a study on perception of end-users towards various … · 2016-01-19 · a study on perception of...

ELK ASIA PACIFIC JOURNAL OF MARKETING AND RETAIL MANAGEMENT

ISSN 2349-2317 (Online); DOI: 10.16962/EAPJMRM/issn. 2349-2317/2015; Volume 7 Issue 1 (2016)

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A STUDY ON PERCEPTION OF END-USERS TOWARDS VARIOUS PAINT BRANDS

IN AHMEDABAD AND NORTH GUJARAT

PRASHANT PAREEK

Assistant Professor

Shanti Business School

Ahmedabad, Gujarat

E-Mail: [email protected]

MO: 9725333945

ABSTRACT

Keywords: Consumption Patterns, Changing Dynamics, Indian Paint Industry, Macro level Analysis, Urbanization

Urbanization is an “Index of transformation from traditional rural economies to modern industrial one.” Over the

last 4-5 years; the economic growth in India reported an average growth of ~8%, leading to explosion of

urbanization & development in rural India. Also rural spending has started to outpace urban consumption trend

fuelled by a strong increase in incomes, led by rising non-farm employment opportunities and the government’s

focus on rural employment generation schemes. This has led to growth at a CAGR of 15% in last 5 years (FY07-

12) in the Indian Paint Industry which is estimated to be at `291 Bn in FY12. Even the paint volumes growth is

closely related with the GDP growth rate & has grown on an average 1.7 – 2.1x GDP. Thus, going forward with

economy revival, changing lifestyle & public aspirations, we believe the Indian Paint Industry is expected to

conservatively grow at a CAGR of 15% for next 3 years to be ~ `443billion industry by FY2015. The Paint Industry

is dominated by decorative paints (77%) & Industrial paints (23%). Emulsion, which constitutes the majority share

of decorative paints, is the fastest growing segment of the paint industry. Presently, the growth of the Indian paint

industry is being witnessed from new demand pockets, especially in Tier-II and Tier-III cities, thus, signaling the

growing acceptance of branded quality products among the masses. The growing popularity of branded quality

paints & increasing income levels of people residing in Tier-II and Tier-III cities has led to a shift in demand from

unorganized players to organized players & pushed the growth & shift towards premium paint segment i.e.

“Emulsion” category from “Distemper & Primer” Category. This research has been conducted on 400 households

of Ahmedabad, Kalol and Mehsana cities in Gujarat. Questionnaire survey method and observation method has

been used to conduct the research. The questionnaire was formed with the combination of close-ended, open-ended

and scale questions. The main objective of this study is to find out various factors that consumers consider while

purchasing paint.

http://dx.doi.org/10.16962/EAPJSS/issn.2394-9392/2014

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1. Introduction

Till the Second World War the industry

consisted of small producers and two

foreign companies. After the war, the

imports stopped which led to the setting

up of manufacturing facilities by local

entrepreneurs. Still the foreign

companies continued to dominate the

market, which in a way is the current

scenario as well. The initial decades saw

the complete dominance of British Paint

companies such as Goodlass Walls

(now Goodlass Nerolac), ICI, British

Paints (now Berger Paints), Jenson &

Nicholson and Blundell &Eomite. The

Indian Paints sector is valued at Rs

6,800 crores in value terms and is very

fragmented (Dhiraj Sinha, 2015). The

current demand is estimated to be

around 650,000 tons per annum and is

seasonal in nature. The per capita

consumption of paints in India stands at

1.0-kg p.a. as compared to 1.6 kg in

China and 22 kg in the developed

economies. India's share in the world

paint market is just 0.6%.

The Indian Paint industry can be

divided as:

The organized sector comprising of

large and medium size units

The unorganized or the small scale

sector.

This is in contrast to the 55% share that the

sector commanded a few years back. Major

companies in this segment include Asian

Paints (44% market share), Berger Paints

(17% market share), ICI (12% market

share), Goodlass Nerolac (15% market

share), Jenson Nicholson (6% market

share), Shalimar Paints and Rajdoot Paints.

The organized sector has grown at a CAGR

of 11.5% in the last five years (A.C.Neilson

Report, 2015) the unorganized sector

comprising of over 2000 units has a

combined market share of around 30%. The

major players are Asian Paints, Goodlass

Nerolac, Berger, ICI and Shalimar.

Recently, world leaders like Akzo Noble,

PPG, DuPont and BASF have set up base in

India with product ranges such as auto

refinishes powders and industrial coatings.

Kansai Paints of Japan, which entered into

collaboration with Goodlass Nerolac in

1984, is now the holding company for

Goodlass Nerolac with 64.52 % equity

holding.




PPG has a joint venture with Asian Paints

to manufacture industrial coatings. Jenson

& Nicholson and Snowcem India are no

longer active players because of dwindling

sales in recent years. In the 1990s, helped

by a growing economy, the paint industry

had recorded a healthy growth of 12-13 %

annually. This was mainly due to a drastic

reduction in excise from a staggering 40%

to 16%. However, the growth was restricted

in 2000-03 to single digits. There was a

revival in 2003-2004 with a robust growth

of 13%.The per capita consumption of paint

in India is 700 grams against 19 kg in the

U.S., and 2.7 kg and 5.8 kg in other

developing countries like China and Brazil.

As the consumption goes with affordability,

the low Indian figure is not a surprise. High

excise duties, low technology and low

capital costs for production led to the

incidence of a high number of units in the

small scale sector. However, since 1992 the

government has been consistently lowering

duties from 40.5% in 1992 to around 16%

currently. This has led to lowering of price

differential between the organized and

unorganized sector. Moreover the paints

sector was also allowed to claim Modified

Value Added Tax (MODVAT) credit on

petro-based products, thus lowering the

excise incidence further.

With the changing landscape of Indian Paint

Industry – from B2B to B2C, Organized

players have aggressively taken marketing

initiatives –to involve customers in paint

selection process , creating awareness of

product differentiating features like Zero

VOC, Low VOC, lead free & eco-friendly

products, opening customer friendly

concept stores like “Colour World,

Impression Stores, Kids World“ for

customers to touch & feel “ Textures,

designs, Glow & Disney themes” &

providing unique professional services of

product consultancy and colour consultancy

through “Home Solutions & Home

Stylers”, Interactive Call Centre &

Simulation Software based websites ,

Social Media Campaigns on Face Book &

Twitter etc have assisted in creating &

meeting the demand related to lifestyle

conscious people to upgrade & change

customer preferences. We believe such

marketing initiatives with aggressive

advertising spends would go a long way in

creating a strong brand image & customer

loyalty paving way for rapid penetration &

Shift in favour of Organized players vs.




Unorganized players in Tier II & Tier III

cities.

2. Research Methodology

(2.1) Literature Review

It was a live industrial project where

in the review material was provided

by the funding organization thus it

was not allowed to reveal the

sources of secondary data analysis.

Some reports of leading paint

brands like Asian paints, Berger

paints, Nerolac paints etc are

mentioned in the reference

(2.2) Research Objectives:

To check awareness level of various

Paint Brands among people

To know the importance of painter

and dealer role in customer decision

making

To know how various trade schemes

provided by different paint

companies affect customers’ decision

To understand the preference and

choice of customers regarding

different paint brands

To understand how consumption

pattern of customers differ in

Ahmedabad, Kalol, and Mehsana

(2.3) Research Design:

This study synthesizes both research

designs i.e. Exploratory and Descriptive

(2.4) Research Tool:

Investigator Administered Questionnaire

(2.5) Method of Data Collection:

Primary Data: It was collected

through investigator administered

questionnaire from 400 respondents

of Ahmedabad, Kalol and Mehsana

Secondary Data: It was collected

from websites of various paint

brands, news papers, Journals, trade

magazines and general web sources

etc.

(2.6) Sampling:

Sampling Technique: Non

Probability sampling with

Convenience sampling technique

was being utilized for this study.

Even the three cities i.e.

Ahmedabad, Kalol and Mehsana

were being selected on the basis

of Convenience

Sample size:

Ahmedabad 200

Kalol 100

Mehsana 100




Sample Unit: Sample Unit is

households from Ahmedabad,

Kalol and Mehsana (North

Gujarat)

(2.7) Scope of the study

This study covers three cities of Gujarat

state i.e. Ahmedabad, Kalol, and

Mehsana. In these cities 400 respondents

were being sampled for this study.

Conceptually this study aims to present a

macro level understanding of Indian Paint

Industry with focus on how consumption

patterns differ within these three cities.

(2.8) Limitation of the Study

Survey area was confined only to three

cities of Gujarat State which were

selected on the basis of convenience of

the investigator. Thus the limitation of

convenience sampling technique is

evident in this study.

3. Data Analysis and Interpretation

(3.1) Frequency of respondents

(Refer Table 1 Here)

From above table, we can see that there

were total 400 respondents 200, 100, 100

from Ahmedabad, Kalol and Mehsana

respectively.

3.2 Which company’s paint you have

used at your home most recently?

(Refer Figure 1 Here)

From the above chart it can be inferred that

in Ahmedabad city the consumption of

Berger paint is highest followed by Asian

paints, In Kalol and Mehsana Asian paints

is topping the chart in terms of

consumption.

3.3 Time Interval of re-painting the

House?


In all three territories where in this study

had been undertaken it was found that

generally people paint their places at the

time interval of 4 to 5 years.

3.4 How you Purchase paint brands?


From the above chart it can be inferred that

painter’s recommendation plays a major

role in decision on which paint brand to be

used.

3.5 Which company's paint you have

used at your home? * Do you consider

Painter's recommendation while

purchase a paint?





From the above table it can be inferred that

people take into account painter’s

recommendation while deciding on the

paint brand to be used. Out of total 400

respondents we found that 212 had used

Asian paints to colour their homes and out

of these 212 respondents 172 respondents

decided to use Asian paints based on the

recommendations from the painter.


used at your home? * Which company's

paint would you like to use the most?



used at your home? * Had you

considered advertisement while

purchasing a paint brand?



Advertisement (i.e. T.V, Print, OOH, Radio

etc) influence people when it comes to

purchase of a paint brand. In our study 117

respondents had used Berger paints and out

of these 102 had purchased it because of its

Advertisement.



considered relatives/neighbour

recommendations while purchasing a

paint brand?


From the above cross tabulation it can be

inferred that recommendation of relatives.

Friends and neighbours also play a pivotal

role when it comes to purchase of a paint

brand. Out of our 400 respondents 354 were

of the view that they had considered the

recommendations of relatives and

neighbours in purchase of paint brand.



considered various Sales Promotion

schemes while purchasing a paint brand?


From the above table it can be inferred

that sales promotion schemes attract

customers towards a paint brand. Since

in our sample size of 400 we found 212

respondents had used Asian paint and

out of these 212 respondents 202 had

used it because of it sales promotion

schemes.

3.10 In future which company's paint will

you prefer to use?






whatever paint brand people had used

during their last purchase but in future out

of 400 respondents 190 will prefer to use

Asian paints. 154 will prefer to use Berger

paints. It can also be understood as how the

dynamics will change in near future because

the current scenario says that 212

respondents had used Asian paint but only

190 will return to the brand again. On the

other hand 117 respondents had used Berger

paints and 154 will prefer to use the brand

in near future.

3.11 People’s satisfaction level for paint

brand they have used?


From the above table it can be inferred

that whatever brand our respondents

had used, out of 400 respondents 108

are satisfied with their brand of paint. 99

are highly satisfied with their brand of

paint and 69 respondents were highly

dissatisfied with their brand of paint.

4. Key Finding

From the data analysis it can be

inferred that Asian paints is market

leader in terms of awareness, usage and

recommendations followed by Berger

paints. Dealers and painters are the

biggest opinion leaders for the end

users their recommendations are being

adhered by the people while deciding

on the paint brand. Awareness and

actual usage for a paint brand may

differ i.e. in the survey 397 respondents

were aware of Asian paints but 212

have actually used it in their house. The

biggest reason why Asian paints is a

market leader is its distribution

channel, Asian has managed to develop

a well penetrated network even in tier

II and III cities of Gujarat. Other

brands such as Berger paints and

Nerolac are slowly strengthening their

network in small cities. Advertisement

and sales promotion schemes play a

key role in influencing the people to

purchase a paint brand.

Asian paints, Berger paints, Nerolac,

deluxe paints, Shalimar etc are the

paint brands with high awareness

among people and among these brands

Asian paints and Berger are top two

brands in terms of awareness and

usage.




5. Conclusion

During this study it was observed that there

are various players in Indian market in

decorative paint segment. But there is a lot

of scope for its improvement in the level of

customer service provided by the

companies.

It is recommended that various

paint brands should increase their

awareness level in Kalol town

through increase in Advertisement

It is also recommended that paint

brands should increase their dealer

network in Kalol and Mehsana

Various paint brands should focus

on influencing Painters and Dealers

because in paint industry Painter’s

and Dealer are very important to

recommend product to customer

Paint brands should conduct

meetings and training programme

for painters and dealers on regular

interval

Advertisement, sales promotion,

positive word of mouth from

relatives and neighbours are the

major influencing factors in

purchase of a paint brand

Indian housing sectors boom, increasing

urbanization had made easy availability of

housing loans and a shift from semi-

permanent to permanent housing structures

have been driving growth in the decorative

paints segment accounting for nearly 65-

70% of the Indian paint industry. Seasons

are also involved in the demand for

decorative paints, where consumption

peaks around festive time.

References

1. Credit Suisse, Paint and Coatings: A

Brief Industry Summary, December 4,

2014

2. Product Care Association, website:

http://www.productcare.org/index.html

, April 4, 2015

3. About Berger Philosophy . (n.d.).

Retrieved 2015, from Berger Paints India

Limited. (n.d.). Retrieved from

www.bergerpaints.com:

http://www.bergerpaints.com/id/90/Com

pany-Profile

4. Booklets of Asian Paints, Berger, Deluxe,

Nerolac, Accessed from the Dealers

5. Indian Mirror, website

http://www.indianmirror.com/indian-

industries/paint.html, accessed on 1st

January 2015




http://www.bergerpaints.com/id/90/Company-Profile

http://www.bergerpaints.com/id/90/Company-Profile

http://www.indianmirror.com/indian-industries/paint.html

http://www.indianmirror.com/indian-industries/paint.html



6. Equity Master, website

https://www.equitymaster.com/research-

it/sector-info/paint/Paints-Sector-

Analysis-Report.asp, accessed on 1st

January 2015

List of Tables:

Table 1: Frequency of respondents

Frequency Percent Valid Percent Cumulative Percent

Valid Ahmedabad 200 50.0 50.0 50.0

Kalol 100 25.0 25.0 75.0

Mehsana 100 25.0 25.0 100.0

Total 400 100.0 100.0

Table 2: Which company's paint you have used at your home? * Do you consider Painter's

recommendation while purchase a paint?

Do you consider Painter's

recommendation while

purchase a paint?

Total Yes No

Which company's paint

you have used at your

home?

Berger Paints 78 39 117

Asian Paints 172 40 212

Nerolac Paints 29 11 40

Delux Paints 17 6 23

Sherwin William Paints 1 0 1

Other 6 1 7

Total 303 97 400


https://www.equitymaster.com/research-it/sector-info/paint/Paints-Sector-Analysis-Report.asp





Table 3: Which company's paint you have used at your home? * Had you considered

advertisement while purchasing a paint brand?

Would you consider advertisement

while purchasing a paint brand?

Total Yes No

Which company's paint you

have used at your home?






Other 3 4 7

Total 314 86 400


relatives/neighbour recommendations while purchasing a paint brand?

Would you consider

relatives/neighbor recommendations

while purchasing a paint brand?

Total Yes No








Other 4 3 7

Total 354 46 400





various Sales Promotion schemes while purchasing a paint brand?

Would you consider various

promo/non-promo schemes while

purchasing a paint brand?

Total Yes No








Other 7 0 7

Total 384 16 400

Table 6: In future which company's paint will you prefer to use?

Frequency Percent Valid Percent

Cumulative

Percent

Valid Berger Paints 154 38.5 38.5 38.5

Asian Paints 190 47.5 47.5 86.0

Nerolac Paints 35 8.8 8.8 94.8

Delux Paints 21 5.2 5.2 100.0

Total 400 100.0 100.0




Table 7: People’s satisfaction level for paint brand they have used?

Frequency Percent Valid Percent

Cumulative

Percent

Valid Highly

Dissatisfied 69 17.2 17.2 17.2

Dissatisfied 78 19.5 19.5 36.8

Moderate 46 11.5 11.5 48.2

Satisfied 108 27.0 27.0 75.2

Highly

satisfied 99 24.8 24.8 100.0

Total 400 100.0 100.0

List of Figures

Figure 1 : Which company’s paint you have used at your home most recently?




Figure 2: Time Interval of re-painting the House?

Figure 3: How you Purchase paint brands?




Figure 4: Which company's paint you have used at your home? * Which company's paint

would you like to use the most?

Figure 5: Structural Representation of Indian Paint Industry




Figure 6: Functioning of Paint Companies through a Pictorial Diagram

RAW

MATERIAL

(56%)

EMPLOYEE

COST

(22%)

SELLING

AND

ADMINISTR

ATION

EXPENSES

(22%)

DECORATIVE

PRODUCTS:

PAINTS,

EMULSIONS,

VARNISHES,

DISTEMPER, WOOD

FINISH, METAL

FINISH,

SPECIALIZED

PAINTS (WEATHER

INDUSTRIAL

PRODUCTS:

POWDER

COATING,

SURFACE

COATING, FLOOR

COATING, HIGH

PERFORMANCE

COATINGS,

SPECIALIZED

COATINGS

AUTOMOBILE

OEMs,

CONSUMER

GOODS,

MANUFACTURE

RSM MARINE

INDUSTRIES

HOUSEHOLDS,

CONSTRUCTION

FIRMS

(70%)

MAJOR PRODUCTS END USERS MAJOR INPUTS


a study on perception of end-users towards various … · 2016-01-19 · a study on perception of...

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