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Assignment of Business Research

A Study Report on“ Consumer Behavior on

Branded and Non Branded Jewelry”

Submitted to: Submitted By:Dr. S. L. Gupta 1. Ravindra Kumar MBA/15004/13Director 2. Srishti

MBA/15008/13Birla Institute of Technology 3. Nidhi Jain

MBA/15011/13MESRA, Patna Campus 4. Nitika

MBA/15009/13

Department of Management

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Birla Institute of Technology, MESRAPatna Campus

Content

Sl. No Particulars Page no.

1. Introduction 3

2. Objectives 4

3. Research problem 4

4. Hypothesis 5

5. Methodology 6

6. Literature review 7

7. Difference between branded & non-branded jewelry 10

8. Analysis of collected data 11

9. Questionnaire 15

10. References 18

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Introduction

As India makes rapid progress in the retail arena, the Indian Jeweler market is undergoing a gradual development from unorganized to organized formats. The jewelry 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 jewelry 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 assured to grow. Jeweler 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 jewelry was worn before is undergoing a tremendous change. Traditional designs are yielding to modern jewelry, heavy gold is giving way to light and simple designs. Consumers are more quality conscious than ever before. The jewelry 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 jewelry 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

All these reasons and more ensure that the modern Indian woman is looking for jewelry 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 jewelry 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 jewelry 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

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with an identity. This shift clearly indicates a change in viewpoint of jewelry as a commodity to brand identification.

Objectives

1. To study and understand the buying behavior of consumers for branded and

non-branded jewelry

2. To find the difference perceptions, opinion and behavior of branded and non-

branded jewelry buyers.

3. To know the major players of jewelry industry.

4. To have an idea about parameters consumer consider while buying jewelry.

5. To have knowledge about demographic segments

6. To know the knowledge level of customers regarding the jewelry brands

available in the market.

Research Problem

What kind of jewelry are preferred by the consumers, Non-branded or Branded?

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Hypothesis:

1. The income level of the buyers has significant impact on the type of jewelry

purchased by them.

2. Buyers make purchases only during some occasion like marriages, gifts, etc.

3. More of female buyers are inclined towards the new designs introduced by the

branded jewelers.

4. The knowledge about the branded jewelers is due to the advertisements floating

on air or there are other sources of information also.

5. The price of gold and other precious stones also play a significant role in the

purchasing procedure.

Sample size

n=50

Type of research

Exploratory Qualitative

Sampling frame

Patna Busy market streets in Patna like Boring Road, Dakbanglow and Bailey Road.

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Methodology

As a part of the study, we reached out to the people at various locations like shopping

malls, bazaars 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 jewelry.

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 jewelry.

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

Gold jewelry Market in Ind ia

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 Cartier’s into the Indian market. In the 1990s, the number of retail jewelry outlets in India increased greatly due to the abolition of the Gold Control Act.

This led to a highly fragmented and unorganized jewelry 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 jewelry. The bulk of the jewelry purchased in India was designed in the traditional Indian style. jewelry 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 jewelry advertised in India as 22-carat was of a lesser quality. Over 80% of the jewelers sold gold jewelry ranging from 13.5 carats to 18 carats as 22-carat gold jewelry. The late 1990s saw a number of branded jewelry players entering the Indian market. Titan sold gold jewelry under the brand name Tanishq, while Gitanjali Jewels, a Mumbai-based jewelry exporter, sold 18-carat gold jewelry under the brand name Gili. Gitanjali Jewels also started selling 24-carat gold jewelry in association with a Thai company. The Mumbai-based group, Beautiful, which marketed the Tiffany range of products in India, launched its own range of studded 18-carat jewelry, Dagina. Other players who entered the Indian branded gold jewelry market during the 1990s and 2000-01 included Intergold Gem Ltd., Oyzterbay, Carbon and Tribhovandas Bhimji Zaveri (TBZ).

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Gold jewelry Becomes Fashion Accessory

Till the early 1990s, the average Indian bought jewelry for investment rather than for adornment. Jewelry 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 jewelry 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 jewelry. However, since the late 1990s, there was a shift in consumer tastes: women were increasingly opting for fashionable and lightweight jewelry instead of traditional chunky jewelry. There was a rise in demand for lightweight jewelry, especially from consumers in the 16 to25 age group, who regarded jewelry 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 jewelry sector is in the transition phase with consumers' desire for possession of jewelry 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 jewelry 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 jewelry 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 jewelry and clearly avoiding heavy, traditional gold jewelry.

• 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.

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 jewelry players.

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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 jewelry. In spite of the economic slowdown

experts believe that it will grow at a CAGR (Compound Annual Growth Rate) 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 copying 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 jewelry the review helps understand the growth

of the retail industry which have leased branded jewelry 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 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 jewelry market and the popularity of diamonds.

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Difference between Branded and Non Branded Jewelry

BRANDED

NON-BRANDED

Name & reputation gives a confidence to the consumer

Customer can tailor make jewelry according to their preferences

It comes with a written lifetime guarantee, considering the emotional quotient of the

consumer

No written lifetime guarantee, trust is purely based on consumer

Excellent quality, good selling policies and backup services for jewelry

Minimum efforts in packaging, finishing, sales & low advertising

Has a more contemporary stylish and classic outlook, which easily segments

itself among the traditional ones.

Is usually bulky & traditional

Available at multiple outlets Available only in traditional jewelry outlets

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Analysis of Collected Data:

Question 2: Why they do jewelry purchase?

Analysis:

Question 3: What kind of jewelry do they buy?

Analysis:

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24%

18%42%

4%12%

Purpose

Fashion StatementStatus SymbolInvestment/ SecurityGiftAny Other

36%

14%21%

7%4%

10%7%

Types

GoldDiamondSilverSemi preciousPrecious StonesPearlsAny Other

Question 6: From where they prefer to purchase jewelry?

Analysis:

Question 15: Do you plan to shift the source of purchasing jewelry?

Result:

Yes No0

5

10

15

20

25

30

35

40

14

36

Satisfied with current shop? Planning to Change

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30%

54%

16%

Purchase Point

Local ShopsBranded Jewelry ShowroomMulty Brand Outlets

Question 13: Brand preference of Respondent

Analysis: We put the available information in SPSS software and we go to

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Analyze Compare Means One Sample T Test and select the variables

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After analysis the collected data in SPSS, we have come a conclusion that the jewelry

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 jewelry irrespective of the prices, designs

and the brand. The consumers buying behavior shows a shift from content to design in

jewelry i.e. fashionable jewelry is the rage nowadays and acquires a status symbol in

their minds. Branded jewelry 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 jewelry 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

jewelry. 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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References

World Gold Council Website

Mckinsey Website

Customer perception towards branded jewelry in India- Dr. Ratna Vadra

Faculty, IMT, Ghaziabad & Dr. Gunjan Malhotra, Faculty,IMT, Ghaziabad

Journal of gem industry

www.business-standard.com

Bhatt, Harish COO Tanishq,” Growing the branded jewelry market: An Indian

Experience”

www.gold.org / value / market intelligence / supply & demand / jewelry

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That’s allFrom usThanks

YouSo Much

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