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CHAPTER II

REVIEW OF LITERATURE

2.1 Introduction

A detailed review of literature has been made to find out the


research gap and to identify the relevant researchable issues for the study.
It is essential for a research scholar review the related literature study to
have clear knowledge about the subject and understand the research gap in
order to drawn the scope for the study. The reviews presented in this
chapter are grouped under the sub- topics like consumer buying behaviour,
consumer attitude, consumer preferences, customer satisfaction and
overview of paint industry in India.

2.1.1 Consumer Buying Behaviour

Consumer behavior analysis is based on consumers buying


behavior. It aims at improving business performance through an
understanding of customers preferences and desires. In todays world of
growing competition where there are numerous brands selling the same
products, consumers have an abundant number of choices and many
diverse factors influence their buying behavior.

Rowley (1997)1 in his research work had commented that consumer


buying process offers two useful perspectives: the decision-making process
associated with consumer buying and the factors which affect the buying
process. The author further stated that the consumers buying process can
be divided into personal, psychological and social and cultural factors. The
social factors, such as consumers small groups, family, reference group,
social roles and status can affect consumer responses and influence their
buying behavior. Personal factors such as age, lifecycle stage, occupation,
education and economic situation, and Psychological factors such as,
motivation, perception, learning, beliefs and attitudes and personality, also
play major roles in consumer decision-making process.

Anurag (2007)4 in his e-article Consumer Behavior and


Buying Decision Making has pointed out that marketing in India is
growing through an indefinable phase and so also the changing role of
consumer in making decision and the way in which the new generation of
Indian consumer behaves. The characteristics of Indian families are
changing under the influence of external factors such as liberalization and
media explosion. Indian families are presently in a state of flux, shifting
from being strictly hierarchical to more egalitarian in character. And the
process of migration definitely has a big role to play in such transition.

2.1.2 Consumer Attitude

Consumers are individuals with likes and dislikes. When the


preponderance of people in a particular group feel one way or another
about a product, service, entity, person, place or thing, it is said to be a
generalized consumer attitude that could affect the marketing of that
person, product or entity in positive or negative ways. Marketers strive
to influence consumer attitudes, and understanding the prevailing
attitude is the first step to changing it if needed.

Kim et al (2002)12 says that as more resources become


available, consumers may desire more emotional image attributes in
products or brand. Ling, Choo, and Pysarchik (2004) 13 note that Indian
customers attitude towards new products are changing significantly and
this can increase their intention to shop in new retail outlets such as
supermarkets. Thus, product attributes such as quality, price and
availability of new products are important constructs within the Indian
context. Miranda, Konya and Havrila (2005) 14 research suggests that
quality, price, availability of new products and product value are the
product attributes that influence consumer attitude.

2.1.3 Consumer Preference

Consumer preferences is the underlying foundation of demand,


therefore, is a model of how consumers behave. The individual
consumer has a set of preferences and values whose determinations are
outside the realm of economics. They are no doubt dependent upon
culture, education, and individual tastes, among a plethora of other
factors. The measure of these values in this model for a particular good
is in terms of the real opportunity cost to the consumer who purchases
and consumes the good. If an individual purchases a particular good,
then the opportunity cost of that purchase is the forgone goods the
consumer could have bought instead

Dunne and Narasimhan (1999) 17 say that


consumers perception of the relationship between price and quality is
the main factor which influences the brand choice decision between
private labels and national brands.

According to Mishra (2007) 18 the Indian market has seen vast


changes in political, economic and social environment which has a great
impact on consumption. Singh (2007) 19 is of the view that production
oriented market has been shifting towards consumer oriented market.
Traditional consumption pattern has also been facing large-
scale changes.

Priya Soni (2010) 20 study aimed to evaluate the customers


perception towards the purchase of branded products. She says that there
is prevailing high competition among various brands in India. In every
product category, customers have more choices and higher expectations.
The success of the strategy depends heavily on the marketers
understanding of the preference building and bonding process. Since
brands seeks reflecting consumer preferences and wants.
2.1.4 Customer Satisfaction

Customer satisfaction, a term frequently used in marketing, is a


measure of how products and services supplied by a company meet or
surpass customer expectation. Customer satisfaction is defined as "the
number of customers, or percentage of total customers, whose reported
experience with a firm, its products, or its services (ratings) exceeds
specified satisfaction goals
As per Kotler (2003) 23 satisfactions is a persons feelings of
pleasure or disappointment resulting from comparing a products
perceived performance (or outcome) in relation to his or her
expectations. The satisfaction judgment is related to all the experiences
made with a certain business concerning its given products, the sales
process, and the after- sale service. Whether the customer is satisfied
after purchase also depends on the offers performance in relation to the
customers expectation. Customers form their expectation from past
buying experience, friends and associates advice, and marketers and
competitors information and promises.
As per J.D. Power and Associates report (2012) 25 it has been
found an additional contributor to increased satisfaction is customers'
experience with paint retailers. More than one-half of customers who
purchased paint received guidance on their painting project from the
retailer and more than one-third received color selection advice.
Interestingly, satisfaction is higher among customers who purchased
their paint directly from a manufacturer's speciality store (e.g., Sherwin-
Williams, Dunn-Edwards) than among those customers who purchased
from a home improvement retailer.

Shaikh Reeha Vasi (2012) 26 research aims to analyse customers


level of satisfaction after using Asian Paints, are they willing to be a
loyal customers or do they prefer other brands. The survey reflects the
areas where the company needs to improve and the areas where it from
where it has gained its popularity.

2.1.5 Paint Industry in India, its Consumption and


Buying Practices

Indian paint industry has grown by leaps and bounds over last 15
years. The per capita consumption of paint still is one of the lowest. This
means there is a big scope for the industry to grow further. This is one
industry that has successfully developed the large small sector together.
This is so because higher and lower segments of buyers are growing
rapidly. The specifications of the large, specialized users are stringent
and cannot be matched small scale sector that will have to remain out of
the corporate business. There is a huge market of domestic, house hold
paints competing with lime and cements paints that cannot be tapped by
the large manufacturers due to their high over heads. The difference
cannot be matched by their high purchasing power. Industrial experts do
not see a possibility of complete elimination of the small scale sector
form the Indian scene. In fact we have not seen any small scale paint
industry closing down in last several years. Everyone is recording a
healthy growth in volume as well as value terms. The richness of the
small scale is amply evident in the annual general meetings of the
members of Indian Small Scale Paint Association. This means, the small
scale industry is doing well and would continue to do well. One of the
major reasons is low fixed capital employed for manufacture of paints.
The working capital requirements are very huge. This is now easily
available from banks and the turnover of the industry is growing very
rapidly. According to Mishra (2002)28 Indian customers look for the
fresh solutions to their problems and in addition with better value for
their money. This persuades the paint industries to introduce products of
some value with the lower cost. Some new types of paints launched by
the companies to attract more customers are; washable odorless interior
paints, water based enamels, and anti- bacterial paints. Apart from these,
companies have even launched paints with long life guarantee.

Raghavan (2006)29 has confirmed that the Indian paint industry


has lately completed its 100 years of manufacturing. The history of
modern paint manufacture of India starts from 1902, when the first
paint factory, shalimar Paints came into horizon. The Indian paint
industry is projected to be worth of approximately USD 1.8 billion. The
total production of the paint is in the area of 900,000 metric tons.
Apparently the Indian paint industry is the only sector of the Indian
chemical industry that has been on the rise for the last three years. It has
been recorded that the growth of the industry has been in double-
figures. The per capita consumption of paint in the Indian market is
noticed to be 0.8 kg or 800 grams. This consumption rate is much
smaller to that of South-East Asia where the consumption is about 4.3 kg
which is the total of the world average of 22kg. However as recorded by
the Indian paint industry, the growth rate has been exceptionally
promising. The demand and the consumption of the paint in the last 8
years have shown an increasing trend and the last 3 years have shown
growth rates in excess of 10per cent.
As per the Indian Paint Association report (2007) 31 there is a
shift in the consumer behavior with the paint buying and painting
process evolving. The consumer is upgrading from buying distempers to
emulsions and from buying paints to buying premium services,
unlocking a completely new value chain. What it would mean for the
industry is that it will have to serve the consumer now in newer
innovative ways. The consumer is ready to pay the price and would be
the key factor driving this change.
Preeti Khicha (2008)34 in her report have mentioned that over
the years, the seasonal aspect of painting a home in India changed and
homemakers gradually came to associate painting with home dcor and
interiors. Choosing a paint brand became a high-involvement category,
particularly in the decorative segment with the focus of the brand
shifting from the builder to the homeowner. As consumers became more
involved in the decision making process, the company realized that an
online presence would perhaps serve as an important tool to engage this
new audience.
Pandey (2009)36 in his empirical research work has
mentioned that paint companies are performing at their best this time
and touching the horizon of success gradually. The present study is to
analyze the various influencing factors which make the consumer's
intent into purchase decision. While the paint manufacturing companies
are putting all efforts to hold the greater market share, it is imperative to
analyze the brand perception of consumers and their final purchase. The
study reveals that the consumers are important but at the same time
surrogate consumers also influence the decision making process of
purchase. The paint industry dealers also play a vital role as a channel
partner in the success of paint companies. The study found that Asian
paint is the best paint company in India followed by Nerolac paints and
Berger paints. There is a cut throat competition among the paint
companies. The maximum number of dealers deal in Asian Paints and
Berger paints followed by Nerolac Paints, ICI paints and Shalimar paints
respectively and Asian paint holds the strongest perception in the minds
of consumers and dealers. But Performance and quality is the most
influencing factors for the customer while choosing paint.

Akhilesh Chandra Pandey (2009)37 in his research article have


registered the prevailing fact that the Paint companies are performing at
their best this time and touching the horizon of success gradually. The
present study is to analyze the various influencing factors which make
the consumer's intent into purchase decision. While the paint
manufacturing companies are putting all efforts to hold the greater
market share, it is imperative to analyze the brand perception of
consumers and their final purchase. The study reveals that the consumers
are important but at the same time surrogate consumers also influence
the decision making process of purchase. The paint industry dealers also
play a vital role as a channel partner in the success of paint companies.

Report on Indian Paint Industry (2010)39 it has revealed that the growth
of the domestic paint industry is attributed to the boom in the housing
sector and the strong growth in the automobile sector. Around 70per cent
of the domestic paint industry revenues come from the decorative
segment, whereas the industrial segment constitutes around 30 per cent.
In 2005, the manufacturing sector has shown good activity with new
projects in roads, ports and industrial segments. The Indian paint
industry has a huge potential, as the per capita consumption of paint in
India is 800-900 grams compared to 15-25 kg in the developed countries.

Acording to Renu Rajaram (2012)43 in India, paints have


traditionally been sold in hardware stores. Most paint brands have
followed the retail route of multi-brand stores. However, with the growth of
the Indian paint industry, and the recognition of individual brands,
prominent players have recognized the need for exclusive
outlets/showrooms. The success of these outlets lies in the fact that the
consumer can negate the time taken to choose between brands, and
instead focus on product choice without having to worry about quality.
As Paint industry Conference report (2013)46 Indian paint
market over the past few years, despite many ups and downs in the
recent past India has shown a formidable performance compared to other
economies. Changing Demographics of the country will certainly help
boost growth rate in all sectors. Paint industry has shown a good growth
record in the past and many believe it will continue to do so in coming
years as well. Albeit growth drivers, consumers, towns, products will
differ from existing ones. The industry is at the threshold and every right
step from here on will only bring success. Industrial experts believes that
time players all get back together and deliberate on all these issues
involving Paint manufacturers, Supplier partners, government
representatives, Scientist and other Stake holders of this industry.

2.2 Conclusion

From the detailed review of literature the researcher has


emphasized the importance of consumers behaviour, attitude,
preferences and satisfaction from the marketers point of view. However,
in the course of desk researcher it has been realised that not much
market research studies in the past have been conducted in the area of
paint market or consumers choice of paints or their preferences towards
paints, similarly their attitude, perception or satisfaction especially in
Indian context,. Moreover, in past more case studies are focused on
Asian paints or Berger or other popular brand. The prevailing stature of
lack of marketing research pertaining paint industry is identified as the
research gap. Thus, this study aims to focus and analyse the consumer
buying behaviour of decorative paints both exterior and interior in both
commercial and household segments.

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