior Designers) in Pune and Bangalore. 35 dealers and

12 AIDs in Pune and 7 dealers in Bangalore were interviewed.

The objective of this was to capture the views and expectations of the dealers and interior

designers regarding the premium paints category in the present times and the upcoming future.

The results of the study have been detailed as part of the Literature Review under Author’s Study

of the Market Structure.

End Consumers

Primary research was undertaken with the end consumers with a sample size of 101 in

Hyderabad, Pune, Delhi, Chennai and Bangalore. Respondent criteria was primarily that they

were from SEC AB category across age group of 25-55 years. (Refer Annexure for

Questionnaire)

Factor analysis was carried out on the factors that the consumers would consider when they

purchase home décor and premium paints.

The factors chosen to be tested in the analysis were selected from a combination of literature

review of related studies conducted and also the in-depth interviews conducted with stakeholders

from the industry including retailers, architects and interior decorators.

Perceptual mapping was done to determine their buying criteria, expectations and perceptions

regarding the home décor and premium paints category.

After the 360 degree analysis with secondary and primary research, the key recommendations

will be put forth on how to effectively associate premium paints and wall papers with home

décor segment in the future.

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Primary Research ResultsHome DecorIn case of home décor there are three major factors as per our factor analysis on SPSS. They are:

Product variety and after sales, Visual aspects and Brand Imagery or Quality.

Home Décor*Factor

1Product Variety and

after salesFactor

2Visualizing /

Display factorsFactor

3 Imagery/Quality

5After Sales Service- Delivery & Fitting 7 Appearance 1 Price

14 Product Design 9Would look good

in my home 2 Brand Perception

15 Wide Choice 24 Advertisements

16Easy Application &

Replacement 25Point of Sale Merchandise

18 Product Texture21 Easy Change/ Upgrade

Reliability of Factor Analysis Test

Fig. 6: Case Processing Summary for home décor industry analysis

Fig. 7: Cronbach’s Alpha for home décor industry analysis

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Premium PaintsIn case of the premium paints, similar to home décor there are three major factors as per our

factor analysis. They are:

Product variety and after sales, Influence of advertisements and Reviews and

recommendation.

Paints*Factor

1Product Variety and

after salesFactor

2ATL

InfluenceFactor

3Reviews and

recommendation

3 Product Quality 24 Advertisements 4 User Reviews

6 Best Value for Money 13Friends/Relatives Recommendations

7 Appearance

8 Suits my needs

10Special

Offer/Promotion

11 Colour

12Quick

Delivery/Availability

14 Product Design

15 Wide Choice

16Easy Application &

Replacement18 Product Texture

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Pre-Purchase Usage Experience/ In-store

Demo20 Durability21 Easy Change/ Upgrade

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Reliability of Factor Analysis Test

Fig. 8: Case Processing Summary for premium paints industry analysis

Fig. 9: Cronbach’s Alpha for premium paints industry analysis*Factors below 0.6 were suppressed because their impact on the analysis were not significant.

Analysis of Results and Key FindingsHome DécorProduct Variety and after sales includes factors like Product Design, Wide Choice, Product

Texture, After Sales Service- Delivery & Fitting, Easy Application & Replacement, Easy

Change/ Upgrade. A consumer typically looks for a wider variety of products and is also equally

concerned about the after sale services. Consumers gave large weightage to product variety (pre

purchase), ease of applicability (Service aspects provided by the manufacturer or the dealer) and

other after sales criteria.

Display Aspects: Display parameters primarily include those factors which helps the consumer

visualize how the décor will look in his/her residence. This factor includes parameters like

appearance, how will the product look in my home, influence of advertisement and point of sale

merchandise.

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Imagery and Quality: Consumers tend to flaunt Home Décor products from some of the most

desired brands especially ones with very high price tag attached to it. Thus price and brand

perception forms an important factor to determine the imagery and the quality of the product

purchased.

Premium PaintsProduct variety and after sales: In case of premium paints the range of products, in store demo

(pre-purchase factors), ease of applicability (usage factor) and durability (after sale) form an

important cluster. This factor is matching with the purchase criteria of the Home Décor.

Influence of advertisements: Consistent with the observations in the industry, “advertisements”

play a very important role in the sector. Major players in the industry invest significantly in

advertisements. Also, players in the category have traditionally employed celebrities to endorse

their products, thus creating a stronger association with the audience. As per the general

observation in Home Décor space, paints as a category is advertised more than furniture,

upholstery etc. Also factors like in store merchandise is rated pretty low by the consumers in line

with the observation that 80% of the paint purchase is done by the painters.

Reviews and recommendation: User reviews, friends or relatives recommendation forms a very

important decision making criteria for premium paints. There is a general mentality amongst the

target consumers (as corroborated by our trade channel research) that they want to be perceived

as the fashionable and trendier segment in the society and want to “keep up” with the trends,

hence rely on online reviews, the latest patterns, textures their friends/relatives have used and

interior designers’ recommendations.

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Relevance of Premium Paints to Home DecorsAs discussed above most of the factors are in sync between Home Décor and Premium Paints to

prove our assertion that consumer’s outlook towards home décor is increasingly beginning to

include paints as well. 36% of consumer respondents surveyed rated ‘paints’ in the top 5 home

décor products. Also, a consumer research parameter that ‘whether purchasing premium paints

matching with other home décor is considered’ got an approval rating of 4.51 on a scale of 5

validates their increasing association.

A simple correlation analysis of the consumer responses between the factors under home decor

and premium paints was run (Refer to Annexure table 1 for the detailed result - Any correlation

of 50% and above is considered to be a reasonably significant in our research)

Following are our major inferences:

Few parameters like ‘easy change or upgradability’ have a very high correlation (approx.

80%) indicating the similarities between home decor and premium paints.

Paints in general have a higher PLC (longer re-purchase cycle) in comparison to most of

the other home decor items like upholstery, furniture etc. But in this research, since there

is a high correlation between paints and home decor for ‘easy change or upgradability’,

one can observe consumers are willing to go for a changeover of premium paints in a

shorter interval of time together with their home décor upgrades. (Refer Annexure Fig. 4)

Some of the parameters which differentiates premium paint as a category from home décor

are:

The nature of the industries is fundamentally different in terms of the size of players

involved, while a majority of the paints category in India is organized with major players

operating in the industry, the home décor segment is primarily unorganized in nature with

some brands starting to acquire a larger market and mind share

Consumers associate premium paints to be an industry where the fashion or trendiness

quotient changes quickly as compared to home décor in general (*from primary data).

This might also be a result of the fact that paint as a category has organized players and

more advertisements. Factor analysis also mentioned advertisements to be an important

parameter. (Refer Annexure Fig. 5)

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Pre-purchase usage experience or in-store demo is very important to paint. This goes to

explain the fact that leading paint manufacturers use multiple methodologies like paint

cards, experience stores etc. to display their offerings to the consumer. (Refer Annexure

Fig. 3)

In premium paints the product quality is not seen as a direct concern of the consumer.

The AID or the painter takes care of this aspect and the consumer is more interested in

the appearance and the visual aspect of the paint unlike let’s say a furniture where the

consumer is concerned about the product quality as well. (Refer Annexure Fig. 6)

RecommendationAs analyzed in the paper, the Premium Paint industry is closely associated with Home Décor

amongst the target consumer. Also the fact that premium paints have a higher repurchase rate

vis-à-vis regular paints implies that the customer profitability of the existing customer base will

increase with more people beginning to use premium paints or wall papers, in conjunction with

home décor upgrades.

Considering the complexities that we discussed in the market structure, it is very important for

the manufacturers to strategically exploit ATL media like TV advertisement to create connect

with the end consumer. Also premium paint manufacturers can increase the association between

premium paints and home space via relevant communication in the TV commercials and

presence in complete home décor solutions stores (trade channel).

Also the insofar commoditized market of wall papers which is poised to take over the premium

paints category, because of its own inherent ease of replicability and variety, will pick up pace in

growth (volume) as one of the most respected Indian paint company has launched its first wall

paper brand. This signifies that wall décor may be increasingly matched with other home décor

products in the future.

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AnnexureFig. 1: Consumers vs. AIDs footfall in dealer store

Customers Architects0

10203040506070

30

70Usage Trends - Visits to Stores (%)

Source: Author

Fig 2: Wall Paper Usage Trends - Home vs. Commercial Segment

60%

40%

Usage Trends - Home Vs Commercial (Volume)

Home Commercial

Source: Author

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Fig. 3: Premium Paints - Various touch points with consumer

Source: Author

Fig. 4: Perceptual Mapping - Fashionable vs matching with other home décor

0 1 2 3 4 5 6

0

1

2

3

4

5

6

Home DécorPremium

Paints

Source: Author

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Fashionable/ Trending

Matching with other home décor

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Fig. 5: Perceptual Mapping- Advertisements vs Reviews & Recommendations

2.5 3 3.5 4 4.5 5 5.5 6

0

1

2

3

4

5

6

Home Décor

Premium Paints

Source: Author

Fig. 6: Perceptual Mapping - Product Quality vs Visual Display

3 3.5 4 4.5 5 5.5 6

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Home Décor

Premium Paints

Source: Author

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Advertisements

Reviews & Recommendations

Product Quality

Visual Display

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Table 1: Correlation Analysis for various factor between Home Décor and Premium Paint

Parameters CorrelationEasy Change/ Upgrade 77.16262976

Friends/Relatives Recommendations 67.18391036Wide Choice 66.19785463

Price 65.10020486Point of Sale Merchandise 64.62693028

Easy Application & Replacement 63.66782007Special Offer/Promotion 62.5

Local Tastes & Preferences 61.94634289Would look good in my home 60.62177826

Advertisements 55.62503628After Sales Service- Delivery & Fitting 55.45058422

Durability 53.95110865Brand Perception 52.79353246

Best Value for Money 51.1607292Pre-Purchase Usage Experience/ In-store Demo 38.85975148

Product Quality 38.27002901Appearance 37.16820775

Product Design 35.72516151Product Texture 33.39868276

Colour 28.90054143Quick Delivery/Availability 28.87090118

Suits my needs 25.12048979Fashionable/ Trending 23.32992513

User Reviews 20.10144038Matching with other home decor 17.61264654

Source: Primary Data

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