1

CHAPTER 1

INTRODUCTION AND DESIGN OF THE STUDY

1.1 INTRODUCTION

An India makes rapid progress in the retail arena of all the products and
commodities, the Indian gold jewellery market is undergoing a gradual
metamorphosis from unorganized to organized formats in the last two decades. The
gold jewellery business in India is estimated to beat Rs. 50,000 crores. According to
the independent estimation studies conducted by World Gold Council and
Mckinsey, out of the overall market share, the share of organized gold jewellery
market is less than Rs. 1,000 crores. This accounts to about 2-3 % of the total
market share that this is a relatively new segment of the market, which is poised to
grow.

Gold 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 coloured
gemstones. The way gold jewellery was worn earlier is undergoing a tremendous
change. Traditional designs are yielding to modern gold jewellery and heavy gold is
giving way to light and simple designs. Consumers are more quality-conscious than
ever before. The gold jewellery market is one of the largest consumer sectors in the
country. It is larger than telecom, automobiles, and apparel. It is perhaps second
only to the food sector. Interestingly, organized retailers have attempted to
understand the market, anticipate social change and strategies appropriately.

The young Indian woman who is the prime market for the organized
retailers differs from the traditional jewellery customer in many ways such as well
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educated and more in tune with international trends, increase in working women
with high disposable incomes, greater mobility and less constrained by traditions.

All these reasons ensure that the modern Indian woman is looking for gold
jewellery from a perspective different from the past. In addition, organized retailing
offers quality products like BIS hallmark, 916 KDM. Following standardized
practices and uniform pricing strategy. Organized retail formats work on transparent
policies that are not necessarily available at the traditional gold 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 gold 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 gold jewellery
as a commodity to a brand of identification.

1.1.1. Consumer Behaviour

Consumer behaviour is the study with various association of questions

such as how do people buy? What do they buy? When do they buy? and why do
they buy? It blends elements from psychology, sociology, socio-psychology,
anthropology and economics. It attempts to understand the buyer decision
processes/buyer decision making process, both individually and in groups. It studies
characteristics of individual consumers such as demographics, psychographics and
behavioural variables in an attempt to understand people's wants. It also tries to
assess influences on the consumers from groups such as family, friends, reference
groups and society in general.
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Belch and Belch define consumer behaviour as 'the process and activities
people engage in when searching for, selecting, purchasing, using, evaluating, and
disposing of products and services so as to satisfy their needs and desires.

1.1.2 Buyer An Enigma

Although, it is important for the firm or corporate to understand the buyer

and accordingly evolve its marketing strategy, the buyer or consumer continues to
be an enigma sometimes responding the way the marketer wants and on other
occasions just refusing to buy the product from the same marketer. For this reason,
the buyers mind has been termed as a black box, the marketer provides stimuli but
it is uncertain of the buyers response. This stimulus is a combination of product,
brand name, colour, style, packaging, intangible services, merchandizing, shelf
display, advertising, distribution, publicity and so forth.

Further todays customer is being greatly influenced by the media

especially electronic. Technological developments in the field of information,
biotechnology and genetics and intensive competitions in all products and services
also have an impact on consumer choices.

1.1.3 Factors influencing Consumer Behaviour

The factors that influence consumer behaviour can be classified into

internal factors and external environmental factors. External factors do not affect
the decision process directly, but percolate or filter through the individual
determinants to influence the decision process. The individual determinants that
affect consumer behaviour with respect to world gold jewellery are

i. Motivation and involvement

ii. Attitudes
iii. Personality and self concept
iv. Learning and memory
v. Information processing
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The external influences or factors are

i. Cultural and sub cultural influences

ii. Social class influences
iii. Social group influences
iv. Family influences
v. Personal influences
vi. Other influences

1.1.4 Models of Consumer Behaviour

There are various consumer models which help in the understanding of

consumer behaviour. They are formulated by different economist and management
scientist based on various ideas. They are

1. Economic Model
2. Psycho-Analytical Model
3. Input process output Model
4. Sociological Model
5. Hawrath Sheth Model
6. Engel-Blackwell-Kollath Model
7. Model of family decision making
8. Nicosia Model
9. A model of industrial buying behaviour

1.1.4.1 Economic Model

Under this model, consumer behaviour is one dimensional. Buying

decisions are based on the concept of utility. Assuming that a human being is
always rational, he will make his purchase decision with the intention of
maximizing his utility. It is based on certain predictions of buying behaviour.
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i. Price-effect- lesser the price of the product, more will be the quantity
purchased (this model doesnt take into consideration in diminishing
marginal utility)
ii. Lesser the price of substitute product, lesser will be the quantity of the
original product bought. This is called substitution effect.
iii. More the purchasing power more will be the quantity purchased i.e.
income effect. It doesnt take into consideration effective component of
human mind and it doesnt take into consideration the products having no
substitute like life saving medicines.

1.1.4.2 Psycho-Analytical Model

Psycho-Analytical model is, based on the research by the psychologists in

the area of personality. It is based on the theory by Sigmund Fraud. Herein, human
needs operate at the conscious as well as sub-conscious minds. Human beings are
considered to have 3 states which work in tandem. They are,

ID: It is a source of all psychic energy, which drives us to action. It is the

most basic innate nature.
Super Ego- It is an internal representation of what is approved by
society.
Ego- It is the conscious directing ID impulses to find gratification in a
society accepted manner. On the basis of this, human behaviour is said to
be directed by a complex set of deep seated motives. Therefore, buyers
will be influenced by symbolic factors while buying a product. Marketers
use this approach to generate ideas for development of product design
features, advertisements and other promotional techniques. It doesnt
take into consideration internal traits of an individual according to the
trait theory.
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1.1.4.3 Input, Process and Output Model

This is a simple model of consumer behaviour, in which the input for the
customer is the firms marketing effort (the product, price, promotion and place)
and the social environment. The social environment consists of the family, reference
groups, culture, social class, etc. which influences the decision-making process.
Both these factors together constitute the input in the mind of the consumer.

1.1.4.4 Sociological Model

As per the sociological model, an individual is a part of institution which

is called society. Since he is living in society, he gets influenced by it through his
life experiences during cultural activities. This individual in turn also influences the
society. The two work in tandem towards growth and development. The individual
lays several formal and informal associations like that of a family member, a
student or an employee or active member of an informal active social organization.
This in turn influences product choices and service selection.

1.1.4.5 Howarth Sheth Model

Howarth Sheth Model shows that consumer behaviour is a complex

process and concepts of learning, perception and attitudes influence consumer
behaviour. This model of decision-making is applicable to individuals. It has four
sets of variables which are,

i. Input
ii. Perceptual and learning constructs
iii. Outputs
iv. Exogenous or external variables.
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1.1.4.6 Engel, Kollat, Blackwell model

The Engel, Kollat, Blackwell model went through a series of revisions and
modifications and finally it was proposed as the Engel, Blackwell and Miniard
Model. The model consists of four sections viz., Information processing, central
control unit Decision process and Environmental influences

i. Information processing:

The information processing consists of exposure, attention,

comprehension and retention of the marketing and non-marketing stimuli. For
successful sales, the consumer must be properly and repeatedly exposed to the
message. His attention should be drawn, so that he understands what is to be
conveyed and retains it in his mind.

ii. Central control unit

The stimuli processes and interprets the information received by an

individual. This is done by the help of four psychological factors.

i. Stores information and past experience about the product, which serves as
a standard for comparing other products and brands.
ii. Evaluative criteria which could be different for different individuals.
iii.Attitudes or the state of mind which changes from time to time, and helps
in choosing the product.
iv. The personality of the consumer which guides him to make a choice
suiting his personality.

iii. Decision process

Decision process is dealt with later in the text, and consists basically of
problem recognition, internal and external search, evaluation and the purchase.
The decision outcome or the satisfaction and dissatisfaction is also an important
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factor which influences further decisions. The decision process may involve
extensive problem solving, limited problem solving or routinised response
behaviour. This depends on the type and value of the product to be purchased.

iv. Environmental influences

The environmental influences are also shown in a separate box and consist
of income, social class, family influences, social class and physical influences and
other considerations. All these factors may favour or disfavour the purchase
decisions.

The model shows that people are continually exposed to stimuli. A

stimulus represents anything, generally inherent in the environment, that has the
potential for triggering some kind of behaviour. In general, marketing decision
making can be viewed (at least in part) as putting together and controlling a set of
stimuli intended to influence customer buying behaviour.

1.1.4.7 Model of family decision making

Family is the next environmental influence, which may affect consumer

behaviour. Family can be defined as a group of two or more persons related by
blood, marriage, or adoption who reside together. Certain aspects will affect the
consumer behaviour of a family. These include the age of the head of the house,
whether a couple is married, whether they have children and whether they work. If a
family has children, there would be, for example, a need to purchase clothing and
medicines.

There are also three factors, which may explain the behaviour of families.
Cohesion refers to the emotional relationship among family members. Family
members can be very close to each other on an emotional level. This constitutes a
high level of cohesion. Adaptability refers to the extent to which a family can
change, when different demands are created in the family. This involves a change in
the role structure and authority in the family. Communication is the third factor in
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this process. If the members of the family are able to communicate effectively with
each other, the result will be an increase in cohesion and adaptability.

Members of a family can play different roles in the purchasing process.

Instrumental roles refer to the money an individual has to pay when purchasing the
product. A family member who helps the buyer to make the decision performs the
expressive role. The role involves giving emotional assistance when needed. It can
be observed that families are important social systems for two consumer-related
reasons. A huge amount of product consumption is generated by families together
and certain product purchases, which are considered as activities performed by one
individual, can become family matters, when the family performs the roles
described above.

1.1.4.8 Nicosia Model of Consumer Behaviour

This is a Dynamic Model of Consumer Behaviour and is concerned with

the Inter-relationship between

i. The firms marketing communications

ii. The attributes of the consumer,
iii. The consumers decision process including
iv. Search and evaluation process
v. Actual decision process
vi. The feedback of the consumers response to the firm

1.1.4.9 Model of Industrial Buying Behaviour

An organizational buying is a process by which a company / organization

establishes a need for purchasing products and choose among competing brands and
suppliers.

Reason to buy product

i. In production of another product

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ii. To sell
iii. Rented
iv. Supplied to Others

1.1.5 Outlet Selection and Purchase

As the number of products brands and retail outlets are increasing in the
market, it becomes very confusing for the customers to choose the retail stores. The
selection of a retail store also involves almost the same process as selection of a
brand. A retail outlet supplies a product which caters to the need of consumer. The
retail trade occurs from the stores but it also occurs from catalogues, direct mail via
print media, television and radio. Retailing is also done in weekly markets which
are put up in different areas of a city on different days. It is also done for the
consumer, by means of various media. It has become very challenging and exciting,
both for consumers and marketers. The consumer may give first preference to the
store or the product or, he may give equal importance to both. Sometimes one
prefers a store first, where he can get friendly and logical advice to buy the product
or brand of second priority. It is assured of proper service and proper guidance, he
buys the brand of second priority missing his, first choice. He misses his choice
which is an important aspect of purchase rather than buying a product of his choice
on first priority and missing out on other important aspects of purchase.

1.1.5.1 Purchase Behaviour

At the time of purchasing the products, decision-making is a very lengthy

process and takes a very long time. The problem is recognized and a lot of
information is gathered. After this is done, the last two stages of decision-making,
such as, the purchase and post purchase come into play. Purchase is very important
as it generates revenue and post purchase gives us an idea of the likes and dislikes
of the consumer. Post purchase behaviour also establishes link between the
marketer and the target market segment.
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Purchase is an important to the marketer as the product was planned,

produced, priced, promoted and distributed after a lot of effort. If purchase does not
take place, the marketer has failed in his marketing effort. He then needs to change
the marketing mix. It has to change entire strategy, as the ultimate aim of the
marketer is to float a product which will generate revenue and bring satisfaction to
the customers. Purchase is an important one for his success, for achieving his
objectives and for formulating competitive strategies against the competitors. It
marks the end of his search, end of his efforts and chooses the brand of his choice
for expected benefits.

1.1.5.2 Post Purchase Behaviour

It is important for the marketer to know whether his product is liked by

the consumer or not. It wants the feedback about his product so that corrective
action, if necessary, can be taken, and the marketing mix be modified accordingly.
Post purchase behaviour is the reaction of the consumers; it gives an idea of his
likes and dislikes, preferences and attitudes and satisfaction towards the product. It
indicates whether or not the purchase motives have been achieved. Purchase is the
means and post purchase is the end. Post purchase behaviour indicates whether or
not repeated purchase will be made. Whether the customer will recommend the
product to others or not indicates whether long term profits can or cannot be
expected. All this can be found out by the post purchase behaviour of the customers.
Post purchase is the last phase in the decision-making process.

1.1.5.3 Buyer Behaviour

Consumer buyer behaviour is considered to be an inseparable part of

marketing and Kotler and Keller (2011) state that consumer buying behaviour is the
study of the ways of buying and disposing of goods, services, ideas or experiences
by the individuals, groups and organizations in order to satisfy their needs and
wants.
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Buyer behaviour has been defined as a process, which through inputs and
their use though process and actions leads to satisfaction of needs and wants (Enis,
1974, p.228). Consumer buying behaviour has numerous factors as a part of it
which are believed to have some level of effect on the purchasing decisions of the
customers

Alternatively, consumer buying behaviour refers to the buying behaviour of

final consumers, both individuals and households, who buy goods and services for
personal consumption (Kumar, 2010, p.218). From marketers point of view issues
specific aspects of consumer behaviour that need to be studied include the reasons
behind consumers making purchases, specific factors influencing the patterns of
consumer purchases, analysis of changing factors within the society and others.

1.1.5.4 Jewellery

Jewellery is a decorative objects worn on clothes or body that are usually

made from valuable metals, such as gold and silver, and precious stones.

Jewellery includes all sort of decorative objects worn by both men and
women. They are usually made with gems and precious metals such as diamond,
gold and silver. However, they can and have often been made out of almost every
kind of material like stones or bones, or even plastic and nickel.

The cleverness of human beings has very often allowed them to use metals
and change them into beautiful jewellery. The most common of all metal used is
actually the nickel which can be found in costume jewellery or clothing
ornamentation such as buttons.

The history of jewellery goes back to thousands and thousands of years when
jewellery was often only made for people with a very high rank and importance in
society to show their social status. They were more created for practical uses than
for decoration as it is most of the time today. It seems that the first signs of
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jewellery came around forty thousand years ago with the ancestors of the Homo
sapiens.

Today, jewellery can go to every part of the body. Whether it goes to the
fingers, the forehead or the feet, the charm of Jewellery can be seen on every parts
of the human and sometimes animal body. There is absolutely no end to the number
of body parts that creative people choose to wear jewellery.

1.1.5.5 Consumer Satisfaction

Whether the buyer is satisfied with purchase depends on the offer which is in
relation to the buyers expectations. In general, satisfaction is a persons feelings of
pleasure or disappointment resulting from comparing products perceived
performance (or outcome) in relation to his expectations of the customer is satisfied.
If the performance exceeds expectations, the customer is highly satisfied and
delighted.

If it is accepted that high quality is a measure of excellence taken from the

customers point of view, producers may grade their goods in terms of quality,
whether their view of the grading is uphold will depend on customers perception. If
the customers like their strawberries to be large, firm, red and sweet, then the fruit
with these characteristics will be considered to be of the highest quality and the
producers of smaller, paler strawberries may not be able to convince customers of
the high quality of their output, however, sweet they may taste.

The focus on the customer means that quality is conceptualized in terms of

the customers perceptions. The organization objectives are to identify customer
requirements, so that both the customers and the organizations needs are met. It is
also the intention to meet these requirements first time and thus avoid the call of
sorting out problems.

According to petar Drucker, Business is nothing but of innovation and

marketing. Marketing is very important function of business centered on the need
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of consumers. As highly competitive in nature business makes the consumers as

king. Innovation is a tool that finds ways to makes the product sole. Innovation and
marketing together make yester luxuries into todays necessities.

Men, women and children in every part of the world wear jewels in
various forms in almost every human culture, on every inhabited continent The
word jewellery is derived from the word Jewel which was anglicized from the
old French Jouel in around13th century. Over the years, gold has had a place in
society giving in the allure of wealth and power. Emperors and kings wore gold in
various ways and used golden objects to show their wealth and position in the
society.

a. Importance of Customer Satisfaction

The need to satisfy the customer in any commercial enterprise is very

important.

In other word, the customer is the sole reason for the existence of
commercial establishment. Thus the core activity of any company is to attract and
retain customer. It therefore no surprise that peter ducker said, To satisfy the
customer is the mission and purpose of very business. Initially the customer can
be attracted by advertisement or through other effort like sales personnel and this
may make the buyer to buy the product. If the customers are satisfied with the
product or the service offered, they continue to buy it and remain loyal to the
product. If, on the other hand, are not satisfied, they will not buy again. This
establishes the need for the importance of customer satisfaction.

b. Consumer expectation

Consumer expectation generally refers to the needs and wants of

individuals in the economic marketplace. Such expectations are usually driven by
people's preconceived ideas regarding goods or services. These ideas drive
consumers to purchase one item over another or avoid companies with which
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they've had a previous bad experience. Consumers may also have high expectations
for new products that have been given a lot of exposure through professional
reviews or other media commentary.

Marketing strategies often focus on consumer expectations in order to

influence the purchase decisions made by consumers. Consumers can be broken
down into three groups: those who are expected to buy, those who are not expected
to buy, and those who are undecided about making a purchase. Business often
focuses on the latter two groups in order to persuade them to purchase their
products.

Negative consumer expectations are an important focus for marketing

strategies, because companies may need to dispel rumors or bad impressions about
their goods or services. These may be spread by competitors or individuals who
have had a previous poor experience with the company. Since such rumors can
lower consumer expectations, marketing strategies must address them and focus on
correcting consumer expectations regarding a companys products.

1.2 IMPORTANCE OF THE STUDY

This study mainly focuses on the buying behavior of the consumers

towards gold jewellery products. Each and every consumer is having different taste
of buying the gold jewellery products. Hence the retailers are working towards
satisfying customers expectation.

Presently the buying of gold jewellery has increased even though the rate
of gold jewellery products has widely fluctuated. So, the consumers are giving
more importance on gold jewellery for every occasion in their life. Thus, the gold
jewellery retailers have to understand the various types of buying behavior of the
consumers towards gold jewellery products and have to satisfy their needs.
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Table 1.1 G-20 Countries Central Bank Gold Stock Details

S. No. Countries Gold Stock Gold Stock

1. America 8133.5 70
2 German 3390.6 66
3 International Monetary Fund 2814.0 --
4 Italy 2451.8 65
5 France 2435.4 65
6 China 1054.1 1
7 Switzerland 1040.1 8
8 Russia 996.4 7
9 Japan 765.2 2
10 Netherland 612.5 52
11 India 557.7 7
12 Europe Central Bank 502.1 27
13 Turkey 441.5 14
14 Taiwan 423.6 4
15 Portugal 382.5 85
16 Venezuela 365.8 66
17 Saudi Arabia 322.9 2
18 England 310.3 12
19 Lebanon 286.8 22
20 Spain 281.6 23
Source: 2013 August 30, Daily Thanthi P.5

1.3 STATEMENT OF THE PROBLEM

As gold is preferred for all occasions, it is viewed that there is still more
scope for this business. Gold jewellery is a very vast field to study upon because for
every culture and religion, we have different style of gold jewellery. Consumer
buying behaviour has changed dramatically in the past few years. Consumers are
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better informed and have more choices about their disposal of income than ever
before. They want experiences and products that satisfy their deepest emotional
needs.

The competitive landscape has been changed Gold jewellery retailers are no
longer just competing with each other, but with luxury holidays, LCD, LED TVs,
spa weekends and cars. Understanding the customers needs is the first step to
winning business. This gave the idea to the researcher to study the marketing trends
of gold jewellery, the motivations and processes involved in the purchase of gold
jewellery, attitude and behaviour of the consumers and finally suggest ways to stay
in touch with the customers.

The job of marketer is to meet and satisfy target customers needs and
wants but knowing customer" is not a simple task. Understanding the buying
behaviour of the target market for its company products is the essential task for the
marketing department. The job of the marketers is to think customer and to guide
the company into developing offers, which are meaningful and attractive to target
customers and creating solutions that deliver satisfaction to the customers, profits to
customer and benefits to the stakeholders. This research focuses on understanding
the consumer preferences at the time of making a gold jewellery purchase. It also
includes measuring the impact that a brand has on a buyers decision. It is very
important to examine the role of price and promotional strategies adapted to face the
competition in the gold jewellery market.

At this juncture, the researchers probed the following questions.

1. To what extent the jewellery buyers are influenced to purchase gold

jewellery?
2. To what extent factors that influenced the gold jewellery buyers?
3. To what extent the expectation and perception leads to increase the gold
jewellery buyers satisfaction?
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1.4 OBJECTIVES OF THE STUDY

1. To identify the factors influencing the buyers purchase decision of gold

jewellery products in Tamil Nadu.
2. To study the buying behaviour of respondents towards gold jewellery
products.
3. To analyze the relationship between perception, expectation and satisfaction
of buyers of gold jewellery products.
4. To analyze the buyers loyalty towards gold jewellery products and suggest
appropriate management strategies for improving it.

1.5 LIST OF HYPOTHESIS TESTED

H01 : There is no significant difference between the respondents gender, age,

income and marital status and the various factors influencing the buyers
purchase decision of gold jewellery products.

H02 : There is no significant difference between the respondents gender, age,

income and marital status and the various factors influencing the buyers
buying behaviour of gold jewellery products.

H03 : There is no significant relationship between pairs of three factors,

perception-expectation, perception-satisfaction and expectation-satisfaction.

H04 : There is no significant difference between the opinion on buying

behaviour of gold jewellery products among various categories of
respondents classification on gender, age, educational status, occupation,
family monthly income, family size, marital status, average value of
purchase, mode of purchase, frequency of visit, and place of purchase.

H05 : There is no difference between level of expectation and level of

satisfaction of respondents.
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H06 : There is no difference in perception, expectation and satisfaction level of

male and females on gold jewellery store.

H07 : There is no significance difference in perception, expectation and

satisfaction level of marital status, age and income level of the respondents
on gold jewellery store.

H08 : There is no significant relationship between selected independent variables

and expectation, perception and satisfaction

H09 : There is no significant impact of perception and expectation on

satisfaction.

H10 : The source of awareness, frequency of purchase and mode of payment

does not depend on gender.

H11 : There is no association between the respondents education, occupation

and marital status and source of awareness, frequency of purchase and
mode of payment.

H12 : There is no association between the respondents gender, age and

education and duration of using a particular store.

1.6 RESEARCH METHODOLOGY

The validity of any research depends upon the systematic method of

collecting the data and analyzing the same in a logical and sequential order. In the
present study, an extensive use of both primary and secondary data was made.

1.6.1 Profile of the Study Area Tamil Nadu

Tamil Nadu state has been selected for the study since it is the culture-
developing area and perk-up in technological place of all types of small, medium
and large size industries and educational institutions.
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Tamil Nadu is the eleventh largest state in India by area and the sixth most
populous state in India. The state was ranked six among states in India according to
the Human Development Index in 2011. It was the second largest state economy in
India in 2012. The state has the highest number (10.56 per cent) of business
enterprises and stands second in total employment (9.97 per cent) in
India, compared to the population share of about 6 per cent. In the 2013, Raghuram
Rajan panel report, Tamil Nadu was ranked as the third most developed state in
India based on a Multidimensional Development Index

Tamil Nadu is the home to many natural resources, classical arts, classical
music, classical literature, Hindu temples of Dravidian architecture, hill stations,
beach resorts, multi-religious pilgrimage sites, and eight UNESCO World Heritage
Sites.

1.6.1.1 Administration

The Governor is the constitutional head of the state while the Chief
Minister is the head of the government and the head of the council of ministers.
Administratively the state is divided into 32 districts. It has 10 city municipal
corporations, 125 municipalities, 529 town panchayats and 12,524 village
panchayats. Chennai (formerly known as Madras) is the state capital. It is the fourth
largest city in India and is also one of the eight Metropolitan cities of India. The
state comprises 39 Lok Sabha constituencies and 234 Legislative Assembly
constituencies.

1.6.1.2 Demographics

As per the year 2011, Tamil Nadu had the total population of 72,147,030.
The other demographical characteristics are depicted under Table 1.2.
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Table 1.2 Population of Tamil Nadu State

Description 2011
Actual Population 72,147,030
Male 36,137,975
Female 36,009,055
Proportion to Tamil Nadu Population 0.0313
Sex Ratio (Per 1000 males) 943
Average Literacy 80.1
Total Child Population (0-6 Age) 7,423,832
Literates 51,837,507
Source: http://en.wikipedia.org/wiki/Tamil_Nadu

Figure 1.1 India map in State wise

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Figure 1.2 Tamil Nadu state Map in District wise

1.6.2 Research Design

The study is descriptive in nature. It attempts to describe the buyers attitudes

towards gold jewellery products with regard to their perception, expectation and
satisfaction towards gold jewellery products and services offered by the gold jewel
retailers in Tamil Nadu.

1.6.3 Sample Size

Sample size refers to the number of data to be gathered for the research study
from the given population. The research study was covering a universe with infinite
population and so the sample size was calculated through the pilot survey. A pilot
study was conducted on 30 buyers to get the value of standard deviation. Then with
95% of confidence level the sample size is calculated.
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To calculate the sample size n for population, the following formula is

used. If we know the standard deviation with an error e by calculating a
confidence interval with confidence corresponding to z, then the necessary sample
size n will be:

z2 2
n (1.1)
e2

By carrying out a pilot study on 30 consumers, the standard deviation

value was calculated as = 0.48. With 95 percent of confidence level the value of z
is 1.960. With standard error of 0.04 the sample size is calculated. The calculated
sample size was 553. The research study was 553 samples. Fifty three (53) samples
were rejected from the analysis due to biased and unfilled response from the
selected sample respondents. Valid 500 samples are considered for the data
analysis. The details of the sample distribution are given in Table No. 1.1.

The 500 respondents were selected as sample for the study from the
Municipal Corporation of Tamil Nadu, such as (Chennai, Vellore, Salem, Erode,
Tiruppur, Coimbatore, Trichy, Madurai, Thirunelveli, Tuticorin).The Sample Area
Population is contributed for study.

Table 1.3 Distribution of the Sample Size

Questionnaire
Name of the No. of Distributed & Questionnaire Questionnaire
S. No.
city Shops Collected Biased Finalized

1. Chennai 10 61 11 50
2. Vellore 8 55 5 50
3. Salem 10 56 6 50
4. Erode 10 53 3 50
5. Tiruppur 12 54 4 50
6. Coimbatore 12 61 11 50
 24

Table 1.3 (Continued)

Questionnaire
S. Name of the No. of Distributed & Questionnaire Questionnaire
No. city Shops Collected Biased Finalized

7. Trichy 10 51 1 50
8. Madurai 10 53 3 50
9. Thirunelveli 8 55 5 50
10. Tuticorin 8 54 4 50
Grand Total 98 553 53 500
Source: Primary data

1.6.4 Reliability

The reliability of the enquiry schedule and individual items in it was tested
with the help of Cronbachs alpha. Examination of Cronbachs alpha provided
information about the reliability of any given set of measures. Alpha being larger
than 0.70 implies reliability of questionnaire. In this research study, the Cronbachs
alpha value for buying behavior is 0.981, level of perception is 0.973, expectation is
0.947 and satisfaction is 0.981 and hence the study is having reliable for further
research.

1.6.5 Sampling Design and Technique

For the present study, the universe comprises of the customers, who makes
their purchases in gold jewellery products of Tamil Nadu State. The sampling units
were selected by covering all the selected 10 Municipal corporations of Tamil Nadu
state. The size of sample was 500 respondents. These samples were carefully
selected by the researcher from those who makes their purchases of gold jewellery
products in all the ten municipalities of the study area.
 25

Primary data has been obtained through field survey technique. A well
framed questionnaire was also used to collect the primary data. The entire Tamil
Nadu state has been selected based on the multi level sampling technique. The gold
jewellery buyers from the 10 municipal corporations have been selected equally
based on stratified random sampling method followed by convenience sampling
technique for collecting the data. First hand information pertaining to the
customers buyer behavior, customers perception, customers expectation and
customers satisfaction for gold jewel products were collected from 500 sample
respondents.

1.6.6 Framework of Analysis

By virtue of a mass of data obtained from research survey, as well as data

from secondary sources collected and presented in the present report descriptive and
analytical research was considered most appropriate for the study. The researcher
used closed-ended and open-ended questions in the questionnaire to collect primary
data.

1.6.7 Construction of Questionnaire

The key aspect of the present research was identified through the preliminary
interviews with some selected consumers. The questionnaire drafted was circulated
among some research experts, gold jewellery store in-chargers / owners and
research scholars for a critical view with regard to wording, format, sequence and
the like. The questionnaire was re-drafted in the light of their comments.

1.6.8 Pre-test

The questionnaire meant for the respondents was pre-tested with thirty
customers. After pre-testing, necessary modifications were made in the
questionnaire to fit in on the track of the present study.
 26

1.6.9 Primary Data

In order to fulfill the objectives set, the primary data were collected in the
form of responses from customers of gold jewellery products in Tamil Nadu State.
The customers are the respondents who provide information regarding their
understanding, experiences, opinion, and perception towards marketing practices
adopted by gold jewellery.

The study was undertaken by using a well framed questionnaire that was
duly filled by the respondents. The respondents were selected with varying
background based on the important aspects of their gender, age, educational
qualification, occupation, monthly family income, marital status, family size and so
forth, in the areas of Tamil Nadu state. A noteworthy feature was that the
respondents filled the questionnaire with much zeal. This was due to the high level
of literacy among the respondents and the researchers rapport established with
them.

1.6.10 Secondary Data

As with any research, the researcher was aware about the value of secondary
data. The secondary data provided the researcher with the information regarding the
activities, scope and opinions of other researchers and experts in the initial stages.

The data further guided the researcher in defining the variables of the study,
identifying the classes of the stakeholders involved in the study. The secondary data
provide useful and necessary information supplementing the qualitative aspects of
research findings. For this purpose, the secondary data was collected from all
associated sources that include:

i. Books on marketing, retailing and customer buying behavior.

ii. Research journals, magazines and periodicals.
iii. Internet web sources.
iv. Libraries of reputed Universities, Institutes in and around Tamil Nadu.
 27

1.6.11 Discussions and Informal Interviews

In order to know the buying behavior of the respondents, several rounds of

discussion were held with knowledgeable persons in the field of gold jewellery
marketing, namely Retail store in-chargers / owners, customers and the research
supervisor.

1.6.12 Statistical Tools Used for Analysis

The difference in the extent of using the gold jewellery store between the
different types of respondents based on their gender, age, educational qualification,
occupation, monthly family income, marital status, family size was studied by
means of Percentages, Mean, Standard Deviation, Two-way classification tables,
Chi-Square test, ANOVA, Correlation analysis, Multiple Regression analysis.
Further Factor Analysis and Structural Equation Modeling have been used
appropriately.

1.6.12.1 Percentage

Percentage analysis refers to a special kind of ratio percentage in making

comparison between two or more series of data. Percentage is used to describe
relationship, since the percentage reduced everything to a common base and there
by allow meaningful comparisons to be made.

1.6.12 .2 Chi-Square Test

The degree of influence of the following independent variables pertaining to

respondents on their opinion towards gold jewellery products was also studied.

(i) Respondents Gender

(ii) Respondents Age
(iii) Respondents Educational Qualification
(iv) Respondents Occupational Status
 28

(v) Respondents Monthly family Income

(vi) Respondents Family Size
(vii) Respondents Marital status
(viii) Respondents Average value purchase
(ix) Respondents Mode of purchase
(x) Respondents Frequency of visit
(xi) Respondents Place of purchase

In order to identify the factors influencing the level of perception,

expectation and satisfaction towards gold jewellery products by the selected
respondents from different places of the study area, a Chi-square ( 2) test was used
and the formula is given below:

2 (O E) 2
(1.2)
E

With Degree of Freedom (D.F.) = (c-1) (r-1)

Where,

O = Observed frequency, E = Expected frequency,

c = Number of Columns, r = Number of Rows.

1.6.12 .3 Analysis of Variance (ANOVA)

Analysis of Variance (ANOVA) is a statistical method for partitioning the

total variation of a set of data into components associated with recognized sources
of variation. Usually, the variance is classified into two parts, namely between
samples (Groups) and within samples (Groups).
 29

ANALYSIS OF VARIANCE (ANOVA) TABLE

Degree of
Sources of Sum of Squares Mean Square
freedom F-Test
Variation (SS) (MS)
(DF)
Between SSB MSB
SSB k-1 MSB F
Samples k 1 MSE

SSE
Error SSE N-k MSE
N k

Total SST N-1

Where,

SST = Total sum of square of variance = SSB + SSE

SSB = Sum of square of between samples

SSE = Error Sum of square.

MSB = Mean Sum of square between samples

MSE = Mean Sum of square due to Error

N = Total Number of Observations

k = Number of Samples

1.6.12 .4 Multiple Regression Analysis

The regression is a statistical relationship between two or more variables.

When there are two or more independent variables, the analysis that describes such
relationship is the multiple regressions. This analysis is adopted where there is one
dependent variable that is presumed to be in relation with the function of two or
more independent variables. In multiple regressions, a linear composite of
explanatory variables is formed, in such a way that it has maximum correlation with
an active criterion variable. The main objective of using this technique is to predict
the variability of the dependent variable, based on its co-variance with all the
 30

independent variables. The linear multiple regression problem is to estimate

coefficients of 1, 2, .., j and 0 such that the expression,

Y= 0 + 1 X1 + 2 X2 +.+ j XK (1.3)

Provides a good estimate of an individual Y score based on the X scores, Where,

Y is Dependent Variable (Assumed Customers buying behaviour)

Xis are Independent Variables (Respondents Demographical factors Gender,

Age, Educational Qualification, Occupational Status etc., and

js are the parameters to be estimated.

1.6.12 .5 Factor Analysis

Factor Analysis is used to study a complex product or service in order to

identify the major characteristics or factors considered important by the respondent.
The purpose of factor analysis is to determine the responses to the several numbers
of statements, which are significantly correlated. Factor analysis is applied to assess
the significance of the factors that are responsible for customer buying behavior of
gold jewellery products which is the area of the study.

1.6.12 .6 Structural Equation Modeling (SEM)

To examine a series of dependence relationships simultaneously. it is

particularly useful when one dependent variable becomes an independent variable
in subsequent dependence relationships.

1.7 SCOPE OF THE STUDY

The present study aims at finding the customers behaviour towards the
gold jewellery and the reasons for selecting the particular shop and also perception,
expectations and satisfaction of buyers towards gold jewellery products. Customer
 31

Satisfaction is dynamic, thereafter it is necessary to study, analyse and understand

their behaviour. So that effective decision can be taken in respect of the price,
investment, quality and special offers in occasions.

It also helps us to identify various factors influencing the customer while

in purchase of gold jewellery in different shops and in different occasions. It also
studies the level of satisfaction, the benefits enjoyed by purchasing jewels. It covers
the customers who are purchasing gold jewellery in Tamil Nadu especially in the
Municipal Corporations (Chennai, Vellore, Salem, Erode, Tiruppur, Coimbatore,
Trichy, Madurai, Thirunelveli, Tuticorin).

1.8 LIMITATIONS OF THE STUDY

i. The study covers only gold jewellery products. The results obtained from the
study may or may not be applicable to other jewellery products like silver,
platinum, diamond.
ii. As the geographical area of the study is limited to Tamil Nadu state,
therefore the findings of the study may not reflect the entire Indian scenario.
iii. The study elicited the opinion on customer buying behavior on gold
jewellery products. The elicited opinion of customers may not good all times,
because of individual differences due to age, gender, income, profession, etc.
iv. Totally 500 samples were taken. Therefore the findings of the study may not
be applicable to the Universe.
v. There is an element of risk on the fitness associated with the suggestions of
the study due to dynamic nature of customer buying behavior from time to
time.
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1.9 CHAPTER SCHEME

The whole study is proposed to be present in five chapters as follows,

The first chapter deals with a brief introduction, importance of the study,
statement of the problem, objectives, hypotheses, methodology, scope, limitations
of the study and chapter scheme.

The second chapter contains of review of literature. This chapter focused

on previous research work on this topic and the importance and useful conclusion
are derived.

The third chapter describes an overview of jewellery industry. It gives a

clear idea about history, occurrence, production and current market both in India
and in the world.

The fourth chapter concerned with analysis and inference of data

regarding consumer behaviour towards perception, satisfaction and influencing
factors to buy the gold jewellery products.

The last chapter gives a summary of the investigation. The investigator

gives his view on regarding consumer behaviour of gold jewellery and attempts to
list out some suggestions for future actions.