Final Project Kalpita

Consumer preference for branded jewellery vis-a-vis non branded jewellery and the promotional strategies adopted by in Mumbai
Subject title:
CONSUMER PREFERENCE FOR BRANDED JEWELLERY VIS--VIS NONBRANDED JEWELLERY AND THE PROMOTIONAL STRATEGIES ADOPTED BY EACH IN MUMBAI
1.1 RATIONAL OF THE STUDY
Till the early 1990s, the average Indian bought jewellery for investment rather than for adornment. Jewellery made of 18-karat gold was not favoured as it was considered a poor investment. Confidence in the local jeweller was the hallmark of the gold jewellery trade in India. A jeweller or goldsmith in a local area had a fixed and loyal clientele. The buyer had implicit faith in his jeweller. Additionally, the local jeweller catered to the local taste for traditional jewellery. However, since the late 1990s, there was a shift in consumer tastes: women were increasingly opting for fashionable and lightweight jewellery instead of traditional chunky jewellery. There was a rise in demand for lightweight jewellery, especially from consumers in the 16 to 25 age group, who regarded jewellery as an accessory and not an investment. The new millennium witnessed a definite change in consumer preferences. Branded jewellery also gained acceptance forcing traditional jewellers to go in for branding. Given the opportunities the branded jewellery market offered; the number of gold retailers in the coun try increased sharply. Branded players such as Tanishq, Oyzterbay, Gili and Carbon opened outlets in various parts of the country. Traditional jewellers also began to bring out lightweight 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 pace of 20 to 30 percent annually. The branded jewellery segment occupied only a small share of the total jewellery market because of the mindset of the average Indian buyer who still regarded jewellery as an investment. Moreover, consumers trusted only their family jewellers when buying jewellery. Consequently, the branded jewellery players tried to change the mindset of the people and woo customers with attractive designs at affordable prices. However branded jewellery players will continue to face lot of competition from local jewellers. In order to gain market share, they will have to come up with designs that customers want and win the
Viva- Institute of management studies
Page 1
trust and confidence of consumers by hallmarking and demonstrating the purity of the gold used by them. To compete with traditional players, branded players must also find some way to differentiate themselves. While the success of a particular brand will depend on differentiation, affordability and quality will be a key element in sustaining a brand. In addition, branded players require focused advertising and astute salesmanship to compete with traditional jewellers. Besides the major brandsTanishq, Carbon, Oyzterbay, Gili and Trendsmith - several regional players have opened branches to leverage the trust and reputation that they have built up over the years.
Page 2
1.2 RESEARCH OBJECTIVES

The objective to study the Consumer preference for branded jewellery vis--vis non-branded
jewellery and the promotional strategies adopted by each in Mumbai. is to find out
1. To compare between Branded and Non-Branded Jewellery.
2. To know Consumer perception towards Jewellery.
3. To know the Major Players of Jewellery industry.
4. To identify which parameters play a vital role in the selection of Jewellery.
5. To identify the segment under which branded and unbranded jewellery is mostly preferred.
6. To identify whether price factor plays an important role in the purchase of jewellery.
7. To know the Marketing strategies used by various jewellery brands.
Page 3
1.3 RESEARCH METHODOLOGY 1.3 (1) Literature Review
1) Jewellery goes branded
By TFW Bureau CONSIDERING Indian women's love for the yellow metal and precious stones, including the finery that goes along with it, and the prospect of a huge consumer market that India boasts of, it would be natural for more retailers to seek their share in developing the branded jewellery market in India. With consumers becoming judiciously demanding, brands, today, are seeking to establish exclusive outlets at a fast pace. The Indian market, of late, has also attracted the attention of international retailers. The already very strong Indian jewellery market, with the coming of international brands like DeBeers, Tiffany and Cartiers and other multi-national players, has seen a significant change. Given the opportunities that the branded jewellery market offered, the number of gold retailers in the country increased sharply. However, the share of branded jewellery in the total jewellery market is still small (about Rs 10 billion of the Rs 400 billion per annum jewellery market in 2002), growing at a pace of 20 to 30 per cent annually. The branded jewellery segment occupied only a small share of the total jewellery market because of the mindset of the average Indian buyer who regarded jewellery as an investment. Moreover, consumers trusted only their family jewellers when buying jewellery. Consequently, the branded jewellery players tried to change the mindset of the people and woo customers with attractive designs at affordable prices.
Jewellery market in India

Jewellery business primarily runs on goodwill and clientele, and no matter where a jeweller moves his base, his customers will still follow him. The Indian jewellery market witnessed a shift in the consumer perceptions of jewellery in the late 90s. Instead of being regarded as only an investment option, jewellery today is being prized for its aesthetic appeal. According to Mr Vijay Jain, CEO, Orra, The jewellery market in India is a very exciting and versatile industry with the diamond jewellery market recording a growth of 20 per cent plus. Similarly, Mr Biju John, Chief Manager Franchise Operations, Ddamas Jewellery India Pvt. Ltd, comments, The jewellery market in India is witnessing a new awakening in the form of arrival of branded jewellery. The lightweight, trendy jewellery with an international flair has sure made its mark thus changing the mindset of a lot of customers in the country.The focus of the consumers has shifted from content to design. Trendy,
Page 4
affordable and lightweight jewellery has gained familiarity, and branded jewellery has also gained acceptance forcing traditional jewellers to go in for branding. According to Mr Jatin R Chhadva, CEO, SIA Art Jewellery, The jewellery market in India is only three per cent branded, however, the percentage is expected to increase from 24 to 30 per cent in the coming few years. Delving on the changes that have occurred in the jewellery industry, Mr Jain opines lot of changes have occurred in jewellery industry in India. There is a total change in the attitude of the people as jewellery is no more considered to be an investment. People today are largely going for readymade jewellery, and diamond jewellery is found in shop n shop environment in shopping malls. Today jewellery is not bought to kept in lockers rather it is used regularly and people wear jewellery to enhance the way they look.During the past few years there is lot of consciousness among people regarding the quality and standard of the jewellery. People today have become more pract cal and i they do not mind wearing art jewellery which was earlier considered to be a bad taboo, says Mr Chhadva. Players, such as Tanishq, Oyzterbay, Gili and Carbon, have opened outlets in various parts of the country, and likewise traditional jewellers have now begun to concentrate on lightweight jewellery, with some even launching their in-house brands.
Brands dominating the marke t

The national and international jewellery brands drawing the attention in the Indian jewellery sector includes Gitanjali Gems, the owners of jewellery brands D'damas, Asmi, Nakshatra and Gili. According to Mr John, Considering the huge customer base of Ddamas over the years the branded jewellery is here to stay. Depending upon the variety of products or brands offered teame with the d popularity of these brands, the parent company is sure to embrace success.
Adora, launched by Mumbai-based Concept Jewellery (India) Pvt. Ltd, is a part of M Suresh Group. Adoras rate of growth has earned it the distinction of being the fastest-growing jewellery brand in India. Each piece of Adora diamond jewellery comes with an authenticity certificate from the International Gemological Institute and a buyback guarantee. It has also ventured into the international marketplace, starting with Dubai to be followed by Malaysia and Singapore. Inter Gold Gems Pvt. Ltd. is a part of the Rosy Blue Group, worlds largest diamond jewellery manufacturing company with the presence in 14 countries. Inter Gold is Indias largest diamond jewellery exporter. Today Inter Gold Gems Pvt Ltd is present 15 cities across India with 24 stores in two store formats Orra and Inter Gold. From traditional jewellers category Tribhovandas Bhimji Zaveri, is the name that strikes. Trendsmith, one of the finest jewellers dealing with diamond and gold jewellery, in association with the Tribhovandas Bhimji Zaveri (TBZ) and Nirmal Zaveri group of Mumbai, has presented exclusive lightweight gold collections from the house o TBZ and Nirmal f
Page 5
Zaveri group. The brand that is leading the race in jewellery industry in India is Tanishq. Tanishq challenged the age-old jeweller's word with Tata's guaranteed purity. Tanishq introduced innovations like, Karatmeter, the only non-destructive means to check the purity of machine-made gold jewellery, far superior finish and value to the customer, and beautiful hand crafted jewellery influenced by various jewellery traditions of India. Other than these there are brands like SIA Art Jewellery, Oyzterbay, Carbon, Kiah, Cygnus, etc that are dominating the Indian jewellery market. After having gone through all these upcoming brands it can be estimated that jewellery is growing tremendously. Thus, astonishing is the outcome of the change in the attitude of the people towards jewellery. Today jewellery is no more considered as an investment in fact these days people have come to know the exact significance of jewellery and that is to enhance the beauty and looks.
Jewellery franchising
Franchising has more or less covered almost all the areas of human needs be it food, clothing, , footwear, bags, makeup kits, electronics, education, or the IT sector. Although the jewellery sector is very popular in India, franchising in this sector is yet to pick up. Starting at a slow pace, franchising in jewellery is expected to flourish in the coming times. Franchising is doing very well in the jewellery sector. Tanishq is the leading franchise company in India, says Mr Jain. Expressing similar views, Mr John acknowledges, Indeed jewellery franchising is one of the bette options for profitable r expansion by any company.Companies like Eros, Orra, Tanishq, Sia Art Jewellery, and Cygnus, etc, have already adopted franchising as an expansion model.Mr Jain opines, Orra has opted for franchise model. The consumer must experience brand in totality and franchising is the best way to expand in a set pattern. Training of the franchisees helps in making consumer experience the product in totality. Eros jewellery has expanded in a big way by opening 65 more franchise showrooms in the country within a year. The group has approximately 85 outlets all over India.It has recently launched a new range of gold ornaments for the firm in Dubai. The company plans to expand in Dubai and Middle East through franchising with retailers. Gitanjali is the largest manufacturer and retailer of jewellery in India. The company has in place a large retail set up, which includes 26 exclusive distributors across the country, around 620 outlets including those in host stores, five stand alone stores and 17 franchised stores in 30 cities and towns. It continues to be a leading diamond processor in the world. Oyzterbay focuses on easy-to-wear, non-traditional jewellery, non-locker jewellery and claims to offer a variety in design, reliability and standardisation. The unique feature of the business model is the franchising structure proposed by the company. It is introducing an innovative store management concept. The exclusive Oyzterbay signature stores will be given out on wet lease to franchisees that will run it on day-to-day basis. Titan's jewellery arm Tanishq presently has six company-owned boutiques, 29 franchise boutiques and 18 service centres. Besides, Tanishq is ready for its US foray with the seven-stone diamond collection Aria. The collection will be distributed through US company
Page 6
Highglow, which caters to the ethnic Indian and Asian population there. The collection will be sold under the Tanishq name with no sub-branding so as to cash in on the brand equity Tanishq enjoys. The launch coincides with Mother's Day on May 3. This move is significant for the company as it will be a first stage in testing when to roll out franchised Tanishq stores there as well as in the UK. Launched by Laxmi Diamond Group, Cygnus is another jewellery brand with range con sisting of rings, pendants, earrings, bracelets, neckwear, bangles and designer wear. The range, priced between Rs 1,000 and Rs 30,000, will be originally marketed through lifestyle stores, traditional jewellers and exclusive franchise outlets. Cygnus claims to offer a range for everyone and for every occasion. It primarily targets women in the age group of 18 to 30. The range also offers a variety of gift options . Pallazzio, a 13,000 sq. ft store at Crossroads, the mega shopping and recreation mall at Haji Ali in Mumbai, is billed as India's first multibranded, multinational, one-stop centre for jewellery, watches and accessories. Pallazzio is managed on a franchise basis where the mother company provides the systems and products while the franchisee enjoys the advantage of being a local entrepreneur. Says Mr John, Jewellery franchising has emerged over the years as a preferred option for investing money in. Entrepreneurs invest in jewellery franchisee outlets because buying jewellery is one of the favourite shopping activities among the Indian women.
Emergence of international brands

With a large number of foreign brands making their way into the Indian market the Indian brands may perceive a threat. Mr Jain believes, The entry of global brands in India in jewellery sector will hardly affect traditional jewellers. They have already started reinventing themselves, and they understand the mindset of the Indian consumer.Giving his opinion on the treat, Mr Ashok Verma, Director, Diamond Hut says, The consumer tries anything new once on an experimentation bases, even ignoring the price tag and other factors. But again, if you talk about the longevity of the product, then, the Indian jewellery companies are in a better position because of their benevolence in the sector. With the entry of global brands lot of restorations will take place in jewellery sector in India whether it is fine jewellery market or art jewellery. The traditional jewellers are required to become more practical in their approach. They need to keep their expansions in pace with the global players and should follow rigorous expansion plans, says Mr Chhadva
Steps to consider on franchising

Franchising in the jewellery sector in India is still at its nascent stages. Therefore, it becomes necessary for aspiring franchisees to consider certain cautionary factors before initiating jewellery franchising. Mr Jain believes, One should go in for jewellery franchising only if one cherishes the
Page 7
love and passion for jewellery as this sector requires lot of understanding and interest. Mr Chhadva, suggests the aspiring franchisees to evaluate their investment powers and the investment policies of the companies, study the market and the brand before opting for any franchisee. Spelling out some of these factors, Mr Verma says, In jewellery franchising, some of the important considerations are to actually look into the market value of the jeweller, the specimen and the quality of the material used, and the guarantee policy of the franchisor. Moreover the number of existing showrooms and their performance should also be taken into thought.
Future of jewellery franchising
With a middle class population of 30 crore, India will be one of the biggest markets for the premium brands that will also push the concept of branded jewellery in India. What may speed up the process of big brands like Tiffany, Cartier, Zales and Harry Winston in jewellery to come to India is the Finance Minister's announcement in this year's Budget to set up an expert body which will help increase FDI in the gems and jewellery sector.The future of jewellery franchising, says Mr Jain appears to be quite bright and is expected to grow tremendously in the coming years. He adds, FDI is not going to make much a difference as jewellery is mainly country specific. More over lot of trust is attached in buying jewellery. People will definitely take time to accept global brands. The liberalisation of gold imports will help make India a global hub for manufacturing gold products, while the establishment of a gold trading centre will generate revenues, increase employment and stabilise the trade. According to Mr John, With the passage of time trends change and so is the case in the jewellery sector. The product keeps on evolving to suit customer needs. Expressing positive growth in jewellery franchising due to the huge potential in India Mr Chhadva goes on to say that FDI will definitely affect the present jewellery industry. With the opening of FDI large number of global brand will enter the Indian market, says Mr Chadhva. Mr John believes that the opening of FDI will hardly make a difference to franchising in the jewellery sector in India
An overview
Jewellery industry is booming and lot of aspiring entrepreneurs are looking forward to enter into it. Branded and non-branded majors in the Indian jewellery market are offering the best quality products to the consumers who now do not consider jewellery as an investment or something kept in locke rs for difficult times. Jewellery sector is quite different from others as there is no fear of depreciation as is the case with other products. Jewellery sector has highest per sq. ft yield. Despite all this there are
Page 8
certain challenges in jewellery industry. It is highly unorganised and there is hardly any code of conduct to business in jewellery sector. There is lot of competition in this sector and franchising in this sector requires special interest and skills. Franchising in this sector has been slow i being n adopted by investors. However, branded as well as non-branded jewellery companies have identified franchising as the most appealing way to expand business. They have recognised that franchising offers a set pattern of expansion strategy and that the consumer enjoys the same kind of experience wherever he goes.
2) Indian branded jewellery segment to grow 40% p.a: McKinsey report By: Diamond World News Service
Analysts have pegged good hope for the branded jewellery market in India, which accounts for around less than 10 percent of the entire domestic jewellery market pie according to Credit Analysis and Research Limited (CARE). According to a report by McKinsey, the same is likely to witness a growth rate of 40 percent per annum to touch Rs. 10,000 crores this year. The report predicts sales of non-branded jewellery products to grow at around 12 percent. CARE pegs the domestic jewellery market at US$ 16 billion. It is estimated that the domestic jewellery pie id sliced as about 96 percent being unorganized (representing 300,000 traditional retailers or family jewellers present only in one town, while 4 percent comprise of the organized sector. The branded jewellery segment offers around 50 brands today from 30 players six years ago. Many players are reporting close to 80 percent growth rate. With names like Tanishq, Nakshatra, Gili, Cygnus, Sangini, Asmi, D'damas, and more, the domestic market has also seen some penetration of international luxury brands, like Tiffany, Dolce Vita, Bvlgari, Chopard, Cartier, Harry Winston, Damiani, Di Modolo, Pranda Jewelry and Christian Dior ( are expected to venture into Indian domestic jewellery market). The McKinsey study has pegged the Indian luxury market size at $3.5 billion with a growth upto $30 billion by 2015. The Gem and Jewellery Export Promotion Council (apex body for the Indian G&J industry) has been making efforts to promote Brand India in the global jewellery market, with concepts like Anant, India International Jewellery Week, and such other events, and representing the sector to the government for friendlier policies for the sector
Page 9
Consu r r r nce for br nded jeweller vis vis non br nded jeweller and the promotional strategies adopted by in Mumbai
3) Jewellers say duty on branded items will hinder new entrants
ET B Feb 28, 2011
M MB
: The next ti e a consumer enters a branded jewellery store of Tanishq or Gitanjali, she
will have to shell out a tad more on her purchase. This is because government has reintroduced 1% excise duty on branded jewellery and branded articles made from precious metals li e gold, silver and platinum after waiving it two years ago. The levy will not apply to unbranded jewellery and articles such as utensils made from precious metals, etc. Even branded jewellery or branded precious metal articles that are exported are exempt from such a levy since it would otherwise end up in exporting taxes. Leading jewellers such as Gitanjali have termed the move as "one that will lead to a lot of nuisance since the brand is not marked on the jewellery pieces." ML Arora, AGM of Bank of India, said the amount would be absorbed by the consumer since it was not "very significant." Another leading PSU banker, who earlier worked in the bank's bullion division, said jewellers could resort to under reporting of branded jewellery manufactured to avoid the levy. While one jeweller said the levy could result in unmarked jewellery sales being stepped up, the PSU banker said such a step was unlikely as it would reduce the brand equity of the seller. "I think the margins branded jewellers earn are good enough to absorb the excise duty if they decide not to pass it on to their consumers. If they choose to pass on the cost, it will not make much of a difference to the consumer as she buys branded jewellery assured of purity and resale value." The Gems & Jewellery Federation, a nodal body of domestic jewellers, is set to appeal to the government to waive the levy. "The reintroduction of the abolished 1% excise duty on "branded" jewellery, is a retrograde step for the industry. Five years ago we made representations to the government and subsequently the excise duty was withdrawn two years ago. We do not understand the rationale behind this step. These kind of levies and back door licence raj measures will create hardship, litigation and encourage corruption. We urge the finance minister to rollback the 1% excise duty on "branded" jewellery. Interestingly, to give a boost to local gold refining and improve the backward integration process, the government has decided to reduce the excise duty on serially numbered gold bars, other than tola bars, made from ore/concentrate in the same factory to Rs 200 per 10 gms from Rs 280 per 10 gms. This concessional excise rate is also being extended to serially number gold bars made from gold dore bars. A gold dore bar consists of gold in the raw form.
Page 10
"The decision to allow imports of ore and concentrate was introduced in the previous budget and the reduction in excise is to encourage people set up gold refining facilities here and strengthen backward integration," said Rajesh Mehta, chairman, Rajesh Exports. He added that his company would take a call on setting up a refining facility in due course. The reduction in excise on bars will benefit the upcoming MMTC-PAMP gold refinery being set up in north India. Apart from these measures, an excise duty of Rs 300 per 10 gm will be levied on gold produced during the copper smelting process. Hindalco and Sterlite are the major copper smelters in the domestic market. An excise duty of Rs 1500 per kilo will also be levied on silver manufactured during gold refining from ore or concentrate, dore bar and also during copper smelting stage.
Analysis of literature Review

y
The review also brings light to the fact that the Indian consumers are price sensitive and hence the branded jewellers cannot charge exuberant prices for the same.
The jewellers have to offer designs that are more Indian in their culture rather than aping the west this can be proved by the e.g. of Tanishq and should also be affordable.
Since the thesis focuses on a comparative study of the popularity of branded v/s non branded jewellery the review helps understand the growth of the retail industry which have leased branded jewellery stores and also the popularity of traditional goldsmith
The number of foreign entrants also pose a challenge to the traditional jewellers and hence we can see that these jewellers also come up with strategies to retain their customers these practices were not prevalent in the market previously.
The branded jewellers on the other hand have to adapt strategies to win the trust of their customers and attract new customers.
A few research reports also help us gauge the changing trends in the jewellery market and the popularity of diamonds.
Page 11
1.3.2 RESEARCH DESIGN AND HYPOTHESIS 1.3.2 (A) RESEARCH DESIGN Purpose Of Study
The 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 consumers between branded and non branded jewellers. The study would also help to find out the consumer preference and their buying behaviour towards branded and non branded jewellers, this would help both the retailers to know what are the consumer preference and what strategies should they adapt to grab the market.
Problem Statement
In spite of product quality, services branded retailers provides why do people still prefer buying jewellery from local retailers.
1.3.2(B) HYPOTHESIS
H working hypothesis :
There is no significance difference among the consumer in the parameters such as Celebrity endorsement, Promotion, Wide Variety of designs, Brand Name, Exhibition and New Collection which attract them for the purchase of jewellery.
Ha:
There is a significance difference among the consumer in the parameters such as Celebrity endorsement, Promotion, Wide Variety of designs, Brand Name, Exhibition and New Collection which attract them for the purchase of jewellery.
Page 12
Purchase of jewellery is not preferred from the family jeweller compared to that of branded Jeweller
Ha:
Purchase of jewellery is preferred from the family jeweller compared to that of branded Jeweller
H working hypothesis:
Jewellery is not considered as status symbol for most of the consumer.
Ha:
Jewellery is considered as status symbol for most of the consumer.
Price does not play an important role in purchase of jewellery
Ha:
Price does play an important role in purchase of jewellery
1.3.3 PERIOD OF STUDY

The proposed study shall be covering the period from 15th September 2010 to 15th March 2011.
Page 13
1.4 SAMPLING
1.4(1) Sampling universe: Primary Data:
The data for this research project would be collected through questionnaire. A structured questionnaire would be framed as it is less time consuming, generates specific and to the point information, 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. The Sampling Universe shall consist of Mumbai.
1.4(2) Sampling Techniques:

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.
I will use the simple random sampling for collecting the data .
Secondary Data: It was collected from internal sources. The secondary data was collected from the articles, news papers, management books, and the internet. The secondary data would be collected from: 1) Books 2) Magazines/ Project report 3) Internet 4) Articles
Page 14
1.4(3)Sample Size
y y
100 respondent The sample size has been determined using Moser and Kalton (1972) formula;
n = P (1-P) / (SEp)2
where,
n :- The required sample size P: - The estimate proportion of the sample universe who prefer Branded Jewellery over Unbranded Jewellery. (50%) SEp:- Level of significance i.e. 5 % (0.05)
The primary data would be collected from 1) Non branded and branded jewellers -Non Branded jeweller: Mahalaxmi jewelers and more -Branded Jeweller: P.P Jewellers 2) The population of Mumbai city The secondary data would be collected from: 5) Books 6) Magazines/ Project report 7) Internet 8) Articles The questionnaires response format for the population would be close ended questions. With a mix of question types varying from ranking, multiple choice to checklist questions. The attitude of the respondents would be measured by itemized category scales, pictorial scale. The questionnaires response format for the branded and non branded jewelers would be open ended as well as close ended questions.
Page 15
1.5 DATA:1.5.1 Type of Data:Primary data obtained through questionnaire filled by respondents residing in Suburban Mumbai (Bandra to Virar). The data thus obtained is used in combination with secondary data obtained from web sites, books, research magazines etc.
1.5.2 Data Sources:The data was collected through primary collection method, i.e. The source of data collected, was questionnaires filled by the respondents. Also data supporting the primary data was collected from web sites.
1.5.3 Method of data collection:The method of data collection was survey method. In the survey method, individual survey was conducted on the respondents residing in suburban Mumbai.
1.6 TOOLS AND TECHNIQUES OF DATA ANALYSIS:1.6.1 Graphical analysis:The study conducted was of a descriptive nature and involved an element of comparisons and contrasts between the defined variables. The data obtained was thus subjected to pie -charts and column charts for comparative analysis.
1.6.2 Statistical analysis:The data collected contained both parametric as well as non-parametric forms. Thus chisquare test was applied for testing the hypothesis.
Page 16
1.7 SCOPE AND LIMITATIONS OF THE STUDY 1.7.1 SCOPE OF THE STUDY
The gems and jewellery industry occupies an important position in the Indian economy and is one of the fastest growing industries in the country. The study considered sample respondents residing in Suburban Mumbai i.e Bandra to Virar only. Study would help both the retailers to know what are the consumer preferences and what strategies should they adapt to grab the market.
1.7.2 LIMITATIONS OF STUDY
The scope of study is limited due to the following reasons: 1) Sample size- the sample size of the study is only 100 which would not give a comprehensive result. Many important samples may not be considered at all. The conclusion of the study may not result to an accurate outcome due to the sample size being small. 2) Bound to only western suburbs of Mumbai- the other limitation of the study is it is limited to only the western suburbs of Mumbai and ignores the samples from the central as well as the harbour and south end. The buying behaviour of an individual varies from place to place. 3) Awareness- the sample taken and the conclusion drawn can be led to only one side if there is lack of awareness about branded jewellery. 4) Time constraint- since the time span for the thesis is only few months and in depth study and analysis will become a little difficult.
Page 17
1.8 EXPECTED CONTRIBUTION FROM STUDY:y
It shall throw some light about the perception in the mind of the respondents with respect to the branded and unbranded jewellery.
y y
It shall indicate whether the price really plays a role in the buying decision of the respondents. It shall also cover the strategies used by various jewellery brands.
1.9 DIRECTION FOR THE FUTURE RESEARCH:

y
In future a larger sample size and more prudent sampling techniques may be used for drawing conclusions about the conducted study.
The study has an element of subjectivity to it which can be improvised upon by the use of more prudent research methods.
Page 18
2.1 MEANINGS AND DEFINITIONS
Introduction to Indian Gems and Jewellery Industry

India is a leading player in the global gems and jewellery market. 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 GJ sector may be further categorised into the following sub-sectors based on characteristics, processing techniques, preciousness in terms of price range and marketability.
y
Gemstones
1. Diamonds 2. Coloured Stones-precious, semi-precious, synthetic

y
Jewellery
1. Plain gold Jewellery 2. Studded Jewellery 3. Silver Jewellery 4. Costume Jewellery
The two major segments of the GJ business in India are gold jewellery and diamond jewellery. While a predominant portion of gold jewellery manufactured in India is for domestic consumption, a predominant portion of rough, uncut diamonds processed in India in the form of either polished diamonds or finished diamond jewellery is exported. 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. Preference for gold dominates the domestic jewellery demand. The domestic demand for gold jewellery is estimated at Rs. 390 billion in 2005, accounting for an estimated 80% of the Indian jewellery market of Rs. 490 billion. The balance comprises diamond jewellery (Rs. 80 billion), and other fabricated jewellery (Rs. 20 billion).
The Indian gems and jewellery industry is competitive in the world market due to its low cost of production and the availability of skilled labour. In addition, the industry has set up a worldwide
distribution network, of more than 3,000 offices for the promotion and marketing of Indian diamonds.
Page 19
T E SE T R IS LARGEL
UNORGANIZE
AT PRESENT WIT
A SMALL BUT
GROWING ORGANIZE SE TOR

The Indian gems and jewellery sector is largely unorgani ed at present. There are over 15000 players across the country in the gold processing industry, of which only about 80 players have a turnover of over US$ 4.15 million (Rs 200 million). There are about 450,000 goldsmiths spread throughout the country. India was one of the first countries to start making fine jewellery from minerals and metals and even today, most of the jewellery made in India is handmade.
Share of India's Gem & Jewellery Sector

4%
Organised Sector Unorganised Sector (Family Jewellers)

96%
The industry is dominated by family jewellers, who constitute nearly 96 per cent of the market. Organi ed players such as Tata with its Tanishq brand, have, however, been growing steadily carving a 4 per cent market share. As Indias jewellery market matures, it is expected to get more organi ed and the share of family jewellers is expected to decline. There are more than 6000 players in domestic diamond processing industry. The average gestation period for setting up a diamond cutting and polishing unit is 15 months. The low gestation period, coupled with low capital cost allows easy entry into the sector. This has led to the industry being largely characteri ed by a large number of small scale players. However, just as in the case of jewellery, the share of the organi ed sector has increased significantly in recent years due to an increase in demand for better and finer quality finished goods.
Page 20
CHANGING SCENARIO
THE INDUSTRY STRUCTURE

The Gems and Jewellery (G&J) market essentially comprises of sourcing, processing, manufacturing and selling of precious metals and gemstones, such as, Gold, Platinum, Silver, Diamond, Ruby, and Sapphire etc. The G&J market is a significant contributor to the Indian economy, based on the size of the domestic market and through its contribution to the countrys exports. The GJ industry has
registered a remarkable growth with exports having grown from US $29.35 million in 1966-67 to US $ 21.11 billion in 2008-09 accounting for 19.1 percent of total Indian exports. Export of cut
and polished diamonds (CPD) accounts for 67% of the export basket of Indian Gems and Jewellery and is therefore a leading foreign exchange earner for India. India is the largest consumer of gold
(around 20 percent of global consumption) and also the largest diamond processor (around 90 percent by pieces and 55 percent by value) of the global market.
Page 21
MARKET STRUCTURE AND POTENTIAL
Gems & Jewellery exports are the back-bone of the sector and also of our overall exports. The current Slowdown had hit the sector badly and in 2008 some months showed negative growth. However the sector is expected to grow at a CAGR of 15% to reach a size of US $ 58 billion by 2015 from the current US $ 25 billion. The government has taken significant steps for the Gems & Jewellery exports in terms of duties and taxes, infrastructure (SEZ, EPZs etc) and policy (EXIM Policy for 2002-07) but this is not the time to get complacent for the government or the industry as the recent global
Page 22
economic crisis has shown. We need to keep working at making the sector more resilient and competitive especially in the wake of rising competition from countries such as China.
The domestic market of gems and jewellery is estimated to be in the US $ 18-20 billion range and is expected to grow by about 13% per annum to reach US $ 35-40 billion by 2015. Given the fragmented nature of the business it is very difficult to estimate the exact range. With per capita consumption almost 1/10th that of any matured market India presents a very large potential market. If some of the recommendations suggested by us in this report are acted upon appropriately, the industry size could potentially reach US $27- 35 billion. More importantly there is a significant opportunity to create additional value through higher margins possible through differentiation and branding.
GEMS AND JWELLERY CLUSTER

The Indian gems and jewellery sector employs around 1 million people directly and indirectly. The sector is primarily concentrated in Maharashtra and Gujarat, and Mumbai and Surat are the most important diamond-cutting-and-polishing centres in both states, respectively. Mumbai is an important export-import centre for gems and jewellery and Surat is an important centre for processing diamonds. Furthermore, Gujarat accounts for 80% of the total diamonds processed in India and 72% of the diamonds processed in the world almost 8 out of the 10 diamonds processed in the world are processed in Gujarat. Popularly known as the silky city sparkling with diamonds, Surat is the largest diamond processing centre, with around 10,000 diamond units located in and around the city. Surat accounts for more than 50% of Gujarats total exports of processed diamonds from India. Apart from Surat, Ahmedabad and Rajkot are the other major gems and jewellery clusters in Gujarat of which, Rajkot is also famous for its exclusive handmade gold and silver jewellery. The Indian government has set up gems and jewellery parks in special economic zones (SEZ) in Mumbai and Surat to promote the diamond industry. Mumbai has an SEZ called SEEPZ SEZ, which has a gems and jewellery complex that houses more than 150 gems and jewellery units. Similarly, Surat also has a SEZ that houses a diamond park. However, the sector is gradually spreading its wings to other parts in India such as cities in the south (Coimbatore, Bangalore, Hyderabad, Nellore, Thrissur), West Bengal (Kolkata) and the north (Delhi and Jaipur).
Page 23
Page 24
Page 25
VALUE CHAIN OF THE SECTOR
Value Chain - Diamonds
Diamonds pass through a series of processes before they are finally sold in the retail market. The value chain of diamonds begins with exploration of diamonds from mines and is followed by processing, manufacturing, whole selling and retailing.
Mining
There are very few commercially-viable diamond mines operating in the world currently. Diamonds are sourced through three ways, open pit mining, underground mining and extraction from alluvial deposits. The rough diamonds that are sought from mining are then sorted in different categories according to the quality, shape, colour, and size. The diamonds that are not good in quality are used for industrial purposes and the good quality diamonds are sent for further processing.
Processing
Processing is the next and the most important step as the greatest value addition takes place at this stage. Diamonds are sorted, graded, and valued at this step and then sent for further processing. Not all countries that produce diamonds also process it. The sorted and graded diamonds are sent to the cutting and polishing centres such as Antwerp (particularly high-value diamonds), Tel Aviv, Israel (for medium-value diamonds), India (for low value diamonds), China, Johannesburg, New York and Thailand. These processed diamonds are then exported or sold in domestic markets as finished diamonds or as diamond-studded jewellery.
Manufacturing and Retailing

Once the diamonds are processed, they are then sold to manufacturers directly or through registered diamond exchanges. Much of the value addition is done at this stage, as the diamonds are converted into jewellery. Jewellery making has high margins and therefore, many cutting and polishing centres across the globe are aiming to move up the value chain to gain maximum revenue. The jewellery that is manufactured from the diamonds is sold either through a wholesaler or directly in the retail market, domestically or internationally. India is not a major miner of precious metals and stones such as diamonds but it is the largest processor of diamonds in the world owing to its skilled labour and low cost of processing.
Page 26
Value Chain Gold

South Africa is the largest producer of gold in the world. Gold mining, the process of mining gold out of the earth, is done through the following methods: hard rock mining, gold ore processing, placer mining and by-product gold mining. The gold that is extracted from mines is in impure form, and it is obtained in its purest form through a series of chemical processes called refining. The gold that is refined is converted into cast bars/gold bars through fabrication. The fabricated gold is then used for either making jewellery or for making coins, industrial products and dental products jewellery fabrication garners the highest share among the value chain activities. The gold jewellery is then sold in the retail outlets in domestic as well as international markets.
Page 27
SWOT ANALYSIS
STRENGTHS
1. Strong Reserves and Surplus backed by an additional Rs. 10 cr. to Foreign Exchange and metal price fluctuation reserve. 2. 19% growth rate in operating income and 22% growth in Net Profit. 3. Strong risk management focus as part of strategy. 4. Investments in upgrading the technology and setting up new units in Kolkotta and Bangalore. 5. Manufacture handicraft jewellery along with branded jewellery to cater to diverse markets. 6. Long standing relationship with dealers in US, Antwerp, Dubai etc.
Page 28
WEAKNESS
1. A smaller player in size compared to the rest of the competitors such as Rajesh Exports and Gitanjali Gems and Jewellery, and therefore would not be able to enjoy the same benefits of returns to scale as the others. 2. No well established brand like other firms (e.g. Gili from Gitanjali Gems and Jewellery or Tanishq from Tata). 3. At present, no tie up with the retail sector firms which could have increased the reach of the Su-Raj to the non-accessible market. 4. Lacked infrastructure to cater to the retail customers abroad. Company sells most of its product to the wholesalers in which case they have much of the b argaining power. Such power with the consumer puts pressure on the margins of a firm and Su-Raj diamond does not have bargaining power here.
OPPORTUNITIES
1. Gems and Jewellery to grow by 12% (as calculated by the demand forecasting).Indias share is projected to be around 1.5 to 2 percent of the global industry. 2. Tax regime to be structured to develop India as a global hub for gems and jewellery. 3. Increase in wealth leading to increase consumption is expected to boost demand for this sector. 4. Global Silver to Gold ratio is improved to 15:3 from 7:3 in 2000 in the world market; this is mainly because of a younger generations preference for a white metal than gold. 5. Increase demand in Middle East and North American countries, forming the largest segment and offering the highest growth in the previous financial year.
y y y y
North America Europe Middle East Asia
Increase of 23.25 % Increase of 6.02% Increase of 51.67% Increase of 19.02%
6. Availability of high skilled labor in production of gold jewellery.
Page 29
THREATS
1. Emergence of China as a competitor. 2. Unusual increase in the price of gold and rough diamonds. 3. Fluctuation in currency, especially appreciation of rupee against the dollar. 4. Change in fashion trends. 5. As per the CMIE data, only 4% of the gems and jewellery sector is in the organized hands, Tanisq, Gili (subsidiary of Gitanjali Gems), Oysterbay, being the major players from whom company faces a lot of competition. 6. Substitution of gold and other banking products as a better source of investment has lead to the decline in the consumption of silver. 7. The reduction of consumption of silver in the Indian market. Witnessed a decrease of 53.1% from 1996 to 2005 in consumption. 8. Low availability of skilled labour in processing of diamonds. 9. Infrastructure bottlenecks, absence of latest technology. 10. China, Sri Lanka and Thailand's entry in small diamond segment.
Page 30
Page 31
PORTER'S FIVE FORCES MODEL OF GEMS AND JEWELLERY INDUSTRY
Page 32
2.2 HISTORICAL PERSPECTIVE OF THE TOPIC
Indian Gems & Jewellery Industry Profile
Page 33
Exports of the Gems and Jewellery sector
The Gems & Jewellery sector has experienced high growth over the years on the back of a buoyant performance in its exports. Total exports of Gems and Jewellery has registered an impressive growth from US$ 2.99 bn in FY91 to 21.12 bn in FY09 which translates into a CAGR of around 11.47%. However, during FY01-FY02, the slowdown in the US, which is the largest importer of India's gems and jewellery, and some other importer countries, led to a demand contraction and a subsequent decline in the export growth rate for the sector; while the decline was mainly in exports of cut and polished diamonds (CPD), gold jewellery exports had remained resilient as it registered a positive growth. Net exports during FY01 and FY02 fell to US$ 7.8 bn and US$ 7.6 bn, respectively, as compared with US$ 8.1 bn during FY00. The government took important policy initiatives, including de-licensing of the import of rough diamonds (with effect from April 1, 2002), which was a long standing need, to give a boost to this sector. This was reflected in the growth in the exports during FY03. Exports during FY03 grew by 21.36% as compared to a decline of around 3% during the previous financial year. The growth momentum in exports continued during the following two successive financial years; however, during FY06 and FY07 the sector witnessed a deceleration in the rate of growth (6.5% during FY06 and 2.7% during FY07) in net exports due to the dismal performance in the cut and polished diamonds segment.
Page 34
Factors such as abolition of the Target plus Scheme affected the exports during the first quarter of FY06. Under the above scheme exporters of medallions and coins used to register their exports in the jewellery category and these exports constituted a significant part of the jewellery exports due to their size. Besides, the change in the value-added norms, as per which value addition was to be calculated on the entire piece of jewellery (including diamond and precious stone content) instead of the earlier method, as per which only the gold content was considered as the base, also affected the exporters. Besides, heavy rains that flooded Surat and Mumbai affected the diamond exporters and disrupted office attendance, production and movement of goods. Further, owing to the market slowdown in the US, the sector witnessed a decline in exports during the last two quarters of FY06. Sluggish demand from the US continued during FY07 as well. The exporters also faced delay in payments especially from the US. Moreover, there was a decrease in the diamond trading activities of bonded warehouses. In FY08 the gems and jewellery sector showed resilience amid turbulent market conditions. The facility of duty-free treatment under the General Scheme of Preferences (GSP) for precious metals (other than silver) and articles of jewellery enjoyed by the Indian exporters was terminated by the US from July 1, 2007. The US GSP benefit was terminated on the grounds that the articles from India were exported in quantities exceeding the applicable competitive need limitation during 2006. After the termination of the benefit, a basic import duty of 5.50% was implemented on the precious metals and jewellery exported from India to the US. However, the sector achieved a commendable export growth rate of 21.47% (y-o-y) during FY08 in the face of high interest rates, appreciating rupee, termination of GSP benefits and economic slowdown in major export markets. This growth could be partially attributed to the increase in trading activities. Moreover, fiscal measures such as reduction of import duty on cut and polished diamond (CPD) to 0%, reduction of import duty on un-worked corals and rough synthetic stones from 30% to 10% coupled with various trade facilitation measures undertaken by the government provided a boost to the sector. The appreciation of the rupee during FY08, which helped in increasing the competitiveness of gems and jewellery sector by making imports of raw materials cheaper, had also benefitted the sector to some extent. However during FY08, Indias exports of gold jewellery recorded a significant moderation. Due to the volatility in gold prices in FY08 and global economic downturn, a slowdown in demand for gold jewellery was witnessed worldwide. Growth in the exports of gold jewellery moderated to 6.67% during FY08 as compared with a high growth rate of 34.18% during FY07.
Page 35
During FY09, the global economic slowdown, which manifested during the second half of FY09, severely hindered the purchasing power of the jewellery customers, both external as well as domestic. In spite of this, the growth in the net exports during FY09 remained in the positive territory mainly due to the robust performance during the first half of the year. Despite the slump in exports of CPD segment (the CPD segment witnessed a decline of around 8% in exports in dollar terms), the sector was able to achieve a marginal growth rate of 1.32% in dollar terms on account of gold jewellery export sales, which clocked a high growth rate of 23.29% during FY09. Besides, tightening of foreign currency credit facilities and high interest rate during the first half of the year also adversely affected the CPD sector, which is heavily dependent on bank financing. The overseas demand erosion, mainly from US led to postponement or cancellation of orders resulting in inventory build up, erosion of profit margins, shutting down of manufacturing units and retrenchment in the sector. However, the March 09 export figures point out to the fact that the pace at which the exports were declining has been arrested to some extent. Exports during March 2009 registered a decline of 16.75% on a y-o-y basis, while they were down by about 33.94% (y -o-y) during January 2009. The contraction in the decline in exports continued during the first five consecutive months of FY10 as well. With the stabilising of demand conditions from Indias major trading partners, there has been a growth in exports in dollar terms from the sector since September 09. However, the export growth in rupee terms had turned positive since July 2009 mainly due to the depreciation of the rupee against the US dollar. The various incentives announced by the government for the sector to combat the slowdown have also in part helped the sector in its recovery. Nonetheless, the increase in export growth rates since October 2009 can be partly attributed to the base effect, as export figures had started declining in absolute value terms since October 2008 due to the onslaught of the global financial crisis.
Page 36
The growth in Gems and Jewellery exports has been primarily driven by the CPD segment over the years. As one of the largest cutting and polishing centre of diamonds in the world, the Indian CPD segment has always held the largest share in the total exports of gems and jewellery. India primarily focussed on exports in cut and polished diamonds owing to its traditional expertise in diamond cutting and polishing. Growing by around an annual average growth rate of 9%, this segment held an average share of around 83% in the net exports of gems and jewellery during FY92 to FY02. However, since, FY03, its share shrank to around 69%. Even though its share in net exports had fallen, it had continued to register an average growth rate of around 13% during the above mentioned period. CPD exports grew from US$ 7.11 bn in FY03 to US$ 13.02 bn in FY09; however, over the years, the fall in the share of CPD exports has been increasingly replaced by the growth in exports of gold jewellery.
Page 37
The share of gold jewellery in India's net exports of gems and jewellery increased from merely 6.80% in 1990-91 to 16.50% in FY03 and to 32.47% in FY09. Exports of gold jewellery (as shown in the graph below) also witnessed an increase from US$ 1.51 bn in FY03 to US$ 6.86 bn in FY09 at a CAGR of 28.69%.
Recognising the growing acceptance of Indian gold jewellery in the world market the government had initiated several measures including a medium term strategy in FY06. The following measures were a part of this medium-term strategy: a. Hallmarking and certification of gold to aid the development of Indian brands in the jewellery market. b. Integration throughout the jewellery supply chain from mining of raw materials to retailing of end products as well as joint venture manufacturing with the leading suppliers of the world. c. Developing market intelligence with a focus on key markets including NRIs. Measures such as gradual liberalisation of gold import in the country and opening of gold trading in exchanges had also provided a boost to the gold segment. The sustained buoyancy in exports of gems and jewellery over the years reflects the effects of continuing policy initiatives taken by the government over the years. As raw materials for the sector are largely imported, the government has focussed on reducing the barriers to import raw materials. Identified as a thrust sector which has prospects for export expansion and for employment generation under the Foreign Trade Policy of 2004-09, special policy initiatives had been announced to increase the competitiveness of the Gems and Jewellery sector.
Page 38
Under the Market Development Assistance and Market Access Initiative scheme of the Government undertaken during the foreign trade policy of 2004-09, steps have also been taken to encourage: creation of training infrastructure to impart skills to artisans in jewellery designing; participation of exporters in international fairs, and arrangement of buyerseller meets abroad to showcase the quality and variety of Indian products.
The share of exports of coloured gemstones in Indias net exports is very small. Moreover, India is a net importer of pearls and synthetic stones. In fact, rough coloured gemstones, synthetic stones and raw pearls are largely imported for value addition and for preparation of final products, which are then sold either in the domestic or international market. India has a rich resource of highly skilled and low cost labourers which is effectively utilised by the Indian manufacturers in this sector for creation of highly value added goods. Even though platinum jewellery is highly sought-after in the international markets, India does not export the same because it lacks natural resources for platinum; however, platinum bars are imported into India, though in very low quantities, as the demand for platinum jewellery is restricted to highend customers and is not very robust.
Imports of Gems and Jewellery

The raw materials required for manufacturing gems and jewellery are scarcely produced in India and hence, the sector heavily depends on imports. Thus, for this highly export oriented sector, one of the competitive disadvantage that it faces is the fact that most of the raw materials required are imported. Consequently, the manufacturers have to endure the risk of exchange rate and global commodity
Page 39
price volatility, which affects the profitability of the sector to a large extent. The government has time and again taken various measures such as: de-licensing gold imports; reducing the barriers to imported raw materials; lowering the customs and excise duties to facilitate imports and for enhancing the competitiveness of the sector. The total imports in the sector have witnessed a steady increase over the years, especially since FY03, which could be partly attributed to the various measures taken under the EXIM policies to facilitate imports of this sector. Total imports increased from US$ 5.81 bn in FY00 to US$ 7.71 bn in FY03 and to US$ 19.54 bn during FY09.
In recent years, India has been increasingly importing cut and polished diamonds. The CPD has been completely exempted from import duty (as on May 3, 2007); as a result, the imports of these diamonds saw more than two-fold increase during FY08 from FY07 and the trend continued in FY09 as well. Further, this exemption of import duty of cut and polished diamonds would provide a boost for the diamond sector and will enable India, which is one of the largest diamond manufacturing centres, to gain a strong foothold in the global market as a global trading hub for gems and jewellery.
Page 40
India imports almost its entire requirement of rough diamonds. However, imports of rough diamonds during FY09 witnessed a significant decline of 23.19% (y -o-y). Even though low demand from domestic as well as external markets was one of the reasons, another reason could also be that the players in the diamond sector decided to reduce the import of rough diamonds for some time to ease the pressure on inventory and to help the sector face the challenge that had
risen out of turmoil in the global financial market. While most categories of gems and jewellery imports declined during FY09, imports of gold bars and platinum bars witnessed a sizeable increase. The increase in imports of gold bars in value terms could be in part attributed to the steep rise in gold prices during FY09. Increase in gold price and its volatility, which continued during FY10, had an impact on the demand for gold in the domestic market. During the first 2 quarters of FY10, demand remained severely subdued; nonetheless, during the third quarter of FY10, demand for gold rebounded due to seasonal factors such as weddings, festivals et al. In India, direct import of precious metals including gold is restricted to certain agencies and institutions. This leads to supply tightness during the peak season.
Factors Affecting Imports of Gems and Jewellery Exchange Rate Volatility

The rupee-dollar exchange rate determines the manufacturing competitiveness of this sector by impacting the import cost. Rupee had started depreciating against the dollar since end -FY08, and during FY09, it witnessed a steep depreciation that resulted in high import cost of raw materials.
Page 41
Consequently, the profitability of the sector came under duress, as raw material cost constitutes a significant part of the production cost of gems and jewellery. The depreciation of the rupee against the dollar, which would have provided some fillip to the export demand in normal market conditions, was not able to provide support as major export destinations were bearing the brunt of economic recession during FY09. Manufactures were, thus, not only facing a decline in demand due to global slowdown but also bearing the brunt of increasing cost of raw materials on account of rupee depreciation. The rupee, which continued to depreciate from April 09 onwards, started witnessing appreciation from October 09. While appreciation of the rupee might benefit exporters, it is unlikely to benefit importers through reduced import cost given the rise in the international prices of the raw materials.
Volatile Commodity Prices

Commodity prices, especially gold prices, remained highly volatile since 2008. The spike in the gold prices has affected the demand for gold jewellery in the domestic market during 2008. Besides, uncertainty in the global and domestic markets followed by retrenchment across the sectors, have led to postponement of purchase plans of gold jewellery among the gold customers. Faced with credit crunch and low demand conditions investors and bullion dealers have imported less gold to India during FY08.
Page 42
According to the World Gold Council, in CY 2008, gold jewellery demand in India, traditionally the worlds largest gold market, declined by 15% while gold investment demand fell by 12%. The total demand for gold in India declined significantly by 83% (y-o-y) during Jan-Mar FY09 to just 17.7 tonnes owing to high price of the precious metal coupled with a slowdown in demand conditions in the domestic economy. High prices of gold as well as volatility kept the demand highly subdued during the first 2 quarters of FY10 as well. However, the demand witnessed a strong recovery during the third quarter of FY10, despite high prices, due to the festival (for example Diwali) and weddingrelated purchases.
Outlook
With the gradual recovery in demand in the global economy and the efforts for diversification of markets by the domestic players, export in this sector is likely to pick up in the near future. Further, the e-commerce opportunities that are being explored by the players will also aid their plans to tap into new markets. The imports of gems and jewellery, on the other hand, will improve due to the buoyant domestic demand conditions, stability in the volatile prices of precious metals and appreciation of rupee, coupled with low currency volatility. However, the government also needs to continue to facilitate the players in this sector to help them gain a stronger ground
Page 43
2.3REGULATORY ASPECTS Introduction
The gems and jewellery sector is a major foreign exchange earner. Due to its importance in Indias foreign trade, the government has taken many initiatives to boost the sector. The government, for instance, has declared this sector as a thrust area for exports. During the global economic meltdown especially the government has dealt out many initiatives for the badly-affected sector. This chapter focuses on the various policies and measures that were taken by the government for the gems and jewellery sector.
Regulating Bodies Gems & Jewellery Export Promotion Council (GJEPC): Established in 1966, the GJEPC is the
apex body of the Indian gems and jewellery industry, and has around 6,500 members across India. The primary goal of the Council is to introduce the Indian gems and jewellery to the international market and to promote their exports. The Council provides market information to its members regarding foreign trade inquiries, trade and tariff regulations, rates of import duties, and information about jewellery fairs and exhibitions. The roles played by the GJPEC are broadly highlighted below:
Trade Facilitator
The Council promotes the Indian gems and jewellery industry in the international market. It organises international jewellery shows, hosts trade delegations, and undertakes image-building exercises through advertisements, publications and audio-visual means.
Advisory Role
The Council also aids better interaction and understanding between traders and government. The Council takes up relevant issues with the government and agencies connected with exports. It also submits documents for consideration and inclusion in the Exim Policy.
Nodal Agency for Kimberley Process Certification Scheme

GJEPC works closely with the Indian government and the traders to implement and oversee the Kimberley Process Certification Scheme; in fact, the Council has been appointed as the nodal agency in India under the Kimberley Process Certification Scheme.
Page 44
Training and Research
The GJEPC runs many institutes that provide training in all aspects of manufacturing and design in Mumbai, Delhi, Surat and Jaipur.
Varied Interests
The Council publishes many brochures, statistical booklets, trade directories and a bi-monthly magazine - Solitaire International, which is distributed internationally as well as to its members.
Gem & Jewellery Trade Council of India (GJTCI):

The GJTCI was founded in 2000, and is tasked with resolving any issue arising from trade in gems and jewellery. It plays an important role in showcasing the Indian gems and jewellery to the international as well as the domestic market. Like the GJEPC, GJTCI also provides information to its members through a monthly newsletter, various educative and trade -motivational events such as seminars, workshops, exhibitions, festivals etc.
The Bureau of Indian Standards:

The Bureau of Indian Standards (BIS), the National Standards Body of India, is a statutory body set up under the Bureau of Indian Standards Act, 1986 and is responsible for hallmarking gold jewellery in India.The Indian Gems & Jewellery (G&J) industry has reported a significant growth in the current financial year primarily due to rising demand and subsequent exports to the US, Hong Kong, UAE and Europe. For the period between April 2010 and January 2011, exports of Cut & Polished (C&P) diamonds have surged 53.5% y-o-y to US$21 billion. In FY2010, UAE and Hong Kong were two of the biggest destinations for India's G&J industry, together accounting for 64.5% of the countrys total G&J exports. According to the World Gold Council (WGC), Indias gold outlook for CY2011 looks robust despite record high prices. Indias gold demand in CY2010 increased 66% y-o-y to 963 tonnes and accounted for 25% of global gold demand of 3,812 tonnes (up 9% y -o-y). Also, rough diamond prices have increased 25-30% in CY2010 and any further rise in rough prices could impact the margins of diamond companies.
Page 45
Duty Structure
Budget Proposals
Concessional Excise duty of 1% without CENVAT credit facility is being imposed on the following goods, namely:-
Page 46
Impact on the industry
The reduction of customs duty on specified gems and jewellery machinery is a step towards improving G&J manufacturing activity in India and is a welcome step. Marginal impact of imposition of excise duty on serially numbered gold bars.
Impact on companies
Foreign Trade Policy 2009-2014

Foreign Trade Policy has identified the gems and jewellery sector as a thrust area with prospects for export expansion and employment generation. The highlights of the policy are: a. Import of gold of 8 carat and above allowed under replenishment scheme subject to import being accompanied by an Assay Certificate specifying purity, weight and alloy content. b. Duty Free Import Entitlement (based on FOB value of exports during the previous financial year) of consumables and tools, for: 1. Jewellery made out of: i. ii. iii. Precious metals (other than gold and platinum) 2% Gold and platinum 1% Rhodium finished silver 3%
2. Cut and polished diamonds 1% 3. Duty free import entitlement of consumables for metals other than gold, platinum will be 2% of FOB value of exports during the previous financial year. c. Duty-free import entitlement of commercial samples shall be Rs 300,000. d. Duty free re-import entitlement for rejected jewellery shall be 2% of FOB value of exports.
Page 47
e. Import of diamonds on consignment basis for certification/ grading and re -export by the authorised offices/agencies of Gemmological Institute of America (GIA) in India or other approved agencies will be permitted. f. To promote export of gems and jewellery products, the value limits of personal carriage of gems and jewellery products in case of holding/participating in overseas exhibitions increased to US$ 5 mn and to US$ 1 mn in case of export promotion tours. Further, the limit in case of personal carriage, as samples, for export promotion tours, has been increased from US$ 0.1 mn to US$ 1 mn. g. Extension in number of days for re-import of unsold items in case of participation in an exhibition in the US increased to 90 days. h. In an endeavour to make India a diamond international trading hub, diamond bourses will be planned. i. Gems and jewellery units may sell up to 10% of FOB value of exports of the preceding year in Domestic Tariff Area (DTA), subject to fulfilment of positive Net Foreign Exchange (NFE). In respect of sale of plain jewellery, recipient shall pay concessional rate of duty as applicable to sale from nominated agencies.
Page 48
3.1 METHOD OF DATA COLLECTION IN DETAIL:The research design was of a descriptive nature, and hence the method of data collection was through the Survey method.
The Survey was carried through the individual mode. It involved personal interviews conducted on the respondents. The data collection involved the following steps:a. Designing of the questionnaire. b. Selection of respondents based on the sample size calculated and the parameters defined. c. Distribution of the questionnaire to the respondents. d. Respondents filled the questionnaire. e. The questionnaires were collected. The data for the purpose of research was thus of a primary nature. In addition to the primary data, secondary data was also sought through web sites, journals, reference books etc.
3.2 (1) METHOD OF DATA COMPILATION:-
The data of score of features and score of brand perception was fed into the excel sheet. Separate Excel sheets were employed for analysis:
Page 49
3.2(2) GRAPHICAL REPRESENTATIONS OF DATA:The objectives of the study was to understand the consumers buying preferences, the reach of branded jewellers, brand awareness of various brands in the jewellers market, the type of promotional strategy adopted by each to attract their customers, when do they plan their promotional strategies, implement them and the effectiveness of the same. Hence the first question was to find out the factors that guide a customer while purchasing jewellery which dealt with nine attributes. The respondents where just asked to tick on the attribute that guided that purchase decision. The result is as follows
Design
Price
Purity
Image
Variety
Display
Promotion and Offers
Service
Family and Friends

12
85
92
87
65
67
10
Table 1 Factors that guide while purchasing jewellery
From the above results an observation can be drawn that out of the 100 respondents 92 of them feel that price is a major factor that guides their purchase decision. Apart from price purity also is considered important by 87 respondents, followed by design with 85 respondents feel it is an important factor. Variety and image are the other important attributes that are considered while making a purchase decision. Attributes like family and friends, promotions and offers are still not very popular among the respondents selected for this research. The attributes like service and display have been selected only by 2 and 5 respondents respectively showing that these are the least important thing that guide an individual to purchase jewellery. The diagram below shows the guiding factor of the respondents while purchasing jewellery in an ascending manner.
Page 50
92
100 80 60 40 20 0
85 65
67
87
10
12
Figure 1 Factors that guide while purchasing jewellery The question was to find out the popularity of 5 brands. The respondents were asked to tick against the brands that they are aware about. The 5 brands considered here are Gili, Tanishq, Ddamas, Oyzterbay, and Trendsmith. These are the prominent brands for gold jewellery there are many other players but the research is limited to gold jewellery. Brands No of Respondents
Gili
100
Tanishq
100
Ddamas
100
Oyzterbay
84
Trendsmith
45
Table 2 Popularity of brands
Brand Awareness
100
100 80 60 45 No of Resondents
100
100 84
40 20 0
Figure 2 Popularity of brands
Page 51
From the above table and figure inference can be drawn that brands like Gili, Tanishq and Ddamas are extremely popular as they have 100% awareness. Oyzterbay is popular among 84 respondents and Trendsmith that is brand of TB is popular with a little less then 50% of the respondents that is 45%. Oyzterbay has a brand has been discontinued from the market however as observed it was quiet popular among the population. The question was to find out the reason why the respondent purchases jewellery that is the reason for purchasing. Is it purchased as an investment option or on occasions, festivals or as a fashion statement?
Investment Fashion Occasions Festivals No of Respondents

34 39 11 16
Table 4 The reason for the purchase of jewellery 34 respondents buy jewellery for investment purpose, 39 respondents look out for fashion or the latest trends while purchasing jewellery. 11 respondents buy jewellery during occasions like weddings, anniversary, birthdays etc. and 16 respondents buy jewellery during festivals.
No of Respondents
16
Festivals 39
Fi ure 3 The reason for the purchase of jewellery
Occa ion
11
Fa hion

34
Inv tm nt
Page 52
The question is a direct question which inquires the respondent preference for jewellery that is it branded or family jeweler.
Preference No of Respondents
Branded Jewellery
24
Family Jeweler
76
Table 5 Preference of jewellery From the above table it can be observed that 24 respondents prefer branded jewellery and 76 respondents prefer family jewellery. This makes non-branded jewellery more popular among the respondents.
Respondent Preference
24%
Branded Jewellery Non-Branded Jewellery 76%
Fi ure 4 Preference of jewellery
Page 53
The question further probes into finding out how many among the respondents have bought branded jewellery.
Branded Jewellery No of Respondents
Bought
22
Not bought
78
Table 6 No. Person bought branded jewellery
No of Re ondents urc asing branded jeweller

22%
Not bought ought

78%
Figure 5 persons who bought branded jewellery Out of the 100 respondents 78 have not bought branded jewellery and 22 have bought branded jewellery. However even if these 78 respondents have not bought branded jewellery they are aware of branded jewellery being sold and also know the brands by their names.
Page 54
Since the sample consist of females and males the next set of question deals with whether jewellery is bought for gifting purpose If the respondents do buy jewellery for gifting purpose then where is it bought from family jeweller or branded shops.
Buy jewellery for gifting No of Respondents
Yes
29
No
71
Table 7 No of person bought jewellery for gifting purpose 29 respondents of the 100 buy jewellery for gifting purpose among these 29, 12 are men. 71% of the respondents do not buy jewellery for gifting purpose. The next question was the jewellery purchased for gifting is branded or non-branded and the result found are as under
Branded No of Respondents
09
Family jeweler
20
Table 8 no of people bought branded jewellery for gifting purpose 09 respondents out of 29 buy branded jewellery for gifting and 20 out of 29 buy jewellery from their family jeweller for gifting. Percentage wise 31.03% buy branded jewellery for gifts and 68.97% buy jewellery for gifting from their family jeweller
Page 55
Percentage of respondent
31%
Family Jeweller 69%
Branded Jeweller
. Figure 6 People bought branded jewellery for gifting purpose
Page 56
Given below are few characteristics of traditional family jewellers (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 Jewelers

Convenient Trustworthy Good Investment Price Traditional design
Number of points
This question will help gain an insight as to which parameter of a family jeweler attracts respondent towards them. Since the points are given out of 10 and there are 100 respondents each parameter will be out of 1000. Characteristics of Family Jewelers
Convenient
Trustworthy
Good Investment
Price
Traditional design
Number of points
660
895
775
870
745
Table 9 characteristics of a family jeweller which attracts people The respondents were asked to give points on a scale of 1 to 10 where 10 was the highest hence the 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 jewellers high hence it has scored 895. The respondents also feel that the price charged by the family jewellers is reasonable and hence have given it decent points i.e. 870. While purchasing jewellery from family jewellers the respondents consider it to be a good investment. Family jewellers are popular for traditional designs and the respondents have given it points that add up to 745.
Page 57
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 jewellery

Wide range of products under one roof Shopping experience Trendy and fashionable jewellery Price
Number of points
Since the points are out of 10 and the no of respondents who have bought branded jewellery are 22. Hence the assessment of this question is based on the points given only by these 22 respondents. Hence the total would be 220 and not 1000 here. Characteristics of branded jewellery
Wide range of products under one roof
Shopping experience
Trendy and fashionable jewellery
Price
Number of points
153
137
195
123
Table 10 characteristics of Branded jeweller which attracts people Respondents rate trendy and fashionable jewellery highest when it comes to branded jewellery. It scores 195 out of 220. Price according to the respondents is high hence it scores 123. Shopping experience wise branded showroom scores least among the other characteristics. This could also be because when a customer goes to buy jewellery he may not be looking for the experience but wanting good trendy jewellery which is priced appropriately.
Page 58
The e question was to find the level of satisfaction on a scale of 1 to 10 for family jewellers. Since the points are given out of 10 and there are 100 respondents the level of satisfaction will be out of 1000.
Family jeweler No of respondents
Level of satisfaction
765
Table 11 Level of satisfaction of family jewellers customer The level of satisfaction that the respondents have is 765. Hence if the average were to be removed it would be between 7 and 8. The last question was to find the level of satisfaction for branded jewellery on a scale of 1 to 10. Here again the rating is out of 220 because only those respondents who have bought branded jewellery are being considered.
Branded jewellery No of respondents
Level of satisfaction
144
Table 12 Level of satisfaction of family jewellers customer The level of satisfaction on the whole for branded jewellery is 693 and if the mean were to be removed then it would be between 6 and 7 hence the level of satisfaction that the respondents have towards branded jewellery is lower than that towards family jewellers.
Page 59
3.3 MATHEMATICAL & STATISTICAL ANALYSIS AND INTERPRETATIONS Hypothesis Testing
There is no significance difference among the consumer in the parameters such as Celebrity endorsement, Promotion, Wide Variety of designs, Brand Name, Exhibition and New Collection which attract them for the purchase of jewellery.
Ha:
SUMMARY Groups Celebrity endorsement Promotion Wide Variety of Designs Brand Name Exhibition New Collection Count 100 100 100 100 100 100 Sum 306 392 545 466 401 551 Average 3.06 3.92 5.45 4.66 4.01 5.51 Variance 3.2489 2.4582 1.8662 2.9943 2.7777 2.0908
Source of Variation Between Groups Within Groups Total
SS 457.29 1528.2 1985.5
Df 5 594 599
MS 91.459 2.5727
F 35.55
P-value 7E-32
F crit 2.2292
Anova for the parameter which attract for purchase of jewellery
Page 60
Since the p-value is less than 0.05, at 95% significance level we reject the H working hypothesis .
Purchase of jewellery is not preferred from the family jeweller compared to that of branded Jeweller
Ha:
Purchase of jewellery is preferred from the family jeweller compared to that of branded Jeweller
Family_Jeweller_over_Branded_Jewellery
Observed N Strongly Disagree Disagree Neutral Agree Strongly Agree Total 7 21 22 32 18 100 Expected N 20.0 20.0 20.0 20.0 20.0 Residual -13.0 1.0 2.0 12.0 -2.0
Observed and Expected value for preference of Family jeweller over Branded jewellery store Test Statistics
Family_Jeweller_over_Branded_Jewellery Chi-Square Df Asymp. Sig. 16.100a 4 .003
Page 61
Test Statistics for preference of Family jeweller over Branded jewellery store
Since the p-value is less than 0.05, at 95% significance level we reject the H working hypothesis . Hence, Purchase of jewellery is preferred from the family jeweller compared to that of branded Jewellery.
Jewellery is not considered as status symbol for most of the consumer.
Ha:
Jewellery is considered as status symbol for most of the consumer.
Status_Symbol
Observed N Disagree Neutral Agree Strongly Agree Total 3 10 42 45 100 Expected N 25.0 25.0 25.0 25.0 Residual -22.0 -15.0 17.0 20.0
Observed and Expected value for Status Symbol Test Statistics

Status_Symbol Chi-Square Df Asymp. Sig. 55.920a 3 .000
Test Statistic for Status Symbol
Page 62
Since the p-value is less than 0.05, at 95% significance level we reject the H working hypothesis . Hence, jewellery is considered as status symbol for most of the customers.
Price does not play an important role in purchase of jewellery
Ha:
Price does play an important role in purchase of jewellery
Imp_of_Price
Observed N Strongly Disagree Disagree Neutral Agree Strongly Agree Total 1 10 9 43 37 100 Expected N 20.0 20.0 20.0 20.0 20.0 Residual -19.0 -10.0 -11.0 23.0 17.0
Observed and Expected value for Importance of Price Test Statistics

Imp_of_Certification Chi-Square Df Asymp. Sig. 70.000a 4 .000
Test Statistics for Importance of Price
Page 63
Since the p-value is less than 0.05, at 95% significance level we reject the H working hypothesis . Hence, Price plays an important role in purchase of Diamond jewellery.
Page 64
Promotional Strategies adopted by Non Branded/ Family Jewellers

The other set of questionnaire was to find out the promotional strategies that are used by the non branded stores and jewellers to face competition. The sample set consist of 30 jewellers spread across Mumbai In this set of questionnaire first the information about the number of years of operations is found out. All the jewellers that are into this business for over a period of 60 years and above have been considered. The first question here again is to find out whether these traditional jewellers are aware of branded jewellery.
Awareness No of respondents
Yes
30
No
0
Table 13 Awareness of branded jewellery among traditional jeweller All the 30 traditional jewellers are aware of branded jewellery in the market. The next question is to find whether the entry of these brands has affected their sales.
Effect on Business No of respondents
Yes
11
No
19
Table 14 Effect of branded jewellery on traditional jeweller 11 out of the 30 respondent have seen an effect on their business due to the entry of branded jewellers making it 36.37%. 63.33% of the respondents feel that their business has not been affected due to the entry of branded jewellers they claim to have a loyal set of customers which not only generate revenue but also help them bring new business.
Page 65
Percentage of Respondent
36%
yes
64%
no
Figure 7 Effect of branded jewellery on traditional jeweller
The third question deals with whether these family/ traditional jewellers have adopted any strategies to fight competition.
Strategies adopted No of respondents
Yes
25
No
5
Table 15 No of traditional jeweller adopted strategies 25 respondents have adopted strategies to fight competition. 5 respondents are still functioning in their traditional old fashion and have not adapted any strategy to increase their sales or revenue. 83.33% of the traditional jewellers have adopted strategies to upgrade themselves with the market demands. The next question is to find what type of strategy they have adopted. Since it was a close ended question the strategies selected were discounts, cash back, zero making charges, gifts, others.
Strategies adopted No of respondents
Discounts
Cash back
6
19
Zero making charges 22
Gifts
Others
23
Table 16 types of strategies adopted by family jeweller
Page 66
Strategies adopted by Family jewelers

Others
Gifts Zero making charges 5 23
22
No of respondents 6 19 0 5 10 15 20 25
Cash back
Discounts
Figure 8 strategies adopted by family jeweller This question was asked to know what the strategies that the family jewellers have adopted are. Discounts are given by 19 jewellers they may be when there is a bulk purchase or when the customer is an old and loyal customer. Cash back as a strategy is only adopted by 6 of the family jewe llers among the 25 considered under this research study. Cash back by a few are given in the form of coupons such that on their next purchase they would get certain percentage cash back. 22 among the 25 respondents have a strategy where in they plan a period such where they would not be charging any making charges. Another most popular strategy among these jewellers is gifts which are given when their purchase limits exceed a certain amount or to their loyal customers during festivals. Other strategies that are undertaken are like giving free polishing and maintenance services. The next question is to find when they plan these strategies. Where in are the strategies planned during festivals, wedding season or during the off season when the sales are low.
When are the strategies planned No of respondents
Festivals
Wedding season
Off season
11
11
Table 17 strategy duration Among the 30 respondents 11 plan these strategies during festival. Another 3 respondents plan the strategies during the wedding season and the remaining 11 during the off season.
Page 67
Percentage of respondents
44%
44%
Festivals
Wedding season Off season
12%
Figure 9 strategy duration of family jewellers

In terms of percentage 44% plan their strategies during the festival season, 12% plan their strategies during the wedding season and the remaining 44% plan the strategies during off season.
The sixth question is to find out the effectiveness of their planned strategies in terms of increased sales.
Increased sales No of Respondents
Yes
21
No
4
Table 18 Effectiveness of strategy Out of the 25 respondents who have adopted some strategy to increase their sales only 21 have seen an increase in their actual turnover the remaining 4 have not seen any increase or decrease in their sales.
Page 68
Percentage of Respondents
16%
Yes
No 84%
Figure 10 Effectiveness of strategy

In terms of percentage 84% out of the 25 respondents have seen an increase in their sale and the remaining 16% have not seen any significant increase in their turnover. The last question is an open ended question that asks whether they have adopted any other strategy to retain and attract customers. Here the respondents say that they have taken steps to build relati on with their customers where in they make a note of their customers birthdays, anniversaries send them cards on these days, and they also send them calendars.
Page 69
Promotional strategies adopted by Branded Jewellers
Tanishq:
Among the branded jewellery players in the Indian market, Tanishq is considered to be a trendsetter. Tanishq began with 18-carat jewellery. Realizing that such jewellery did not sell well in the domestic market, the 18-carat jewellery range was expanded to include 22 and 24-carat ornaments as well. When Tanishq was launched, it sold most of its products through multi brand stores. In 1998, Tanishq decided to set up its own chain of retail showrooms to create a distinctive brand image. As the jewellery market was highly fragmented, lacked branding, and allowed 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 the business and change the pe rception of jewellery as a high-priced purchase. Tanishqs strategy was to create differentiation and build trust. Differentiation plays the role of primary attraction; trust takes care of lifelong loyalty. The differentiation was created through designs. The emphasis had to be on design because local jewelers could offer to design any pattern according to the customer's specifications. For a national brand a generic design concept with regional variations had to be evolved.
Oyzterbay:
Oyzterbay seeks to build a national brand in the jewellery industry in India and aspires to be the largest branded jewellery company in the country with a chain of 100 stores. Oyzterbay has been taken over by Rajesh Exports Limited in 2009. Rajesh Exports Limited is one of the largest gold jewellery manufacturer and distributor in the world.
Trendsmith:
Mumbai-based Tribhovandas Bhimji Zaveri (TBZ), which had been in the jewellery business since 1864, saw tremendous scope in the branded segment and opened its new concept s tore 'Trendsmith' in Mumbai in December 2001. Encouraged by the response towards its first store, the Zaveris planned to take Trendsmith (India) Pvt. Ltd. all over the nation by opening as many as 50 stores by 2006. Trendsmith offered eight lines of exclusive designer jewellery from well-known export jewellery manufacturers and designers from Mumbai and Delhi.
Gili:
Gili offered a wide range of 18-carat plain gold and diamond-studded jewellery, designed for the contemporary Indian woman. The designs combined both the Indian and western styles and motifs.
Page 70
Some of the companies have even cleverly played on Indian customs and tradition to advertise and establish their brands. Jewellery is now marketed for every occasion; even Valentine's Day calls for "a special something [diamond] for a special someone". The latest strategy adopted by leading jewellers of the world is celebration of womens week where in on purchase of jewellery free gifts like Morellato watches, gift vouchers from VLCC are being given. The participating companies are Ddamas, Gili, Gitanjali jewels etc... Today there are more than 50 brands, endorsed by models, film actors, sports celebrities and other well-known faces. Some designs of these brands are so popular that local jewellers have begun to copy them. The recent entrant in branded jewellery market is reliance jewels. The marketing strategy that Gitanjali jewels take up is advertising by having top celebrities as their brand ambassadors. Tanishq comes up with customer schemes; it also provides jewellery in films to be easily identified. Movies like Paheli and Jodha Akbar had its lead actresses wearing Tanishq jewellery. And they also lend their products to contestants in beauty pageants. Reliance jewels marketing strategy is press releases.
Page 71
INTERVIEW QUESTIONS
1. What are the factors that provide a competitive edge to your company

2. How has the rising price of gold affected the jewellery business Where do you see the gold

price in future
6. According to you, what course of action should the government adopt to develop the Indian

gems and jewellery sector
Interview with Naresh Jhawar, Brand Manager, P.P.Jewellers Limited, Q1 what are the factors that provide a competitive edge to your company?
A. We have following strategy which provides competitive edge to our company:y y y y y
Exclusive distribution rights Wide and exclusive variety of design Ongoing research and innovations in design process and surface ornamentation Ready stocks 100% Hallmark jewellery.
Q2. How has the rising price of gold affected the jewellery business? Where do you see the gold price in future?
A. In our personal experience, the rising prices of gold has not affected the jewellery business. However, the quantum of purchases has changed. For instance, earlier Husband who used to gift gold set to his wife has changed his preference from:
8. What are the growth plans of your company in the future
7. What would be the emerging areas of growth in the near future
5. What are your views on hallmarking of jewellery
4. What are the current trends in the sector What are the consumer preferences

How does your company cope with the changing trends
Page 72
3. Does the changing consumer tastes in terms of fashion affect the jewellery making business
Gold Set
Gold Chain
Gold Bracelets
Gold Ring
Gold Coin
However, this change in buying preferences has not affected our business. Earlier a gold set would cost around Rs 10,000 but with increasing prices of gold, even a gold ring costs more than Rs 10,000. The rising prices of gold has not affected the demand but has rather led to a situation of demand explosion as, we have three categories of consumers belonging to lower income level, middle income level and high income level. With an increase in the disposable income levels, the preference of lower income level consumer has been shifted to gold jewellery. Similarly, the preference of middle income and high income level consumers has shifted from gold jewelle to diamond jewellery. This has ry created a new segment for us and increased the demand for our business leading to demand explosion.
Higher Income Level

Preference shifted from gold jewellery to diamond jewellery
iddle Income Level
So, in our opinion, the rising price of gold has rather increased the business. Looking at the current trend, we feel that the price of gold will keep on increasing until the dollar becomes stable.
Lower Income Level
Preference shifted to gold jewellery
Page 73
Q3. Does the changing consumer tastes in terms of fashion affect the jewellery making business? How does your company cope with the changing trends?
A. In todays world of ever-evolving fashion trends, we always strive to understand the current trend. We keep a check on the available designs, latest trend, and exclusive designs as per the consumers taste, and make designs accordingly. Our manufacturing process begins with the design, which begins from generating ideas and sketches as per required market trends, capturing every dot on a piece of paper and producing an art that would have a value tomorrow. Several versions are made, to achieve the right aesthetic value for the jewellery and we keep on changing our designs as per the prevailing market trend.
Q4. What are the current trends in the sector? What are the consumer preferences?
A. The rising price of gold has led to the trend of consumers opting for light weight jewellery. Also, we are witnessing an increased trend of diamond jewellery purchases.
Q5. What are your views on hallmarking of jewellery?

A. We believe in 100% hallmark jewellery and sell and export only hallmark jewellery. We have also promoted hallmark jewellery through a programme on Doordarshan. Hallmarking of jewellery is an assurance for the purity of gold for consumers. The market for hallmarked jewellery will increase if customer awareness about the benefits of hallmarked jewellery increases and subsequently, they start demanding the same. Further, jewellers who deal in hallmark jewellery can also create awareness and promote hallmarking, which can boost the demand for such jewellery. Even in terms of exports, if jewellery hallmarking is made mandatory it can open new avenues for exporters, and increase the acceptance of Indian jewellery around the world (especially in countries where hallmarking is compulsory).
Q6. according to you, what course of action should the government adopts to develop the Indian gems and jewellery sector?
A. According to us, the Government should allow direct import of gold to Indian gems and jewellery sector which will definitely help in the development of this sector.
Page 74
Q7. What would be the emerging areas of growth in the near future?
A. Growth in tier II cities is increasingly gathering pace and they will emerge as the focal centres of development. The moment this happens, it will increase the purchasing power of the middle income level group, which will ultimately help in increasing the demand for jewellery.
Q8. What are the growth plans of your company in the future?
A. P.P. Jewellers is always open to new ideas and try to mould their business to meet emerging trends following the motto of perfection and purity. In this year, the group is about to open one of the largest jewellery showroom of the country in Karol Bagh, the heart of Delhis Jewellery District.
We are also planning to open showroom in Mumbai and have acquired space in prime area of Mumbai. This area is the main area for trading loose diamonds in the world. Further, we are also planning to open showroom in Ludhiana and have procured 5000 meters of space and are also planning to open an outlet in Kolkata. The company is also in process of opening a school by the name of P.P. School. Presently, we are concentrating in the opening of franchisee outlets. We are planning to open 50 franchise outlets across the country and two of our franchise outlets are already operational.
Page 75
4.1 SUMMARY FINDINGS:

Many customers feel that price is a major factor that guides their purchase decision. Design, purity, variety and image are the other important attributes that are considered while making a purchase decision. Attributes like family and friends, promotions and offers are still not very popular among the respondent. The attributes like service and display are the least important thing that guides an individual to purchase jewellery.
Maximum number of customer buys jewellery for investment purpose.
Customers have rated trust aspect of family jewellers high. The customers also feel that the price charged by the family jewellers is reasonable. While purchasing jewellery from family jewellers the customers consider it to be a good investment. Family jewellers are popular for traditional designs.
When a customer goes to buy jewellery he may not be looking for the experience but wanting good trendy jewellery which is priced appropriately.
The level of satisfaction that the respondents have towards branded jewellery is lower than that towards family jewellers. There is a significance difference among the consumer in the parameters such as Celebrity endorsement, Promotion, Wide Variety of designs, Brand Name, Exhibition and New Collection which attract them for the purchase of jewellery. Purchase of jewellery is preferred from the family jeweller compared to that of branded Jewellery. Jewellery is considered as status symbol for most of the customers.
Price does play an important role in purchase of jewellery Non-Branded jewellers have taken steps to build relation with their customers where in they make a note of their customers birthdays, anniversaries send them cards on these days, and they also send them calendars. Non-Branded jewellers who have adopted some strategy to increase their sales maximum numbers of jewellers had seen an increase in their actual turnover.
Page 76
4.2 CONCLUSIONS:
The main objectives of the study were to compare between Branded and Non-Branded Jewellery, to know Consumer perception towards Jewellery, to know the Major Players of Jewellery industry, to have an idea about parameters consumer consider while buying Jewellery, to have knowledge about demographic segments, to know the Marketing strategies used by various jewellery brands. India is growing at a very fast pace and jewellery sector is one which is registered to achieve 65% international market by 2012. The jewellery sector is largely unorganized in India but is changing into organized business because of many major and influential players entering into the market. The booming economy along with the rapid increase in income levels is estimated to further accelerate the growth of this industry. According to a KPMG study, Indias growing importance in the global jewellery market is only expected to increase in the future with total estimated jewellery sales of US$ 21 billion by 2011 and US$ 37 billion by 2015. Diamond jewellery consumption in India is also estimated to jump by 78 per cent in 2012. In India, brands are required as no one shop alone can do advertising due to lack of resources. Today, there are more than 50 brands in the Indian market. For brands the right approach is to have a continual revitalization of the brand and its position within the market.
Branding commands a premium price but it has to be justified. The consumers buying behaviour shows a shift from content to design in jewellery i.e. fashionable jewellery is the rage nowadays and acquires a status symbol in their minds .Branded jewellery players will continue to face lot of competition from local jewellers.
Luxury brands have entered the jewellery market with clear strategies to reach the final consumer. The distribution by luxury brands is also very good. Competition now is for jewellery as an accessory rather than as a jewel. For those who want to venture into branding and retailing in India, the 7 Es of brand marketing strategy are recommended for the new jewellery retail environment.
Page 77
4.3 SUGGESTIONS:
y y
The making charge is affecting their sales so they should cut down their prices. Branded jewellers should provide more number of patterns & also should increase their market share by bringing more innovative scheme & loyalty programs.
Target young business man & young professional as they are now more in investing money in gold.
Gold price are increasing day by day so they should increase their sales by selling biscuits of gold rather than selling more of ornaments.
Ansoffs Matrix
Market Penetration (Present product-Present market)

y
Provide EMI by tying up with banks in order to deliver the goods on time & have low pressure on repaying the credit.
Low cost and quality manufacturing.
Page 78
Product Development (New product-Present market)
y
Find new applications to current users: Increasing the versatility of the product in terms of usage. For example, provision for using pendant as earrings, finger rings and vice versa.
Market Development (Present Product- New Market)

y
Expand geographically: Opening new outlets in US and increasing the number of outlets in the existing cities.
Diversification (New Product- New market)

y
Related: Gold and diamond studded buckles in belts and footwear.
Page 79
QUESTIONNAIRE
CONSUMER PREFERENCE FOR BRANDED JEWELLERY VIS --VIS NON-BRANDED JEWELLERY AND THE PROMOTIONAL STRATEGIES ADOPTED BY EACH IN MUMBAI QUESTIONNAIRE NO. ___ RESPONDENT NO. ___ Hello, I am Kalpita choudhary. I am a second year student of management pursuing my MBA from VIVA Institute of Management Studies. As a part of my curriculum I have to undertake a survey on the given topic. All the information that we collect is strictly for study purpose and will be dealt with at most confidentiality. This survey would take only 10 mins of your time.
Name: Telephone number: Age: Sex: 1) Factors that guide you while purchasing jewellery Design Variety Service Price Display Purity Brand Image
Promotions and offers
Family and friends influence
2) Are you aware of the various jewellery brands available in the market Yes No
3) Tick against the brands that you are aware about in the jewellery market Gili Tanishq Ddamas Oyzterbay Trendsmith
Others (please specify)
4) You buy jewellery for Investment Fashion Occasions Festivals
5) Which jewellery do you prefer Branded Family Jeweller
6) Have you bought any branded jewellery Yes No
7) Do you buy jewellery for gifting purpose Yes No
8) Where do you prefer to buy the jewellery from (for gifting) Branded Family Jeweller
Page 80
9) Rate the following parameters which attract you towards jewellery purchase? (Where 1 = Least important and 7 = Most important) 1 Celebrity endorsement Promotion Wide variety of designs to choose from Brand Name Exhibitions New collections Others(please specify below) 2 3 4 5 6 7
10) Given below are few characteristics of traditional family jewellers (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 Jewellers
Convenient Trustworthy Good Investment Price Traditional design
Number of points
11) 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 Jewellers
Wide range of products under one roof Shopping experience Trendy and fashionable jewellery Price
Number of points
Page 81
11) Given below is a scale that indicates points from 10 to 1, you have to indicate a point that describes your satisfaction on the overall satisfaction on jewellery purchased from family jewellers (local jewellery retailer). 10 being the best 10 9 8 7 6 5 4 3 2 1 12) Given below is a scale that indicates points from 10 to 1, you have to indicate a point that describes your satisfaction on the overall experience of store and the branded jewellery that they offer. 10 being the best 10 9 8 7 6 5 4 3 2 1
13) Rate the following statements with the following options given below
Strongly Disagree Neutral Agree Strongly Disagree Price plays an important role in purchase of jewellery Agree
Purchase
of
jewellery is
mostly
preferred from the family jeweller compared to that of branded jeweller
Jewellery is considered as status symbol for most of the customers
Thank you.
Page 82
QUESTIONNAIRE
CONSUMER PREFERENCE FOR BRANDED JEWELLERY VIS --VIS NON-BRANDED JEWELLERY AND THE PROMOTIONAL STRATEGIES ADOPTED BY EACH IN MUMBAI Hello, I am Kalpita Choudhary. I am a second year student of management pursuing my MBA from VIVA Institute of Management studies. As a part of my curriculum I have to undertake a survey on the given topic. All the information that we collect is strictly for study purpose and will be dealt with at most confidentiality. This survey would take only 10 mins of your time.
Name of the store: Name of the owner: Number of years into this business: 1) Are you aware about jewellery being sold through brands Yes No 2) Has your business been effected by the latest trend of branded jewellery Yes No
3) Have you adopted any strategy to increase your sale to fight competition Yes No
4) Which type of strategy have you adopted Discounts Cash back Zero making charges Gifts
Others (please specify) 5) When do you plan such offers Festivals Wedding seasons off season
6) Have your sales picked by after adapting these strategies Yes No
7) Is there anything else (apart from the points mentioned above) that you do to attract new customers and retaining your loyal customers please specify.
Thank you
Page 83
BIBLIOGRAPHY
Web Sites
ho.shrenuj.com www.fine-jewellery.com www.gitanjaligroup.com www.gjepc.org www.ibef.org www.moneycontrol.com www.myadora.com www.rosyblue.com www.sheetalgroup.com www.tanishq.co.in
Magazines
International Business Times National Jeweller The Art of Jewellery Making Solitaire International Journal of Gem Industry
Books
Consumer Behaviour Basic Findings & Management Implications Marketing books
Page 84

Final Project Kalpita

Transféré par

Informations du document

Description originale:

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Final Project Kalpita

Transféré par

Droits d'auteur :

Formats disponibles

Consumer preference for branded jewellery vis-a-vis non branded jewellery and the promotional strategies adopted by in Mumbai

Viva- Institute of management studies

Viva- Institute of management studies

1.2 RESEARCH OBJECTIVES

2. To know Consumer perception towards Jewellery.

3. To know the Major Players of Jewellery industry.

4. To identify which parameters play a vital role in the selection of Jewellery.

7. To know the Marketing strategies used by various jewellery brands.

Viva- Institute of management studies

Jewellery market in India

Viva- Institute of management studies

Brands dominating the marke t

Viva- Institute of management studies

Viva- Institute of management studies

Emergence of international brands

Steps to consider on franchising

Viva- Institute of management studies

Future of jewellery franchising

Viva- Institute of management studies

Viva- Institute of management studies

Viva- Institute of management studies

Analysis of literature Review

Viva- Institute of management studies

Viva- Institute of management studies

1.3.3 PERIOD OF STUDY

Viva- Institute of management studies

1.4(2) Sampling Techniques:

Viva- Institute of management studies

Viva- Institute of management studies

Viva- Institute of management studies

1.7.2 LIMITATIONS OF STUDY

Viva- Institute of management studies

1.8 EXPECTED CONTRIBUTION FROM STUDY:y

1.9 DIRECTION FOR THE FUTURE RESEARCH:

Viva- Institute of management studies

2.1 MEANINGS AND DEFINITIONS

Introduction to Indian Gems and Jewellery Industry

1. Diamonds 2. Coloured Stones-precious, semi-precious, synthetic

1. Plain gold Jewellery 2. Studded Jewellery 3. Silver Jewellery 4. Costume Jewellery

Viva- Institute of management studies

GROWING ORGANIZE SE TOR

Share of India's Gem & Jewellery Sector

Organised Sector Unorganised Sector (Family Jewellers)

Viva- Institute of management studies

THE INDUSTRY STRUCTURE

Viva- Institute of management studies

MARKET STRUCTURE AND POTENTIAL

Viva- Institute of management studies

GEMS AND JWELLERY CLUSTER

Viva- Institute of management studies

Viva- Institute of management studies

Viva- Institute of management studies

Manufacturing and Retailing

Viva- Institute of management studies

Value Chain Gold

Viva- Institute of management studies

Viva- Institute of management studies

North America Europe Middle East Asia

Increase of 23.25 % Increase of 6.02% Increase of 51.67% Increase of 19.02%

6. Availability of high skilled labor in production of gold jewellery.

Viva- Institute of management studies

Viva- Institute of management studies

Viva- Institute of management studies