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  2. 2. DECLARATIONI hereby declare that the project report entitled “A COMPARATIVE STUDY ON THECONSUMER’S PREFERENCE TOWARDS BRANDED JEWELLERY OVER NONBRANDED JEWELLERY IN MUMBAI” carried out at S.P.JEWELLERS is my worksubmitted in partial fulfillment of the requirement for Degree of MASTER OF MANAGEMENTSTUDIES (MMS), UNIVERSITY OF MUMBAI from KOHINOOR BUSINESS SCHOOL,KURLA, MUMBAI and not submitted for the award of any degree, diploma, fellowship or anysimilar titles or prizes.Date: Signature: _______________Place: Mumbai Student Name: ___________ 2
  3. 3. CERTIFICATEThis is to certify that the project entitled “A COMPARATIVE STUDY ON THECONSUMER’S PREFERENCE TOWARDS BRANDED JEWELLERY OVER NONBRANDED JEWELLERY IN MUMBAI” is successfully completed by “Chetan N Nakte”during the second year of her course, in partial fulfillment of the Masters Degree in ManagementStudies, under the University of Mumbai, through KOHINOOR BUSINESS SCHOOL,Kurla, Mumbai-400070.Date:Place: Mumbai “Dr.Amit Aggrawal” 3
  4. 4. ACKNOWLEDGEMENT It is my privilege to express my gratitude and respect to those who guided and inspiredme in the completion of this project. I am deeply indebted to my project guide of the Kohinoor Business School Dr.AmitAggrawal for giving me this opportunity to undergo my project in his esteemed organizationand for his timely suggestions and valuable guidance. I also want to give thanks to Mr. Namdev G Nakte He constantly encouraged me andshowed me the right path from day one till the completion of my project. I am also thankful to Mr. Dattaram Pujari for helping me to proceed in conducting thesurvey and complete it on time. I am grateful to the Director, Faculties, administrative staff and the librarian of KohinoorBusiness School for providing me all the support required for successful completion of myproject. Chetan N Nakte 4
  7. 7. Executive SummerySociety is a diversified in all aspects. We see this among consumers, marketers, producersand even among consumer behavior from theoretical aspects.The study of consumer behavior enables marketer to predict a consumer behavior in themarket; it also produces under standing of the role that consumption has in the lives ofindividuals.Consumer behavior is defined as a behavior that consumers display while searching forpurchase, using, evaluation and disposal of products, services and ideas that they to satisfytheir needs. The study o f consumer behavior is concerned not only with what consumersbuy, but also with what they buy it, when, from where and how they buy it and how oftenthey buy it. It is concerned with learning the specific meanings that products hold forconsumers. Consumer research takes place at every phase of the consumption process; beforethe purchase, during the purchase and after purchases.Consumer behavior is the study of how people buy, what they buy, when they buy and whythey buy. It attempts to understand the buyer decision processes/buyer decision makingprocess, both individually and in groups. It studies characteristics of individual consumerssuch as demographics, psychographics, and behavioral variables in an attempt to understandpeoples wants. It also tries to assess influences on the consumer from groups such as family,friends, reference groups, and society in general.What we buy, how we buy, where and when we buy, in how much quantity we buy dependson our perception, self concept, social and cultural background and our age and family cycle,our attitudes, beliefs, values motivation, personality, social class and many other factors thatare both internal and external to us.Consumer behavior is interdisciplinary; i.e. it is based on concepts and theories about peoplethat have been developed by scientist in such diverse disciplines as psychology, sociology,social psychology, cultural anthropology and economics. Consumer research is themethodology used to study consumer behavior. 7
  8. 8. The study of consumer behavior is the study of ho individuals make decision to spend theiravailable resources on consumption elated items. It includes the study of what, why, whenand form where they buy etc.Consumer behavior is a relatively new field of study emerged in late 1960s with no history orbody of research of its own unlike branches of economics. Many early theories concerningconsumer behavior were based on economic theory on the notion that individuals act tomaximize their benefits in the purchase of goods and services.There are number of reasons why the study of consumer behavior developed as a separatemarketing discipline. As sum as the marketing researchers began to study the buyingbehavior of customers, they realized that, despite a something “me too” approach to fashions,many consumer rebelled at using the identical products everyone else used. The primarypurpose or studying as part of a marketing curriculum is to understand why and howconsumers make their purchase decisions. These insights enable marketer to design moreeffective marketing strategies.Consumer behavior has become an integral part of strategic market planning. The belief thatethics and responsibility should also be integral components of every marketing concept,which calls on marketer to fulfill the needs of their target market in ways that improvesociety as a whole. 8
  9. 9. Objective of studyThe objective to study the “A comparative study on the consumer’s preference towardsbranded jewellery over non branded jewellery in Mumbai.” is to find out 1) The consumer‟s buying preferences 2) The reach of branded jeweler‟s 3) Brand awareness of various brands in the jeweler‟s market 9
  10. 10. Research MethodologyResearch is initiated by examining the secondary data to gain insight into the problem. Theprimary data is evaluated on the basis of the analysis of the secondary data.DEVELOPING THE RESEARCH PLANThe data for this research project would be collected through questionnaire. A structuredquestionnaire would be framed as it is less time consuming, generates specific and to the pointinformation, easier to tabulate and interpret. Moreover respondents prefer to give direct answers.Both type of questions i.e. Open ended and closed ended, would be used.COLLECTION OF DATA a) Secondary Data: It was collected from internal sources. The secondary data was collected from the articles, news papers, management books, and the internet. b) Primary data: They were the main source of Primary data. The method of collection of primary data would be direct personal interview through a structured questionnaire.SAMPLING PLANSince it is not possible to study whole population, it is necessary to obtain representative samplesfrom the population to understand its characteristics. 1) Sampling Units: would comprise of men and women. 2) Research Instrument: Structured QuestionnaireSAMPLE SIZE  100 respondent 10
  11. 11. The primary data would be collected from 1) The population of MUMBAI cityThe secondary data would be collected from: 1) Books 2) Magazines/ Project report 3) Internet 4) ArticlesThe questionnaire‟s response format for the population would be close ended questions. With amix of question types varying from ranking, multiple choice to checklist questions. The attitudeof the respondents would be measured by itemized category scales, pictorial scale.Hypothesis –The null hypothesis would be: “50% of the consumer prefers buying branded jewellery.”The alternative hypothesis would be: “More than 50% of the consumer prefers buying nonbranded jewellery.” 11
  12. 12. Significance of the studyThe gems and jewellery industry occupies an important position in the Indian economy and isone of the fastest growing industries in the country.Hence the research conducted would help me 1) Understand the consumers preference while purchasing jewellery 2) How much impact does a brand have on their purchase decision 3) Does price play an important role in guiding their purchase decision 12
  13. 13. Justification of the studyThe previous research done on branded and non branded jewellery markets are 1) Indian Gems and Jewellery Market - Future Prospects to 2011 2) The impact of recession on the jewellery industry 3) The growth of the Branded jewellery market in India No study has been done to find out the preference of consumer‟s between branded and non branded jewelers. The study would also help to find out the consumer preference and their buying behavior towards branded and non branded jeweler‟s, this would help both the retailers to know what are the consumer preference and what strategies should they adapt to grab the market. 13
  14. 14. IntroductionTill the early 1990s, the average Indian bought jewellery for investment rather than foradornment. Jewellery made of 18-karat gold was not favored as it was considered a poorinvestment.Confidence in the local jeweler was the hallmark of the gold jewellery trade in India. A jeweleror goldsmith in a local area had a fixed and loyal clientele. The buyer had implicit faith in hisjeweler. Additionally, the local jeweler catered to the local taste for traditional jewellery.However, since the late 1990s, there was a shift in consumer tastes: women were increasinglyopting for fashionable and lightweight jewellery instead of traditional chunky jewellery. Therewas a rise in demand for lightweight jewellery, especially from consumers in the 16 to 25 agegroup, who regarded jewellery as an accessory and not an investment. The new millenniumwitnessed a definite change in consumer preferences.Branded jewellery also gained acceptance forcing traditional jewelers to go in for branding.Given the opportunities the branded jewellery market offered; the number of gold retailers in thecountry increased sharply. Branded players such as Tanishq, Oyzterbay, Kisna and Carbonopened outlets in various parts of the country. Traditional jewelers also began to bring outlightweight jewellery, and some of them even launched their in-house brands. However, theshare of branded jewellery in the total jewellery market was still small (about Rs. 10 billion ofthe Rs. 400 billion per annum jewellery market in 2002), though growing at a pace of 20 to 30percent annually. The branded jewellery segment occupied only a small share of the totaljewellery market because of the mindset of the average Indian buyer who still regarded jewelleryas an investment. Moreover, consumers trusted only their family jewelers when buyingjewellery. Consequently, the branded jewellery players tried to change the mindset of the peopleand woo customers with attractive designs at affordable prices.However branded jewellery players will continue to face lot of competition from local jewelers.In order to gain market share, they will have to come up with designs that customers want and 14
  15. 15. win the trust and confidence of consumers by hallmarking and demonstrating the purity of thegold used by them.To compete with traditional players, branded players must also find some way to differentiatethemselves. While the success of a particular brand will depend on differentiation, affordabilityand quality will be a key element in sustaining a brand.In addition, branded players require focused advertising and astute salesmanship to compete withtraditional jewelers. Besides the major brands- Tanishq, Carbon, Oyzterbay, Kisna andTrendsmith - several regional players have opened branches to leverage the trust and reputationthat they have built up over the years.The emergence of branded gold jewelleryIn the late 1990s, the Indian jewellery market witnessed a shift in consumer perceptions ofjewellery. Instead of being regarded as only an investment option, jewellery was being prized forits aesthetic appeal. In other words, the focus seemed to have shifted from content to design.Trendy, affordable and lightweight jewellery soon gained familiarity. Branded jewellery alsogained acceptance forcing traditional jewelers to go in for branding.Given the opportunities the branded jewellery market offered; the number of gold retailers in thecountry increased sharply. Branded players such as Tanishq, Oyzterbay, Kisna and Carbonopened outlets in various parts of the country. Traditional jewelers also began to bring outlightweight jewellery, and some of them even launched their in-house brands.However, the share of branded jewellery in the total jewellery market was still small (about Rs.10 billion of the Rs. 400 billion per annum jewellery market in 2002), though growing at a paceof 20 to 30 percent annuallyThe branded jewellery segment occupied only a small share of the total jewellery market becauseof the mindset of the average Indian buyer who still regarded jewellery as an investment.Moreover, consumers trusted only their family jewelers when buying jewellery. Consequently,the branded jewellery players tried to change the mindset of the people and woo customers withattractive designs at affordable prices. 15
  16. 16. Gold Jewellery Market in IndiaBefore the liberalization of the Indian economy in 1991, only the Minerals and Metals TradingCorporation of India (MMTC) and the State Bank of India (SBI) were allowed to import gold.The abolition of the Gold Control Act in 1992, allowed large export houses to import gold freelyExporters in export processing zones were allowed to sell 10 percent of their produce in thedomestic market. In 1993, gold and Gold ornaments mining were opened up for private investorsand foreign investors were allowed to own half the equity in mining ventures. In 1997, overseasbanks and bullion suppliers were also allowed to import gold into India. These measures led tothe entry of foreign players like DeBeers, Tiffany and Cartiers into the Indian market.In the 1990s, the number of retail jewellery outlets in India increased greatly due to the abolitionof the Gold Control Act. This led to a highly fragmented and unorganized jewellery market withan estimated 100,000 workshops supplying over 350,000 retailers, mostly family-owned, singleshop operations. In 2001, India had the highest demand for gold in the world; 855 tons wereconsumed a year, 95% of which was used for jewellery. The bulk of the jewellery purchased inIndia was designed in the traditional Indian style.Jewellery was fabricated mainly in 18, 22 and 24-carat gold. As Hallmarking was not verycommon in India, under-carat age was prevalent. According to a survey done by the Bureau ofIndian Standards (BIS), most gold jewellery advertised in India as 22-carat was of a lesserquality. Over 80% of the jewelers sold gold jewellery ranging from 13.5 carats to 18 carats as22-carat gold jewellery.The late 1990s saw a number of branded jewellery players entering the Indian market. Titan soldgold jewellery under the brand name Tanishq, while S.P.Jewellers Jewels, a Mumbai-basedjewellery exporter, sold 18-carat gold jewellery under the brand name Kisna. S.P.JewellersJewels also started selling 24-carat gold jewellery in association with a Thai company, Pranda.Su-Raj (India) Ltd. launched its collection of Gold ornaments and 22 -carat gold jewellery in1997.The Mumbai-based group, Beautiful, which marketed the Tiffany range of products in India,launched its own range of studded 18-carat jewellery, Dagina. Cartiers entered India in 1997 in afranchise agreement with Ravissant. Other players who entered the Indian branded gold 16
  17. 17. jewellery market during the 1990s and 2000-01 included Intergold Gem Ltd., Oyzterbay, Carbonand Tribhovandas Bhimji Zaveri (TBZ).Kisna: In 1994, Kisna Jewellery was established as a distinct brand by S.P.Jewellers Jewels, soonafter the abolition of the Gold Control Act by the Indian government. Kisna offered a wide rangeof 18-carat plain gold and Gold ornaments-studded jewellery, designed for the contemporaryIndian woman. The designs combined both the Indian and western styles and motifs. With salesof Rs.0.14 billion for the year 2000-01, Kisna had a 0.03 percent share of the 400 billionjewellery market in India and a 1.4 percent share of the branded jewellery market.Tanishq: In 1984, Questar Investments Limited (a Tata group company) and the Tamil NaduIndustrial Development Corporation Limited (TIDCO) jointly promoted Titan Watches Limited(Titan). Initially involved in the watches and clocks business, Titan later ventured into thejewellery businesses. In 1995, Titan changed its name from Titan Watches Ltd. to TitanIndustries Ltd. in order to change its image from that of a watch manufacturer to that of afashion accessories manufacturer. In the same year, it also started its jewellery division under theTanishq brand.Among the branded jewellery players in the Indian market, Tanishq is considered to be atrendsetter. When it was launched in 1995, Tanishq began with 18-carat jewellery. Realizing thatsuch jewellery did not sell well in the domestic market, the 18-carat jewellery range wasexpanded to include 22 and 24-carat ornaments as well. When Tanishq was launched, it soldmost of its products through multibrand stores. In 1998, Tanishq decided to set up its own chainof retail showrooms to create a distinctive brand image.By 2002, Tanishq retailed its jewellery through 53 exclusive stores across 41 cities. To meetincreasing demand, Tanishq planned to open 70 stores by the end of 2003 and offer a range ofwearable products with prices starting at Rs. 400. With sales of Rs. 2.66 billion in 2000-01,Tanishq had a 0.66 percent share of the total jewellery market and a 27 percent share of thebranded jewellery market.Carbon: In early 1991, the Bangalore based Peakok Jewellery Pvt. Ltd., (Peakok) wasincorporated and Mahesh Rao (Rao) was appointed director. Peakok realized that the Indianconsumers relationship with gold jewellery would grow beyond an investment need towards alifestyle and personality statement. In 1996, within the Peakok fold a new brand of 18-carat gold-based jewellery called Carbon was launched. 17
  18. 18. In 2000-01, with sales of Rs. 0.14 billion, carbon had a 0.03 percent share of the jewellerymarket and a 1.4 percent share of the branded jewellery market. The company expected Carbonsales to touch Rs. 1.5 billion by 2005-06 and exports to start by 2008. The brand was available at40 outlets in 16 cities in 2002 and would be made available in 23 cities by 2005.Oyzterbay: Oyzterbay was founded by Vasant Nangia and his team in July 2000. It beganoperations in March 2001. By November 2002, the company had 41 outlets across the country.Oyzterbay seeks to build a national brand in the jewellery industry in India and aspires to be thelargest branded jewellery company in the country with a chain of 100 stores and severalhundred-distribution points by 2004. With sales of Rs. 0.17 billion in 2000-01, Oyzterbay had a0.04 percent share of the Rs.400 billion jewellery market and a 1.7 percent share of the brandedjewellery marketTrendsmith: Mumbai-based Tribhovandas Bhimji Zaveri (TBZ), which had been in the jewellerybusiness since 1864, saw tremendous scope in the branded segment and opened its new conceptstore Trendsmith in Mumbai in December 2001. Encouraged by the response towards its firststore, the Zaveris planned to take Trendsmith (India) Pvt. Ltd. all over the nation by opening asmany as 50 stores by 2006. Trendsmith offered eight lines of exclusive designer jewellery fromwell-known export jewellery manufacturers and designers from Mumbai and Delhi.BRANDED GOLD JEWELLERY MARKET (MAJOR PLAYERS)Brand Market share (2000-01) in %)Tanishq 27.0Oyzterbay 1.7Kisna 1.4Carbon 1.4Source: ICFAI Centre for Management Research. 18
  19. 19. Gold Jewellery Becomes Fashion AccessoryTill the early 1990s, the average Indian bought jewellery for investment rather than foradornment. Jewellery made of 18-karat gold was not favored as it was considered a poorinvestment. Confidence in the local jeweler was the hallmark of the gold jewellery trade in India.A jeweler or goldsmith in a local area had a fixed and loyal clientele. The buyer had implicitfaith in his jeweler. Additionally, the local jeweler catered to the local taste for traditionaljewellery.However, since the late 1990s, there was a shift in consumer tastes: women were increasinglyopting for fashionable and lightweight jewellery instead of traditional chunky jewellery. Therewas a rise in demand for lightweight jewellery, especially from consumers in the 16 to 25 agegroup, who regarded jewellery as an accessory and not an investment. The new millenniumwitnessed a definite change in consumer preferences. According to Samrat Zaveri, CEO ofTrendsmith, "Research shows that the Indian jewellery sector is in the transition phase withconsumers desire for possession of jewellery for its aesthetic appeal and not as a form ofinvestment."In October 2002, Trendsmith conducted a survey to understand the shifting needs, motivationsand aspirations of consumers in the jewellery market, and to identify new trends andopportunities. The research study arrived at the following conclusions:• The Indian market was witnessing an accelerated shift from viewing jewellery as an investmentto regarding it as aesthetically appealing ornaments. The focus had shifted from content todesign.• The younger generation was looking at trendy, contemporary jewellery and clearly avoidingheavy, traditional gold jewellery.• The consumer wanted a wider selection at a single convenient location and expected aninternational shopping experience.• The Indian consumer was willing to experiment with new designs.The late 1990s and early 2000s, with the increase in the number of designers from design schoolssuch as the National Institute of Fashion Technology (NIFT), a wide range of new designs. 19
  20. 20. Strategies for Wooing CustomersTanishqIn the late 1990s, players in the branded gold jewellery market formulated strategies for wooingcustomers. According to Jacob Kurian (Kurian), Chief Operating Officer of Tanishq, thechallenges were many. As the jewellery market was highly fragmented, lacked branding, andallowed many unethical practices to flourish, Tanishq worked hard on a two-pronged brand-building strategy: cultivate trust by educating customers about the unethical practices in thebusiness and change the perception of jewellery as a high-priced purchase. Said Kurian, "We arechanging the attitudes of customers from blind trust to informed trust."To increase its market share, Tanishq formulated a strategy for luring people away fromtraditional neighborhood jewelers. Tanishqs strategy was to create differentiation and build trust.According to Kurian, the first part of the strategy was "to provide a point of differentiation in ahighly commoditized category - which is the whole point of branding." The second part of thestrategy was to project Tanishq as an unimpeachable mark of trust. According to Kurian, "Ifdifferentiation plays the role of primary attraction, trust takes care of lifelong loyalty.”One way to create differentiation was through design. The emphasis had to be on design becauselocal jewelers could offer to design any pattern according to the customers specifications. For anational brand a generic design concept with regional variations had to be evolved.For this, Tanishq set up a seven member in-house design team and also outsourced designs fromfreelance designers. The designers travelled the length and breadth of the country to get feedbackon Tanishqs designs and learn about customer preferences. On the basis of this feedback, eachshowroom could select the designs it would carry.Source:http://www.icmrindia.org/free%20resources/casestudies/branded-gold-jewellery1.htm 20
  21. 21. Brand appealBranded jewellery has found a niche for itself in the tough Indian market, and its increasinggrowth rates show that before long it will corner a significant share of the jewellery market.WITH the retail industry in India burgeoning, several companies have made inroads into thetraditional jewellery industry, selling the product that was never really "marketed" in "brand"new ways. So much so that branded jewellery is the new mantra in the market, having rapidlyacquired a niche over the past few years.Some of the companies have even cleverly played on Indian customs and tradition to advertiseand establish their brands. Jewellery is now marketed for every occasion; even Valentines Daycalls for "a special something [Gold ornaments] for a special someone".In spite of pessimism about the marketability of branded jewellery in a country rooted in buyingornaments from the traditional goldsmith, 30 brands were launched in 2004. However, this doesnot take away from the fact that India is a tough market. According to Mehul Choksi of theDDamas and S.P.Jewellers Group, branded jewellery has witnessed more than 50 per centgrowth in the last three years. The Gold ornaments branded jewellery, he says, is especiallyimpressive with the segment witnessing a 20 per cent rise annually as against 10 per cent adecade ago.Although branded jewellery accounts for less than 10 per cent of the Rs.40,000-crore jewellerymarket, a study has concluded that it is growing in popularity at a tremendous pace of 20-30 percent annually. Such is the potential of this industry that the consulting firm McKinsey estimatesthe branded jewellery market in India to grow at the rate of 40 per cent per annum to touchRs.10,000 crores by 2010.Big drivers of this kind of jewellery are the numerous malls opening across the country with theemergence of an affluent class following the successful growth of the new economy companies.In the past decade, the country has seen a section of the population gaining exposure to designerwear, fashion accessories and globally branded products. "Why not have accesses to them?" asksRima Khan, a brand executive. "Of course jewellery is harder to brand but it has done well giventhe tough competition," she says.One of the reasons branded jewellery is doing well is that now anyone can walk into a mall,window shop and decides at their own what they would like to buy. The entire culture of 21
  22. 22. shopping has changed with attentive and helpful attendants and well-displayed products. "Youno longer have the sales staff who look at you and decide whether you are worth serving or not.Everyone is a potential customer in the new market," says Rima Khan. Yet the most importantpart of branded jewellery is that you can get a piece of jewellery with a Gold ornaments for aslittle as Rs.1,500. And as branded is equated with quality, you are assured of a good product."Suddenly jewellery has become accessible and affordable for all income brackets."The shift was visible in 2004 when more than 30 players entered the market. Today there aremore than 50 brands, endorsed by models, film actors, sports celebrities and other well-knownfaces. Some designs of these brands are so popular that local jewelers have begun to copy them."While it is a compliment to the industry that people like the product, it could also affect thecompany because the cost may be lower," says Rima Khan.The biggest challenge perhaps is in educating the consumer. Consumers need to understand thefour Cs - Cut, Carat, Color and Clarity. Companies that brand their products place a lot ofemphasis on educating and therefore helping the customer make his purchase. "Buying jewelleryis a very personal thing and we need to understand what we are buying," says Seema Thakur, anattendant in a jewellery store at a mall in Mumbai. "We have an average of 50 people on a weekday and at least 100 on a weekend who walk in and look around the shop. If you make theproduct look special, for instance, appeal to a young gentleman to buy it for a loved one, he isoften interested." And the big selling point is: "If you can spend Rs.1,000 on two music CDs,why not spend for that special person in your life."The branded jewellery industry is still in its infancy, but increasing growth rates show that in ashort time it will corner a significant chunk of the market. Perhaps the best compliment to thebranded segment is that old jewellery showrooms have also begun to design jewellery linesunder a brand name. 22
  23. 23. Indian Customers Showing Interest in Branded JewelleryAs per our recently published research report “Indian Gems and Jewellery Market – FutureProspects to 2011”, gems and jewellery market in India posses tremendous potential for futuregrowth since it has an added advantage of low production cost and highly skilled labor thatseparate it from its competitors. It is projected that the overall gems and jewellery market willgrow at a CAGR of around 14% during 2009-2012.India possesses world‟s most competitive gems and jewellery market due to its low cost ofproduction and availability of skilled labor. As per our new research report “Indian Gems andJewellery Market - Future Prospects to 2011”, highly skilled and low cost manpower, along withstrong government support in the form of incentives and establishment of SEZs, has been themajor driver for the Indian gems and jewellery market. The market also plays a vital role in theIndian economy as it is a leading foreign exchange earner and accounts for more than 12% ofIndia‟s total exports. Currently the Indian market remains highly fragmented, but is rapidlytransforming into an organized sector.Currently, the industry is facing a slowdown due to global economic turmoil. But due to variousgovernment efforts and incentives coupled with private sector initiatives, the Indian gems andjewellery sector is expected to grow at a CAGR of around 14% from 2009 to 2012. At present,the Indian gems and jewellery market is dominated by the unorganized sector; however, thetrend is set to change in near future with the branded jewellery market growing at an expectedCAGR of more than 41% in the coming four years. As per our research report, with itsconsumption pegged at nearly 20%, India remains world‟s largest gold consumer and this shareis expected to grow further.Given the fact that majority of market share is occupied by family-owned jewelers, thedomination of unorganized segment still continues on the Indian gems and jewellery market.However, this scenario is gradually changing with the entrance of organized players whoprimarily focus on customer satisfaction by giving better and finer quality products. Thus,consumers are now moving towards branded jewellery which is more reliable in terms of qualityand design. 23
  24. 24. Traditional v/s Branded jewelersGems and Jewellery sales and marketing received a facelift with the advent of the supermarketculture. As organized retail in India progresses to the next lap, Sadanand Subramanian checks forGold ornaments World with some precious Industry players about their preparedness andstrategy to achieve maximum mileage.As India reacts to a retail revolution, the hitherto sober gems and jewellery industry seems tohave jumped on the bandwagon with a clear plan of action. The industry has already made amark by capturing 3 per cent of the organized retail space thanks to the leadership shown by ahandful of companies prepared to dazzle the world. While organized retail under this segmentimpressively grows at over 50 per cent annually, deliberations are on to arrive at what theindustry in general must do to keep the customer perennially delighted. The gems and jewellerymarket in India is estimated to be about Rs.80,000 crores and the topmost agenda is to adopt theright strategy to accelerate its growth keeping in mind current global dynamics. For now theindustry faces keen competition from other luxury goods such as electronic innovations andother personal accessories. How far is it necessary for the gems and jewellery sector to seriouslyconsider it?There is no doubt that things are a lot more organized in stores inside malls. They also showcaseand present products very attractively. But in my opinion, real sales take place throughtraditional jewellery stores as jewellery is mainly sold on trust. Ghanshyam DholakiaThe urgency in the industry indicates rapid changes in the way goods are produced andmarketed. The evolution of new formats for sale and the massive technology and to some extent,sizeable infrastructural developments taking place all foretell a prospect of growth way beyondthe current overall 10 per cent.The Indian gems and jewellery industry boasts a strength of over 3 lakh jewellery retailers acrossthe length and breadth of this country. The huge number indicates strength in itself but it alsoindicates a difficult diversity to grapple with when exploring common grounds to formulateunited approaches to tackle common concerns. 24
  25. 25. Organized V/s Traditional RetailComparisons have always been drawn between organized retail and traditional retail. Attemptshave always been made to define them. Rooting for organized retail, Navneet Goenka, Vice-Chairman of Goenka Gold ornaments and Jewels says, “Right now organized retail seems tohave wrested an edge over traditional retail.” Goenka argues that the indications to this effect areseen in the manner large proportions of the society are becoming lifestyle oriented, especially theyounger generation. When considering India‟s statistic of having the highest percentage of youthin the world, this observation cannot be taken lightly. Goenka says that the gems and jewellerysector is one of the fastest growing segments. He adds, “The young generation today has moredisposable income and they are willing to spend it on luxuries of choice.”Ghanshyam Dholakia, partner, Harikrisha Exports holds a different view with regard to the tusslefor supremacy over the two formats. “There is no doubt that things are a lot more organized instores inside malls,” he concedes. “They also showcase and present products very attractively.But in my opinion, real sales take place through traditional jewellery stores as jewellery ismainly sold on trust.” While explaining his point of view, he adds, “To the credit of traditionaljewellery stores they also have upgraded themselves in various ways including the overallambience in the last five to ten years. They are also changing themselves in the matters ofpresentation and the customer approach.” Dholakia says that in promotions and awarenesscreation, traditional retailers have realized its importance thereof and have started allocatingsizeable budgets for them. Consequently this section has already started reaping the benefits ofquality promotions by creating awareness about their products and services. Dholakia is somewhat emphatic with regard to modern day organized retail citadels, “In my personal opinionmalls mainly serve the purpose of promotion and show of products. I don‟t think a lot of gemsand jewellery sale takes place in malls.”Ashwin Shah, Head of Retail at C. Mahendra Exports holds a similar view with regard tojewellery sales at modern shopping malls. He opines, “The sales that take place in a mall are of avery different kind. You can call it window shopping if you like.” Shah elucidates his point,“The young generation often resorts to some impulse buying.” He stresses that serious buyerswho are looking for high value purchases for occasions such as weddings prefer to plan theirjewellery shopping and eventually purchase from known reputed jewelers. 25
  26. 26. Changes in Gems & Jewellery RetailWhilst organized retailers are ahead when it comes to taking care of the different aspects in themarketing and sales value chain, those in traditional retail are also changing or adapting to theneeds of the modern customer in the areas of service and customer care. They too are improvingtheir style of presenting and dealing with customers. “In the past, jewelers didn‟t have muchmodern education. Today, there are a number of MBA‟s in these families and amongst keypersonnel employed by them,” points out Ghanshyam Dholakia.Retailing the Organized WayWhile complementing the planned approach by organized retail, Mahesh Gandani-Head Retail,Hari Krishna Exports says, “We can see that times have changed and somewhere along the way,the whole approach to marketing has also undergone transformation.” Gandani says that forbranded Gold ornaments jewellery there is much planning involved. He says meticulous strategyis charted out, and there is systematic presentation of the product. All this goes on even as aproduct portfolio is made and promotions are carried out. Gandani says creating brand awarenessin the minds of the consumers is all about adopting a few strategic steps. “One might say thedifference between traditional and organized is just doing and doing by planning.”Recent developments have been both a boon as well as a bane. Actually, this has spurred us on tobecome innovative with our offerings to suit the market. We have actually managed to reducecost by adopting the strategy of reducing the volume of gold in some of our products to make itaffordable. Ashwin ShahSpeaking about organized retail, V. Muraleedharan, gems and jewellery professional and visitingfaculty at well known management institutes in Mumbai says, “The number of foreign brandscoming into India is simply amazing. Brands that were only heard of a few years ago are todayvery much within anyone‟s reach here. Muraleedharan goes on to explain, “So far people whohad only seen traditional offerings have started making intelligent international comparisons withIndian products and this has brought about real room for retail to grow a number of times.”Well known brands have always insisted that when they talk about a particular grade, they arecertified. Moreover the quality standard is confirmed and authorized and remains the same in any 26
  27. 27. laboratory in the world. Muraleedharan says, “In my opinion the quality a brand expresses, andthe certification make it easy for a customer to confidently buy the product.”The Value Proposition:“Today everyone is looking for value for money, a new design, a new concept, something verycreative and that is the concept of retail today. It is not like yesterday where the shopkeeper orthe manufacturer used to dominate. Today, the customer is going for customized designs; thewhole concept is changing,” says Muralidharan. “The consumer is looking for value for money,when they buy Gold ornamentss. They like to buy from reputed players like example Tanishq,S.P.Jewellers, Goenka, Nakshatra, Kiah and Nirvana. All of whom have achieved very organizedpresence in the market today. Each one of them has a standard quality certificationinternationally and that is what is going in the minds of the customer when they talk aboutbuying from the organized sector.” 27
  28. 28. Company Profile S.P. JEWELLERSFounded as a single company cutting and polishing Gold ornaments for the jewellery trade atMumbai, in 1995, the S.P.Jewellers became, many times over, a pioneer among major Goldornaments and jewellery houses.First major Gold ornaments and jewellery house to be launched and run by modern entrepreneursrather than dynastic jewellers. An authorised DTC Sightholder and loyal customer – and amodern multinational business run on innovative insights.At the forefront of the global breakthrough in Gold ornaments jewellery design and productionbrought about by India‟s ability to cut Gold ornamentss considered unworkable for jewellery tillthen. Has the distinction of producing the world‟s smallest heart shaped Gold ornaments (0.03carat), and developing some 25 patented facet patterns.Besides changing the face of manufacture, broke the mould of traditional jewellery marketing: itabandoned jewellery trade convention by launching multiple brands for multiple markets andprice segments.Business model now integrates all operations, from rough Gold ornaments sourcing, cutting,polishing and distribution, and jewellery manufacture, to jewellery branding and retail, as well asglobal lifestyle brands, in India and abroad.Offers jewellery in diverse styles: traditional, international classic, and casual. For consumers ofall age groups, tastes and budgets. With a growing hamper of brands, some already global, andeach targeted to specific consumer and market segments. 28
  29. 29. Analysis and FindingsThe objectives of the study was to understand the consumer‟s buying preferences, the reach ofbranded jeweler‟s, brand awareness of various brands in the jeweler‟s market.Hence the first question was to find out the factors that guide a customer while purchasingjewellery which dealt with nine attributes. The respondents where just asked to tick on theattribute that guided that purchase decision. The result is as follows 1) Factors that guide you while purchasing jewellery? Family Promotion Design Price Purity Image Variety Display Service and and Offers Friends 85 92 87 65 67 5 10 2 12From the above results an observation can be drawn that out of the 100 respondents 92 of themfeel that price is a major factor that guides their purchase decision. Apart from price purity also isconsidered important by 87 respondents, followed by design with 85 respondents feel it is animportant factor. Variety and image are the other important attributes that are considered whilemaking a purchase decision. Attributes like family and friends, promotions and offers are still notvery popular among the respondents selected for this research. The attributes like service anddisplay have been selected only by 2 and 5 respondents respectively showing that these are theleast important thing that guide an individual to purchase jewellery.The diagram below shows the guiding factor of the respondents while purchasing jewellery in anascending manner. 29
  30. 30. 100 92 85 87 90 80 65 67 70 60 50 40 30 20 10 12 2 5 10 0Question two dealt with the awareness of various brands of jewellery available in the market.This question would help find out the percentage of the respondents who are aware aboutbranded jewellery. 30
  31. 31. 2) Are you aware of the various jewellery brands available in the market? Yes No 95 5 5% Yes No 95%From the above result it can be observed that there is 95% awareness about branded jewellery.Out of the 95 respondents there is not a single respondent who is not aware about brandedjewellery. 31
  32. 32. 3) Tick against the brands that you are aware about in the jewellery marketThe third question was to find out the popularity of 5 brands. The respondents were asked to tickagainst the brands that they are aware about. The 5 brands considered here are Kisna, Tanishq,Ddamas, Oyzterbay, and Trendsmith. These are the prominent brands for gold jewellery there aremany other players but the research is limited to gold jewellery. Zaveri Brands Kisna Tanishq Bafna bazar No of 70 80 100 100 Respondents’ 120 100 80 60 East 40 20 0 1st Qtr 2nd Qtr 3rd Qtr 4th QtrFrom the above table and figure inference can be drawn that brands like Kisna, Tanishq areknown but the traditional MUMBAI outlets of Zaveri bazar and Bafna our preferredThe fourth question was to find out the reason why the respondent purchases jewellery that is thereason for purchasing. Is it purchased as an investment option or on occasions, festivals or as afashion statement? 32
  33. 33. 4) You buy jewellery for… Investment Fashion Occasions Festivals No of 34 39 11 16Respondents No of Respondents 16 34 Investment 11 Fashion Occasions Festivals 3934 respondents buy jewellery for investment purpose, 39 respondents look out for fashion or thelatest trends while purchasing jewellery. 11 respondents buy jewellery during occasions likeweddings, anniversary, birthday‟s etc. and 16 respondents buy jewellery during festivals. 33
  34. 34. 5) Which jewellery do you prefer? Branded Family Preference Jewellery Jeweler No of 69 31 Respondents Family Jeweler, 31 Branded Jewellery, 69From the above table it can be observed that 69 respondents prefer branded jewellery and 31respondents prefer family jewelers. This makes branded jewellery more popular among therespondents. 34
  35. 35. 6) Have you bought any branded jewellery? Branded Jewellery Bought Not bought No of Respondents 78 22 No of Respondents purchasing branded jewellery Not bought 22% Bought 78%Out of the 100 respondents 78 have bought branded jewellery and 22 have not bought brandedjewellery. However even if these 22 respondents have not bought branded jewellery they areaware of branded jewellery being sold and also know the brands by their names. Since thesample consist of females and males the next set of question deals with whether jewellery isbought for gifting purpose 35
  36. 36. 7) Do you buy jewellery for gifting purpose? Buy jewellery Yes No for gifting No of 30 70 Respondents No of Respondents 30% Yes 70% No30 respondents of the 100 buy jewellery for gifting purpose among these 30 12 are men. 70% ofthe respondents do not buy jewellery for gifting purpose. 36
  37. 37. 8) Where do you prefer to buy the jewellery from (for gifting)? Branded Family jeweler No of Respondents 14 1614 respondents out of 30 buy branded jewellery for gifting and 16 out of 30 buy jewellery fromtheir family jeweler for gifting. Percentage wise 46% buy branded jewellery for gifts and 54%buy jewellery for gifting from their family jeweler. Percentage of Respondents Branded 46% Family jeweler 54% 37
  38. 38. 9) Given below are few characteristics of traditional family jeweler’s (or local jewellery retail stores). Please give each characteristic some points based on your assessment, such that the points range from 1 to 10. (1 being the lowest and 10 being the highest). Characteristics of Good Traditional Convenient Trustworthy Price Family Jeweler’s Investment design Number of points 660 895 775 870 745 Number of points 19% 17% Convenient Trustworthy 22% 23% Good Investment Price 19% Traditional designThe respondents were asked to give points on a scale of 1 to 10 where 10 was the highest hencethe total figures are arrived by adding the points given by all the 100 respondents. Hence if the„convenience‟ characteristic was to be taken then it scored 660 out of the grand total of 1000.The respondents have rated trust aspect of family jewelers high hence it has scored 895. Therespondents also feel that the price charged by the family jewelers is reasonable and hence havegiven it decent point‟s i.e. 870. While purchasing jewellery from family jewelers the respondentsconsider it to be a good investment. Family jewelers are popular for traditional designs and therespondents have given it points that add up to 745. 38
  39. 39. 10)If you purchase branded jewellery then given below are a few characteristics. Pleasegive each characteristic some points based on your assessment, such that the points rangefrom 1 to 10. (1 being the lowest and 10 being the highest). Wide range Trendy and Characteristics of of products Shopping fashionable Price branded jewellery under one experience jewellery roof Number of points 663 590 727 673 Number of points Wide range of products under one roof 25% 25% Shopping experience 28% 22% Trendy and fashionable jewellery PriceRespondents rate trendy and fashionable jewellery highest when it comes to branded jewellery. Itscores 727 out of 780. Price also according to the respondents is justified hence it scores 673.Shopping experience wise branded showroom scores least among the other characteristics. Thiscould also be because when a customer goes to buy jewellery he may not be looking for theexperience but wanting good trendy jewellery which is priced appropriately. 39
  40. 40. ConclusionThe conclusions that can be drawn from the study are: 1. The guiding factor behind purchasing jewellery is price, purity and design which score the maximum. Other factors are variety, the brand image, influence of family and friends. The least guiding factor for purchasing jewellery is the service and display. Hence when a customer goes to buy jewellery they do keep the price in mind followed by the purity and the design. Factors like service given the shop or by the jeweler and the display do not have a very big impact on the customers. 2. Branded jewellery is extremely popular since it has 100% awareness. This may be due to the wide spread publicity taken up by the various brands. Brands like Kisna, Ddamas, and Tanishq are again the most popular brands. Trendsmith is a brand by Tribhovandas Bhimji Zaveri (TBZ) which is not very popular. 3. As stated in the literature review that „there was a shift in consumer tastes: women were increasingly opting for fashionable and lightweight jewellery instead of traditional chunky jewellery.‟ Is proved to be correct by this research as respondents have selected fashion over investment while purchasing jewellery. Now jewellery is regarded as more of an accessory and less of an investment. 4. Branded jewellery is bought by more than 3/4th of the population. Hence it can be said that the population is aware and has also tried these brands. 5. When jewellery is bought for gifting purpose the population still wants to buy it from their family jewelers. 6. When it comes to family jewelers the level of satisfaction that the population has on a scale of 1 to 10 is a little more than 7. These jewelers are also popular because of the trust that they have with their customers and also because they charge reasonable prices. These family jewelers are also popular for traditional designs hence when a customer is specifically looking out for traditional jewellery they approach these jewelers. The jewellery bought from these jewelers is considered to be pure and a good investment. 7. The level of satisfaction that the population has towards branded jewellery is a little higher than 8. These branded jewelers have become popular for latest and trendy 40
  41. 41. jewellery. Also the prices that the branded jewelers charge is justified and they provide a wide range of products under one roof.8. The level of satisfaction that the population has for branded jewellery is higher then that for non branded jewellery making branded jewellery more popular.9. The consumers prefer buying branded jewellery over non branded jewellery. This has also been proved by using the sign test. Hence to conclude branded jewellery is preferred over non branded jewellery. 41
  42. 42. QUESTIONNAIREName:Telephone number: Age: 10) Factors that guide you while purchasing jewellery? Design Price Purity Brand Image Variety Display Promotions and offers Service Family and friends influence 11) Are you aware of the various jewellery brands available in the market? Yes No 12) Tick against the brands that you are aware about in the jewellery market Kisna Tanishq Zaveri bazar Bafna 13) You buy jewellery for… Investment Fashion Occasions Festivals 14) Which jewellery do you prefer? Branded Family Jeweler 15) Have you bought any branded jewellery? Yes No 16) Do you buy jewellery for gifting purpose? Yes No 17) Where do you prefer to buy the jewellery from (for gifting)? Branded Family Jeweler 42
  43. 43. 18) Given below are few characteristics of traditional family jeweler‟s (or local jewellery retail stores). Please give each characteristic some points based on your assessment, such that the points range from 1 to 10. (1 being the lowest and 10 being the highest). Characteristics of Family Jeweler’s Number of points Convenient Trustworthy Good Investment Price Traditional design19) If you purchase branded jewellery then given below are a few characteristics. Please give each characteristic some points based on your assessment, such that the points range from 1 to 10. (1 being the lowest and 10 being the highest). Characteristics of Branded Jeweler’s Number of points Wide range of products under one roof Shopping experience Trendy and fashionable jewellery Price 43
  44. 44. BIBLIOGRAPHYSecondary data collected from the internet. The web sites are: 1) http://www.icmrindia.org/free%20resources/casestudies/branded-gold-jewellery1.htm 2) http://www.flonnet.com/fl2223/stories/20051118003809800.htm 3) Source: http://www.rncos.com/Report/IM148.htm 4) http://www.pressabout.com/indian-customers-showing-internet-in-branded-jewellery- 24860/ 5) http://www.scribd.com/doc/19901085/Jewellery-Companies-Comparison 6) http://www.commodityonline.com/news/Branded-gold-jewellery-shops-lure-Indians- 23837-3-1.html 7) http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=266902 8) http://www.Gold ornamentsworld.net/contentview.aspx?item=2465 9) http://travelersindia.com/archive/v5n2/v5n2-indian_jewelry.html 10) http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy1/BSTR041.htm 11) http://www.rncos.com/Market-Analysis-Reports/Indian-Gems-and-Jewellery-Market- Future-Prospects-to-2011-IM148.htm 12) http://www.allheadlinenews.com/articles/7017272531Newspapers: 1) The Times of India 2) The Economic Times 44