PRODUCT
SURVEY REPORT
02/08/2020 PREFABRICATED HOMES
PRODUCT SURVEY REPORT
TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................................ 2
SURVEY SUMMARY .............................................................................................................................. 3-4
RESPONDENT’S SUMMARY....................................................................................................................................................... 3
LOCATION WISE RESPONSES ................................................................................................................................................... 4
PERCEPTION ......................................................................................................................................... 5-8
PERCEPTION ABOUT PREFABRICATED HOMES ............................................................................................................................ 5
PERCEPTION ABOUT THE CAPACITY .......................................................................................................................................... 6
MOST APPEALING FACTORS .................................................................................................................................................... 7
CONCERNS ABOUT THE PREFAB ............................................................................................................................................... 8
PRICING ............................................................................................................................................. 9-10
PREFERRED PRICE ...................................................................................................................................................................... 9
UPPER PRICE LIMIT ................................................................................................................................................................ 10
INVESTMENT PREFERENCES ............................................................................................................. 11-13
PREFERRED INVESTMENT OPTION IN REAL ESTATE .................................................................................................................. 11
CAPITAL INVESTMENT PREFERENCES ...................................................................................................................................... 12
BREAK-EVEN POINT .............................................................................................................................................................. 12
TAKEAWAYS ......................................................................................................................................... 14
IDEAL TARGET SEGMENT ....................................................................................................................................................... 14
RECOMMENDATIONS FOR THE MARKETING TEAM ................................................................................................................. 14
RECOMMENDATIONS FOR THE PRODUCT MANAGEMENT ...................................................................................................... 14
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PRODUCT SURVEY REPORT
Executive Summary
Zostel, which is now a seasoned player in the hospitality sector and has successfully carried
the torch as the largest backpacker's hostel chain in India is now planning to enter the market
of prefabricated homes, an entirely new concept & unchartered territory in Indian real
estate market.
Prefabricated homes or simply prefab is the prefabricated building that is often built off-
site in advance, a concept that many Indians would possibly not think of resorting to if they
were investing in their own house due to non-familiarity with the concept & architecture.
However, it provides a great investment opportunity with constant returns due to its cost-
effectiveness. There is no denying the fact that there are some market risks that need to be
mitigated and this survey is an attempt to do just that.
This survey measures the perception of people for their awareness on the concept of prefab
homes, the most appealing factors about it, the concerns that will be required to address,
pricing factors like price sensitivity on comfortable prices, and the perception on the upper
cap of the price.
This survey also determines the investment preferences of people, what options of investment
do they prefer in the real estate, the size of capital investment that people would be
comfortable investing in a property, and their expectations on the break-even point.
After thoroughly analyzing these factors, the report concludes with the ideal target segment
for the prefabricated houses along with their most likely ages and income range, along with
the recommendations for the product management and marketing team.
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PRODUCT SURVEY REPORT
P R E FA B R I C AT E D H O M E S
1. SURVEY SUMMARY
This survey was taken by nearly 1540 respondents of ages between 19-65 of different cities and different
income groups. The age group of 25-34 took a major interest in completing the survey and turned out to
be most enthusiastic about the concept of prefabricated homes.
The number of respondents from each age group is categorized with their income range as indicated in
table 1.
Table 1
It is apparent from the table1 that the age segment that took most interest in the sur vey
was of 25-34, followed by the younger age group of 19 -24. The grown -up segment of
35 & above were little less enthusiastic about the concept however they took some interest
due to the investment oppor tunity that prefabricated homes come with.
When segmented fur ther base d on income, youngsters of 19 -24 are in the range of less
than 1lakh INR followed by the 2.5 -5 lakhs INR and 5 -7 lakhs INR range, making it a
little c hallenging for this segment to be the ideal target segment for prefabricated
homes. While most population in the 24-34 age range falls in the range of 10 -15 lakhs
INR, followed by the range of 7 -10 lakh INR and then the higher range of 15 -25 lakhs
INR, similarly significant propor tion of the age range 35 -44 falls in higher income
brac ket, making these both age group a convenient target population with priority on
the age range of 25 -34.
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PRODUCT SURVEY REPORT
Location wise Responses
Although there were respondents from all major cities of India however hilly areas in the north and the
cities on the western coastline particularly formed the major part. Respondent's cities are mapped in figure
1.
Interestingly respondents from entire coastline areas right from Gujrat (Valsad, Surat, Bharuch), Followed
by Maharashtra (Mumbai, Sindhudurg), Goa, Karnataka (Mangaluru, Gokarna, Udupi), and then the major
coastal regions of Kerala. The density of the responses from these areas can be seen in the map in figure
1, giving a hint of investment opportunities that the South beholds.
Figure 1
Himachal Pradesh topped the enthusiasm in responses from the north region with its popular regions like Shimla,
Manali, Kullu, Bir, Chamba, and Dharmshala and several other towns. Himachal Pradesh was closely followed
by the Uttarakhand with attractive options like Rudraprayag, Nainital and Haldwani. A good number of
responses were from the cities of Punjab like Bathinda, Jalandhar & Chandigarh.
Two hill stations however that stood out were Darjeeling and Siliguri, where Zostel doesn’t yet have its presence
and should be considered from the project of prefabricated homes.
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PRODUCT SURVEY REPORT
2. PERCEPTION
I. Perception about Prefabricated Homes
Respondents were asked a question on what is their perception of the prefabricated homes. And this
section sums up the responses categorized age-wise. As can be seen in figure 2, there were seventeen
factors that respondents could choose from.
Respondent's perception turned oy to be more in line with positive perception factors like Quick & Easy,
Fast Construction, Eco Friendly, Modern, Portable, and Futuristic.
Figure 2
However, some negative perceptions about maintainability, Durability, and cost were there although it was
not as significant as positive ones however they formed an approximately 10-12% of all the perception
factors, throughout all the age ranges and subsequently would be required to address from the point of
marketing communications.
This was the initial perception of prefabricated homes in the respondent’s mind and it was found to be
uniform throughout the age ranges with positive & negative perception factors alike.
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PRODUCT SURVEY REPORT
II. Perception About the Capacity
Capacity in prefabricated homes play a crucial feature as they come in ready to be installed condition
and therefore have predefined standards in terms of living capacity and it would play an important role
in making or breaking a deal in the market, as in this case, the target audience would be the ones who are
looking for vacation homes to rent out for the fairly large group of people. Respondents were asked on
what's their expectations on the capacity of prefabricated homes and their responses are summarized in
figure 3.
Figure 3
Considering the response to this question, the product rightly fits the user expectations as the majority of
the respondents indicated for 4-6 guests that is a good sign as that very much lies inside the accommodation
capacity of prefabricated homes. This fact could again, be used in the marketing communications of the
product.
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PRODUCT SURVEY REPORT
III. Most Appealing Factors
"What is the factor that will be the most appealing one to the potential customers?" is the crucial one for
the success of any product. To get an answer for this, respondents were asked the same from the list of
options. There was a similar trend across the age groups when it came to the appealing factors of
prefabricated homes.
Figure 4
Design, Fast construction, and Cost-effectiveness are usual attributes that are assigned with prefabricated
homes therefore without much surprise they turned out to be the most appealing factors throughout the age
ranges. One important trend to be observed was that the as age range increased, easy transportation &
mobility took the upper spots in appeals.
Energy efficiency however is one feature that prefabricated homes do come with but it was not as important
as the appeal to customers as the design, transportation, construction ease, and mobility were. This provides
an insight into the product management team to work on designs that meets the customer's expectations
and is easy to install as well. Product that meets these criteria will be of a good product-market fit.
To further understand what appeals to the customers the most, possibly a more design and utility-focused
survey could be carried out to understand the customer expectations in an even clearer manner in the
context of expected designs of prefabricated homes.
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PRODUCT SURVEY REPORT
IV. Concerns about Prefab
All respondents were asked about their concerns on prefabricated homes in case if they were planning to
buy one? options covered all major concerns that a person usually has before the purchase of new
prefabricated homes.
Figure 5
In answer to the concerns about prefabricated homes, most respondents indicated their concerns on the
lifespan of the product as its an assembled one, it was followed by the concerns about build quality &
strength.
The concept of prefabricated homes is still new in India, therefore respondents also indicated their
reluctance due to the same reason. However, when it came to the land costs and other architectural issues,
they were of the least concern.
It is very important that potential customers would be required to be educated and addressed these
concerns to successfully convert a lead into a deal. These concerns were similar throughout the different
age ranges.
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PRODUCT SURVEY REPORT
3. Pricing
I- Preferred Price
Responses to this question indicate the preferred prices of prefabricated homes as indicated by
respondents. It is tabulated in table 2.
Table 2
It is evident from the observation of table 2 that the most preferred price is between 10-15 lakh that
However, is not realistic considering the quality and cost of the prefabricated homes. This could be taken
as an initial negotiation point with the potential customers.
Responses to this particular question also indicated at the segment that has chosen a higher price of 20-30
Lakhs INR & 30-40 lakhs INR, i.e. the segment who has its yearly income between 10-15 lakhs INR, 15-25
lakhs INR and some proportion of respondents from the segment from 7-10 lakhs INR.
II- Upper Price Limit
In a similar fashion of understanding the preferred prices that a potential customer is comfortable with,
understanding the upper cap of their investment is important as well. Responses to this particular question
gauges exactly that variable. And responses are segmented concerning the income range of the
respondent and tabulated in the table 3.
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Table 3
Most respondents marked the price range of 20-30 lakhs INR as their upper stretch, however, there is a
good possibility that customers could think over the possibility of attractive investment opportunity for better
returns. Like the previous question, this indicates that segment with the income range of 15 lakhs INR &
above it would be more comfortable in spending amount that is in the range of 30-40 lakhs INR and above.
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PRODUCT SURVEY REPORT
4. INVESTMENT PREFERENCES
I- Preferred Investment Option in Real Estate
Responses to this question indicate the most preferred investment option when it comes to real estate.
Understanding the preferred investment option gives a clearer picture of the customer’s perception on which
Property they consider as the best investment, accordingly, they could be educated for prefabricated
homes over other investment options. Responses to this are tabulated in table 4.
Table 4
Most preferred investment option is the farmhouse followed by Homestays and independent houses, it is
apparent Commercial properties and Hotels are not enjoying the status of preferred investment
option that they used to.
Thus, potential customers could be educated by the right marketing communications of the advantages of
prefabricated homes over the farmhouses or Homestay or even independent houses would provide. And
there are almost similar choices in between all segments of different ranges.
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II- Capital Investment Preferences
Respondents were asked to record their preferred range of capital investment that they would like
to make in the real estate if they had an option. Responses to this question are tabulated in the
table 5.
Table 5
Most responses were in the range of 0-10 lakh INR, however some feasible responses in the context
of prefabricated homes were from the segment having the income of 10-15 lakh INR, followed by
15-25 lakh INR & above, thus affirming the findings from previous questions about these segments
being the right target audience for the market of prefabricated homes.
III- Break-Even Point of the Investment
In answer to this question, respondents indicated their expectations in the break-even point on the investment if
they would make a capital investment in the real estate. Responses are recorded in table 6.
Most respondents indicated a feasible range of break-even point in 2-3 years that could be stretched up to 5
years. Very interestingly the segment with income range 10-15 lakhs INR and 15-25 lakhs INR have more
inclination to be patient for fully matured returns in the timeframe of 5 years.
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Table 6
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5. TAKEAWAYS
I- Ideal Target Market
With the responses, it could be safely concluded that the most responsive audience will be the younger
Working population of age range 25-34 and with the income range of greater than 10 lakhs. They can
be educated on the prefab homes as an investment opportunity and they would be enthusiastically
participating.
II- Marketing Communications
It is indicated in the survey that people are reluctant as prefab homes are a new concept in India.
Considering this, marketing communications should be built around the appeals that are most liked i.e.
Fast Construction & Cost Effectiveness, while addressing concerns like life-span and the build quality of
the prefab homes.
III- Product Management
Designs of the prefab homes were indicated as one deal-making factor. A detailed survey should be
planned & carried out to understand what are the design preferences of the customers in different
geographies and that should be brought into implementation.
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