Jewellery buying behaviour


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Jewellery buying behaviour

  2. 2. Introduction India is a country which is rich in culture and heritage. Gold has played an important part in India's culture and continues to play an integral part in our lives. Gold plays a pivotal role in our daily life. It can be clearly said that Indians love for gold is almost a religion. Besides being a symbol of wealth and status, gold is also used for worship and culture. Indian jewelery varies from region to region catering to local tastes. In India we have the traditional and modern methods of making gold. In India, jewelery design has been greatly inspired by nature : paisley motif of the mango, rice grains, melon and cucumber seeds, etc. The modern methods have new process which are used in designing ornaments and are far more popular than the traditional ones. In the past 20 years India's economy is growing at a rapid rate and the purchasing capacity of an Indian has increased to a great extent. Every Indian now aspires to buy gold. In India,nothing is more valuable than purchasing gold. For Indians, gold is wealth, financial security and also a fashion statement. These factors make India the largest consumer of gold in the world . Historical Perspective The history of gold began in remote antiquity. According to archaeological evidence , man's first encounter with gold was supposed to be in the 40,000 B.C when experts found traces of gold in Spanish caves used by the paleolithic man. Initially gold was used as a decorative item in several cultures around the world. Egyptian cultures was specifically known to be patrons of the yellow metal and it reflected in their culture immensely. From India's perspective, Indians from per-historic times had a penchant for adorning themselves with jewelery made from gold. Ever since time immemorial people used to adorn themselves with a variety of jewels like necklace,anklets,earrings etc. With the passage of time, people soon learned the art of polishing gold and silver and to extract semi-precious gems and stones from the mines. In ancient times gold was used for various purposes like, jewelery-making, barter system, decoration, coin minting etc. Jewelery Sector in India Indian jewelery industry is growing at a fast rate of almost 15%. In India, there are around 15,000 vendors in the gold processing industry and about 450,000 gold smiths spread across the length and breadth of the country .There are also about 6000 vendors in the diamond processing industry in India. India’s total consumption of gold in 2011 was around Rs 974 billion. Gold is consumed most in South India(37%),West India(32%) , North India(18%) and East India(13%) in that order. Around 75% of India's total gold consumption is for jewelery , 23% for investment and 2% for industrial and decorative use. Classification of jewelery industry The jewelery industry can be broadly classified into two types which in turn are further divided into six types. The pictorial representation of the classification of the industry is given below 2
  3. 3. The classification of the jewelery industry is given below: Competitors in Indian Jewelery Market There are around 15,000 gold vendors in India. Some of the prominent and reputed ones in India are listed below • • • • • • • • • • • • • • • • • • • 3 Tanishq G.R. Thanga Maligai Saravana Stores Thanga Maligai Nakshatra D'Damas Asmi Nirvana Gili Kirtilal Kalidas & Co Vummidi Bangaru Jewellers Gitanjali Joy Alukkas Jos Alukkas Prince Alukkas Francis Alukkas Prince Jewelery Tata Gold Plus Khazana Jewelery NAC Jewelers
  4. 4. Comparison between Branded and Non-Branded jewelery Branded Jewelery Non Branded Jewelery Name and reputation gives confidence Customers can tailor make their jewelery to buyer according to their preferences It comes with a written lifetime No written lifetime guarantee. Purely based on guarantee trust of the customer Excellent quality and service back up Minimum effort in packaging and service Has a more contemporary and stylish Usually bulky and traditional design Available in multiple outlets Available only in traditional jewelery outlets Consumer Behavior According to Leon G Schiffman and Leslie Lazar, Consumer Behavior is defined as the behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their need. Also according to Philip Kotler, Consumer Behavior is the study of how individuals, groups and organisations select, buy, use and dispose goods, services, ideas or experiences to satisfy their need and wants. Consumer behavior focuses on how individuals make decisions to spend their available resources on consumption related items. That includes what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate it after the purchase, the impact of such evaluations on future purchases and how they dispose it. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Consumer Behavior can also be said to be an amalgamation of various disciplines like psychology, social anthropology and sociology. Factors affecting Consumer Behavior There are several factors which affect Consumer Behavior. They are given below • • • • Cultural Social Personal Psychological Factors such as cultural, social, personal, psychological which affect consumer behavior have other major classification in them which will also play a major role in affecting the behavior of a consumer to a great extent. The pictorial representation of it is given in the next page. 4
  5. 5. The visual representation is given below. Types of Buying Behavior 1. Complex Buying Behavior: Complex buying behavior involves a three-step process; first, the buyer develops beliefs about the product. Second, he or she develops attitudes about the product. Third, he or she makes a thoughtful choice. When the customer is involved in complex buying, they are aware of significant differences in brands. This is the case when the products are expensive, bought frequently, risky and highly self expressive. In this case the customer does not know much about that category. For example, a person buying a personal computer may not know what attributes to look for. Many product features carry no meaning, unless the buyer has done some research. 2. Dissonance – Reducing Buyer Behavior: Sometimes the consumer is highly involved in a purchase but sees little difference in brands. The purchase is expensive, infrequent, and risky; therefore the consumer is highly involved. In this case, the buyer will go around to learn what is available, but will buy when he gets a good price. After the purchase, the consumer might experience dissonance that stems from noticing certain odd features or hearing favorable things about other brands. The consumer will be alert to information that supports his or her decision. In this case, the consumer first acted, then acquired new beliefs, then ended up with a set of attitudes. Marketing communications should supply beliefs and evaluations that help feel good about his or her brand choice. 5
  6. 6. 3.Habitual Buying Behaviour: There are many products which are bought under conditions of low involvement and the absence of significant brand differences. Take a simple example of salt. Consumers have little involvement in this product category. They go to the shop and reach for the brand. If they keep reaching for the same brand, it is out of habit, riot strong brand loyalty. It is-evident that consumers have low involvement with most low-cost, frequently purchased products. With these products, consumer behavior does not pass through the ‘normal sequence of belief, attitude and, behavior. Consumers do not search extensively for information, evaluate characteristics and make decisions on which brand to buy. Instead they are passive recipients of information through television or print ads. The repetition of ads creates brand familiarity rather than brand conviction. After making the purchase, they may not even evaluate the choice because they are not highly involved with the product. For low involvement products, the buying, process begins with brand beliefs formed by passive learning & is followed by purchase behavior which may be followed by evaluation. 4. Variety seeking Buying Behaviour : There has some buying situation that an characterized by low involvement but significant brand differences. In such cases the consumer often goes into a lot of brand switching. Take the example of chocolates. The consumers has some beliefs about chocolates, chooses a brand of chocolates without much evaluation, & evaluates the product during consumption. Next time, the consumer may reach for another brand out of a wish for a different taste. In this case the brand switching occurs for the sake of variety rather than dissatisfaction. Decision Making Decision making is referred to the series of steps which helps us in shortlisting one alternative out of many alternatives. Decision making involves the following: Objectives must first be established Objectives must be classified and placed in order of importance Alternative actions must be developed The alternative must be evaluated against all the objectives The alternative that is able to achieve all the objectives is the tentative decision The tentative decision is evaluated for more possible consequences The decisive actions are taken, and additional actions are taken to prevent any adverse consequences from becoming problems and starting both systems (problem analysis and decision making) all over again • There are steps that are generally followed that result in a decision model that can be used to determine an optimal production plan. • In a situation featuring conflict, role-playing is helpful for predicting decisions to be made by involved parties. • • • • • • • 6
  7. 7. Decision Making Process Need Recognition and Problem Awareness This is the stage when consumer recognizes a problem or need. The need can be triggered by internal or external stimuli when one of the person's needs rises to a level high enough to become a drive. Information Search Once the consumer has recognized a problem, they search for information on products and services that can solve that problem. Belch and Belch (2007) explain that consumers undertake both an internal (memory) and an external search. Sources of information include: • • • • Personal sources Commercial sources Public sources Personal experience The relevant internal psychological process that is associated with information search is 7
  8. 8. perception. Perception is the process by which an individual receives, selects, organizes, and interprets information to create a meaningful picture of the world. Consumers' tendency to search for information on goods and services makes it possible for researchers to forecast the purchasing plans of consumers using brief descriptions of the products of interest. Evaluation of alternatives At this time the consumer compares the brands and products that are in their evoked set. The evoked set refers to the number of alternatives that are considered by consumers during the problem-solving process. Sometimes also known as consideration , this set tends to be small relative to the total number of options available. Consumers evaluate alternatives in terms of the functional and psychological benefits that they offer. The marketing organization needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a decision. It also needs to check other brands of the customer’s consideration set to prepare the right plan for its own brand. Purchase Decision Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase intention does not result in an actual purchase. The marketing organization must facilitate the consumer to act on their purchase intention. The organization can use a variety of techniques to achieve this. The provision of credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now. The relevant internal psychological process that is associated with purchase decision is integration. Once the integration is achieved, the organization can influence the purchase decisions much more easily. Post Purchase Evaluation Post-purchase evaluation processes are directly influenced by the type of preceding decisionmaking process. Directly relevant here is the level of purchase involvement of the consumer. Purchase involvement is often referred to as the level of concern for or interest in the purchase situation, and it determines how extensively the consumer searches information in making a purchase decision. Reasons why Indians buy gold There are several reasons why Indians buy gold. Some of them are listed below : 1) Gold is considered an equivalent for liquid cash: Gold is highly liquid and portable as a security or asset. It can be converted to cash anytime when an emergency arises and is considered a friend in need. 2) Gold is considered as Status Symbol: Especially in India, gold symbolizes wealth. In Indian weddings the gold the bride brings in show her family's status and wealth and forms part of the dowry given to bride. It is believed that a bride wearing 24k gold on their wedding day brings luck and happiness throughout her married life. 8
  9. 9. 3) Gold is a very good investment: Gold is an asset which has consistently increased in value and thereby considered as a safe and secure investment. Gold is considered an effective alternative which helps to reduce portfolio risk. 4) Gold is considered as a good gift item: It is precious and worthy across all cultures and times. The gold jewelry is given as gifts during weddings, festivals and other special occasions. 5) Gold has great religious significance: Gold is the symbol of the Hindu Goddess Lakshmi and considered highly auspicious. Gold is brought or presented on festivals like Dhanteras and Akshaya Tritiya. Toe rings are never made of gold as it represents the goddess of wealth and should not be soiled by touching a human's feet. 6) Great Ornamental Value: No Indian woman can resist gold ornaments. Women of every age and time have always loved wearing gold ornaments. Moreover, gold ornaments are never out of fashion. It also may be remembered that wedding rings are also traditionally made of gold to mark a long lasting relationship. 7) Great value as Heirloom: Gold jewelry is something which can be passed down from one generation to the other as ancestral property. 8)Importance placed to events such as Akshaya Tritya:According to the Hindu Calendar, Akshaya Tritiya is a very auspicious occasion for new beginnings. Buying gold is also a popular activity as it is the symbol of wealth and prosperity. Gold bars, coins and gold jewelery bought and worn on Akshaya Tritiya signify never diminishing good fortune. During the period both banks and jewelers promote gold sales aggressively, offering the best prices and discounts. Customer demand during Akshaya Tritiya surges due to a belief that gold purchases go a long way in securing the future. 9)Gold used for wedding purpose : The one event that drives most of that demand is an Indian wedding. There may be no wedding like an Indian wedding. The events can last for days with music and dancing and traditions that go back centuries. Everywhere you look, there's a collection of colors, flowers and food. And then there is also gold. Here it's a symbol of purity that also shows off the couple's wealth and well being. Reasons for Kerala's obsession with gold Kerala is one state in India which accounts for nearly one-third of India's total gold sales. This is due to a large number of factors which are listed below. 1. Ability of Kerala based NRI's to invest large amount of money in gold. 2. Willingness to invest in gold . 3. Dowry system widely prevalent in Kerala. 4. Part of lifestyle. 5. Survey has proved that Kerala women do not like wearing the same jewelery on all occasions. So they buy new ones frequently. 6. Stare Government patronage to the sale of gold industry. 7. Influence of elders in decision-making. 9
  10. 10. Statistical Data related to gold buying behavior A survey was conducted by the ATR Institute of Jewelery Design regarding the gold buying behavior amongst Indians. The survey was conducted amongst 550 respondents drawn from 10 Indian cities. Questionnaire method was adopted for field research and the data collected were analyzed using statistical software such as SPSS and MS -EXCEL. The following findings were obtained from the survey: 1.Indian city-wise gold buying behavior/trend Product Fashion Jewelery B'lore Chennai Cochin Delhi Hyd Jaipur Kolkata Mumbai 0.00% 4.00% 4.00% 0.00% 0.00% Gold Jewelery studded 13.00% 0.00% with color gemstones 7.00% 5.00% 7.00% 0.00% 15.00% 2.00% 38.00% 5.00% 7.00% 4.00% 0.00% 65.00% 9.00% 22.00% Gold Jewelery studded with diamonds Plain Gold jewelery Pearl Jewelery Platinum Jewelery Platinum Jewelery studded with diamonds Silver Jewelery Synthetic Diamond Jewelery 10 0.00% CBE 45.00% 2.00% 2.00% 0.00% 0.00% 71.00% 95.00% 56.00% 55.00% 87.00% 98.00% 11.00% 89.00% 36.00% 0.00% 0.00% 4.00% 0.00% 0.00% 2.00% 2.00% 0.00% 0.00% 5.00% 3.00% 9.00% 9.00% 2.00% 0.00% 5.00% 0.00% 2.00% 5.00% 0.00% 15.00% 16.00% 0.00% 0.00% 0.00% 0.00% 2.00% 2.00% 0.00% 0.00% 2.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2.00% 0.00% 0.00% 0.00% 0.00% 0.00%
  11. 11. 2.Occasions on which jewelery in bought in India 3.Brands trusted most and purchased by customers 11
  12. 12. 4.To whom is the jewelery usually bought 5.Ornaments most likely to buy 12
  13. 13. 6.Place of purchase 7.Frequency of purchase 13
  14. 14. 8.Influences in choice of jewelery store Conclusion Gold has played an important role in the life of Indians from time immemorial. They have been an integral part of our culture and it is evident that gold is not alone used for jewelery but for other purposes as well. Times and cultures have changed, people's perceptions have changed, tastes have changed, people's outlook have changed, but the approach of people towards gold has not changed and gold still continues to be an indispensable part in the life of an Indian. 14
  15. 15. References 1. The Midas Touch, Business Standard 2. “Marketing Management” by Philip Kotler, Kevin Keller, Abraham Koshy, M Jha 3. “Organization Behaviour” by Jit S Chandan 4. “Consumer Behaviour” by Leon G Schiffman and Leslie Lazar 5. “The Consumer Survey” by Ved Prakash Sharma 6. The Real Price of Gold (National Geographic) 7. 8. 9. 10. 15