CHAPTER I

INTRODUCTION AND RESEARCH DESIGN

1.1 Introduction
Paints and colours have remained an integral part throughout the human
existence, and the domain has evolved rapidly over a period. The Indian paint
industry has come a long way from the days when paints were considered a
luxury item. Today the awareness level on preventing corrosion through paints
is relatively high, a development that should be a huge boost to the paint
industry. The domestic paint industry is expected to touch `. 50,000 crore mark
in the next three years on the back of rising urbanisation and economic revival,
according to the Indian Paint Association (IPA). Though the paint industry
witnessed some slowdown in the last few years due to global economic
uncertainties and growing urbanisation, industrial experts feel that a good
growth is expected in over the next three years.

The economic growth in India has led to higher disposable income,

increasing urbanization, easy availability of credit and a concurrent growth in
construction, automobiles and consumer durables segment which have emerged
as the driving force behind the rise in current consumption of paints. Industry
has experienced dynamic changes in the last decade in terms of changing
environment and structure which propelled it to a high growth trajectory.
However, India per capita consumption of paints is still abysmally low at
1.5Kg/annum compared to world average of 15Kg and 25Kg for US. It is even
lower than Sri Lanka with per capita consumption of 3.5/Kg. This however
indicates tremendous opportunity for paint industry which is currently highly
under-penetrated.

The industry is witnessing inclinations in technology and also in

marketing. These are some of the efforts taken by the major players in the
industry to increase their market share. Moreover, the growth in the
construction and housing sectors along with a considerable increase in the
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 disposable income of the people and the increasing size of the middle class are
all reasons for an increase in the demand in the decorative segment. To sum it
all, the Indian paint market is very lucrative but competitive. With the retail
marketing approach, marketers have succeeded to achieve the targets on a year-
on-year basis. It is safe to predict a 9-10per cent growth rate as per research in
the paint industry in the next 5 years.

Indian paint industry is dominated by organized sector which currently

captures 67per cent market share. Organized sector has grown at a higher rate
vis--vis unorganized sector in last few years. Unorganized sector mostly offers
lower end products like low end enamels, distempers, lime wash, cement paint
etc. Region-wise, West region market accounts for 32per cent of paint industry
revenues followed by South (28per cent), North (26per cent) and East (14per
cent) in order. Rural regions and smaller towns contribute 40per cent of the
paint industry sales. Growth in Tier II and Tier III cities is higher than the
growth in urban markets due to higher construction activities and increasing
rural income.

Rising income and aspiration levels of young demography along with

changing lifestyle has catapulted the demand for both repainting and fresh
paints. Moreover, rising disposable income and created awareness from
marketing efforts by organized players resulted in consumers preferring for
better quality and higher end products like emulsions. Despite slowdown in
2009, paint industry reported robust double digit growth in last two years on
back of higher demand. Going ahead, industrial experts believe that the
demand scenario to remain strong backed by higher discretionary spend,
increasing penetration and also due to higher construction activities.

Robust construction activities on back of higher housing demand has

further boosted the growth of paint industry. The share of fresh paints in total
demand has increased significantly in last decade on back of increasing
urbanization and higher demand for housing. The fresh demand for paints is

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 expected to remain strong in many years to come. Moreover, in recent years in
India, there has been considerable reduction in average number of years
required for repainting from 10-11 years 5 years back to 4-5 years now.
Traditionally repainting has dominated the demand for decorative paints but
higher construction activities on back of demand for housing space has resulted
in higher growth for new painting demand. Share of fresh demand for paints
has increased to 30per cent currently from 15per cent a decade ago. This is the
stark evidence of changing lifestyle with rising income levels. Repainting the
home is not just a discretionary spend as it used to be as changing lifestyle
resulted in people aspiring for cleaner and beautiful looking homes or
commercial areas.

1.2 Significance of the Study

Over the past years, the Indian paints and coatings industry has
substantially grown and caught the attention of many international players. The
country is expected to witness a higher economic growth in the future leading
to a larger market size for paint and coating industry. Other emerging countries
in Asia-Pacific region are also witnessing this growth as these places are
backed by higher disposable income, exponentially growing population,
improving Infrastructure and huge investments in infrastructure.

Indian paints and coatings market is mainly driven by demand of two

types of paints, decorative paints that constitute 75per cent of the market and
industrial paint which constitute the remaining 25per cent. The major players in
Indian paints & coatings market are Asian Paint, Kansai Nerolac, BergerPaints,
AkzoNobel and Shalimar Paints. The Indian paints & coatings market is highly
organized with about 70per cent of market domination by organized player.
The market tends to have a monopolistic competition, led by Asian paints.
With improvements in standard of living and growth in awareness about paints
and coating, the Indian consumers have become more conscious about how the
house interior and exterior looks. They have shifted the focus from regular
paints and distempers to enamel and premium paints. This change has driven
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 demand for premium paints in the market. The Indian market recorded a
tremendous growth of 45per cent in last five years. The rural sector is still an
untapped market of India. Companies show focus on coming up with paints
and coatings which are consumer specific to the villagers and small towns of
India. The global Paint and Coating industry has witnessed a healthy growth in
past few years. Its market size is about US$99Billion. The market is expected
to witness a tremendous growth in the emerging nations of the world.

1.3 Statement of Problem

Indias paint industry has a bright future not only because the per capita
consumption is high but also because of increase in residential construction
activity, and rising income levels in rural as well as urban areas. The demand
for premium category paints i.e. emulsions is increasing with rise in
construction of housing apartments, commercial infrastructure, like shopping
malls, whose main focus is aesthetics. Indian paint markets are now buyer
market. Therefore the marketers have to design suitable strategies to stay
successful in the market. Their success depends on the ability to cater to the
market demand as per consumer preferences, wants and buying capacity. On
the other hand the foremost factors which consumers consider while purchasing
paint are durability, price, health and environment, in that order. The quality of
paints is a prime pre-purchase factor. Based on the concept discussed, this
study aims to analyse the household and commercial consumers preferences,
attitude and satisfaction towards selected branded paints in India. The study is
focused on the geographical region of Coimbatore city, one of the most
commercial and developing metropolitan in Tamilnadu, next to Chennai.

1.4 Scope of the Study

In India earlier, it was mostly people above 45 who chose types and
shades of paints, but that is changing now with more young people owning
apartments and taking such decisions. Demand for premium branded paint
products has been increasing as buyers become more aesthetically aware, and
realise that the paint on their walls is as vital a feature of their homes as the

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 television set or the couch. Growing demand for paints by both commercial and
household consumers has motivated researcher to pursue this study. The
researcher believes that the current study will be useful to paint manufactures,
marketers and retailers in understanding commercial consumers preferences,
attitude and satisfaction towards selected branded paints marketed in
Coimbatore city.

1.5 Objectives
The objectives of the study are:

To study the demographic and socio-economic status of the paint

consumers in household and industrial area.
To study the nature of psychological factors that influences the
consumers to buy the branded paints.
To analyse the pre and post purchase behaviour of brand paint
consumers.
To measure the level of satisfaction derived by the consumers of
branded paints
To measure the prevailing gap between consumer preferences and
satisfaction and to suggest suitable measures to overcome the same.

1.6 Hypotheses of the Study

Based on the objective framed following hypotheses are constructed:

The socio economic status of household consumers significantly
influences their attitude on importance of painting home.

The business profile of commercial consumers significantly influences

their attitude on importance of painting home. (ANOVA)

There exists no significant association between paint brand bought by

the consumer and the influences of personal factors on their decision
making.

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 There exists no significant association between paint brand bought by
the consumer and the influences of non-personal factors on their
decision making.

There exists no significant association between paint brand bought by

the consumer and the influences of product features on their decision
making.

Consumers attitudes towards painting homes /commercial

establishment are not closely related with their personality. Chi-Square

There exists association between consumers level of satisfaction and (i)

paint brand selected, (ii) budget fixed for painting (iii) preference of
paints (iv) occasion of painting (v) usage of interior paint products and
(v) usage of exterior paint products.

1.7 Research Methodology

The research methodology of the study consists of two stages.
First stage of the research was exploratory in nature. This forms the desk
research work where the reviews of available secondary literature for the study
were collected. This exploratory search forms the basis for preparing the
interview schedule for the next stage. A descriptive research was carried out at
the second stage by applying a survey method.

1.7.1 Area of the Study

Coimbatore district is the largest industrial center next to Chennai.
Growing commercial business centers, educational institutions, IT Park,
housing constructions and changes among the households in Coimbatore city
has motivated the researcher to select this region for the field research. More
over Coimbatore falls under the Tier III city classification in India that attract
real estate investment, boom and affordable housing demand from its urban
populate. Based on these focal determinants Coimbatore city is selected as the
area of the study.
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 1.7.2 Sample Framework
Coimbatore city has population of 1,061,447; its urban / metropolitan
population is 2,151,466 of which 1,077,812 are males and 1,073,654 are
females. With around 1,45,946 households living in the city and the city also
has 1,00,000 business establishments. With the support of Delphi Interview
(discussion with industrial experts it was understood that around 40 per cent of
households living in Coimbatore city every year paint their home and 35 per
cent commercial consumers paint their business establishment). That amount to
57578 household users of paint products and 35,000 of Commercial consumers
paint.

For the effective conduct of the study the entire sample region
Coimbatore city has been divided into five geographical regions: East, West,
Central, North and South. As the researcher encounter practical difficulties in
approaching the household and commercial consumers of paints, the sample
population was restricted to just one percent of the actual population available.
The researcher had chosen sample population based on the sampling techniques
proposed by Roscoe (1975), who had set the rule of thumb for sample
selection: sample size larger than 30 and less than 500 are appropriate for most
social sciences or consumer based researches. A sample of 575 households and
350 commercial users of paints were chosen as the sample population. A
sample of 115 households and 70 commercial respondents were chosen from
each geographical zone. Well-structured interview schedules were used as the
data collection tools. The researcher took all possible measures to inform the
sample respondents about the purpose of the study to avoid ambiguities in
required information collections. Only volunteer respondents were included for
the survey. All the interview schedules distributed were collected.

Asian Paints, Kansai Nerolac Paints Ltd, Tata AutoComp Systems,

Berger Paints and Akzo Nobel. The paint manufacturers associations has more
than 270 associates and 75 paint companies including Asian Paints, Kansai
Nerolac Paints Ltd, Berger Paints, Nippon Paints, Akzo Nobel and Premium
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 Coatings. Out the 75 major paint manufacturers only seven organised
manufacturers cum sellers were considered as the sample. The study focuses on
these seven popular brands buying behaviour. These seven companies are:
Asian paints, Goods lass Nerolac Paints, Agsar paints, Shalimar paints, Berger
paints, ICI paints and Jonson & Nicholson paints.

1.7.3 Data Source

The study has made use of both primary and secondary data. The
primary data, collected through the well- structured interview schedules, were
classified and tabulated for analysis in accordance with the outline laid down
for the purpose at the time of developing the research plan. The secondary data
were sourced from various international and national-level research theses,
research articles published in national and international journals and magazines
and Websites.

1.8 Statistical Tools Applied

To analyse the data and to draw inferences the following statistical tool:
Frequency Distribution, Likerts Scaling, Weighted Average, ANOVA and
Reliability Analysis (Factors Influences), Multiple Regression Analysis and
Rotation Factor Analysis.

Data collected have been presented in tabular form and analysis has
been made, using simple percentage and weighted mean score. Likerts
five-point scale has been used to ascertain the perception and
satisfaction respondents towards various brands paints available in India
and in their region and also about its durability, reliability and
performances.

Chi-Square test and Pearsons Correlation were performed to establish

association between paint brand bought by the consumer and the
influences of personnel, non-personal factors and product features on
their decision making.

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 ANOVA test was applied to measure association between socio
economic status of household consumers and business profile of
commercial consumers and their attitude on importance of painting
home. Same test has been applied to association sample mean relevance
between consumers level of satisfaction and (i) paint brand selected, (ii)
budget fixed for painting (iii) preference of paints (iv) occasion of
painting (v) usage of interior paint products and (v) usage of exterior
paint products.

Reliability Analysis was performed to assess the reliability and

validation of data used in the current study.

Multiple Regressions and Rotation Factor Analysis were performed to

evaluate the factors considered as important while purchasing the paints.

1.9 Limitation of the Study

The study is confined to paints consumers of Coimbatore city only. The
results of the study may not be applicable to other places of the country. The
views of the respondents may be biased in nature due to differences in
individual opinion, though the researcher took adequate care to make the
respondents express their view frankly and freely. A casual conversation was
developed to make the respondents answer freely without prejudice. The data
used for this study were collected in the year 2012. Hence the conclusions are
based on the conditions and situations prevailed during that year.

1.10 Chapter Scheme

The current thesis is organized into five chapters:
Chapter I titled Introduction And Design of the Study deals with brief
description of the study, statement of problem, significance and conceptual
framework, scope, objectives, hypotheses, methodology, limitations and
chapter classifications.

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 Chapter II deals with Review of Literature. The chapter contains reviews
both national and international reviews on consumer buying behaviours,
preferences, attitude and satisfactions.

Chapter III this chapter clearly defines the basic purpose of this study. It
contains a detailed theoretical discussion about decorative paint market in India
and theoretical outlook on the concepts of consumer buying behaviour, attitude,
brand preferences and satisfaction.

Chapter IV titled Household Consumers Attitude, Preferences and

Satisfaction Levels towards Selected Branded Paints (analysis and
interpretation: Part-I) deals with effective discussions of data drawn from
residential i.e., household consumers at the time of field study.

Chapter V titled Commercial Consumers Attitude, Preferences and

Satisfaction Levels towards Selected Branded Paints Analysis and
interpretation (Part: II) deals with effective discussions of data drawn from
residential i.e., commercial consumers at the time of field study.

Chapter VI constitutes Summary of Findings, Suggestions and Conclusion.

This chapter gives brief summary of the findings, research implications and
suggestions of the study.

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 References

http://businesstoday.intoday.in/story/premium-paint-products-are-
becoming-increasingly-popular/1/187191.html
http://www.researchandmarkets.com/reports/2391/indian_paint_industry
Renu Rajara, Paint industry has witnessed annual growth of 12-13%,
http://www.projectvendor.com/ArticleDetailsByCategory.aspx?aid=112
1

Indian paint industry to touch Rs 50,000 cr mark by FY16: IPA,

http://www.financialexpress.com/news/indian-paint-industry-to-touch-
rs-50000-cr-mark-by-fy16-ipa/1061405
http://www.census2011.co.in/census/city/492-coimbatore.html
Paints Industry Report, June 15, 2011, SPA Securities Ltd.
http://www.docstoc.com/docs/141834091/Indian-Paints-and-Coatings-
Market-Trends-and-Opportunities-%282012-2017%29
Indian decorative paint market to grow by 2015
Monday, 10 December 2012 , http://www.european-
coatings.com/Markets-Companies/Coatings-Market/Indian-decorative-
paint-market-to-grow-by-2015

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