bilal ahmed shaik bangalore survey final report

8/13/2019 BILAL AHMED SHAIK BANGALORE SURVEY Final Report

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Team Coordinator:

Bilal Ahmed Shaik

ALL THAT GLITTERS IS

USUALLY GOLDASURVEY ON JEWELLERY

GROUP 2

BATCH 24E

NOVEMBER 29, 2013


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Group 2 Survey on Jewellery Batch:24E

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ACKNOWLEDGMENT

We are grateful to our Faculty Mr. Janardhan Shastry for the constant support

and guiding us throughout this Survey and providing us her valuable inputs

for its successful completion.

This Survey is done to study the Indian Jewellery market which has a

prominent role in India.

Lastly we would thank all the group members who are associated with this

Survey.


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Index

1. Introduction32. Objectives...........53. Relevance of Study.64. Scope of Survey..75. Methodology...86. Limitations107. Analysis and Interpretation of Data..118. Conclusion36


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Introduction

India is the worlds largest market for jewellery. More than fifty percent of the

demand for gold jewellery in the world comes from India. Since ancient times

gold has been considered auspicious by Indians and has become deeply rooted

in religious and social customs of the country. From birthdays to marriages to

anniversaries every event is commemorated by buying jewellery. For many

families across the nation owning gold jewellery is a matter of pride and

prestige. In the average Indian household the purchasing of jewellery may

sometimes take precedence over all other expenses.

Gold has long been considered to be a very safe and low risk investment. It is

considered to be a safe haven in times of economic uncertainty. Gold has

always been considered as one of the most liquid assets and is a universal

currency. Traditionally jewellery has been used as leverage against loans taken

through money lenders and pawnbrokers. The recent trend of banks and non-

banking finance companies offering gold loans, where the jewellery is used as

collateral against the loan has allowed some of the liquidity that was lying

dormant in the hands of the consumer to return to the market. Coupled with

lower interest rates and better services it has lured even more people towards

purchasing jewellery not just as a vanity but as an investment.

The jewellery business is considered to have a high potential for profit on

account of the demand. The fact that the price of the precious metals used


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Objectives

Primary Objective:

The primary objective of the survey is to study the relationship between buyers

and sellers in the jewellery market and to understand the effects of the current

economic conditions on them.

Secondary Objectives:

1. To study the different types of customers.2. To understand the factors that influence the customer while purchasing

jewellery.

3. To understand the reasons behind customers decision to purchasejewellery.

4. To study the factors influencing choice of seller.5. To study the different types of sellers.6. To understand different factors affecting their business.7. To study the different methods used to attract customers.


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Relevance of Study

In the last two years the price of gold has increased by an estimated 30%. The

instability in the economy and slower growth has resulted in more and more

people buying gold jewellery as an investment. This has directly affected the

growth of the country. Excessive importing of gold has resulted in a huge

depletion of our countrys foreign exchange reserves. It has also caused the

amount of liquidity in the markets to reduce as investors divert their funds

towards purchasing gold. Over the last few months the government has taken

steps to reduce the demand for gold. It has raised prices by levying a higher tax

on the import of gold.

In this current scenario it is necessary to understand the mind-set of the

consumers and the sellers. This study will give us a better understanding about

this important factor in our nations economy. It will also help us understand

about the effectiveness of government policies. It will allow us to understand

how the jewellery market functions from the point of view of both, buyers and

sellers.


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Questionnaire:

There are two questionnaires. The questions are designed to help us create a

complete profile of the respondent. There were both open-ended (Alternative

answers) and close-ended (Yes or No) questions. All the questions were

multiple choice in nature.

Location:

The survey was conducted in two areas of Bangalore; Commercial Street in

Shivaji Nagar and MG Road. The reasons for choosing the two areas were;

1. Commercial Street, Shivaji Nagar: Had a good collection of smaller localjewellery stores.

2. MG Road: Had fewer but expensive high end jewellery stores.The 13 members were divided into six groups of two each. In each group one

person was given the questionnaire to ask the person taking the survey and the

other was handed a table to be able to record the answers. Three groups were

responsible for surveying the buyers and the remaining for the sellers.

Two groups were assigned to conduct the survey at MG Road and the remaining

four were assigned to conduct it at Shivaji Nagar. Each group was required

survey a minimum of five people.


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Limitations

1. Only a small area was considered.2. Shortage of time.3. Shortage of manpower.4. All respondents did not answer all questions.

5. The sample size is small.6. Budget limitations.


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Analysis of Data Collected


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Sellers

Average number of buyers in a day:

We observed that smaller local shops received less than 10 buyers a day

whereas the larger stores in more upmarket areas can receive more than 500

buyers in a day.

The medium sized stores received more than 50 customers daily and depending

on the location some received up-to 500.

35%

35%

15%

5%

10%

Below 10 50-100 100-250 250-500 Above 500


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Methods used to attract customers:

None of the shops surveyed used pamphlets to promote themselves.

10% of the shop owners used banners for promotion. These usually consisted of

large and medium sized stores.

28% advertised in newspapers. This method of promotion was used only by

sellers in upmarket locations.

10% of the sellers used TV advertisements. This method was only used by the

major branded sellers.

38% used discounts and offers to lure customers. This was usually seen in small

and medium sized stores.

14% claimed that they did not advertise but depended on their reputation,

quality and designs to attract customers.

10%

0%

28%

10%

38%

14%

Banners Pamphlets news paper ad tv ad discounts & offers Sales,quality,desgin


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Effect of gold prices on sales:

73% of the sellers claimed that despite the rise in the price of gold the sales

have increased. This indicates that in spite of the government taking steps to

reduce the demand for gold the market remains largely unaffected.

The 27% who claimed that sales had fallen include smaller local shops.

27%

0%

73%

Yes,sales became down No, there is no effect Sales have increased


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Preferred mode of payment:

Majority of customers now use plastic money to make payments.

28%

29%

32%

11%

cash creditcard debit card all


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Maximum expenditure by a customer:

43% customers spend the maximum during weddings and festivals. This is due

to the fact that buying jewellery for weddings is one of the major characteristics

of any Indian wedding. Buying jewellery on certain religious occasions and

during festivals is considered auspicious.

Only 14% said that customers spend more on other occasions such as birthdays,

anniversaries etc.

43%

43%

14% 0%

Festivals Weddings Other Ocassions


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Availability of Gold Scheme

The larger sellers are now providing their customers the benefit of Gold

Scheme. In this scheme the customer can deposit small amounts of money

periodically like a recurring deposit. On maturity of the scheme the customer

can purchase jewellery equivalent to the value of the investment.

Annual Turnover:

45%

55%

Yes No


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45% claimed that their annual income was less than 50 lac. This category

mainly consisted of smaller shops.

5% claimed that their turnover was between 50 lac and 1Cr. This category

consisted of medium sized and centrally located small stores.

20% claimed that their turnover was between 1Cr. and 5Cr. This category

consisted of medium sized and traditional jewellers in upmarket areas.

30% claimed that their turnover was above 5Cr. This category consisted of

established stores in upmarket areas and outlets of large jewellery brands.

Making Charges on Jewellery:

45%

5%

20%

30%

less than 50 lac 50 lac to 1 cr 1cr to 5cr more than 5cr


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10% said that their making charges were less than 2% of the MRP.

10% claimed that making charges varied between 2-5% of MRP.

30% claimed that making charges varied between 5-10% of MRP.

40% claimed that making charges were more than 10% of MRP.

10% said that it depends on the type of jewellery.

Source of Materials (Gold)

10%

10%

30%

40%

10%

less than 2% 2-5% 5-10% more than 10% depends on orticles


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The majority, 48% bought gold for making the jewellery directly from the

market.

The respondents said that imports had reduced (19%) due to increase in import

duties.

16% exchanged old jewellery to use as source of raw material.

10% directly buy from dealers and distributors.

Customer Preference:

48%

19%

16%

10%

7%

market import exhange old jewelery dealers remanufacture


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An overwhelming number of customers (67%) prefer gold over every other

material while purchasing jewellery.

Buyers

Average Customer Age:

67%

4%

11%

11%

7%

gold platinum silver diamonds pearls


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The majority 40% of the respondents purchasing gold were between the age of

30 to 40 years.

32% were between the ages of 25 and 30.

20% were above 40 years of age.

8% were below 25 years of age.

Customer Job Profile:

20%

32%

40%

8%

Less than 25 Years 25 to 30 Years 30 to 40 Years Above 40 Years


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43% of the customers were housewives.

26% worked at a private business.

22% were employed at a corporate organization.

9% were students.

Beneficiary of the purchase:

22%

26%

43%

9%

Corporate Employee Business Housewife Student


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58% were making the purchase for themselves for their personal use.

27% were purchasing it as a family and usually with the intent to use in rituals.

15% were purchasing jewellery as a gift. The gift was usually for someone close

such as family members or on occasion of weddings.

Major reasons for buying jewellery:

58%27%

15%

Self Family As Gift


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40% were buying jewellery as an investment. This reaffirms the fact that when

the economy is unstable or stagnant, gold is the most preferred form of

investment.

37% were purchasing jewellery on account of events such as weddings. This is

mainly due to the relating of all major social events in India to the purchase of

jewellery since many generations.

20% were buying the gold on account of the festival season as gold jewellery is

considered auspicious.

Only 3% were purchasing jewellery on account of work related events.

20%

37%

40%

3%

Festival Event(Weddings, Birthdays,) Investment Work Events


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Nature of Purchase:

77% of the customers said that the purchase was planned. This is in line with

the general opinion that Indians are cautious buyers when making more

expensive purchases. The purchasing of jewellery was a family decision.

22% made the purchase on an impulse.

Place of Purchase:

77%

23%

Planned Impulsive


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50% of the purchases were made at branded stores.

40% at a local jeweller.

10% in shopping malls.

Mode of Payment

40%

50%

10%

Local Jeweller Branded Store Shopping Malls


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43% of the payments were made using a credit card.

34% were made using debit cards.

23% were made in cash.

This is in line with the findings from the sellers.

Frequency of Purchase:

23%

34%

43%

Cash Debit Card Credit Card


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57% of the people surveyed said that they purchased jewellery at least once in

six months. These purchases usually coincided with major festivals such as

Dusheera and Diwali.

20% purchased jewellery at least once every three months.

13% only purchased jewellery once a year.

10% claimed to have not bought jewellery in the last one year.

Influence of advertisements:

13%

57%

20%

10%

Once a year Once in 6 months Once in 3 months none


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52% of the customers were aware of the seller on account of TV

advertisements. The customers were easily able to recall the names of the

jewellery brands that used TV advertising.

32% of the customers were influenced by ADs in newspapers.

14% of the customers recalled the jewellers from the posters placed around the

city.

Only 3% recalled seeing ADs for jewellery stores online.

Important factors while making purchase:

52%

31%

14%

3%

TV Newspaper Posters Online


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42% of the customers consider price to be the main factor while making a

purchase. This indicates the price conscious nature of the Indian consumers.

23% of the customers consider quality to be the main deciding factor while

purchasing jewellery.

23% of the customers consider the reputation of the jeweller while making the

purchase.

Only 3% and 4% of the customers considered the brand and the design as the

deciding factor.

Knowledge about KDM:

47%

23%

4%

3%

23%

Price Quality Design Brand Reputation


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60% of the respondents were aware of KDM. This shows that the consumers are

now more aware while purchasing jewellery.

40% were ignorant about the meaning of KDM jewellery.

KDM jewellery is jewellery that does not consist of Cadmium. Presence of

cadmium in jewellery can have adverse effects on the health of the user. It can

even lead to death.

Factors influencing choice of store:

60%

40%

Yes No


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47% of customers considered the prices offered by the jewellers as the main

reason for choosing the store.

27% of the customers chose the jeweller based on the years of trust and

familiarity with the jeweller.

13% chose shops based on how close they were to their residence.

10% chose a store solely on its brand value.

Only 3% chose a store based on the variety of jewellery offered.

27%

47%

13%

3%

10%

Trust Price Proximity Variety Brand Value


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bilal ahmed shaik bangalore survey final report

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