www.final-yearprojects.co.

cc

www.troubleshoot4free.com/fyp/

Paper Title

CUSTOMER PERCEPTION TOWARDS BRANDED JEWELRY IN INDIA

Dr. Ratna Vadra

Faculty, IMT, Ghaziabad

& Dr. Gunjan Malhotra,

Faculty,IMT, Ghaziabad

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

Abstract
Recent times have seen larger brands witnessing an upward swing mainly due to factors such as increasing consumer sophistication, diminishing investment-driven purchases, alternative retail channels and competition from other luxury products. Responding to the changing trends, India's small, independent jewelers are starting to organize themselves into groups of four to five players to share a common brand identity and marketing strategy. This paper is aim to study the very changing market scenario i.e. transition from unorganized sector to an organized one. Moreover this paper gives us an insight into consumer buying behavior when it comes to jewellery. The paper also studies how the branded players are changing the perceptions and attitudes of Indian customers towards jewellery. The analysis showed that consumers are moderately aware of the branded players who have forayed into the jewellery market and would like to purchase branded jewellery in the near future and still large proportion of consumers regard jewellery as an investment. The consumers buying behavior also 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.

Introduction
The gems and jewellery industry has an important role in the Indian economy. While a predominant portion of gold jewellery manufactured in India is for domestic consumption, a predominant portion of rough, uncut diamonds processed in the form of either polished diamonds or finished diamond jewellery is exported. With an estimated consumption of 722 tonnes during calendar year or CY2005 (including jewellery consumption of 587 tonnes), India is the largest consumer of gold in the world. Recent times have seen larger brands witnessing an upward swing mainly due to factors such as increasing consumer sophistication, diminishing investment-driven purchases,

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

alternative retail channels and competition from other luxury products. Responding to the changing trends, India's small, independent jewelers are starting to organize themselves into groups of four to five players to share a common brand identity and marketing strategy. In order to gain marketshare, branded players will have to come up with designs that customers want and win the 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 jewelers.

Branded jewellery in India

As India makes rapid progress in the retail arena, the jewellery market is undergoing a gradual metamorphosis from a 'storehouse of value' to a fashion accessory bazaar. Plain gold has now given way to diamonds, platinum and colored gemstones. Growth in the diamond industry has been remarkable. According to industry estimates, the gem industry is growing at 20 per cent annually and currently stands at US$ 3.6 billion. India is also a big export hub for processing diamonds and other precious stones. The two major segments of the sector in India are gold jewellery and diamonds. India is the worlds largest gold jewellery market by volume accounting for around 590 tonnes of consumption demand in 2005. Traditionally gold is 22 carat. Gold jewellery forms around 80 per cent of the Indian jewellery market, with the balance comprising fabricated studded jewellery that includes diamond as well as gemstone studded jewellery. Gold jewellery and colored gem segments account for about 15 per cent and 5 per cent, respectively of India's gems and jewellery export in value terms. The largest cutting and polishing centre of diamonds in the world both in terms of quantity and value, the Indian gems and jewellery sector contributed to about 15 per cent

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

of India's total merchandise exports during 2005-06. And in 2006-07, it accounted for 13.7 per cent of the country's total merchandise exports. In terms of carat, India's share in this sector is about 80 per cent of the world market. India produces 60 per cent of the world's polished diamond market by value, 82 per cent by carats and 95 per cent by number of pieces. According to the Gems and Jewellery Export Promotion Council (GJEPC), the total exports of the industry for the fiscal year 2006-07 were US$ 17,101.77 million as against US$16,646.04 million in 2005-06, showing a growth rate of 2.74 per cent over the previous fiscal year. The current fiscal witnessed an impressive growth of 10.86 per cent. India's 300,000 traditional jewellers commonly referred to as the unorganized sector dominate the country's jewellery retail landscape with a 96 per cent market-share, while large brands or organized retail form only 4 per cent of the overall market. But in recent times larger brands have been witnessing an upward swing mainly due to factors such as increasing consumer sophistication, diminishing investment-driven purchases, alternative retail channels and competition from other luxury products. Responding to the changing trends, India's small, independent jewelers are starting to organize themselves into groups of four to five players to share a common brand identity and marketing strategy.

Major Players in the market

Major players for branded jewellery in the market are ASMI, EROS, TANISHQ, SOLITIARE, SIGNATURE, GILI, AGNI, KIAH etc. Of late, some of the world's biggest names in the jewellery and luxury items such as watches and cuff-links are making inquiries to set up shop in India. Multi-national jewellery brands such as Tiffany, Cartier, Zales and Harry Winston are all said to be interested in coming here following the Government's decision to allow foreign direct investment of up to 51 per cent in single

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

brand retail stores. Most of these stores have been sourcing cut and polished diamond and gold items from Indian firms. Now they are making inquiries for possible tie-ups in India. Simultaneously, domestic players are also drawing aggressive plans

Shrenuj & Company Ltd has acquired 84.6 per cent stake in the US-based jewellery distributor Simon Golub & Sons Inc for US$ 22.7 million.

Kerala-based jeweller Malabar Gold will spend US$ 48 million over the next year in order to expand its presence in southern India as well as abroad.

Gitanjali Gems Ltd, a Mumbai-based jeweller, has incorporated a wholly-owned subsidiary in Dubai, Gitanjali Ventures DMCC, whose main activity is trading in diamonds, precious stones, diamond jewellery and pearls.

Also, the Gitanjali Group has announced its foray into the luxury retail market through a new entity Luxury Connexions'. The company will invest US$ 24.5 million over three years to set up luxury malls in eight leading cities across the country.

Two new special economic zones (SEZs) for gems and jewellery are to come up at Goregaon and Dhulia, both in Maharashtra. Also, the state-run Minerals and Metals Trading Corp. (MMTC), plans to establish a gems and jewellery special economic zone (SEZ) in partnership with a private company.

Key factors influencing the jewellery retail scenario in India.

Diamond jewellery now is not restricted to just occasions like marriage but extends to all modern day occasions like Valentines day, Mothers day, Fathers day, Karva Chauth etc. All brands are targeting on the emotional bonds of human relationships and promoting the same accordingly, thus giving retailing jewellery in India a major boost. There is a marked shift in the consumers preferences and aspirations from goldjewellery to diamond jewellery which is fuelled by media hype and exposure to lifestyle and luxury products.

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

With more women working in todays scenario the positioning of diamond jewellery as 9 to 5 wearable jewellery has increased emphasis on thissegment. This is further fueled by the fact that with the number of double income households increasing this has resulted in more disposable incomes being available.

With more and more players being introduced in the branded jewellery segment there is an onslaught of schemes and promotions on diamond jewellery round the year, which gives retail a great push.

Each brand offers value added services like certification of gold and diamonds, life time return /buy back schemes, zero interest installments schemes which have made the diamond jewellery more affordable than its perceived traditional image of being expensive, thereby increasing consumption.

To further strengthen the retail segment, most brands are getting into departmentalstores, hypermarkets, supermarkets and specialty stores. Western style malls have begun appearing in metros and smaller cities alike, introducing the Indian consumer to a shopping experience like never before. Besides the franchise route the counters in most malls is another route that most of the brands are getting into which helps create a better reach of the product.

The opening of a number of exclusive franchise outlets, not only can provide the entire range of jewellery under one roof but create an ambience to give consumers a total shopping experience.

Consumers are moving slowly away from contemporary jewelry to designer wear. They have also become very quality conscious. The Indian consumer is well traveled, and is exposed to the international shopping experience, and not only commands the same, but receives it too in India.

Jewellery buying is no longer confined to seasonal cycles of marriages, and Diwali and Christmas: anytime is a fine time, and jewellery can be bought as much to express an emotion, as to proclaim the financial status of the wearer.

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

Men from metros are also donning jewellery, over and above the traditional wedding rings and chains.

Methodology

The study is based on primary data collected from market as well as through online survey techniques. The research technique adopted was a questionnaire method. The non random sampling technique i.e. convenience sampling method was adopted to collect information from around 140 people selected at random from various age groups and income brackets. After this we did the editing and coding of the responses received by these customers and found that only 100 customers responses were useful for our study. Thus the other 40 responses were eliminated from further analysis.

The central statistical techniques like mean, median and mode are used to find out the common perception or general liking of the consumers towards branded jewelry. In order to analyze the factors affecting the consumer behavior towards branded jewelry we have used multiple linear regression equations. Also to find the impact of different seasons on the purchase of a branded jewelry, we have tried to analyze the time period during which the jewelry is preferred more by the customers.

Analysis

Through our analysis and observation techniques of the customers responses we find that following are the major factors which influence customers to buy a branded jewelry.

1. Risk in approaching the branded stores rather than old family jewelers

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

Jewelry market has recently become an organized sector. Many new brands have entered the market giving tough competition to the unorganized sectors and especially to old family jewelers. Through the responses received we can conclude that the customer is aware about the new brands launched in the market. They believe that its worth buying from these branded shops once in a while probably because of the quality and to a certain extent price of the jewelry. The changing scenario of peoples perception towards branded jewelry is shown in graph 1.

Graph 1: Depicting customers perception to move towards branded jewelry stores

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

2. Media influence on customers preference towards branded jewelry

We tried to depict if media plays any role in changing the perception of the Indian

buyers to buy branded jewelry at any point of time (Graph 2). We find through our survey that Television plays the key role in creating awareness and educating customers
on different brands available in the market. Almost 58% of the respondents show that they are severely motivated by television media, followed by newspapers (39%), internet (17%),

friends and relatives (14%), billboards (11%), radio (10%). Thus we can conclude that television is the prime factor which helps customers recall the brand while actually being in the market and thus their purchases at times are motivated by this clear winner of media advertisement. Graph 2: Share of various Media influence to promote branded jewellery

3. Seasonality implications towards branded jewellery From our analysis we can state that demand of jewellery is highly influenced by the seasonal variations (Graph 3). The fourth quarter of the year is most powerful period during which maximum of jewellery is bought by the consumers. This may because during this period various festivals like Diwali, Christmas, Eid take place and consumers find it most favourable to give branded jewellery as a token of gift. The second strongest quarter from our analysis is found to be the first

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

quarter of the year probably due to the Chinese New Year, the Indian wedding season and, to a lesser extent, Valentines day. The second and third quarters are usually seasonally low with a relative absence of major gold giving occasions. Graph 3: Seasonality impact towards branded jewellery

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

4. Influence of resale value, availability and status while purchasing jewellery On detailed analysis of the data collected we come to know that the decision to purchase jewellery is dependent on resale value ( Average Likert Scale value = 3.679). This shows that most of the people in India still considers jewellery as an investment. Another strong influence is the availability of the outlets which complies that people prefer to buy jewellery from the stores which are in their vicinity ( Average Likert Scale Value = 3.10). On questioning people about the status symbol, the data reveals that it has a strong influence on peoples decision to buy jewellery ( Average Likert Scale value = 3.86).

Thus, based on the data it can be fairly concluded that factors like resale value, availability and status have a strong influence on peoples decision making process.

5. Few factors which might get ignored but play a significant role

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

According to the data collected in the survey we conclude that pleasant environment while shopping is important from consumers point of view ( Average likert scale value = 4.32 ). Price , as everywhere has been the most significant factor to check upon. Thus, the dealers should have competitive prices and should only offer that much consumer service and satisfaction where they find it difficult to sell at par with the market in terms of price.

Some pictorial representations of important data collected are

A) Tanishq B) Asmi C) Nakshatra D) Aura E) Agni F) Gili G) Solitaire H) DeBeers I) DDamas

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

J) Sangini K) Other

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

Conclusion
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 behavior 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.

With companies like Bulgari and Guccis bold communication, keen competition within the jewellery sector is increasing. Luxury brands have entered the jewellery market with clear strategies to reach the final consumer. The distribution by luxury brands is also very

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

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.

References
1. Buchanan, Norma, Branded Jewelry Grow Into a Viable Market Publication: National Jeweler ,Wednesday, December 4 1996 2. 2. Choksi,Mehul Chairman & CEO, Gitanjali Group, Branding and marketing

in new jewellery retail environment 3. Gogna , Amul ,The Indian Gems and Jewellery Sector. 4. Nigam, Vineet, National Diamond Strategy; Diamond retail Assistant General Manager, ICRA, Executive Director, ICRA 5. Bhatt, Harish COO Tanishq, Growing the branded jewellery market: An Indian Experience

6.

http://www.icmr.icfai/casestudies/
equity

7. www.financialexpress.com/news/Gems-and-jewellery-industry-keen-to-build-brand-

8. www.jewellery.indianetzone.com/1/branded_jewellery.htm 9. www.emeraldinsight.com/10.1108/02580540210793428

10. www.gold.org / value / market intelligence / supply & demand / jewellery 11. www.gjepc.org/gjepc

www.final-yearprojects.co.cc

www.troubleshoot4free.com/fyp/

12. Jewellery.indianetzone.com/1/branded_jewellery. 13. www.allbusiness.com/retail-trade/apparel