MARKETING MANAGEMENT TERM END EXAMINATION

INDUSTRY: HOME IMPROVEMENT RETAIL INDUSTRY

COMPANY: @HOME BY NILKAMAL

SUBMITTED BY:

GROUP NO. 24

 Riya Bhavsar C031 80011220137

Rohan Jindal C032

Sahil Gupta C033

Saloni Soni C034 80011220127

Saptarshi C035
 Chakraborty
Q1) Evaluate the macro environmental forces affecting demand in the industry assigned to
your team specifically in the Indian context.

PESTEL
The PESTEL framework is used to monitor the external or the macro environmental factors
that have an impact on the organisation. The result will then be used to draft the SWOT
analysis table.

1. Political factors
Political factors play a major role in determinative the factors that may impact any
corporations future profit in an exceedingly sure country or market. The Republic of
India being a politically made and a democratic country, it’s challenging for any
company to survive while not considering political factors impact on the demand
aspect of the merchandise. It plays an important role in demand creation once it
involves Home Improvement Retail sector. Government programs like “Swatch
Bharat” and “Gramin Awaas Yojana” are anticipated to come up with rural demand
for hygienical ware and plumbing equipment.

2. Economical factors
The Macro setting factors like – the rate of inflation, savings rate, rate of interest,
interchange rate And economic cycle impacts demand and aggregate investment in an
economy. The Asian nation being a really economically numerous country, economic
factors play a vital role in demand prognostication. for example, in recent years
there's a trend of growing disposable incomes of people across the country, therefore
there's extra money at hand, which individuals need to use for higher home interiors.
This trend is outstanding in tier-2 cities also. The Asian nation currently offers tax
credits as a part of its inexperienced building laws that have conjointly additional to
the present rate of growth within the home improvement market. Similarly, lower
disposition rates as well as increasing land prices area unit billowing the house
improvement market development. the opposite key aspects contributory to an
increase in demand embody increasing employment, and economic process within the
country.

3. Social factors
Social trends are contributing majorly to a booming home improvement industry.
Demographic changes, changing consumer interests and education levels have a deep
impact on home improvement retail sector.
To Baby boomers, home improvement is attractive because it allows them to “age-in-
place.” With relatively minor investments, home improvement projects can readily
accommodate lifestyle changes.
Many people also see home improvements as a means to pursue creativity, innovation
and self-expression. To some, it is also a means to show their social status in their
peer group.
 4. Technological factors
The Home improvement retail industry have been emphasising on the use of
technology for its growth in the past years. Companies are widely making use of this
aspect to expand their reach to its customers who want to adapt to the current trend of
having a smart home lifestyle. One of reason for it being its contribution to efficient
use of energy. The technological aspect emphasises on the factors like quick and
convenient renovations, producing better quality of raw materials, use of technology
for performing difficult and risky jobs and proper home planning using virtual
Augmented Reality.

5. Environmental factors
The home improvement retail industry is working every day to improve packaging
sustainability, energy efficiency, waste and pollution reduction through research,
development departments and technology up-gradation, which not only reduces the
carbon footprint but also helps to conserve energy and the environment. This is
something that population as a whole demand for. The government, environmental
activists and the general public – all of them are striving for sustainable living. For
example, nowadays we have automatic water taps which help to conserve water, we
have Air conditioners and kitchen appliances running on solar energy that result in
lesser pollution.

6. Legal factors
The housing industry of India is one of the most advancing sectors. The Home
Improvement industry is highly dependent, corelated and influenced by the housing
sector of India. Building permits and housing starts are the leading indicators in the
housing market. In the Federal structure of the Indian polity, the matters pertaining to
the housing and urban development have been assigned by the Constitution of India
to the State Governments. However, the Union government is responsible for
formulation and implementation of social housing schemes. Our section on housing
highlights various initiatives and schemes implemented by government for rural,
urban and EWS housing.

Q2) Prepare a Marketing Research Proposal/plan for evaluating the feasibility of introducing
a new line of product in the industry.

MARKETING RESEARCH PROPOSAL

SITUATIONAL ANALYSIS

Executive Summary

@home is a perfect one-stop solution store for home planning with finest quality furniture,
soft furnishings & home accessories that helps make life beautiful. The designs at ‘@home’
are contemporary yet practical, reflecting Indian tastes & requirements.  We are planning to
launch a new product line for @Home in the Smart home automation segment. For this, we
have carried out an extensive market research plan to check the demand and the feasibility of
the product.
Market Growth

The home improvement market revenue in India is expected to rise from USD 800 million in
2018 to around USD 1,120 million by 2025. The necessity to reduce electricity costs in order
to improve energy efficiency is driving the home improvement market growth extensively.
Lower lending rates in synergy with increasing land costs are surging the home improvement
market development. The other prominent aspects which contribute to the rise in demand
includes rapid urbanization, internal & external migration, increasing employment, and
economic growth in the country.

Market needs and Trends

With the advent of technology, home automation and artificial intelligence will be the new
normal. The home improvement industry is gaining popularity in today’s world with the
advent of making life easier and luxurious. Not only this but to make homes more
comfortable and to upgrade outdated systems like heating and cooling, streamline energy use,
and Going green. Current trends in the industry include aspects like security and safety
upgradations such as security cameras and comprehensive home security systems, followed
by factors like convenience and comfort like smart lighting, climate control, and
entertainment.
SWOT ANALYSIS
Strengths Weaknesses

- High level of customer satisfaction: - Major expertise in the furniture

- Distribution and reach (19 cities) segment
- Very well known for home décor and - There are competitors who are better
home improvement retail – brand - The purchases in this industry demand
awareness a huge investment of time, space and
- Highly trained sales team money.
- Cost structure - A huge amount goes into prototyping;
- Strong social media presence the products are such that the
customers often need the touch and feel
experience

Opportunities Threats

- E-commerce and internet - Bargaining power of suppliers has

 - Technological developments increased over the years. Cost of input
- Increase in average household income could increase.
- India has a low inflation rate which - Advancing technology, getting obsolete
will increase people’s lending and real fast
spending capacity - Consumer tastes keep changing
- Booming demand in the home - Competitive home improvement
improvement market market
- Rising trend of DIY in the home - Unstable economy can affect spending
improvement industry capacities of people

COMPETITION ANALYSIS
The home improvement market is a newly developed segment in India and its growth is due
to the increase in income of the bulk middle class people. That is why a lot of new players are
emerging out in this new market and competition is increasing.
@HOME D’DECOR GODREJ INTERIO
Company Profile 2005 1999 2006
Key Competitive In addition to our Their products are Have a strong
Advantage qualified products also qualified network of indirect
for home sellers and
improvement we are distributors
also inculcating AI
technology for home
automation
Target Market The customers Fashion conscious Millennial
belonging to the female population population
higher income group who would like to
and upper-middle decorate their homes
income group in a unique way
Marketing Strategy Omni-channel Omni-channel Omni-channel
strategy market strategy marketing strategy
Products and Home improvement Home improvement Home improvement
services and home
automation
Strengths -High level of -Lower price -Brand Awareness
Customer -Good network
Satisfaction
-Brand awareness
Weakness -Major expertise in -Lack of Quality and -Huge transactional
furniture segment networking expense

PRODUCT OFFERING
Our product majorly focuses on providing home lighting automation infrastructure to the
customers. For starters, the product will consist of 3 elements – lights, fans and ACs.
Automation will revolve in these three elements.
We will be providing traditional switchboards and remote controls to operations the 3
elements. On top that, now comes the Unique Selling Proposition of the product – Sensory
system and the Automatic customisation system.
The Sensory system will identify pre-set gestures for switch on and switch off of the devices.
The use of remote controls and traditional switch boards will get eliminated here. This has an
added advantage that once the sensor detects that no one is there in the room, it will
automatically switch off the device which will help save electricity and encourage sustainable
living.
The Automatic Customisation works along with a Finger print/Iris scanner for the members
in the house. Each member will feed in their light preferences, Fan speed preferences and AC
temperature preferences in the system. As soon as the particular member enters the house and
enters their finger print/Iris; the setting will automatically change to that member’s
preference of the lighting, speed of the fan and temperature of the AC.

CRITICAL ISSUES
Home automation requires new technology which provides timeless & seamless connectivity
among the sensors of home appliances. Variety of the important challenges faced within the
domain of home automation are well explained below:
1. Availability of Internet: Even today, Internet connectivity and its reliability remains
unpredictable and, in some cases, simply insufficient when it involves propelling
these smart devices. Especially in India where home control continues to be in its
growth stages, this might be a big hurdle.
2. Infrastructural Systems: Supporting infrastructure like smart power grids, which are
indistinguishable and crucial parts of smart homes are still uncommon.
3. Price of IoT Enabled Systems: Indians consumers are very selective in terms of
investing in convenience and technology. This problem might be solved once the
concept of home automation will become more popular and relevant within the state.

MARKETING STRATEGY
The key focus of marketing strategy is to focus on a speedy, reliable, customizable and
durable home automation product for the customer which can solve their problems and give
them an experience like a king when they are at their home. At Home can cover a major
chunk of the home automation market as the product has the ability to cater to different
segments.
Mission
At home is on the mission to provide world-class home automation products to the
consumers to cater to their needs and demand. The company wants to attract and maintain
customers and build long-term relationships with them. With the belief that our product will
exceed consumer expectations, the future growth and prosperity of the company is assured.
Marketing objective
  Revolutionizing the market: The company wants to disrupt the market by moving to
things which are fully automatic with the help of artificial intelligence and technology
from the things which are manually operated.
 Growing consumer base: The company wants to maintain strong growth in the market
and raise its consumer base.
 Awareness about the product: The company wants its target audience to know each
and every feature of the product and its proper application so as to get a competitive
edge in the market.  

Financial Objectives
 Increasing revenue and profit: The company aims a double-digit growth in its revenue
and profit for the coming five years.
 Developing a strong research and development department: The company wants to
invest a good amount in the research and development department to get frequent
updates in the product and get a strong hold of the market in the future.

MARKETING TACTICS

FINANCIALS
SALES FORECASTING
Industry Sales Forecast –
The Indian sensible home market is anticipated to be around $6 billion by 2022, a two-fold
increase from $3 billion calculable in 2020, in step with Statista. Globally, that variety is
anticipated to reach $53.45 billion by 2022 growing at a CAGR of twenty- nine,
8% throughout the forecast amount 2019-2022.

Company Sales forecast

Since this home automation market is very new, therefore the sales forecast figures are
conservative. We will try our level best to increase the sales after the advertising campaigns
start. We are largely focusing on comfort and lighting part of the home automation system.
Focusing on only one segment will allow us to be clear with our action plan.

Sales 2020 2021 2022

Total Industry $ 3000 Mn $ 4535 Mn $ 6085 Mn

Industry - comfort $ 317 Mn $ 485 Mn $ 668 Mn

and lighting

Our Share- comfort 5% 8% 12%

and lighting

Total $ 15.85 Mn $ 38.8 Mn $ 80.16 Mn

EXPENSE FORECAST

Marketing Expense 2020 2021 2022

Budget
Website $ 0.224 Mn $ 0.7 Mn $ 2.8 Mn
Advertisement $ 0.448 Mn $ 2.1 Mn $ 5.0Mn
 Printing $ 0.448 Mn $ 0.7 Mn $ 1.0 Mn
Total $ 1.12 Mn $ 3.5 Mn $ 8.8 Mn
% of sales 7% 9% 11%

Q3) Design a Segmentation, Targeting and Positioning strategy for the new line of product
proposed to be introduced.

SEGMENTATION

Customers that have utility for our product will be  

 People renovating and upgrading their homes
 People who are building new homes for themselves
 Real-estate builders and interior decorators
 
Further, we divided these groups geographically, into 3 types - Metropolitan, urban, semi-
urban.
People renovating and upgrading their homes
We further divided this group based on the amount that people are willing to spend 
1. People spending less than 10 lakhs 
2. People spending between 10 to 50 lakhs 
3. People spending more than 50 lakhs

People who are building new homes for themselves

We further divided this group based on the amount that people are willing to spend 
1. People spending less than 30 lakhs 
2. People spending between 30 to 80 lakhs 
3. People spending more than 80 lakhs

Real-estate builder
We further divided this group based on builder providing economical priced, medium-priced,
and high-class luxury housing solutions to the people.

Further, we divided our customer on the basis of the following:

Age 
We divided our customer into 2 segments on the basis of age:
- Age group of 25 to 40
- Age group of 40 to 60
Physiographical factors
We divided customer into 5 segments that are Innovators, ideals, achievers, self-expressing,
and survivors.

TARGETING
Geographically
As we are in direct selling, we have to focus on the area where we have a high number of
customers per square km. For this, we have to focus on the metropolitan and the urban areas
because a large number of high-income groups are available here, which are our potential
customers.
Spending Capacity
We will be targeting more on the people spending 10 to 50 lakhs who can be our potential
customers and we will highly focus on the people spending more than 50 lakhs as they are
majorly in the desire of something new. Similarly, for the people who are building new
homes for themselves, we will be targeting those spending more than 30 to 60 lakhs and
focus highly on those spending more than 60 lakhs.
Also, we will be focusing on builders who are making medium-priced and luxury flats.
Age
The company will target the people age between 25-60, as they have the drive to experience
new things and are willing to spend on luxury products.
Physiographical factors
We will be focusing on Innovators and self-expressing groups as these people are highly
motivated people who are ready to try new products and take the risk for a new and different
experience which will be a perfect customer base for our product.

POSITIONING
We aim to position @Home as a technologically advanced company. @Home is not into
smart homes yet. With this product, we aim to introduce a new line of product. In the current
market situation, there is no such offering. Hence, we aim to capitalize on this exclusivity and
the market potential.
More importantly we want create a product that resonates with leisure and convenience and
one which comes at an affordable price. We will position the product as unique and
innovative by leveraging on its USP that it will have the Sensory system and the Automatic
customisation system, along side the traditional switchboards and remote-control facilities.
We also wish to position ourselves as a brand that aims for sustainable living and works
towards the same.