Marketing Research on Efficiency of Marketing

System on Spacewood Customer

Under the Guidance of:

Ms. Dimple Sawkar By:

& Darshan S
Mr. Nimish Thaker
 About the Company
• Spacewood was founded by the directors Kirit Joshi &
Vivek Deshpande in 1996, Nagpur
• It is the India's largest manufacture and preferred
consumer brand for Modular Furniture for the last 23
years
• It presently includes over 350 dealers, 17 company
owned stores across the country, 1,300 distributors, sub-
dealers and retailers
• Exports contribute to around 8% of the company’s total
turnover
• Its mission is to achieve “To achieve ₹1000 crores group
sales by 2022 led by a strong brand through value for
money, products, quality and service”
 Furniture Market
• Branded furniture market is valued at $58 billion in 2015;
expected to reach $165 billion in 2022
• The overall furniture market is 85% unorganized
• The branded furniture market in India is mainly
Executive concentrated in the cities

Summary Trends In the Furniture Sector

• Forward Integration
• Kids furniture gaining popularity
• Rising popularity of traditional furniture
• Modular Furniture
• Use of Recycled Wood
• Use of Innovative Materials
 Market Overview
• Furniture market in India is highly unorganized (85%) with
organized sector having 15% market share
• The branded furniture market in India is mainly catering to
premium segment customer and it is concentrated in the cities
• The furniture market is driven by increasing income levels and
increased consumption of the lifestyle products
• Key segments are:
• Domestic furniture which are for household uses
• Commercial furniture for office and hospitality sector
• The pre-existing manufacturers uses a three-tier selling and
distribution structure, comprising of the distributor, wholesaler
and retailer
 Key Consumer Raw Material
Segment Preferences
Consumer Segment Raw Material Usage

15% 65%

20%

25%
65%

10%

Household Office Contract Wood Metal Plastic

Source: KPMG Analysis Source: KPMG Analysis
Overview of Domestic and Commercial
Furniture Markets
• Domestic consumer market accounts for the 65% of the furniture market
• Manufacturers catering to this segment try to differentiate on the basis of
design, variety and price
• Demand of the furniture with international standards is limited to the
larger cities
• The premium segment families focus on the design and quality and price
is not a major concern for them
• The commercial furniture segment only caters for the office and the
hospitality segment
• The growth of the IT and ITES segment is the major target for them
• The major part of the office furniture market caters to the desk, storage
cabinets and chairs
• In commercial space manufacturers focus on the building a strong and
reliable brand
Drivers & Challenges
Drivers
• Increase in the disposable income
• Reduction in the import duties
• Growth in the real estate sector
• Growth in the organized retail
• Increasing in the quality consciousness among the
Indian consumer

Challenges
◦ Reduction in the timber harvest
◦ FDI regulation
◦ Market restricted to the cities
 Competition Overview
Indian Furniture companies
Furniture market is dominated by operate both, through direct
the unorganized players who selling in the market and through
offers high degree of the distributors but companies which
customization has large customer base tend to
sell directly
/
Manufacturers prefer a 3-tier
distribution structure comprising
of the distributor, wholesaler and
the retailer, the gross percentage
margin of retailer varies from 10%
- 15%

There are a large number of

furniture retailers and franchises
The market has witnessed the Leading manufacturers tend to
engaged in furniture retailing in
entry of the specialty of furniture spend 5%-10% of their revenue
India. Majority of the retailer are
chain in the furniture retailing on the advertisement
small scale and larger retailers
usually operate in the larger cities
 Strength
 Offers premium furniture designs at affordable price
 Largest modular furniture manufactures in India
 High degree of flexible designs in modular segment
 High quality standards and best quality assurance check
 Strong distribution channel (Over 350 distributors across
India)
Opportunity
 Lead generation can be done through E – commerce
 Social media advertising and lead generation
 Increase in online aggregators
 Hybrid business model offers scope for expansion
 Expanding Middle income group with larger pockets that
drive demand
Weakness
 Price driven industry that operates on demand
 Lack of expertise in sofa manufacturing segment
 Less product categories compared competitors
 Weaker brand presence and online presence
 Dependent on suppliers
Threats
 High competition from unorganised sector
 Emerging players from modular segment
 Government policy on the raw material usage
 Large variations in stock control owing to new
production methods
 Trends in the
• Forward Integration by plywood and laminate makers
are venturing into the branded furniture segment
• With the rise of single-child-double income families
Furniture Segment
many urban parents are investing high quality
furniture's for their kids space
• As consumers are looking for new designs their Forward
dating back old era of Mugal & Rajasthani Furniture integration
style for the luxury lifestyle
• The concept of the modular kitchen and awareness of Innovative Kids
Materials Furniture
it end to rise 10 times every 3-4 years
• Due to the shortage of wood many manufacturers are
Trends
using recycled wood for manufacturing
• There is also a demand for the solid recycled wood
• Many company are offering a diverse range of Recycled Traditional
Wood furniture
furniture made from particle board, MDF (Medium
Density Fiber Board) and HDF (High Density Fiber Modular
Board) Kitchen
 Key Findings from the Survey
Brand Awareness of Spacewood
• The Brand awareness of the
Spacewood is low compared to the
other market leaders
• Even though we enquired the
34.68%
customers who visited spacewood
website the awareness is only 35%(~)
• The company most go for the celebrity
65.32% endorsement to increase its brand
identity among its customers
 New Buyers Analysis
Products that Customers bought
Brands Customers Shortlisted
100

90 80

80 70

70 60

60 50
50 40
40 30
30 20
20 10
10 0
0

• From the above graph we can conclude that the highest demanded product is Wardrobe, Modular Kitchen, TV unit,
Sofa, Bed and Full Home Modular Furniture
• And also see in the second graph that the customer doesn’t have any idea of furniture brands apart from that the
pepperfry is the only online aggregator which is popular nowadays
• Hence the company can go for aggressive advertising and gain some brand presence and can also increase there
products base on Pepperfry
 New Buyers Analysis

Key Criteria
Customer Who Took Quotation after Contacting
Spacewood

18.88%

81.12%

Yes No

Design Price Warranty Material Durability Quality Brand Finishing Ergonomics

• From the graph we can observe that the majority of the customers
prefer the key criteria such as Design, Price, Material and Durability
• Despite the fact that the vast majority of the client doesn't go for the
branded furniture since they don't know material utilized in the
furnishings and its quality, if an awareness is created for the
customers about the base material and quality then I guess we
increment the customer base who purchases branded furnishings
• Since Economic segment customer's are price sensitive and they
always look for ‘value for money’ products the company can also go
for this segment by disclosing all the details of the manufacturing
furniture they are looking for
• The Premium Segment customers also are design oriented they have
high spending capacity and the main attributes that they look into
are design, durability
• From the second chart we can also conclude that the no. of people
who took quotation from spacewood is too less
• There are several reasons that they didn’t took quotation from
spacewood, but one of the most common was “Expensive compared
to other brands” this problem might be solved by providing
attractive offers to them and explaining about base material and its
strength (for economic segment)
 Furniture Brands that Customers are Aware of
30 Walk-ins
25
Analysis
• From the graph we can observe that
20 even walk-ins also doesn’t have any
idea about any furniture brands.
15 • Hence this will be a great opportunity
for the company to increase its
popularity by means of advertising
10
• The advertising strategy can be
formulated by different means which
5
will be shown in the coming slides
• Apart from that the only furniture
brand that the customers are aware of
0 is the market leader of the branded
furniture i.e., “Godrej Interio” and an
online aggregator “Pepperfry”
 Analysis for Advertising

Newspaper TV channel
45

40 35

35 30

30
25
25
20
20

15
15

10 10

5 5

0
Business Line Business Economic Times of Hindustan Mumbai Mumbai 0
Standards Times India Times Samachar Mirror News GEC Movie Infotainment
 Facebook Radio

14
12
10 39.30%
8
6
4
2
0
Once in a day More than 20 Once in a Once in 2 More than 10
times a day week days times a day

Series1 Yes No

Communicaton Medium that Influenced the Most

1%

17%

39%

20%

6%

Word of mouth Hordings Social Media Newspaper Radio

 Frequency of Refurbishment Online Aggregators

30 25

25
20
20
15
15
10
10

5 5

0 0
Never Once in 5 yrs Once in 10 yrs Once in 15 yrs Once in 20 yrs Pepperfry Flipkart Amazon Urban Ladder

• From the graphs we can observe that the best medium for advertising is ‘Newspaper’ because most of the
customers were influenced by that, apart from that the company can also go for ‘TV advertising’ & ‘Social Media
advertising’
• We can also observe that frequency of refurbishment of furniture's are mostly ‘Once in 5 yrs.’ & ‘Once in 10 yrs.’,
hence company can also devise a strategy and attract them and also encourage them by giving additional
discounts.
• Apart from that the most popular online aggregator is ‘Pepperfry’ & ‘Urban Ladder’ , hence company can increase
its products stake with them
 Existing Buyer Analysis
Products and Offerings Material & Finishing

20 16
18 14
16
12
14
12 10
10 8
8 6
6
4
4
2 2
0 0
Highly Satisfied Neutral Dissatisfied Highly Highly Satisfied Neutral Dissatisfied Highly
Satisfied dissatisfied Satisfied dissatisfied

Furniture Design Overall Experience

14 18
12 16
14
10
12
8 10
6 8
6
4
4
2 2
0 0
Highly Satisfied Neutral Dissatisfied Highly Highly Satisfied Neutral Dissatisfied Highly
Satisfied dissatisfied Satisfied dissatisfied
 • Since most of the Indian furniture sector is unorganized the company can
try to tap this segment by catering all the segments of the customers
• Currently the company only caters to the premium segment customer
because of their high spending power but the real market consists of
economy segment
• The distribution channel of the company is the prime key point of the
sale
• The price of the furniture is not an important consideration factor, as long
as the “design” and “quality” of the furniture meet the requirements. As
consumers are most concerned about quality and design in cases where
Conclusion price is an indicator of quality and design, they do not mind paying more
• Hence the company should must add more designs to their list and must
cater to both economy and premium segment customers who are moving
to new home
• The company should also go for aggressive advertising to attract
customers, since the brand awareness is too less
• The various options for the advertising are “Newspaper” & “TV Channel”
& “Social Media” I would not suggest to go for Radio advertising, because
most of the customer doesn't listen to it and effectiveness of Radio
advertising is also too low
• Lastly, from the frequency of refurbishment graph the company can also
go for attracting those customers and providing attractive offers for them
Thank You