A Thesis On

A Thesis on

A STUDY ON FACTORS INFLUENCING CONSUMER TO SELECT ORGANIZED AND UNORGANIZED JEWELLERY RETAILERS

Submitted in Partial Fulfillment of the requirement for the Award of the degree of Masters in Business Administration By

SATHYAMOORTHY.R 8NBMD008

ADAM SMITH INSTITUTE OF MANAGEMENT (Affiliated to ICFAI University) 1

SR Nagar, Hyderabad Andhra Pradesh 500038

Nov 2009

Management Thesis I Report On

A STUDY ON FACTORS INFLUENCING CONSUMER TO SELECT ORGANIZED AND UNORGANIZED JEWELLERY RETAILERS

2

BY SATHYAMOORTHY.R 8NBMD008

SUBMITTED TO MRS.NANDITA KAPUR

DECLARATION

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I here by declare that the project report titled “A STUDY ON FACTORS INFLUENCING CONSUMER TO SELECT ORGANIZED AND UNORGANIZED JEWELLERY RETAILERS” is carried out by me for the partial fulfillment of SEMESTER III MBA 2008-2010 from ADAM SMITH INSTITUTE OF MANAGEMENT, HYDERABAD and share not submitted this title to any other University/ Institute for any degree.

Sathyamoorthy.R

8NBMD008

CERTIFICATE

4

This is certify that the thesis “A STUDY ON FACTOR INFLUENCING CONSUMER TO SELECET ORGANIZED AND UNORGANIZED JEWELLERY RETAILERS” submitted by R.SATHYA MOORTHY for the award of master of business

administration

degree

by

the

ADAM

SMITH

MANAGEMENT, Hyderabad, in his original work and it

INSTITUTE

OF

has not previously

formed the basic for the award of any degree diploma associate ship, fellowship or any other similar title and it represents wholly his independent work.

Signature of the Faculty Supervisor Name:

Nandita Kapur

Designation: Soft Skill Trainer Center:

Hyderabad

Signature of the Center – head

5

ACKNOWLEDGEMENT

The credit of completion of the Management Thesis I report “A STUDY ON FACTOR

INFLUENCING

CONSUMER

TO

SELECT

ORGANIZED

AND

UNORGANIZED JEWELLERY RETAILERS” not only relies on me, the credit goes to all the persons who stood behind me to do this project. The project will be incomplete if I won’t convey my regards to all those people.

I express my deepest gratefulness to Mrs.NANDITA KAPUR, Faculty guideMT I. The support he gave me at various stages of the project was invaluable. I thank Mr. TRINATH, (Campus head), for his continuous support to the students. I sincerely thank all my friends who are doing projects at Jewellery retailers . The information shared by them was very valuable in putting up this report.

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CONTENT

1. Introduction …………………………………………………………………………….1 2. Objectives………..………………………………………………………………………5 3. Scope of the study…………………………………………………………………….....5 4. Research and methodology …..…………………………………………………………6 5. Limitation………………………………………………………………………………..7 6. Investing India…………………………………………………………………………..8 7. Indian Jewellery Retail…………………………………………………………………..14 8. Organized Retailer……………………………………………………………………….21 9. Review Of Literature………………………………………………………………….....24 10. Analysis & Interpretation………………………………………………………………...31 11. Findings………………………………………………………………………….............42 12. Suggestion……………………………………………………………………………….43 13. Conclusion……………………………………………………………………………….46 7

14. Appendix 15. Bibliography

Introduction

The Indian gems and jewellery industry is one of the fastest growing segments in the Indian economy with an annual growth rate of approximately 15 per cent. The domestic market is estimated to be around US$ 16.1 billion and the All India Gems and Jewellery Trade Federation, a nodal agency representing 300,000 jewellers across the country, expects it to grow to US$ 25.2 billion in two to three years. The country is also the largest consumer of gold in the world. It consumes nearly 800 tonnes of gold that accounts for 20 per cent of world gold consumption, of which nearly 600 tonnes go into making jewellery. India is also emerging as the world's largest trading centre for gold targeting US$ 16 billion by 2010. The industry has the best skilled manpower for designing and producing high volumes of exquisite jewellery at low labour costs. Let us at first take a look at the evolution of the Indian Gold Market. India was never in dearth of Gold Reserves. History had been a witness of the fact that India was always self sufficient in all its natural resources and more so in case of gold. It was this abundance in availability of such precious metals that lured foreign invaders from all parts of the globe as well as from time to time to come to India and plunder as much of it as was possible for them to do.

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However there were a significant number of such intruders who, after entering the country, fell for the land and its cultural heritage which eventually led them to settle and establish their empire in India .

As a inevitable consequence of the lavish livelihood exhibited by the Indian rulers, the Gold reserves in India gradually diminished. The arrival of the British in the hierarchy in the middle of the eighteenth century announced the decline of India's Gold Reserves even further. The colonial status given to India by the British crippled the economy which once boasted of its wealth in gold. Huge quantities of the precious metal was carried to England right after their extraction. As a result a major proportion of India's Gold Reserves was 'vanishing' without even entering into the economy.

By the time India gained independence, a huge vacuum had already been created as far as Gold Reserves in India was concerned. Slowly, after several decades have gone by India has finally started to fill up the vacuum in a big way. After reaching a new height in the form of 8 % growth in Gross Domestic Product (GDP) for the year 2005-06, India is being recognized as one of the fastest emerging economies of the world. India's growing prospects can also be noticed in the gold market as well. India is viewed as the largest consumer of gold in recent times. According to the figures presented by the estimates of the World Gold Council (WGC), India's total demand for gold in the year 2001 was 243.2 tonnes which comprised 26.2 % of the total world demand. India, the largest democracy in the world, with its consistent growth/performance and abundant skilled manpower provides enormous opportunities for investment, both domestic and 9

foreign. India is the fourth largest economy in terms of Purchase Power Parity and the tenth most industrialized country in the world. Major initiatives such as industrial decontrol, simplification of investment procedures, enactment of competition law, liberalization of trade policy, full commitment to safeguarding intellectual property rights, financial sector reforms, liberalization of exchange regulations etc., have been taken, which provide a liberal, attractive, and investor friendly investment climate. The Government of India reviews the foreign direct investment (FDI) policy on an ongoing basis. Important policy initiatives taken in the recent past include raising FDI equity limit in domestic airlines sector to 49 per cent and placing it under the automatic route; allowing FDI up to 100 per cent under the automatic route for the development of townships, housing, built-up infrastructure and construction development projects; procedural simplification for approval of proposals for new joint ventures, technology collaborations with existing joint ventures, technology transfer/trade marks agreement in India and transfer of shares from existing Indian companies. The manual, 'India: FDI Policy and Procedures', is aimed at providing investors upto-date information on the policies and procedures relating to FDI. The growing rate of internet users in India Provides a developing market prospects to the retailers to concentrate on Internet retailing. Internet retailing is the one of the critical issues of Retiling sector in India. Because customers love Internet retailing for so many reasons, comparison shopping, saving time, eases of purchase. Today, India is having highest growing population of youth segment in the world and the users of Internet tremendously increased. Customers have created an attitude of getting anything on the table. So they are interested in online retailing. 10

For Indian people jewellery is one of the major sources of investment. The attitudes of Indian consumers Jewellery purchasing are interconnected with culture. But now organized retailers wants to break the concept of trust based purchasing in jewellery. The next stage of this retailing is to be an online retailing. Normally Indian people are not much aware of internet retailing especially in jewelry retailing because Indian people strongly believe in human touch and Trust among the retailers. At present online jewellery retailing have grown so strong in India but it’s having highest compounded growth rate because of growing population and increasing individual level of income and technology growth of the country. So in this study we are focusing on online purchasing behavior of customers, factors influencing consumers while purchase jewelry on internet and Online retailer’s perceptions about consumer’s expectations, consumer’s expectations. As in the final result of this study would help to get a clear idea about consumer’s expectations, evaluations and management perceptions about consumer’s expectations and develop right strategy to enhance online jewellery retailing.

Research Design 11

Objective of the Study: •

To identify the buying motivation and concerned factors while consumers to select jewellery retailers.

•

To study about consumers purchasing behaviors.

Scope of the Study: •

The gems and jewellery industry occupies an important position in the Indian

economy. It is a leading foreign exchange earner and also one of the fastest growing industries in the country. •

The two major segments of the sector in India are gold jewellery and diamonds

•

This study about find out the most influencing factors while consumers to select

jewellery retailers and create suitable plan based on results obtained from research.

Research methodology: Research Design:

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The research is carried out by the method of description of various problem. So the research was taken as descriptive method.

Sources of data collection: Secondary data: The secondary data for this study has been collected from the internet. The data collected includes identification of online services offered by major jewellery brands in India

Primary data The data has been collected from the respondents through the personal interview

Method of data collection Personal interviews with the retailer service providers of respective jewellery brands. And Personal interviews with the jewelry consumer purchasers.

Sampling unit: The consumers of internet retailing offered by major jewellery brands in mumbai and Service provider.

Sampling Technique

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Here the Judgmental sampling method has been adopted under the non-probability sampling technique.

Sampling size The number of qualified respondents of this study is 100.

Limitations of this Study: •

It can’t be assured that this study is applicable for other cities.

•

The no of respondents were 100

•

The respondents are only jewellery consumers.

Investing India 14

The gold market is undergoing radical change with investments in Europe and US taking a lead over the traditional market – Jewelry in India. While Indian Jewelry is still the world’s biggest consumer, the market seems more diverse now. The Gold ETF (GLD) has become the biggest market mover and there has been heavy demand for coins and bars. If this fundamental change in consumer/investor choices continues, Gold could see a significant upward movement in price in the short to medium term, and even a $1200/ounce is likely. It remains to be seen how this change in behavior would continue after the end of this crisis (in 3-5 years). If it is a permanent change, it is good for the gold industry as it gives a far wider/diverse base and removes the quirkiness associated with Indian marriage seasons and domestic economy. Indian consumption is the only bright aspect in the Jewelry scene, as Jewelry consumption of rest of the world has gone down the toilet. This is most likely due to the fact that the world recession has not come to India so far. However, Jewelry consumption could significantly tank once the reality sinks in and Indian market goes faces economic winds. In October 2008, when gold was below 700, I claimed that the metal will significantly go up. And go up it has. But, I am moving to a neutral territory now. My personal opinion is that $1000 is a good price for gold in the current scenario, but if there are new surprises from financial markets, then we should cross $1200. Once the crisis is over and when people start getting out of gold to stocks and homes, gold could fall to the sub-700 range. In short, it is still a good investment for short to medium investors, and long term investors might want to book profits now at around $950-1000.

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1. One of the biggest Individual gainer is the Gold ETF – GLD. It has more than 1000

tonnes of gold in its management and has become a great market mover of the underlying (it is now the tail wagging the dog). •

Since the start of Jan 2008, GLD has had a more substantial lead in gold holdings than similar ETFs.

•

Gold Investment in Europe has skyrocketed (by over 10 times) in the 2008. Europe is now the biggest net retail investor in gold, while Vietnam and US were leading this space till 2006.

•

In the US, gold investments declined in 2007 from 2006 and then strongly rebounded in 2008. Now, over 75 tons are consumed for investment purposes in the US

•

More people are buying gold for investment purposes than for other consumption.

•

Bar and coin sales have grown more than twofold since last year, while sales of Jewelry (biggest consumer) went down 6%

Consumption: •

While Gold prices were choppy in 2008, measured in Dollars, gold prices were more stable and smooth than measured in Euros.

1. India is still the world’s biggest consumer at 147 tons in Q4, followed by China, Europe and the US (Figure 6). It had briefly ceded its lead to the US last year and now got it back with a bang. It consumes 21% of world gold. 16

•

Indian Jewelry consumption more than doubled in Q4 2008 compared to Q4 2007, while for Turkey it went down by 57%.

•

The US exports far more gold than it imports.

•

While Gold prices were choppy in 2008, measured in Dollars, gold prices were more stable and smooth than measured in Euros (Figure 0).

1. India is still the world’s biggest consumer at 147 tons in Q4, followed by China, Europe and the US. It had briefly ceded its lead to the US last year and now got it back with a bang. It consumes 21% of world gold. •

The US exports far more gold than it imports.

The central banks have dramatically reduced their sales (-27%) and bar and coin sales have grown by 247%. Mine production is almost unchanged at ~630 tons/year, while there is a 17

significant bump in old gold scrap. It is pretty likely that people are bringing up junk and cashing in on the bullish markets.

World Gold Supply and Demand Statistics:

Demand Characteristic: It is interesting to note that electronics and industrial usage has come down. Either they have made significant technological progress to reduce the need for gold in their manufacturing processes, or it is an indicator for a fundamental demand collapse in world markets for those products. It is bad for the global economy, but for gold it is not that much of a problem given that they consume a small portion of annual consumption. World mints are running out of coin supply as consumers and investors are pounding them to get a hand at the most secure thing in the world. Jewelry sales have come down a bit, and are more of an indicator that consumers are tightening their belts in US, and there are some fundamental alterations in consumer trends in

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India, where many girls prefer platinum these days. It has not impacted gold sales in India that much, but is of concern over the long term. http://seekingalpha.com/dashboard/etfs?source=headtabs

Gold Holdings in the ETF-GLD The world’s biggest Gold ETF fund (to keep it simple, assume that it buys gold for its warehouses and sells shares on its store) has been seeing a huge increase in their assets. Holding gold as an ETF is the most cost effective thing, as trading costs are very minimal and you don’t need to worry about assaying and value estimation, security, etc. While the “end of the world” pessimists might be reluctant to use an ETF for their most secure investment, for most practical investors this is the way to go. It might make some sense to have gold in bars and coin for emergency situations. GLD is the most heavily traded ETF and it has been buying gold in gobbles and now hold more than a 1000 tonnes of gold (worth about 30 billion USD). GLD’s asset increase has coincided exactly with the increase in gold price and thus it is reasonable to

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assume that Gold is mainly moved by this .

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Indian Jewellery Retail:

India and diamonds are the best known combination throughout the diamond industry. Though India was known to have diamond mines many centuries ago - the fabulous Kohinoor is an Indian diamond - it has virtually no mines today. However, India has continued to maintain its tradition of diamond cutting and thousands of people are involved in this skilled occupation.

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Today, with its cut and polished diamonds, colored gemstones, gold jewellery, pearls, non-gold jewellery and fashion jewellery, India accounts for almost 50% of the international market. The gems and jewellery sector contributes nearly 55% of the world’s net exports of cut and polished diamonds in value, 90% in terms of pieces and 80% in terms of carats. Every 11 of 12 diamonds sold around the globe are processed in India, irrespective of where these are mined. With the right policy and regulatory framework, India could establish itself as a brand in the international Gems & Jewellery market, increase employment and create new breed of entrepreneurship.

Apart form being the world’s largest diamond processing (cutting and polishing) country with an 80 per cent share in world market India’s favorable trade policies have made India the hub for gems and jewellery. The burgeoning retail industry in India is instrumental in innovatively marketing and branding diamonds and traditional jewellery, making inroads in this sector and contributing to the nation’s economy. The Indian consumer has lately become the focus of every retailer's eye, proof being the international brands flocking in to set up franchises in India. Economic boom coupled with retail sales explosion has made a smooth pathway for all those who understand the art of retail in India. Due to the Economic boom in the country, India is emerging as a very big Consumer Market for jewellery and other luxury products and offering a very lucrative opportunity for major brands to establish presence in the Indian market. The booming domestic market along with export advantage of the industry and the Government's decision to allow foreign direct investment of up to 51 per cent in single brand retail stores has attracted a large number of players to the sector.

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Players like Reliance, pantaloons, Wal-Mart, etc have already set up shops in India. The Reliance group plans to spend $5 billion in new retail formats including malls and combined service and retail formats along the evolving Indian highway system. Global behemoth Wal-Mart has also officially entered India with a strategic tie-up with the Bharti group. Wal-Mart will provide the back-end services such as sourcing and supply-chain management for the Bharti group’s planned retail formats across the country as well as an initiative to supply the countless small, convenience stores that dot the countryside all across India- reaching out directly to the consumer. Branded jewellery is the new mantra in the market, having rapidly acquired a niche over the past few years. Increasing purchasing power and disposable incomes of India’s middle class has resulted in consumption growth of this industry by about 11 per cent in the five-year period preceding 2006-07. Add to that the insatiable Indian craving for gems and jewellery, and the demand will skyrocket to US$ 20 billion by 2010 and US$ 30 billion in 2015, according to industry experts. Focused marketing creating awareness and demand for the products, innovative product range creating excitement and expanding the category as well as transparency and adherence to best practices will help build consumer confidence. The surprising thing about retail investment is that about 20 per cent of retail effort – in a planned manner – is targeted at rural areas, which is defined as towns with a population of less than a million. India has seen a significant growth in disposable incomes as a result of the economic growth that it has been enjoying. This income is spread in the rural areas also. According to the Tata Statistical Outline of India – 2005-06, around 60 per cent of the rural income is from north and east. Depending on the size of the market, retailers work with multiple 23

formats – currently they are partnering with local jewellers and these jewellers retail their brands, commonly known as the ‘shop in shop’. These stores would carry a merchandise mix and are in the range from 600- to 1,000 square feet. Retailers are also looking at mobile store concepts and thinking of innovative ways to connect to the consumer. Brand building, and creating brand identity is the focus of every retailer in India at present. Indian retailers see a huge jewellery consumer market in India but there is a slight speculation that they might soon face stiff competition from within as well as from international brands who are rapidly setting up chain stores. India consumes nearly 800 tonnes of gold accounting for about 20 per cent of the world gold consumption. Out of which nearly 600 tonnes goes into making jewellery. According to The World Gold Council (WGC) total gold supply in the second quarter this year stood (Q2FY08) at 840 tonnes, whereas the demand was 944 tonnes. A study by KPMG reveals the Indian jewellery market to be US$ 13.5 billion in fiscal 2006-07, accounting for 8.3 per cent of world jewellery sales. However the export of diamond-studded jewellery from India is merely 4 per cent of the total export of gems and jewellery worth US$ 18.06 billion. Since the demand of diamondstudded jewellery among Indian consumers has risen sharply, the industry should focus on the domestic market. Diamantaires, in Surat's US$ 11.29 billion diamond industry, are eyeing jewellery manufacturing in a major way, after DTC has decided to prune supply of rough diamonds to India. If India becomes a manufacturing hub for jewellery as well as a consumption market it will just prove India’s strength in both sectors. The government has offered some concession to the industry by lowering import duty on platinum from US$ 13.82 per 10 gms to US$ 5.03 – exempting rough colored precious gems 24

stones from customs duty at the first stage itself, instead of claiming reimbursements later. Rough, semi-precious stones are already exempt, a move aimed at further promoting the exports of studded jewellery and platinum jewellery. Duty-free import of consumables for metals other than gold and platinum up to 2 per cent of f.o.b. value of exports and duty-free import entitlement for rejected jewellery up to 2 per cent of f.o.b. value of exports. There is increased duty-free import of commercial samples of jewellery to US$ 2.50 and import of gold of 18 carat and above under the replenishment scheme. The Indian retail scene is set to flourish and there is no looking back for those who know how to sell jewellery to a Indian women, since jewellery is a part of Indian tradition and customs.

Indian organized retail market is growing at a fast pace due to the boom in the India retail industry. In 2005, the retail industry in India amounted to Rs 10,000 billion accounting for about 10% to the country's GDP. The organized retail market in India out of this total market accounted

for

Rs

350

billion

which

is

about

3.5%

of

the

total

revenues.

Retail market in the Indian organized sector is expected to cross Rs 1000 billion by 2010. Traditionally the retail industry in India was largely unorganized, comprising of drug stores, medium, and small grocery stores. Most of the organized retailing in India have started recently and

is

concentrating

mainly

in

metropolitan

cities.

The growth in the Indian organized retail market is mainly due to the change in the consumers behavior. This change has come in the consumer due to increased income, changing lifestyles, 25

and patterns of demography which are favorable. Now the consumer wants to shop at a place where he can get food, entertainment, and shopping all under one roof.

Retail market in the organized sector in India is growing can be seen from the fact that 1500 supermarkets, 325 departmental stores, and 300 new malls are being built. Many Indian companies are entering the Indian retail market which is giving Indian organized retail market a boost. One such company is the Reliance Industries Limited. It plans to invest US$ 6 billion in the Indian retail market by opening 1000 hypermarkets and 1500 supermarkets. Pantaloons is another Indian company which plans to increase its retail space to 30 million square feet with an investment of US$ 1 billion. Bharti Telecoms an Indian company is in talks with Tesco a global giant for a £ 750 million joint venture. A number of global retail giants such as Wal-Mart, Carrefour, and Metro AG are also planning to set up shop in India. Indian organized retail market will definitely grow as a result of all this investments. http://diamondworld.net/default.aspx

Gems & Jewellery Gems and Jewellery sales and marketing received a facelift with theadvent of the supermarket culture. As organized retail in India progresses to the next lap, Sad anand Subramanian checks for Diamond World with some precious Industry players about their preparedness and strategy to achieve maximum mileage.

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As India reacts to a retail revolution, the hitherto sober gems and jewellery industry seems to have jumped on the bandwagon with a clear plan of action. The industry has already made a mark by capturing 3 per cent of the organized retail space thanks to the leadership shown by a handful of companies prepared to dazzle the world. While organized retail under this segment impressively grows at over 50 per cent annually, deliberations are on to arrive at what the industry in general must do to keep the customer perennially delighted. The gems and jewellery market in India is estimated to be about Rs.80,000 crore and the topmost agenda is to adopt the right strategy to accelerate its growth keeping in mind current global dynamics. For now the industry faces keen competition from other luxury goods such as electronic innovations and other personal accessories The Indian gems and jewellery industry is one of the fastest growing segments in the Indian economy with an annual growth rate of approximately 15 per cent. The domestic market is estimated to be around US$ 16.1 billion and the All India Gems and Jewellery Trade Federation, a nodal agency representing 300,000 jewellers across the country, expects it to grow to US$ 25.2 billion in two to three years. The country is also the largest consumer of gold in the world. It consumes nearly 800 tonnes of gold that accounts for 20 per cent of world gold consumption, of which nearly 600 tonnes go into making jewellery. India is also emerging as the world's largest trading centre for gold targeting US$ 16 billion by 2010. The industry has the best skilled manpower for designing and producing high volumes of exquisite jewellery at low labour costs. 27

Diamonds India is the largest diamond cutting and polishing centre in the world—the industry enjoys 60 per cent value share, 82 per cent carat share and 95 per cent share of the world market in terms of number of pieces. In other words, nearly 9 out of 10 diamonds sold worldwide are cut and polished in India. India exported cut and polished diamonds worth US$ 14.18 billion in 2007-08. Due to the Indian consumers’ attraction for diamond for its high aspirational store value, Rio Tinto has launched pink diamond for the first time in India on the occasion of its 20th anniversary in the country.

Organized Retailers

Branded Jewellery:The journey of branded jewellery in India has been full of trials and tribulations. Branded jewelers have had to coax consumers out of buying jewellery from their family jewelers to trusting a product bought off the shelves. Furthermore, Indian consumers gravitate towards 22K gold and have little tolerance to gold below 22K. Almost all branded jewellery is made from 18k gold, which is an international standard. Finally, Indians purchase jewellery as an investment option and hence are not overly concerned by designs, which is the USP of branded jewellery. Riding the Indian economic wave is a class of ‘Nouveau Riche’ Indians. Apart from possessing greater purchasing power, the ‘Nouveau Riche’ 28

Indians are more adventurous and willing to try newer and trendier products. Suddenly demand for branded jewellery in India is picking up pace, driven predominantly by the ‘Nouveau Riche’ Indians The branded jewellery industry in India is poised for a period of sustained growth. A number of individual players in the branded jewellery sector are recording close to 80 percent growth rate. Growth prospects for the Indian economy are extremely bright which would translate to greater sales of branded jewellery. The retail boom has spawned a large number of brands in the jewellery segment over the past year with many more to come. These players have been aggressively and extensively focusing on developing strong brands and large retail operations. Gitanjali Gems Ltd is one of India's leading fully integrated jewellery groups. Gitanjali itself boasts of around 25 jewellery brands.

Organized Jewellery Retail in India: India along with China is one of the fastest growing economies of the world. In addition to high GDP growth, India is the second most populous nation in the world. Both these factors work in favor of retail. Understandably, the AT Kearney Global Retail Development Index 2008 (GRDI) placed India on top of its emerging retail destination chart. The GRDI analyzes various parameters that are conducive to organized retail and ranks new markets to help retailers make strategic investments.

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About, 96% of Indian Jewellery Market is unorganized. The unorganized sector represents 300,000 traditional retailers or “Family jewelers” who are present only in one town. The organized sector accounts to only 4 percent. However, Reliance, Tanishq and other Luxury goods companies are exceptions to an otherwise unorganized sector. They represent the future of jewellery retail in India Reliance is set to compete with Tata’s jewellery arm Tanishq. Tanishq with 100 stores in over 53 cities is currently India’s first and largest jewellery retail store. According to analysts at Technopak Advisors Indian jewellery market is poised to grow at 15 percent annually, while branded jewellery is pegged to grow at 30 percent. Luxury goods companies, which until recently had a very limited presence in India, are eagerly seizing the opportunity to sell exclusive jewellery to rich Indians. Tiffany, Dolce Vita, Bvlgari, Chopard, Cartier and Harry Winston have a presence in India. Other international players such as Thailand-based Pranda Jewelry and Christian Dior are said to be foraying into the Indian jewellery retail sector soon. Malls and Online Shopping: Organized retail, branded jewellery and online shopping are going to be the biggest growth areas for jewellery retail. Jewellery retailers have taken notice of this opportunity and more retailers are taking the organized retail approach, introducing brands and creating a channel for online shopping.

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According to ASSOCHAM, the current size of the retail jewellery trade in India is worth Rs 1,12,000 crore. The jewellery market has been undergoing a gradual metamorphosis and plain gold is giving way to diamonds, platinum and colored gemstones. The current trend also reveals a shift in the buying pattern where the family jeweler is being replaced by branded jewellery makers

This literature on consumer online purchasing decisions has mainly concentrated on identifying the factors which affect the willingness of consumers purchase jewellery on internet this study “A study on internet retailing of major jewellery brands in India” is focus on online jewellery retailing and consumers perceptions & Experience about online jewellery retailing. The classic consumer purchasing decision-making theory can be characterized as a continuum extending from routine problem-solving behaviors, through to limited problemsolving behaviors and then towards extensive problem-solving behaviors 31

[Journal of Electronic Commerce Research, VOL. 6, NO.2, 2005]. In traditionally consumer select the jewellery retailer based on the trust before services offered by the online service providers. The traditional framework for analysis of the buyer decision process is a five-step model. Given the model, the consumer progresses firstly from a state of felt deprivation (problem recognition), to the search for information on problem solutions. The information gathered provides the basis for the evaluation of alternatives. The development and comparison of purchasing evaluation criteria result in the actual decision to buy. Finally, post-purchase behavior is critical in the marketing perspective, as it eventually affects consumers’ perception of satisfaction/dissatisfaction with the product/service. This classic five stage model comprises the essence of consumer behavior under most contexts. (Journal of Electronic Commerce Research, VOL. 6, NO.2, 2005) New product development (NPD) and planning has assumed a heightened level of importance in the modern world as organizations recognize the need to improve the NPD process and its outcomes (Allen 1993, Power 1993). In this part of the paper, the new product development literature will be reviewed— specifically that relating to the actual process of NPD. The section begins by exploring the nature of innovation and what innovation is considered to be. The section then discusses what constitutes a new product and the role extensions play. Next, the benefits & opportunities and the costs & risks of NPD for organizations are presented. This is followed by a review of the evolution of generations of NPD models —the generic (sequential) and various extension NPD models (stage-gate, fuzzy-gate, rugby, activity blocks, multiple convergent processing, continuous learning, QFD, return maps, chaos approach) that appear in the literature. Key NPD success factors are then profiled. The section concludes with a summary and evaluation of the NPD models, including a table indicating the usefulness of each model 32

for NRCD. As a myriad of uses and applications of retail meat price data exist, the quantification of the shortcomings in the collection and reporting of the historical retail meat price data becomes an all-

encompassing task. Detecting the shortcomings in the current retail price data and making suggestions for improvements begins with an examination of some of the applications of retail meat price data. To limit the scope of this study, only those applications of retail meat price data as they apply to the process of academic research and policy analysis were considered. Past and present research efforts will, therefore, provide the basis for a critical evaluation of the usability, efficiency, and accuracy of retail meat price data.

Over the last 30 years, problems within the beef industry have necessitated changing the focus of research efforts. As the research focus has changed, so have the data needed to conduct the research. Table 2.1 is a summary of the main policy issues that have received attention over the last three decades within the beef industry as well as the data needs associated with these issues. During the 1980’s and into the early 1990’s, emphasis was placed on understanding the dramatic changes and shifts in the demand for beef. Much of the literature focused on modeling demand and developing econometric models of demand shifts to better identify and explain all the factors that effect demand. (Brester and Wohlgenant, 1991; Capps and Nayga, 1990; Lusk, Fox, Schroeder, Mintert and Koohmaraie, 1999; Purcell, 1998). Many of these research efforts examined demand shifts in terms of price changes, demand elasticities, and other measures of price. These research efforts served to focus attention on the effect of retail demand changes on the farm-to-retail price spread for beef and the derived demand for beef cattle at the farm level. Wohlgenant and Mullen (1987) and Bessler and Akleman (1998) focused on issues of price spreads in an attempt to quantify the effects of various shifts in the demand and supply on, the retail-to-farm price 33

ratio, derived demand elasticities, and ultimately, the farmers share of retail food expenditures.

Researchers also started examining the issues of simultaneity and structural change, particularly as the latter emerged as a driver of the U.S. demand for meat (Eales and Unnevehr, 1993). With this research, researchers tried to account for apparent shifts in demand due to structural changes in supply. An example of such changes in supply that shifted the supply curves for meat steadily outward are increased pork and broiler feed efficiency, higher beef carcass dressed weights, and the beef herd liquidation following feed price escalations in the early 1970’s. Such factors would have contributed to a false appearance of demand growth, when the converse was true in some meat industries, particularly in the

beef sector.

Another prominent issue that came to light in the 1990’s is price asymmetry (Goodwin and Holt, 1999 ; Assam, 1999; Paul, 1998). That farm level prices have not kept up with changing prices at the retail level led to research into this area as observers questioned the extent to which retail-level shocks are realized at the farm level. An overall concern in this area is whether pricing patterns in food markets are cost or demand driven. Since both prices and costs are involved, understanding both these aspects is

critical. In all aspects of the research topics and policy issues receiving prominence in the beef industry over the last couple of decades, meat price data are an important input in the research process (Table 2.1). The price data requirements may vary, but often the data needs include the price of beef at the farm, wholesale, or retail level, or the price of substitute meats at the retail level. Weekly beef prices – producer prices, wholesale prices for boxed beef cutouts, retail beef prices – are typically favored.

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Competitive advantage of Indian jewellery industry: The factors leading to the Indian jewellery industry’s growth are many. A near dominance in diamonds and colored stones, manufacturing excellence, forward looking entrepreneurs, liberalized government policies and an extensive international marketing network has helped India establish itself as one of the leading jewellery centers in the world. Moreover, its high consumption of gold, steady inflow of silver and growing interest in platinum enable India to develop the entire range of jewellery, in plain metal and studded, that caters to the desires of every market

The Indian jewellery industry is having competitive advantage in the world market due to its low cost of production and availability of skilled labor. The Indian diamond industry has acquired leadership position in cutting and polishing of rough diamonds. India has the world’s largest cutting and polishing industry, employing around 8,00,000 people (constituting 94 per cent of global workers) with more than 500 hi-tech laser machines. The industry is well supported by government policies and the banking sector - around 50 banks provide nearly US$ 3 billion credit to Indian diamond industry.

(Numerical source from ibef.com) 35

Precious Metals are used in Indian jewellery market: Gold The current consumption of gold in India is estimated at over 900 tones, used mostly in 20 / 22 carat jewellery. Nearly 95 per cent of gold is used to manufacture gold jewellery in the domestic markets and the remaining 5 percent is exported. Gold consumption in India is primarily aimed at investment.

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Silver India annually consumes around 4,000 tones of silver. Silver jewellery and other articles for personal use, especially in the rural areas, account for the bulk of the sales. India is also the third largest industrial user of silver in the world, after the US and Japan.

Platinum Platinum or white gold, targeted at the premium jewellery segment, is gaining preference of designers and consumers globally. While India’s share in the global platinum jewellery market is growing by 19 per cent annually, it continues to be is less than one per cent in the global platinum jewellery market. Given the global growth and the maturing of the Indian market to international trends, this represents an area for potential growth in India.

Gemstones India’s gemstone industry has been growing due to the popularity Of gemstone-studded jewellery across the globe, with an estimated turnover at US$ 0.22 – 0.26 billion. Jewellery The Indian jewellery market is one of the largest in the world. The Indian market size at US$ 13 billion is second only to the US market of US$ 40 billion and is followed by China at US$ 11 billion.

(Source: Indian brand Equity foundation, ibef.com)

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Analysis and Interpretation Confirmable Analysis An analysis is made for a sample based on the processes followed for indenting at World of Titan, the factors involved, the area in which the store is located, etc are also analyzed. The Survey was conducted for Store managers, Store officers and Franchisee owners.

The sample is collected for 12 respondents (12 WOT Stores in Hyderabad) and the analysis is drawn for the questions. The Responses were varied from store to store as some were managed by the franchisee themselves, few are flagship stores of TITAN, and others are being headed by the store managers. The indenting followed by each store is varied based on experience. To avoid biased answers, a Questionnaire has been drafted with close ended Questions and given to the respondents to fill up.

As each store’s response is important, and to understand the positioning of these stores in terms of the indenting processes, SPSS Statistics 17.0 software has been used to draw up analysis. MS Excel has also been used for summing up the solution for each question and draw up a chart.

•

Certain marks provided for each preferences and choices.

•

Results were ranked based on maximum marks obtained. 38

Usual Purchase Place:

SL

1 2

Particulars Traditional Jewellery Purchaser Retail Store purchaser

Total

No.Of.Respode nt

100

57

100

43

Interpertation: The most of the people buying the product Traditional Gold smith and 43% people are buying retail show room…

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Important Factors: SL

Particulars

1 2 3 4 5

Design

6 7 8 9 1 0

Price Purity Brand Image Ambience Promotional activities variety Display Service family and friends influence

100 100 100 100 100

No.Of.Respod ent 17 9 9 14 6

100

14

100 100 100

8 8 9

100

6

Total

Interpertation: Consumer are given to mostly imporatant factors for buying, in this analysis find out the result Design,Brand image, family and friends…

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What is that you purchase the most?

S L

Particul ars

Tot al

No.Of.Respod ent

1

22K gold

100

33

2

hall mark gold

100

27

3 4 5 6 7

Platinum

100 100 100 100 100

4 14 9 10 3

Silver Diamond Pearl Others

Interpretation: The people mostly buying the product 22k Gold and Hall mark gold

What are the most frequently purchased product?

41

S L 1 2 3

Particulars Ring Earring chain

Tot al 100 100 100

No.Of.Respod ent 23 17 16

4 Necklace/Pendent

100 19

5 Bracelet

100 10

6 Matching sets

100 8

7 others

100 7

Interpretation: Mostly and regularly buying ring and chain, earring….

What are your design preferences?

42

S L 1 2 3 4

Particul ars Basic Classical Modern Ultra Modern

Tot al 100 100 100

No.Of.Respod ent 26 22 28

100

24

Interpretation: All Jewellery consumer now a days prefer model and ultra model….

What are the main occasions you buy?

43

S L Particulars 1 Birthday

Tot No.Of.Respod al ent 100 27

2 Festival/New Year

100

20

3 Self-gratification

100

17

4 Wedding/engagement 5 Others

100 100

33 3

Interpretation: People are buying gold now a days for only wedding and birthday occasions….

How many times you purchase in a year?

44

S L 1 2 3 4 5 6 7

Particul ars Zero once Twice Three Four Five more than five times a year

Tot al 100 100 100 100 100 100

No.Of.Respod ent 0 6 8 12 21 25

100

28

Interpretation: They are buying gold more than five times in one year and middle class people buying four times…

What is the range you are mostly concerned when purchasing?

45

SL 1 2 3 4 5 6

Particulars High price & high quality High price & low quality Medium price & high quality Medium price & low quality Low price & high quality Low price & low quality

Total

No.Of.Respod ent

100

23

100

0

100

42

100

13

100

16

100

6

Interpretation: People wanted in medium price high quality mostly prefer and like them also our self…

What promotional activities influence your purchase?

46

S L 1

Particula rs Magazines

Tot al 100

No.Of.Respod ent 20

2

Newspaper

100

14

3 4 5

Radio TV Internet Word of mouth others

100 100 100

17 28 3

100

15

100

3

6 7

Interpretation: In jewellery retailers for increase our sales some promotional activity. According to people mostly heard TV, Radio, Newspaper…

What range of products do you like to purchase? 47

S L 1 2 3 4

Particula rs Rs.25,000

Tot al 100

No.Of.Respod ent 31

100

23

100

29

100

17

Interpretation: People are buying Rs.10, 000 to Rs.25, 000 in this rate…

Findings 48

 Most of the consumers to select jewellery shop based on the quality assurance of product given by retailers.  Only higher- end consumers are purchasing jewellery in jewellery specialty and organized retailers.  Most of the middle class and upper middle class people purchase jewellery from family retailers.  The most important promotional tool for jewellery retailers are T.V media & newspapers.  Word of mouth concept followed by traditional families and some of the youngsters influenced by their friends.  The main motivating factor of Madurai consumers are purchase jewellery for wedding/engagement.  Most frequently purchased product is ring.  The most people choose traditional gold smith because the retail show room now only entire the market so people are would like traditional gold smith.

Suggestion and Conclusion 49

Based on our research we divided consumers in to Floating people of Madurai, Madurai natives, Female office workers and teenage girls, Business class people. Designed different 4p’s of different consumers. Place: Mainly at the Exhibition Hall that provides an interesting environment for visitors and customers. The customers should be served with free food and drinks to encourage them to stay longer and purchase more merchandise. Price: Make available products of all price ranges. Product: Make available products and services according to customer needs. Some jewellery should be designed with Madurai traditional manner. Promotion: Distribute cash coupons to stimulate customer visits and spending, and to encourage repeat purchases.

Madurai Natives: 50

Place: retail shop should be in specialty areas and bazaar areas. Price: Make available products of all price ranges. Product: Make available products of all designs and varieties. Promotion: Advertise in all local T.V channels and radio. Create positive impression and believes about the shop among Madurai people by utilize word of mouth concept. Female office workers and teenage girls: Place: Organized and jewellery specialty stores should have a simple decoration that gives customers a sense of freedom to shop. Price: Range from hundreds to thousands rupees . Product: Emphasize on innovative and fashionable designs. Diamond and gemstones merchandise should be as trendy as possible. Promotion: Distribute membership cards to enhance brand loyalty and stimulate repeat purchases; other promotional activities; advertisement in ladies’ magazines with coupons; partnership with other merchants such as cosmetics retail shops and fitnesscentres.

Business class people: Place: Retail shops should be close to hotels or exhibition venues. 51

Price: High starting from thousands of rupees. Product: Top ten sales products; small size and easy to carry Promotion: Partnership with hotels or service departments; advertising on the magazines, leaflets and intranets of hotels.

Conclusion

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 Jewellery is one of the investments.  Because easily converted in to money.

 Retailer should focuses on quality assurance of their product.  Consumers attitude towards jewellery slightly deviate, investment into fashion and trends  Because most of female office workers and teenage girls taking decisions independently.  So retailers should focuses on the new fashions and used advanced technology while manufacturing products.

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