SYNOPSIS

CONSUMER PERCEPTION
TOWARDS
BRANDED AND UNBRANDED
JEWELLERY

(Submitted for Partial fulfillment of award of

Post Graduate Diploma in Management (PGDM)
In
Retail management

By
CHIRAG PARIKH

I.T.S. – Management & I.T Institute,

Mohan Nagar, Ghaziabad

 INTRODUCTION

“Gold jewellery is often envisioned as a symbol of wealth and status.

Interestingly, buying gold jewellery is also one of the best ways to invest
hard earned money. Vibrant looks, exquisite design and the impeccable
style, innate to well crafted gold jewellery; make it nothing short of a
treasure. Gold jewellery is a striking piece of art and the aptly described as
Poetry in metal.”
India is the largest consumer of gold in the world. Country’s jewelry
market is mostly dominated by the unorganized sector. About 3lakh
traditional retail jewelers hold 96per cent of the market share, while large
brands or organised retail form only 4 per cent of the overall market.
In the recent years, jewelry market has witnessed tremendous change.
Old, traditional ornaments are giving way for branded designs and gold is
replaced by diamonds and precious stones. Buying pattern is also changing.
People are more and more opting for branded jewelry than buying from a
‘family jeweler’. This change has created ample opportunity for the
retailers. Multi-national jewellery brands such as Tiffany, Cartier, Zales and
Harry Winston, all are showing interest in setting up their shops in India.
Government’s decision to allow 51per cent FDI in single brand retail store
also helped many foreign retailers to enter into India.
Damas Jewelry, one of the world’s leading jewelry retailer entered India
in 2003 with a 50-50 joint venture with Gitanjali Gems Ltd. Damas opened
its first retail store in Bangalore in 2005 and it increased its presence by
another seven showrooms in short span of 5 months. It intends to open
another 30 showrooms by 2006-07.
 Generally, Indian consumer looks out for low-cost jewelry for daily
wear and prefers to buy from trustworthy jewelers. Diamonds, precious
stones which give elegant look not so expensive and changeable after few
years of wearing are preferred by the working class women. Some of the
prominent brands in the market are Adora, D'Damas, Oysterbay, De
Beers and Carbon. There are about 30 major players marketing about 50
brands in India.

Change in Perception:
In the globalized era, jewellery in India, like many other traditional product
segments, is undergoing an astounding change of perception. While it
continues to enjoy the position of being an enhancer of beauty and means of
security, the new-age consumer perceives jewellery as a personal accessory
that manifests the wearer’s attitude, personality and lifestyle. It is imperative
for jewellery manufacturers to recognize this shift and adopt new, innovative
approaches in the creation of jewellery. This is what will enable them to
establish an edge over their competitors. On the other hand, a glaring reality
is that the traditional jewellery sector constitutes a significant chunk of the
jewellery market. This jewellery in most instances is handcrafted and bought
from the family jeweler. This segment has a strong socio-cultural bias, as the
jewellery is bought for auspicious occasions like weddings, engagements,
and rituals. The decision to buy a piece of jewellery is more often a family
decision than an individual choice. Jewellery in this segment is also a means
of investment and future security traditionally constituting the wealth that a
bride takes with her to her new home.
 RESEARCH PROBLEM

To determine and analyze consumer perception towards branded and

unbranded jewellery. the essential things which are the customer keep in my
mind during purchasing the jewellery like, brand, quality, price, availability,
design, fashion etc. these all factors influence the decision of customer for
making the purchase of jewellery.

OBJECTIVE OF RESEARCH

• To ascertain brand awareness of various brands in the jewellery

market.
• To find consumer perception towards branded and unbranded
jewellery available in the market.
• To study the buying decision criteria for banded and unbranded
jewellery.
• To study the market structure of jewellery sector.
 LITERATURE REVIEW

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 cartages was prevalent.
According to a survey done by a Bureau of Indian Standard (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 carat to 18-
carats as 22- carat Gold jewellery.

• 24 Carat 100 percent pure gold

• 22 Carat 91.66 percent pure gold
• 20 Carat 83.33 percent pure gold
• 18 Carat 75 percent pure gold
• 2 Carat 8.33 percent pure gold
• 1 Carat 4.166 percent pure gold
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, old 18- carat
Gold jewellery under the brand Gili. Gitanjali jewels also started selling 24-
carat Gold jewellery in association with a Thai company, Pranda. Su- Raj
(India) Ltd. launched its collection of Diamond and 22- carat Gold jewellery
in 1997.
Jewellery has been part of Indian civilization and culture for more than
5,000 years. The people of the Indus valley civilization, which began around
3300 B.C., used lapis lazuli, turquoise, amethyst, jade, carmelian, shell, and
ivory to make beads, amulets, bracelets, and other treasures. Referances to
gold ornaments and gold neckleces can be found in the Rig Veda, which
dates back to around 3000 B.C. and is the oldest of the Hindu religious texts.
Modern Indians maintain their 5,000 years old jewellery tradition and have
made their country one of the world’s jewellery powerhouses, not only in
consumption, but also in manufacturing and design. Here are half a dozen
examples of today’s Indian jewellery.(JCK November 2006)

In a 2006 survey of over 2500 members, US consultancy group the Jewelry

Consumer Opinion Council (JCOC) found that uniqueness is integral to
brand success: "The key to successful product branding is to design and
deliver a unique product the consumer needs and prefers to other products
available," reported Elizabeth Chatelain, president of MVI Marketing,
founder of JCOC. "Manufacturers and retailers can help consumers come to
understand what exactly branded jewellery is, and that the consumer has
increased flexibility in choosing."(jeweller magazine,article,august 17,2009)

Strategies for wooing customers-

TANISHQ:
In the late 1990s, players in the branded gold jewellery market formulated
stragegies for wooing customers. According to Jacob Kurian, Chief
operating officer of Tanishq, the challenges were many. 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 perception of jewellery as a high-priced
purchase. Said Kurian, “We are changing the attitudes of customers from
blind trust to informed trust.”

To increase its market share, Tanishq formulated a strategy for luring

people away from traditional neighborhood jewelers. Tanishq’s strategy was
to create differentiation and build trust.

According to Kurian, the first part of the strategy was “to provide a point
of differentiation in a highly commoditized category- which is the whole
point of branding.” The second part of the strategy was to project Tanishq as
an unimpeachable mark of trust, according to Kurian, “If differentiation
plays the role of primary attraction, trust takes care of lifelong
loyalty.”(www.icmrindia.org/free%20resource/casestudies/branded-gold-
jewellery.html)

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 “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. However, this does not take away from the fact that
India is a tough market. Acoording to Mehul Choksi of the D’Damas and
Gitanjali group, branded jewellery has witnessed more than 50% growth in
the last three years. The diamond branded jewellery, he says, is especially
impressive with the segment witnessing a 20% rise annually as against 10%
a decade ago.

One of the reasons branded jewellery is doing well is that now anyone can
walk into a mall, window shop and decides at their own that they would like
to buy. The entire culture of shopping has changed with attentive and helpful
attendants and well-displayed products.

The branded jewellery industry is still in its infancy, but increasing growth
rates show that in a short time it will corner a significant chunk of the
market, perhaps the best compliment to the branded segment is that old
jewellery showroom have also begun to design jewellery lines under a brand
name.(www.flonnet.com/f12223/stories/20051118003809800.html)

Indian customer showing interest in branded jewelley

Posted by RNCOS on October-27-2009
As per our recently published research report “Indian Gems and Jewellery
Market- Future Prospects to 2011”, gems and jewellery market in India
posses tremendous potential for future growth since it has an added
advantage of low production cost and highly skilled labor that separates it
from its competitors. It is projected that the overall gems and jewellery
market will grow at a CAGR of around 14% during 2009-12.
India possesses world’s most competitive gems and jewellery market due
to its low cost of production and availability of skilled labor. As per our new
research report “India Gems and Jewellery Market-future prospects to
2011”, highly skilled and low cost manpower. Along with strong
government support in the form of incentives and establishments of SEZs,
has been the major driver for the Indian gems and jewellery market. the
market also plays a vital role in the Indian economy as it is a leading foreign
exchange earner and accounts for more than 12% of India’s total exports.
Currently the Indian market remains highly fragmented, but is rapidly
transforming into an organized sector.
“with changing customers’ attitude towards branded jewellery and entrance
of organized players in the market. This segment will grow at much faster
pace than the overall jewellery market in coming years, “ said a Research
analyst at RNCOS.

The future outlook given in the report is based on past growth trends, current
industry and regulatory developments besides base drivers, opportunities
and challenges faced by the gems and jewellery industry in India.
(www.rncos.com/Reprt/IMI48.htm)

Retailing the organized way:

While complementing the planned approach by organized retail, Mahesh

Gandhi-Head Retail. Hari Krishana exports says, “we can see that times
have changed and somewhere along the way, the whole approach to
marketing has also undergone transformation.” Gandhi says that branded
diamond jewellery there is much planning involved. He says meticulous
strategy is charted out, and there is systematic presentation of the product.
All this goes on even as a product portfolio is made and promotions are
carried out. Gandhi says creating brand awareness in the minds of the
consumers is all about adopting a few strategic steps. “One might say the
difference between and organized is just doing and doing by planning”.

“Today everyone is looking for value money, a new design, a new concept,
something very creative and that is the concept of retail today. It is not like
yesterday where the shopkeeper or the manufacturer used to dominate.
Today. The customer is going for customized designs; the whole concept is
changing.” Says Muralidharan. “ the consumers is looking for value for
money, when they buy diamond. They like to buy from reputed players like
example Tanishq, Goenka, D’Damas, Gitanjali, Nakshatra etc. each of them
has a standard quality certification internationally and that is going in the
minds of the customer when they talk about buying from organized sector”.
(www.pressabout.com/indian-customers-showing-interest-in-branded-
jewellery)

Share of branded jewellery in India’s total market was growing at a pace of

20-30% annually. The number of gold retailers in the country has increased
by 40% since the year 2000, with 150 domestic and over 65 international
established brands. Reliance has opened 14 jewellery stores in India cities
since 2007 and has announced that it will launch showrooms in various other
cities and towns across the country.(
www.commodityonline.com/news/Branded-gold-jewellery-shops-lure-
Indians-23837-3-1.html)

Gems and jewellery sector worried over changes in Direct Taxes Code

Faced with severe margin pressures, members of the gems and jewellery
industry (GJI) are now concerned about the proposed changes in the Direct
Taxes Code, including provisions relating to search and seizure, tax
deduction at source (TDS) and minimum alternate tax (MAT).

The All India Gems and Jewellery Trade Federation (GJF), an apex body
representing the trade feels that since the proposed changes are in the draft
bill now under circulation, the Finance Ministry could reconsider these
provisions. If the Code gets cleared in the present form to be applicable from
April 1, 2011, the industry would be adversely hit.

The Director of All-India Gems and Jewellery Federation, Mr Mohanlal

Jain, said, “if these changes are not brought about before enacting the Direct
Taxes Code Bill, 2009, the provisions relating to seizure of any stock in
trade of bullion, precious and semi-precious stones or jewellery, is draconian
and discriminatory against the GJF trade.”

The seizure of entire stock in trade when there is any difference during raids
is not acceptable. The GJF has also objected to 2 per cent tax on gross assets
since the industry operates on small margins with high inventory levels.
There is a discrepancy in this as a company earning 2 per cent net profit will
require to pay the same tax as a company earning 8 per cent net profit, Mr
Jain said.

The GJI in India contributes to approximately 3 per cent of the gross

domestic product of the country and is a key player in the economy.
Therefore, it would be in the interest of the Government to ensure that it
remains healthy and the trading community are not subjected to these
proposed provisions.
“As a representative of the industry trade body, we are taking up the matter
with the Finance Ministry and apex chambers and hope that the changes are
brought about before it is finally enacted,” he said.

Gems and Jewellery is an important emerging sector in the Indian

Economy. Ranked among the fastest growing sectors, it is also a leading
sector for foreign exchange generation. The gems and jewellery industry is
very much fascinating being traditionally glamorous and artistically modern.
This business employees and engages millions; cover wide activities such as
raw material procurement from far flung Africa, Australia, Canada and
Russia, and transforming these into products in demand with the skills
available in China, India, Italy and Turkey for the sophisticated markets in
the USA, Europe, Far East, Middle East and Asia.(THE HINDU)

India's Position in Gems and Jewellery Sector

• One of the largest exporters of gems and jewellery.

• Established manufacturing excellence in jewellery and diamond
polishing.
• India is the most technologically advanced diamond-cutting centre in
the world.
• One of the world's largest and fastest growing gems and jewellery
markets.

Exports-During April 2009-January 2010, the total exports for gems and
jewellery stood at US$ 22.54 billion as compared to US$ 20.98 billion
during April 2008-January 2009. During the same period, the sector
registered a growth of 7.42 per cent over the previous year.(FICCI)
 RESEARCH METHODOLOGY

Research can be defined as a scientific and systematic search for pertinent

Information on a specific topic.

 Types Of Research:- Descriptive

 Types Of Data To Be Collected:- Primary Data & Secondary data
 Primary Data Collection Method:- Survey
 Primary Data Collection Techniques:- Personal Interview,
Questionnaire
 Sample size:- 100
 Sample unit: Ghaziabad
 Sampling Techniques:- Simple Random Sampling
 REFERANCES

 www.icmrindia.org/free%20resource/casestudies/branded-gold-
jewellery.html
 www.flonnet.com/f12223/stories/20051118003809800.html)
 (www.rncos.com/Reprt/IMI48.htm
 www.pressabout.com/indian-customers-showing-interest-in-branded-
jewellery
 www.commodityonline.com/news/Branded-gold-jewellery-shops-
lure-Indians-23837-3-1.html
 THE HINDU(Newspaper)
 FICCI
 JCK November 2006
 RNCOS on October-27-2009
 Article-17 august,2009 ‘jeweller magazine’ by Nick Lord

WEB SITES:
 www.icmrindia.org
 www.scribd.com
 www.commodityonline.com