Group No - 11
Sharad Gupta (12020841117)
ANSWER - 1
Home Country:South Korea
Introduction: Our Company is gold jewellery making company. We are going to expand our
business in the other country. The steps are following:
Asia Pacific holds the largest gold jewellery market in the world with more than half of the share
being contributed by India and China alone. India is the largest market for gold jewellery in the
world, representing a staggering 552.0 tonnes of gold in 2012. China is the fastest-growing market
for gold jewellery in the world, accounting for 518.8 tonnes of demand in 2012. The US accounted
for 108.4 tonnes of gold in jewellery during 2012.
PESTLE Analysis of China:
Political: After the economic reform in 1978, the economic is growing spectacularly in China. The
reform comprises of motivating the development of private business, foreign trade liberalization,
foreign direct investment, and industrial production investment as well as the employment profile.
From 1979 to 1994, more than 42 % Chinese economic rate has been grown up.
However, there are still many risks to consider before expanding to China. One risk is that the
Chinese communist, socialist philosophy continues to be core to the Chinese culture and may impact
the political/legal environment and therefore foreign investments in the future. Another risk is that
the stability of the current Chinese regime may be negatively impacted by demonstrations
protesting cultural changes, low growth, and inequities of wealth and power.
Legal:Anti-Competitive Practices - Cartels are independent enterprises created to eliminate
competitors. The leaders of a Cartel hope to create a monopoly, or an enterprise that has the
exclusive control or rights to sell a product. Cartels and monopolies unlawfully enlarge their areas of
trade and create unfair selling practices in order to acquire illegal income which endangers the
interests of the consumers.
Social: Chinese buy gold as an inflation hedge. Individuals in China are using gold as a substitute for
capital flight. Though the buying of gold has increased, while inflation has eased. This means that as
the inflation will get more eased up and people will start feeling secure, gold demand would
Economic Analysis: The Chinese government views a growing economy as vital to maintaining
social stability. However, China faces a number of major economic challenges which could
undermine future growth, including distortive economic policies that have resulted in over-reliance
on fixed investment and exports for economic growth (rather than on consumer demand),
government support for state-owned firms, a weak banking system, widening income gaps, growing
pollution, and the relative lack of the rule of law in China.
Technological: By the early 2000s, the hardware, software and, in general, the web technology
were mature enough for develop the design and processing the gold.
Environmental: There is not much environmental difference in the in the jewellery industry.
Because the gold jewellery can be used in any environment.
PESTLE analysis of India:
The gems and jewellery sector contributes significantly to the Indian economy through employment
generation, exports and value additions. A positive business environment to go with the several
incentives offered by the government has further enhanced the country's status as one of the
primary global destinations for gems and jewellery.
The country possesses skilled workforce of over a million people, who are adept at fashioning
beautiful jewellery. This has attracted several international jewellery giants to set up base in the
country like Crystal major Swarovski, Swiss luxury and jewellery watch brand de Grisogono etc.
WGC has formed a separate private company in India to undertake activities on a larger scale in the
Indian market. This includes entering into a commercial setup with banks and gold industry players
in future. The corporate structure will help WGC remove the handicaps of operating as a liaison
office. As of now, the Reserve Bank of India (RBI) does not allow liaison offices to partake in any
commercial activity in the country.
The gems and jewellery industry occupies an important position in the Indian economy. It is a
leading foreign exchange earner, as well as one of the fastest growing industries in the country
The two major segments of the sector in India are gold jewellery and diamonds. Gold jewellery
forms around 80 per cent of the Indian jewellery market, with the balance comprising fabricated
studded jewellery that includes diamond studded as well as gemstone studded jewellery.
Porter’s Five Forces Analysis of Gold Industry:
Threat of New Entrants:Several of the existing firms have contracts with well-known jewelry
distributing companies. New entrants may find it difficult to contract with these companies, because
they lack the financial status. Also new entrants do not have a reputable name, which may cause
doubt from a diamond distributing company and thus no contract will be created. The entry into this
market is getting increasingly difficult due to the growth of companies already established in the
industry and due to high initial investment costs.
Power of Suppliers: The primary resource a gold mine needs is land which is available in large
amount in the world. So the only supply problem remains is the government’s permit to mine the
land. Issues like environmental risks possess difficult challenges in securing government’s approval.
Bargaining Power of Customers: Moderate-Customers have little bargaining power regarding
price when they shop at luxury stores and refuse to search for alternatives, because of such a limited
Availability of Substitute: Currently the threat from substitutes is relatively low. Substitutes for
gold include other precious metals like silver, platinum, diamonds etc. Although their acceptance
level is lower than gold.
Competitive Rivalry amongst existing firms: High-In the jewellery industry companies that are
considered mass merchandisers or limited line jewellers generally compete on the basis of
price.There is a high growth rate in the industry. The companies have created a stagnant industry
that now competes by taking market share away from the other players and creates price wars
among many of the firms in the industry.
Gitanjali groups, Titan industry, P.C jewellers, Prince Gems & jewellery etc.
Customer need and wants:
India is the biggest consumer of the gold. Love of gold in India is goes for beyond a simple source of
future profit. It is an expression of wealth financial security and family stability. It also carries
Reasons for Selection of our target markets:
Fast growing Economy
Largest exporter of gold in year 2013
High government involvement and almost authoritarian rules and regulations
Gold demand might not sustain as economy stabilises.
Large population (2nd only to China)
Fast growing economy
Demand of jewelleries throughout the year because of various festivals across different
cultures and diversities.
Except for last year, India was leading importer of gold and jewelleries.
Lenient government policies for MNCs.
Already established players in this industry.
Plethora of unorganized players.
People still do not readily accept branded jewelleries
After comparing industry condition in both the countries, we have concluded that doing
business in India would be easier and profitable in India rather than China.
ANSWER - 2
A place where people will get any kind of jewellery like gold with stones in it like ruby, emerald,
sapphire etc. Also this helps in creating awareness to the customer about the jewellery, about the
karatage and purity in it, different styles and modern design availability.
a) Product variety:
To be a finest jewellery brand in the market, we would offer a wide range of gold jewellery studded
with colored stone and a wide range of pure 22karat gold jewellery.
Design would be the best and unique with the growing market and awareness we would a design
which is contemporary as well as wide range of traditional design available. We would produce or
make 22kt gold ear-rings which would have a various shapes, sizes and design. Design would be with
the antic finish, small stud ear-rings for children, traditional design ear-rings, with some colour stone
in it etc. Also, we would make bangles, chains, gold sets, necklace, pendent-set, finger-rings so that
customer can have a good range available with them and can buy according to their requirements,
so that, they can wear in some occasions like marriage function, festivals etc.
our gold jewellery would be totally hallmarked so that customer would totally in trust with us and
they would not cheated in the quality of the gold and brand loyalty remains standard in the eye of
the consumers or clients.
We promise to give quality of jewellery with the 22kt purity of gold, as there are end number of
competitor’s entered into the market with new technologies like karat meter. Customer faces many
problems while purchasing the gold jewellery i.e, impurities, less karatage, no certification of
Widely acknowledged as a design leader, we are known for our ability to develop specialized design
collections. Each piece of jewellery is designed by a team of award winning designers.
Product features would be according to their design; it would be convenient to wear and designed as
per the concept.
e) Packaging and sizes:
Packaging of the product would be such that it provide better appearance and convenient to use. It
would be standard in shape, size, and lengthy. Packaging would be of plastic or velvet cloth so that
the jewellery is safe in it; good quality of velvet is used so that the safety also remains in keep the
We would sell directly to customer as we would have our in house production in metro city.
Selling to the customer - we would sell directly to our customer as a retailer; we employed well
trained and experienced staffs who would deals with the front and the final customers in store of
our different outlets.
Our aim is to expand the business with new areas in new place which is outside metro city. So that
we can reach more and more people and also try to give more wide range of products to our outside
There is different pricing strategy we would follow which is given below:
a) Competitive pricing:
If our product will sell at the lowest price regarding all our competitors, we will be practicing
It means that if we add the profit we need to our cost. The authority we have access to the costing
data and should like to check if the profit added to the cost is not too high.
c) Value pricing:
It means we will base our prices on the value we willdeliver to our customers. We could charge high
price when there would new product launch in the market.
d) Cost method- Activity based costing:
Activity based costing helps in providing the benefits like- It help in knowing the most and least
profitable customer products and channels. Enhance the better bargaining power with the
customers. Achieve better positioning of products in the market.
Promotion & Branding Strategy:
In jewellery business presentation matters a lot and it is a critical aspect for attracting more and
more customers. Marketing is that area where we can use our own creative abilities to derive new
and innovative ways to capture target customers.
There are some strategies that are used to branding and advertise jewellery business to get the
desired sales. Strategies can be online and it can be offline also depending upon the target
customers and the area we want to capture, online marketing is affordable and easy to do whereas
offline marketing is quite expensive. Strategies can be divided in two broad areas.
1) Online marketing:
Website creation:Create a website for our company and display all our products and their price
range. We can also implement an e-cart application for customers to place an order online with the
help of the web design company.
Online advertising:We can publish banner advertisements, pop-up advertisements showing the
name of our company and current products on social networking and other sites related to jewellery
Newsletters: We should start our company's newsletter in which potential consumers can sign up
and get updates of new products and news about latest jewellery collections, special offers and
Auction:Put our jewellery on auction on eBay. EBay provides a secure platform to sell jewellery
Talking on message boards and building links with other jewellery owners can also help in marketing.
2) Offline marketing:
Hold an inauguration party:Holding an inauguration party for our new business enterprise is the
effective way to make the people aware about our company. We will also place a notice in the
newspaper inviting all.
Offering discounts and promotion offers:Giving promotional offers and promotional products as
gifts and discounts is also a good way of promoting brand. Some of the promotional products we will
use for this are engraved pen, office flap bags, coffee mugs, mouse pads, T-shirts, office accessories,
calendars, travel pouches etc
Organizing promotional event:We will hold a special event for our company’s brand promotion.
We will put a notice in the newspaper inviting all. Offer discounts to selected customers or we
organize a lucky draw. Give a trendy name to the event.
Press release:Place an advertisement in the newspapers; we can also publish company’s website
with it so people can check our products and services online. We can also give an advertisement in
classified column of the newspaper for local customers or if we want to cater the customers all over
India it should be on the page that is most read by the newspaper readers.
Business cards:Have business cards printed, by the help of some printing company that should
have company’s name along with the contact number and website address. In addition it should also
have our company’s logo. Hand it out to people at social events, parties to give a word out about our
Yellow pages:Placing advertisements in the yellow pages whether online or offline gives our
company an exposure, so that an interested customer can find out about our company and can avail
TV commercials:Giving advertisements on TV can make our brand popular throughout the country.