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A STUDY REPORT ON

CONSUMER BUYING BEHAVIOR FOR BRANDED AND NON BRANDED JEWELLERY IN INDIA
Date of Submission: March 28th, 2012

SUBMITTED TO-

Dr. Richa Misra

SUBMITTED BYGaurav Khatri Vandana Madhuri Singh Siddharth Tripathi Pushpam Shree Timsi Luthra Devendran S.P

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TABLE OF CONTENTS
S.no 1. 2. 3. 4. 5. 6. 7. Particulars Introduction Objectives Research problem Hypothesis Methodology Literature review Difference between branded & nonbranded jewellery Analysis of data collected Questionnaire References Page no. 1-2 3 4 4 5 6-9 10

8. 9. 10.

11-12 13-16 17

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INTRODUCTION
As India makes rapid progress in the retail arena, the Indian Jewellery market is undergoing a gradual metamorphosis from unorganized to organized formats. The jewellery business in India is estimated to beat Rs. 50,000 crores. According to the independent estimation studies conducted by World Gold Council & Mckinsey, out of the overall market share, the share of organized jewellery market is less than Rs. 1,000 crores. This accounts to about 2-3 % of the total market share. But given that this is a relatively new segment of the market, it is poised to grow. Jewellery retailing is moving from a Storehouse of value to a Precious fashion accessory. Plain gold is gradually easing its stranglehold on the Indian consumer psyche to give way to diamonds, platinum and colored gemstones. The way jewellery was worn before is undergoing a tremendous change. Traditional designs are yielding to modern jewellery, heavy gold is giving way to light and simple designs. Consumers are more quality conscious than ever before. The jewellery market is one of the largest consumer sectors in the country- larger than telecom, automobiles, and apparel and perhaps second only to the foods sector. Interestingly, organized retailers have attempted to understand the market, anticipate social change and strategies appropriately. They have ceaselessly endeavored to derive the formulae of What the consumer wants? The young Indian woman who is the prime market for the organized retailers differs from the traditional jewellery customer in many ways as enumerated below- She is well educated and more in tune with international trends - Increase in working women with high disposable incomes - Greater mobility - Less constrained by traditions

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All these reasons and more ensure that the modern Indian woman is looking for jewellery from a perspective different from the past. In addition, organized retailing offers quality products, follows standardized practices & uniform pricing strategy. Organized retail formats work on transparent policies that are not necessarily available at the traditional jewellery shops. Today, goods and services offered by any retailer are strongly driven by their identified Target Group. There are several examples of retailers who are drawing in consumers either across a wide swath or a segment of socio-economic classification, clearly defined by them. This has been the first step towards organized jewellery retailing in India. In a short span of time, organized retailers have successfully implemented a change in the buying pattern of the Indian consumers. This is evident from the shift from the traditional jeweler to the jeweler with an identity. This shift clearly indicates a change in viewpoint of jewellery as a commodity to brand identification.

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OBJECTIVES
1. To study and understand the buying behavior of consumers for branded and non branded jewellery 2. To find the difference between perceptions, opinion and behavior of branded and non- branded jewellery buyers. 3. To know the major players of jewellery industry 4. To have an idea about parameters consumer consider while buying jewellery 5. To have knowledge about demographic segments 6. To know the marketing strategies used by various jewellery brands to reach customers 7. To know the knowledge level of customers regarding the jewellery brands available in the market

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RESEARCH PROBLEM
What kind of jewellery designs are preferred by the consumers, traditional (nonbranded) or branded?

HYPOTHESIS
1. The income level of the buyers has significant impact on the type of jewellery purchased by them. 2. The expectations of the buyers from the jewelers remain the same in every situation. 3. Buyers make purchases only during some occasion like marriages, gifts, etc. 4. More of female buyers are inclined towards the new designs introduced by the branded jewelers. 5. The selection of jeweler has significant relation with the geographical location of buyer. 6. The knowledge about the branded jewelers is due to the advertisements floating on air or there are other sources of information also. 7. The price of gold and other precious stones also play a significant role in the purchasing procedure.

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Sample size
n=50

Type of research
Exploratory qualitative

Sampling frame
Noida Delhi regions like Lajpat nagar, Rohini, Indrapuram

METHODOLOGY
As a part of the study, we reached out to the people at various locations like shopping malls, bazaars, fun-filled locations and side-by-side approached family members, relatives and friends for the smooth running of data collection. Primary data has been the first and foremost method of data collection and it has been done through a questionnaire. A sample of 50 respondents was randomly selected including students, housewives, working women and men. Respondents of various age groups were included to know the variations in the response as we would like to know does age also play a significant role in the buying behavior of jewellery. The raw data collected by questionnaire will be then transferred to SPSS which will help in easily analyzing the collected data and coming to a conclusion about the buying behavior of consumers. The central tendency techniques like mean, median and mode will be helpful in finding the common perception and general liking of respondents towards branded or non- branded jewellery. The significance level has been kept at 5 percent to avoid various errors chances. Various tools and techniques of SPSS will be used to analyze or establish relationship between various statements and to prove the hypothesis formulated earlier.

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LITERATURE REVIEW
Go ld Jew ellery M arket in India
Before the liberalization of the Indian economy in 1991, only the Minerals and Metals Trading Corporation of India (MMTC) and the State Bank of India (SBI) were allowed to import gold. The abolition of the Gold Control Act in 1992, allowed large export houses to import gold freely Exporters in export processing zones were allowed to sell 10 percent of their produce in the domestic market. In 1993, gold and diamond mining were opened up for private investors and foreign investors were allowed to own half the equity in mining ventures. In 1997, overseas banks and bullion suppliers were also allowed to import gold into India. These measures led to the entry of foreign players like DeBeers, Tiffany and Cartiers into the Indian market. In the 1990s, the number of retail jewellery outlets in India increased greatly due to the abolition of the Gold Control Act. This led to a highly fragmented and unorganized jewellery market with an estimated 100,000 workshops supplying over 350,000 retailers, mostly family-owned, single shop operations. In 2001, India had the highest demand for gold in the world; 855 tons were consumed a year, 95% of which was used for jewellery. The bulk of the jewellery purchased in India was designed in the traditional Indian style. Jewellery was fabricated mainly in 18, 22 and 24-carat gold. As Hallmarking was not very common in India, under-carat age was prevalent. According to a survey done by the Bureau of Indian Standards (BIS), most gold jewellery advertised in India as 22-carat was of a lesser quality. Over 80% of the jewelers sold gold jewellery ranging from 13.5 carats to 18 carats as22-carat gold jewellery. The late 1990s saw a number of branded jewellery players entering the Indian market. Titan sold gold jewellery under the brand name Tanishq, while Gitanjali Jewels, a Mumbai-based jewellery exporter, sold 18-carat gold jewellery under the brand name Gili. Gitanjali Jewels also started selling 24-carat gold jewellery in association with a Thai company, Pranda. SuRaj (India) Ltd. launched its collection of diamond and 22 -carat gold jewellery in 1997.The Mumbai-based group, Beautiful, which marketed the Tiffany range of products in India, launched its own range of studded 18-carat jewellery, Dagina. Cartiers entered India in 1997 in a franchise agreement with Ravissant. Other players who entered the Indian branded gold jewellery market during

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the 1990s and 2000-01 included Intergold Gem Ltd., Oyzterbay, Carbon and Tribhovandas Bhimji Zaveri (TBZ).

Gold Jewellery Becomes Fashion Accessory

Till the early 1990s, the average Indian bought jewellery for investment rather than for adornment. Jewellery made of 18-karat gold was not favored as it was considered a poor investment. Confidence in the local jeweler was the hallmark of the gold jewellery trade in India. A jeweler or goldsmith in a local area had a fixed and loyal clientele. The buyer had implicit faith in his jeweler. Additionally, the local jeweler catered to the local taste for traditional jewellery. However, since the late 1990s, there was a shift in consumer tastes: women were 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 to25 age group, who regarded jewellery as an accessory and not an investment. The new millennium witnessed a definite change in consumer preferences. According to Samrat Zaveri, CEO of Trend Smith, "Research shows that the Indian jewellery sector is in the transition phase with consumers' desire for possession of jewellery for its aesthetic appeal and not as a form of investment." In October 2002, Trendsmith conducted a survey to understand the shifting need, motivations and aspirations of consumers in the jewellery market, and to identify new trends and opportunities. The research study arrived at the following conclusions: The Indian market was witnessing an accelerated shift from viewing jewellery as an investment to regarding it as aesthetically appealing ornaments. The focus had shifted from content to design. The younger generation was looking at trendy, contemporary jewellery and clearly avoiding heavy, traditional gold jewellery. The consumer wanted a wider selection at a single convenient location and expected an international shopping experience. The Indian consumer was willing to experiment with new designs.

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The late 1990s and early 2000s, with the increase in the number of designers from design schools such as the National Institute of Fashion Technology (NIFT), a wide range of new designs became available. In addition, the growing number of manufacturers needed a retailing platform with global and national reach. All these led to the proliferation of branded jewellery players.

Brand appeal
Branded jewellery has found a niche for itself in the tough Indian market, and its increasing growth rates show that before long it will corner a significant share of the jewellery market. With the retail industry in India burgeoning, several companies have made inroads into the traditional jewellery industry, selling the product that was never really "marketed" in "brand" new ways. So much so that branded jewellery is the new mantra in the market, having rapidly acquired a niche over the past few years. 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". In spite of pessimism about the marketability of branded jewellery in a country rooted in buying ornaments from the traditional goldsmith, 30 brands were launched in 2004.

Analysis of Literature Review

To draw a conclusion from the above literature review one can observe that there is immense scope for the growth of branded jewellery. In spite of the economic slowdown experts believe that it will grow at a CAGR of 25%. There are also statements like the industry does not cover the entire population making a scope for further growth. The review also brings light to the fact that the Indian consumers are price sensitive and hence the branded jewelers cannot charge exuberant prices for the same. The jewelers 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 jewelers and hence we can see that these jewelers also come up with strategies to retain their

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customers these practices were not prevalent in the market previously. The branded jewelers 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.

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Difference between Branded and NonBranded Jewellery

BRANDED
Name & reputation gives a confidence to the consumer It comes with a written lifetime guarantee, considering the emotional quotient of the consumer Excellent quality, good selling policies and backup services for jewellery Has a more contemporary stylish and classic outlook, which easily segments itself among the traditional ones. Available at multiple outlets

NON-BRANDED
Customer can tailor make jewellery according to their preferences No written lifetime guarantee, trust is purely based on consumer

Minimum efforts in packaging, finishing, sales & low advertising Is usually bulky & traditional

Available only in traditional jewellery outlets

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ANALYSIS OF THE DATA COLLECTED

After analysis the data collected in SPSS, we have come a conclusion that the jewellery market in India is changing rapidly and the buying behavior of people is changing accordingly. The respondents under the study were highly co-operative and we came out with wonderful results about their perception and the behavior. The results show that the price of gold plays an important role in the purchasing procedure. The rising prices of gold are one of the main factors that affect the purchase for a middle class family. On the contrary, it is not a problem for the business class; they are indifferent in buying jewellery irrespective of the prices, designs and the brand. 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 jewelers. People also look for the convenience while visiting the store and this is the reason why some people today also visit non-branded jewellery shops for making purchases as they easily approachable, reliable, prices are negotiable and also they have a long term relationship with them. One of the findings of the study also indicates the seasonal buying behavior of the jewellery. Respondents stated that they make most of the purchases when there is any special occasion like marriage, anniversaries, festivals, birthday gifts, etc. Fall in the prices of gold and silver also affect the seasonal buying behavior of the consumers. The following graph helps in understanding the results.

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QUESTIONNAIRE
Q.1.Do you wear jewellery? Yes No Q.2.Why do you buy jewellery? Fashion statement Status symbol Investment/security Gift Any other

Q.3.What kind of jewellery do you buy? Gold Diamond Silver Semi-precious Precious stones Pearls Any other

Q.4.How frequently do you make jewellery purchases? Once in a long time Once a year Whenever any occasion comes up. Q.5.What kind of designs do you buy? Traditional Indian Classic Western Any other

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Q.6.From where do you prefer purchasing jewellery? Local dealers Branded jewellery showrooms (e.g. tanishq, Ddamas) Multi brand outlets (e.g. Shoppers Stop) Company showrooms

Q.7.If brands, what are the factors responsible for this choice? I can choose from a wide variety of designs The quality of products is excellent The stores are easily accessible as they have their outlets at many places They provide good exchange offers The jewellery is certified

Q.8.If local retailers, what factors affect this decision? I can buy the products at credit The store is located near my house and so is easily approachable The prices are negotiable; I dont have to buy at the MRP The products are comparatively priced low The retailer is very reliable as I have been dealing with him since a long time

Q.9.From where did you get the knowledge of this store/brand? Recommendations from friends/relatives Pamphlets distributed Advertisements Emails Radio Internet

Q.10.How long have you been making your purchases of jewellery from this store/brand? I recently started visiting this store From past 4-8 years Since a very long time, almost always

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Q.11.How satisfied is you with the jewellery you buy? Very satisfied Satisfied Neither satisfied nor dissatisfied Dissatisfied Very dissatisfied

Q.12.How important is the advertisement campaign followed by the store to make you opt for it? Extremely important Very important Somewhat important Not very important Not at all important

Q.13.Does the ambience and the services provided in the store affects your purchase? Very significantly Significantly Partially Neutral Not at all significant

Q.14.Before making any jewellery purchases, do you compare the designs and prices of the same between the branded showrooms & the local dealers? Always Often Sometimes Rarely Never

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Q.15.Do you plan to shift or change the source of purchasing jewellery? Yes No May be Please give the following personal details about yourself: (a) Gender Male (b) Age group 20-25 31-35 41 and above (c) Marital status Married (d) Occupation Business Retired Student (e) Family income (in INR/month) Less than 25,000 25,000-50,000 50,000-1, 00,000 1, 00,000 and above (f) Address salaried housewives any other unmarried 26-30 36-40 Female

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REFERENCES
1. www.google.com 2. www.slideshare.net 3. Shopping for gold! A Ritual Experience-Huma Tariq, Donelda S. McKechnie, Jim Grant, Janice Phillips, American University of Sharjah, United Arab Emirates 4. Customer perception towards branded jewelry in India- Dr. Ratna Vadra Faculty, IMT, Ghaziabad & Dr. Gunjan Malhotra, Faculty,IMT, Ghaziabad 5. Journal of gem industry 6. www.business-standard.com 7. Bhatt, Harish COO Tanishq, Growing the branded jewellery market: An Indian Experience 8. www.gold.org / value / market intelligence / supply & demand / jewellery

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