Marketing Management Assignment: Jewellery Buying Behaviour

Jewelry Buying Behavior Page 1
MARKETING MANAGEMENT
ASSIGNMENT

JEWELLERY BUYING BEHAVIOUR

Submitted By
Ashwin A Kumar
Roll No : 215112004

Introduction
India is a country which is rich in culture and heritage. Gold has played an important part in
India's culture and continues to play an integral part in our lives. Gold plays a pivotal role in
our daily life. It can be clearly said that Indians love for gold is almost a religion. Besides
being a symbol of wealth and status, gold is also used for worship and culture. Indian
jewelry varies from region to region catering to local tastes. In India we have the traditional
and modern methods of making gold. In India, jewelry design has been greatly inspired by
nature: paisley motif of the mango, rice grains, melon and cucumber seeds, etc. The modern
methods have new process which are used in designing ornaments and are far more popular
than the traditional ones.

In the past 20 years India's economy is growing at a rapid rate and the purchasing capacity of
an Indian has increased to a great extent. Every Indian now aspires to buy gold. In India,
nothing is more valuable than purchasing gold. For Indians, gold is wealth, financial security
and also a fashion statement. These factors make India the largest consumer of gold in the
world.

Historical Perspective

The history of gold began in remote antiquity. According to archaeological evidence, man's
first encounter with gold was supposed to be in the 40,000 B.C when experts found traces of
gold in Spanish caves used by the Paleolithic man. Initially gold was used as a decorative
item in several cultures around the world. Egyptian cultures were specifically known to be
patrons of the yellow metal and it reflected in their culture immensely. From India's
perspective, Indians from per-historic times had a penchant for adorning themselves with
jewelry made from gold. Ever since time immemorial people used to adorn themselves with
a variety of jewels like necklace,anklets,earrings etc. With the passage of time, people soon
learned the art of polishing gold and silver and to extract semi-precious gems and stones
from the mines. In ancient times gold was used for various purposes like, jewelry-making,
barter system, decoration, coin minting etc.

Jewelry Sector in India

Indian jewelry industry is growing at a fast rate of almost 15%. In India, there are around
15,000 vendors in the gold processing industry and about 450,000 gold smiths spread across
the length and breadth of the country .There are also about 6000 vendors in the diamond
processing industry in India. Indias total consumption of gold in 2011 was around Rs 974
billion. Gold is consumed most in South India (37%), West India (32%), North India (18%)
and East India (13%) in that order. Around 75% of India's total gold consumption is for
jewelry, 23% for investment and 2% for industrial and decorative use.

Classification of Jewelry industry

The jewelry industry can be broadly classified into two types which in turn are further
divided into six types. The pictorial representation of the classification of the industry is
given below


The classification of the jewelry industry is given below:

Competitors in Indian Jewelry Market

There are around 15,000 gold vendors in India. Some of the prominent and reputed ones in
India are listed below

Tanishq
G.R. Thanga Maligai
Saravana Stores Thanga Maligai
Nakshatra
D'Damas
Asmi
Nirvana
Gili
Kirtilal Kalidas & Co
Vummidi Bangaru Jewelers
Gitanjali
Joy Alukkas
Jos Alukkas
Prince Alukkas
Francis Alukkas
Prince Jewelry
Tata Gold Plus
Khazana Jewelry
NAC Jewelers


Comparison between Branded and Non-Branded Jewelry

Branded Jewelry Non Branded Jewelry
Name and reputation gives confidence
to buyer
Customers can tailor make their jewelry
according to their preferences
It comes with a written lifetime
guarantee
No written lifetime guarantee. Purely based on
trust of the customer
Excellent quality and service back up Minimum effort in packaging and service
Has a more contemporary and stylish
design
Usually bulky and traditional
Available in multiple outlets Available only in traditional jewelry outlets

Consumer Behavior

According to Leon G Schiffman and Leslie Lazar, Consumer Behavior is defined as the
behavior that consumers display in searching for, purchasing, using, evaluating and
disposing of products and services that they expect will satisfy their need. Also according to
Philip Kotler, Consumer Behavior is the study of how individuals, groups and organizations
select, buy, use and dispose goods, services, ideas or experiences to satisfy their need and
wants. Consumer behavior focuses on how individuals make decisions to spend their
available resources on consumption related items. That includes what they buy, why they
buy it, when they buy it, where they buy it, how often they buy it, how often they use it, how
they evaluate it after the purchase, the impact of such evaluations on future purchases and
how they dispose it. It studies characteristics of individual consumers such as demographics
and behavioral variables in an attempt to understand people's wants. It also tries to assess
influences on the consumer from groups such as family, friends, reference groups, and
society in general. Consumer Behavior can also be said to be an amalgamation of various
disciplines like psychology, social anthropology and sociology.

Factors affecting Consumer Behavior

There are several factors which affect Consumer Behavior. They are given below

Cultural
Social
Personal
Psychological

Factors such as cultural, social, personal, psychological which affect consumer behavior
have other major classification in them which will also play a major role in affecting the
behavior of a consumer to a great extent. The pictorial representation of it is given in the
next page.

The visual representation is given below.

Types of Buying Behavior

1. Complex Buying Behavior: Complex buying behavior involves a three-step process;
first, the buyer develops beliefs about the product. Second, he or she develops
attitudes about the product. Third, he or she makes a thoughtful choice. When the
customer is involved in complex buying, they are aware of significant differences in
brands. This is the case when the products are expensive, bought frequently, risky
and highly self-expressive. In this case the customer does not know much about that
category. For example, a person buying a personal computer may not know what
attributes to look for. Many product features carry no meaning, unless the buyer has
done some research.

2. Dissonance Reducing Buyer Behavior: Sometimes the consumer is highly involved
in a purchase but sees little difference in brands. The purchase is expensive,
infrequent, and risky; therefore the consumer is highly involved. In this case, the
buyer will go around learning what is available, but will buy when he gets a good
price. After the purchase, the consumer might experience dissonance that stems from
noticing certain odd features or hearing favorable things about other brands. The
consumer will be alert to information that supports his or her decision. In this case,
the consumer first acted, then acquired new beliefs, then ended up with a set of
attitudes. Marketing communications should supply beliefs and evaluations that help
feel good about his or her brand choice.

3.Habitual Buying Behavior: There are many products which are bought under
conditions of low involvement and the absence of significant brand differences. Take
a simple example of salt. Consumers have little involvement in this product category.
They go to the shop and reach for the brand. If they keep reaching for the same
brand, it is out of habit, riot strong brand loyalty. It is evident that consumers have
low involvement with most low-cost, frequently purchased products. With these
products, consumer behavior does not pass through the normal sequence of belief,
attitude and, behavior. Consumers do not search extensively for information, evaluate
characteristics and make decisions on which brand to buy. Instead they are passive
recipients of information through television or print ads. The repetition of ads creates
brand familiarity rather than brand conviction. After making the purchase, they may
not even evaluate the choice because they are not highly involved with the product.
For low involvement products, the buying, process begins with brand beliefs formed
by passive learning & is followed by purchase behavior which may be followed by
evaluation.

4. Variety seeking Buying Behavior : There has some buying situation that an
characterized by low involvement but significant brand differences. In such cases the
consumer often goes into a lot of brand switching. Take the example of chocolates.
The consumers have some beliefs about chocolates, choose a brand of chocolates
without much evaluation, & evaluate the product during consumption. Next time, the
consumer may reach for another brand out of a wish for a different taste. In this case
the brand switching occurs for the sake of variety rather than dissatisfaction.

Decision Making

Decision making is referred to the series of steps which helps us in shortlisting one
alternative out of many alternatives.

Decision making involves the following:

Objectives must first be established
Objectives must be classified and placed in order of importance
Alternative actions must be developed
The alternative must be evaluated against all the objectives
The alternative that is able to achieve all the objectives is the tentative decision
The tentative decision is evaluated for more possible consequences
The decisive actions are taken, and additional actions are taken to prevent any
adverse consequences from becoming problems and starting both systems (problem
analysis and decision making) all over again
There are steps that are generally followed that result in a decision model that can be
used to determine an optimal production plan.
In a situation featuring conflict, role-playing is helpful for predicting decisions to be
made by involved parties.


Decision Making Process

Need Recognition and Problem Awareness

This is the stage when consumer recognizes a problem or need. The need can be triggered by
internal or external stimuli when one of the person's needs raises to a level high enough to
become a drive.

Information Search

Once the consumer has recognized a problem, they search for information on products and
services that can solve that problem. Belch and Belch (2007) explain that consumers
undertake both an internal (memory) and an external search.
Sources of information include:
Personal sources
Commercial sources
Public sources
Personal experience

The relevant internal psychological process that is associated with information search is
perception. Perception is the process by which an individual receives, selects, organizes, and
interprets information to create a meaningful picture of the world. Consumers' tendency to
search for information on goods and services makes it possible for researchers to forecast the
purchasing plans of consumers using brief descriptions of the products of interest.
Evaluation of alternatives
At this time the consumer compares the brands and products that are in their evoked set. The
evoked set refers to the number of alternatives that are considered by consumers during the
problem-solving process. Sometimes also known as consideration, this set tends to be small
relative to the total number of options available. Consumers evaluate alternatives in terms of
the functional and psychological benefits that they offer. The marketing organization needs
to understand what benefits consumers are seeking and therefore which attributes are most
important in terms of making a decision. It also needs to check other brands of the
customers consideration set to prepare the right plan for its own brand.
Purchase Decision
Once the alternatives have been evaluated, the consumer is ready to make a purchase
decision. Sometimes purchase intention does not result in an actual purchase. The marketing
organization must facilitate the consumer to act on their purchase intention. The organization
can use a variety of techniques to achieve this. The provision of credit or payment terms may
encourage purchase, or a sales promotion such as the opportunity to receive a premium or
enter a competition may provide an incentive to buy now. The relevant internal
psychological process that is associated with purchase decision is integration. Once the
integration is achieved, the organization can influence the purchase decisions much more
easily.

Post Purchase Evaluation
Post-purchase evaluation processes are directly influenced by the type of preceding decision-
making process. Directly relevant here is the level of purchase involvement of the
consumer. Purchase involvement is often referred to as the level of concern for or interest in
the purchase situation and it determines how extensively the consumer searches information
in making a purchase decision.

Reasons why Indians buy gold

There are several reasons why Indians buy gold. Some of them are listed below:
1) Gold is considered an equivalent for liquid cash: Gold is highly liquid and portable as a
security or asset. It can be converted to cash anytime when an emergency arises and is
considered a friend in need.
2) Gold is considered as Status Symbol: Especially in India, gold symbolizes wealth. In
Indian weddings the gold the bride brings in show her family's status and wealth and forms
part of the dowry given to bride. It is believed that a bride wearing 24k gold on their
wedding day brings luck and happiness throughout her married life.
3) Gold is a very good investment: Gold is an asset which has consistently increased in

value and thereby considered as a safe and secure investment. Gold is considered an
effective alternative which helps to reduce portfolio risk.
4) Gold is considered as a good gift item: It is precious and worthy across all cultures and
times. The gold jewelry is given as gifts during weddings, festivals and other special
occasions.
5) Gold has great religious significance: Gold is the symbol of the Hindu Goddess
Lakshmi and considered highly auspicious. Gold is brought or presented on festivals like
Dhanteras and Akshaya Tritiya. Toe rings are never made of gold as it represents the goddess
of wealth and should not be soiled by touching a human's feet.
6) Great Ornamental Value: No Indian woman can resist gold ornaments. Women of every
age and time have always loved wearing gold ornaments. Moreover, gold ornaments are
never out of fashion. It also may be remembered that wedding rings are also traditionally
made of gold to mark a long lasting relationship.
7) Great value as Heirloom: Gold jewelry is something which can be passed down from
one generation to the other as ancestral property.
8) Importance placed to events such as Akshaya Tritya: According to the Hindu
Calendar, Akshaya Tritiya is a very auspicious occasion for new beginnings. Buying gold is
also a popular activity as it is the symbol of wealth and prosperity. Gold bars, coins and gold
jewelry bought and worn on Akshaya Tritiya signify never diminishing good fortune. During
the period both banks and jewelers promote gold sales aggressively, offering the best prices
and discounts. Customer demand during Akshaya Tritiya surges due to a belief that gold
purchases go a long way in securing the future.

9) Gold used for wedding purpose: The one event that drives most of that demand is an
Indian wedding. There may be no wedding like an Indian wedding. The events can last for
days with music and dancing and traditions that go back centuries. Everywhere you look,
there's a collection of colors, flowers and food. And then there is also gold. Here it's a
symbol of purity that also shows off the couple's wealth and well-being.

Reasons for Kerala's obsession with gold

Kerala is one state in India which accounts for nearly one-third of India's total gold sales.
This is due to a large number of factors which are listed below.

1. Ability of Kerala based NRI's to invest large amount of money in gold.
2. Willingness to invest in gold.
3. Dowry system widely prevalent in Kerala.
4. Part of lifestyle.
5. Survey has proved that Kerala women do not like wearing the same jewelry on all
occasions. So they buy new ones frequently.
6. Stare Government patronage to the sale of gold industry.
7. Influence of elders in decision-making.


Statistical Data related to gold buying behavior

A survey was conducted by the ATR Institute of Jewelry Design regarding the gold buying
behavior amongst Indians. The survey was conducted amongst 550 respondents drawn from
10 Indian cities. Questionnaire method was adopted for field research and the data collected
were analyzed using statistical software such as SPSS and MS -EXCEL. The following
findings were obtained from the survey:

1. Indian city-wise gold buying behavior/trend

Product B'lore Chennai Cochin CBE Delhi Hyd Jaipur Kolkata Mumbai
Fashion
Jewelry
0.00% 0.00% 4.00% 4.00% 0.00% 0.00% 2.00% 0.00% 0.00%

Gold
Jewelry
studded
with color
gemstones
13.00% 0.00% 7.00% 5.00% 7.00% 0.00% 15.00% 2.00% 38.00%

Gold
Jewelry
studded
with
diamonds
45.00% 2.00% 5.00% 7.00% 4.00% 0.00% 65.00% 9.00% 22.00%

Plain Gold
Jewelry
71.00% 95.00% 56.00% 55.00% 87.00% 98.00% 11.00% 89.00% 36.00%
Pearl
Jewelry
0.00% 0.00% 4.00% 0.00% 0.00% 2.00% 2.00% 0.00% 0.00%

Platinum
Jewelry
5.00% 3.00% 9.00% 9.00% 2.00% 0.00% 5.00% 0.00% 2.00%
Platinum
Jewelry
studded
with
diamonds
5.00% 0.00% 15.00% 16.00% 0.00% 0.00% 0.00% 0.00% 2.00%
Silver
Jewelry
2.00% 0.00% 0.00% 2.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Synthetic
Diamond
Jewelry
0.00% 0.00% 0.00% 2.00% 0.00% 0.00% 0.00% 0.00% 0.00%

2. Occasions on which jewelry in bought in India
3. Brands trusted most and purchased by customers


4. To whom is the jewelry usually bought

5. Ornaments most likely to buy


6. Place of purchase

7. Frequency of purchase


8. Influences in choice of jewelry store

SWOT ANALYSIS (from buyer and seller perspective)

Strengths:

Available of plenty of variety
More spending power of people.
More sales due to increased buying
Large movement of money in market due to economic growth
Large cross section of people from various economic back grounds will buy
Producer, supplier, distributor, seller and consumer are benefited.

Weakness:
Dilution of quality is possible
Consumers tend to spend all their money on gold alone. Alternative mode of
spending is not there in other fields.


Opportunities:
Option to provide more varieties to consumers.
Can force people to increase their buying by spending more.
Can make realize the importance of gold as an investment option and make them buy
more.

Threats

Heavy competition amongst all sellers
Price of gold may increase due to heavy demand.
Chances of consumers purchasing power may be reduced due to unforeseen
circumstances like cut in bonus, reduce in salary etc.

Conclusion
Gold has played an important role in the life of Indians from time immemorial. They have
been an integral part of our culture and it is evident that gold is not alone used for jewelry
but for other purposes as well. Times and cultures have changed, people's perceptions have
changed, tastes have changed, people's outlook have changed, but the approach of people
towards gold has not changed and gold still continues to be an indispensable part in the life
of an Indian.


References
1. The Midas Touch, Business Standard
2. Marketing Management by Philip Kotler, Kevin Keller, Abraham Koshy, M Jha
3. Organization Behaviour by Jit S Chandan
4. Consumer Behaviour by Leon G Schiffman and Leslie Lazar
5. The Consumer Survey by Ved Prakash Sharma
6. The Real Price of Gold (National Geographic)
7. http://www.mbaknol.com/
8. http://en.wikipedia.org/
9. http://www.slideshare.net
10. http://www.tutor2u.net

Marketing Management Assignment: Jewellery Buying Behaviour

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Marketing Management Assignment: Jewellery Buying Behaviour

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Jewelry Buying Behavior Page 1

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