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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Abstract
The 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

Introduction
The 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 Review
According 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,
[ CITATION Dav15 \l 1033 ] 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
Dealers Covered (75)
d. Dealers & AIDs (Architects and Interior Designers) Markets Covered
Why Wall  Kothrud
Buying Criteria
Papers-Benefits  Karve Nagar
Variety in  Viman Nagar
Colours,
Designs
Convenient  Nana Peth et al
 Timber market
Price/Value Attractive  Aundh, Baner
for Money looking home
 Warje, Camp

Easy
Durability application &
replacement

Fig. 4: Wallpaper- buying criteria and purchase benefits

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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.

Present lack of Awareness only amongst SEC A segment and

visibility commercial developers

Strong Category Introduction of wall paper brand from a reputed

awareness growth company will bring high awareness and acceptability

Category expansion- Preference and WOM for wall paper

Penetration & texture
paint substitute Potential substitute for texture based paints

Fig. 5: Potential growth of wallpaper category

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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.N
o
Factors Source

Ace Global Private Limited. The Home Textile

1 Price/Value for money/ Special offer
Furnishing Industry in India, 2009

M.Gomathi Imaya, & Dr.K.Padhmanaban. Furniture

2 Brand Perception
3 Product Quality/Durability
User Reviews/ Friends/Relatives
4 Recommendations/ Advertisements/
Promotion
Market in India – an Overview, Volume : 3 | Issue : 9
| Sept 2013 | ISSN - 2249-555X
M.Gomathi Imaya, & Dr.K.Padhmanaban. Furniture
Market in India – an Overview, Volume : 3 | Issue : 9
| Sept 2013 | ISSN - 2249-555X
Ace Global Private Limited. The Home Textile
Furnishing Industry in India, 2009

Pre-purchase Experience / After Sales Ace Global Private Limited. The Home Textile
5
Service- Delivery & Fitting Furnishing Industry in India, 2009

Ace Global Private Limited. The Home Textile

8 Availability /Quick Delivery
Furnishing Industry in India, 2009

Primary Source: Trade Channel

S.N
o
Factors Source
Mr. Aashir, AID Channel Manager with a leading
Appearance/Colour/Product Texture/
6 national paint manufacturer, Primary Research – In
Product Design
Depth Interview (Trade Channel Participants)
Suits my needs / Matching with other
Origami Home Improvements, Primary Research –
7 home décor / Local tastes and
preferences In Depth Interview
Horizon Interiors, Primary Research – In Depth
9 Wide Choice/Variety
Interview
Easy Change/Upgrade/Easy application Tulips & Dalan, Aundh/Baner, Primary Research –
10
and replacement In Depth Interview
The Paint Doctors, Primary Research – In Depth
11 Fashionable/Trending
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 Results

Home Decor
In 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 Product Variety and Factor Visualizing / Factor
1 after sales 2 Display factors 3 Imagery/Quality
After Sales Service-
Appearance Price
5 Delivery & Fitting 7 1
Would look good
Brand Perception
14 Product Design 9 in my home 2
15 Wide Choice 24 Advertisements
Easy Application & Point of Sale
16 Replacement 25 Merchandise
18 Product Texture
21 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 Paints
In 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 Product Variety and Facto ATL Facto Reviews and
1 after sales r2 Influence r3 recommendation
Advertisement
Product Quality User Reviews
3 24 s 4
Friends/Relatives
Best Value for Money
6 13 Recommendations
7 Appearance
Suits my needs
8
Special
10 Offer/Promotion
Colour
11
Quick
12 Delivery/Availability
Product Design
14
15 Wide Choice
Easy Application &
16 Replacement
18 Product Texture
Pre-Purchase Usage
Experience/ In-store
19 Demo
20 Durability
21 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 Findings

Home Décor
Product 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 Paints
Product 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 Decors

As 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)

Recommendation
As 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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Annexure
Fig. 1: Consumers vs. AIDs footfall in dealer store

Usage Trends - Visits to Stores (%)

70
70
60
50
40 30
30
20
10
0
Customers Architects

Source: Author

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

Usage Trends - Home Vs Commercial

(Volume)

40%

60%

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

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Matching with other home décor
5

3
0 1 2 3 4 5 6
Fashionable/ Trending
2

Source: Author

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

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Reviews & Recommendations

3
2.5 3 3.5 4 4.5 5 5.5 Advertisements
6

Source: Author

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

5 Visual Display
4.5

3.5

3
3 3.5 4 4.5 5 5.5 6
2.5 Product Quality
2

1.5

0.5

Source: Author

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

Parameters Correlation
Easy Change/ Upgrade 77.16262976
Friends/Relatives Recommendations 67.18391036
Wide Choice 66.19785463
Price 65.10020486
Point of Sale Merchandise 64.62693028
Easy Application & Replacement 63.66782007
Special Offer/Promotion 62.5
Local Tastes & Preferences 61.94634289
Would look good in my home 60.62177826
Advertisements 55.62503628
After Sales Service- Delivery & Fitting 55.45058422
Durability 53.95110865
Brand Perception 52.79353246
Best Value for Money 51.1607292
Pre-Purchase Usage Experience/ In-store Demo 38.85975148
Product Quality 38.27002901
Appearance 37.16820775
Product Design 35.72516151
Product Texture 33.39868276
Colour 28.90054143
Quick Delivery/Availability 28.87090118
Suits my needs 25.12048979
Fashionable/ Trending 23.32992513
User Reviews 20.10144038
Matching with other home decor 17.61264654
Source: Primary Data

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