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An Analysis Of The Gift Market Within India Marketing Essay

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On the basis of the literature review and study of the gifting industry, there is a need to
introduce a newer and more innovative way to gift for individuals as well as corporate
houses. The research establishes the need for personalization [3] , creativity and
uniqueness to enhance the value of a gift. [4] It helps communicate clearly how much
meaning and value the recipient holds in the givers life. A gift which is personalized as
per the recipients interests, personality and hobbies makes it a more memorable
experience and is likely to lead to greater 'emotional connect' between individuals and
enhanced, more loyal business relationships for corporates [5] .
In spite of the added advantages of a personal and well thought of gift, people and
corporate houses are either hard pressed for time and are ready to pay a premium for
'convenience' and saving 'time' or they are at loss of 'how to express and what to
communicate' through a gift. Thus, establishing a need for service provider to fulfill the
above need gaps.
From a research perspective an attempt will be made to understand in the importance of
personalization in gifting and the role of gist service providers in the process of gifting.,

2.2 Research Gap


Research for gifting amongst individuals throws light on what is gifting, what
parameters do people look at before giving a gift, the trends and attitudes of certain
target groups towards gifting, anxiety in the gifting process. Among corporates the
research currently studies how corporate gifts help increasing and enhancing business
relationships and marketing efforts. There is a need to study specific parameters that
enhance the value of the gift and the gifting process. Through this project and the
preliminary research, gaps in the gifting industry for individuals and corporates will be
identified and researched further in detail

2.3 Nature of study


The flow that will be followed to arrive at an entrepreneurial opportunity and business
concept in the Indian gifting industry for the Venture Incubation project will include a
literature review on the gifting industry and primary and secondary research to support
the concept proposed. After this a business plan will be developed and tested in the
market. Finally an experiential report of the same will be given.

2.4 Deliverables of the Venture incubation project


Research findings
An innovative package and concept to provide gifts in a unique manner and provide
convenience to the individuals and corporates in the process of gifting
Validation report - by testing and implementing product and service offerings in the
market

Literature review
3.1 What is gifting?
The following is a study of the meaning of gifting and the unique trends in consumer
behavior related to 'gift giving'. Challenges to retailers and the negative effects of 'gifting'
have also been studied to understand what are the influential factors affecting a 'gift
giver and recipient'.
'Why we shop, Emotional rewards and retail strategies, by author Jim Pooler(2003),
explains 'Gifting' as a form of 'Shopping from the heart'. He states 'People will spend far
more money to please another person with a gift than they will spend on shopping for
themselves'. According to his study,' Gifting' represents one of the most illogical
shopping behaviors.

Why are people so anxious to please others with


gifts?

Pooler (2003) describes 'Gifting' as a tool to make a statement about one's feelings. This
in turn leads to strengthening of an 'emotional bond' between the giver and the
recipient. The emotion or expense in a gift is considered a measure of one's respect,
esteem or love for one another.
Example- a child drawing a card for his mother's birthday or a lover writing a poem or a
person spending hours looking for the perfect gift is making an emotional investment
and represents what one person thinks of the other.
'Gifts act as a tool for expression' especially when articulating one's feelings become
difficult. In such a case, they act as mediator between the two people involved.
According to Unitymarketingonline, the Greeting Card, Stationery, Gift Wrap & Party
Goods and Paper Crafting Report 2007 is a $37.4 billion market [6] .The greeting card
industry which specifically represents a $7.5 billion industry in the US market, thrives,
on its ability to provide emotional expression. Greeting cards are also commonly used to
accompany gifts well. [7] This multi-billion dollar industry offers real advantages of
helping one' express their deep emotions briefly' besides saving time, effort, money and
providing convenience. [8] According to Danziger, with 70 % of American household
purchasing greeting cards, it makes it the third most frequently purchased product that
people do not need. This directly implies the power of the 'gifting' and 'emotional
consumerism'.
'Gifting is a two way process' -A challenge disguised as an opportunity for the marketer
and retailer in the gift business is the understanding that a 'gift' is meant and directed
both towards the receiver and the giver. According to Pooler (2003), 'A customer is
always seeking re-assurance that the given gift will bring him/her as much emotional
satisfaction as the person for whom he is buying it'. Thus, gifts at one level bring
personal satisfaction and are self-indulgent in nature.
'People are irrational when they gift'- Another advantage for the marketer in the 'gifting'
business is the irrational and unjustified expenditure a consumer is willing to make on
it, so as long as it makes 'emotional sense'. Thus, customers are largely price insensitive,
especially if the strength of the relationship between the receiver and giver is strong.
This allows retailers t tap into the potential of high margin products.

'Gifting is largely occasion specific'-Lastly, occasions and holidays such as anniversaries, Valentines days and in India religious festivals such as Diwali and
Dhanteras represent an area of 'gifting' where demand is literally inelastic. Not
purchasing a gift on such days is unthinkable. Occasions such as Valentine's,
Anniversaries, Mothers day, where a son, husband, boyfriend is in a situation where he
must make a purchase act as a major opportunity for specialty stores selling chocolates, flowers, and jewelery. Male shoppers are more ready to high prices and do
not look for bargains in such situations thus presenting an advantageous scenario for
retailers.
'Gifting leads to anxiety'- David B Wooten has explored the negative effects of gifting by
detailing the emotional trauma a giver goes through in the process of choosing the
'perfect gift' for the recipient. Some of the factors that up the stress levels while gifting
are: [9]
Effect of the gift on the recipient- The giver is constantly thinking about the reaction of
the recipient towards the gift and the consequential effect on their relationship.. This is
possible when the effect of the gift on the recipient is positive and helps build and
strengthen the relationship between the giver and the recipient. Thus, this represents an
opportunity for retailers or gift service providers, who can make the experience of giving
gifts simple and tension free.
Obligation to reciprocate sparks tensions (Mauss1954)
Disparities and comparison between gifts may lead to negative emotional outcomes
(Belk and Coon 1993). This may be due to absence of set parameters or guidelines before
exchanging gifts.
Differences and expectations -Green and Alden (1988) cited differences between
individual goals and group expectations as sources of anxiety among givers. Sherry et al.
(1993) cited the unattainable expectations that recipients impose upon givers as a
possible. Both act as sources of anxiety as the consequences of such differences and
expectations are likely to be negative.
Inappropriateness of gifts- can lead to frustration, social embarrassment, threaten social
ties and likely to leave long lasting bitter memories. (Sherry et al. 1993).

Recipient woes- Otnes et al. (1992)have points out different types of recipients
"Difficult" and 'Picky' ones have expectations that are either hard to meet and
'Unfamiliar' ones have expectations that are hard to determine Such recipients impede a
gift givers efforts .
'Dark side of giving' [10] - Concerns about gift interpretation and the fact that a giver
cannot control these interpretations gifts suggest that that scholarship on selfpresentation and social anxiety can help illuminate what has been called a "dark side" of
giving.
'Retailers challenge and opportunity' -Keeping in mind the above frustrations and
anxiety that goes on in the mind of the consumer. It poses as a real challenge for
marketers, retailers and new gift service providers to mitigate these anxieties. This may
be providing convenience, better consumer insight, and personalized gifts. There seems
to be a need for specialists in the 'gifting service'

AN EXPANDED MODEL OF ANXIETY IN GIFTGIVING


The expanded model of anxiety in Gift Giving proposed by Wooten in this research
(Figure 1) explains the sources of the anxiety in gift giving . This brings out why retailers
and marketers must try and mitigate these emotional anxieties

NOTE.-All effects are positive unless otherwise


noted. The letters G, R, and S denote
characteristics of givers, recipients, and
situations, respectively.
Figure 1.1-Study of trends, attitudes and behavior of youth towards gifting. Megha
Nainwal, Batch of 2004, MICA,

3.2 Gifting Industry- World and Indian Market


The world gift market represents an industry in excess of $300 billion. It accounts for
10% of world consumer economy, which is equivalent to spending one out of every ten
dollars on buying gifts. [11]

The Indian gift market is still in nascent stages with per unit consumption being very
low as compared to developed markets of US and Europe ( 0.5 as against 30+) [12] .The
Indian Gift Market is a Rs.1000 crore gift market is looking up to progress at a rate of
10% (2007 estimates) [13] . A large part of this gift market is unorganized, thus making
correct estimates of the size of the market difficult. The Premium and Gift Market is
mostly concentrated out of the major cities. Mumbai is the largest centre, followed by
New Delhi, Bangalore, Hyderabad, Chennai and Ahmedabad. [14]
The Indian Gift market comprises of organized retail stores, local and regional players
and social organizations as well. In the organized sector, the two leading players in the
specialized gifting stores include - Archies and Hallmark.

The Indian market is highlighted by important festivals such as Diwali and Holi for 'gift
giving' , however, westernization of culture has led to occasions such as Valentine's day,
Mother's day, Father' s day becoming popular gift giving occasions.

3.3 Gifting market- Social, shopping and gifting


trends
The following represent changing social, shopping and gift giving trends in the market:
1) General increase in gift purchasing budget- According to Unity Marketing online- The
Ultimate Guide to the American Gift Giving Market. The Report 2007:The Who,
What, Where, How Much and Why of Gift Giving & Shopping , the typical gift giver
spent $2,643 on gift purchases in 2006, with an additional $78 spent on gift cards,
wrapping paper, ribbons and other gifting accessories. This represents an increase of
13.5 percent over the average amount spent by gift givers in 2005.
2) Gifting 365 days a year-According to,Pam Danziger, president of Unity Marketing
and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate
Customer Experience ,People are spending more for gifts on occasions that occur
throughout the year rather than holiday occasions such as Christmas. 42 percent of gift
shoppers' annual budgets were spent buying gifts for gifting occasions, as compared to
38.5 percent in 2005. There is no longer a single gifting 'season.

3) Corporate Gifting, a tool to enhance marketing and PR efforts- In the recent years
Corporate gifting has emerged as an important tool in the market communication mix of
companies. In the corporate world, gift giving can be a double-edge sword (Pachter,
1995).A corporate gift if tactfully presented can help improve business relationships
with customers and employees, create goodwill, develop new relationships and promote
the company's business.
The three identified categories of corporate gifts are:
Low value, High volume - to promote company's name
Standard gifts, suit most occasions and not occasion specific- They are perceived to be of
higher value and presented in a more personal way
Luxury gifts-high value, low volume products that address an individual and carry
prestige based on strong brands (Mintel, 1997).
There has been a shift in business gifting from it being a sales promotion tool to
corporate gifting being used to build relationships. The total value of the promotional
industry including corporate gifts and incentives was 10.1 billion in 2001 (Mintel, 2000,
p. 16).
Corporate gifting requires an organization to keep role, purpose, budget and recipient in
mind while gifting. Secondly, the choice, occasion and timing of gift are important.
Lastly, cross cultural implications of' gift giving' must be taken into account, because in
some countries a gift may be considered a bribe.
Corporate gifts should be chosen with care and maintain a personal touch. Research
shows people appreciate personalized products especially if they use them regularly.
Most successful gifts today are personalized or have a personal touch; they are more
creative and more memorable [15] . One study estimates that more than one quarter of
all business gifts today are imprinted with the recipient's name or monogram (Feder,
1998).
D'Souza and Sansbury's (2000) research on business gift-giving in India gives some
interesting insights. Asked about 'gift giving' 86 percent of respondents said they viewed
it as 'a norm that businesses should practice. Additionally, the research shows it is

common to accept gifts to close a deal and gifts often serve as a tool for strengthening
supplier relationships. The research also talks about 'reciprocity', which is considered a
universal moral standard (Steidlmeier, 1999) particularly in Asian business context to
build trust, respect and show appreciation (Stafford, 1997).
3) Emerging specialized consumer segments-Gender separation as a trend is likely to
find stores making specialty sections for men and women. Additionally, demographic
targeting as per psychographic buying behavior will be important to meet consumer
needs individually.
Gift buyers can be segmented on the basis of their purchase behavior. The typical
American 'Gift Shopper' can be divided into the following personalities [16]
Emotional Ethel/Ed most involved gift giver and shopper and spends the most time and
enjoys the process as well. Both men and women fall into this segment almost equally..
Practical Patty Plans her gift shopping and is likely to make checklists and be practical
about her purchases. She spends more than the average gift shopper.
Gift-Challenged Charlie Wants and feel the duty of giving gifts but finds the process
difficult in terms of finding and selection. He spends less than average on gift purchases.
Just-in-Time Justin- gives importance to gifting and spends average on his purchases.
He knows what to buy, however always waits till the last minute. The men and women
ratio is 60 :40
Such segments mark a need for retailers and marketers to make efforts in meeting
demands of these niche segments with specialized products and individually assess each
consumers needs. Traditional, generic products for 'gifting' are likely to lose out and
there will be a rise in personal , customized products.
4) The evolution of the shopping hierarchy and Gifting for 'self' [17] - The traditional
pyramid of shopping is evolving, as we find that the pie of 'shopping for self
actualization, personal fulfillment and emotional gratification increases'.
Elaborating the fourth level of shopping for esteem needs, it is about people feeling good
about themselves and the situation they are in life. And this feeling is derived from the
things they own and purchase.

The fifth level of shopping is extremely indulgent in nature and people are willing to
spend a lot to acknowledge themselves and make one self feel good. 'Gifting' being a
'self- indulgent' activity as described in the research above, will fall in this level of
shopping.
Additionally, experiential shopping such as travel, cruises, spa treatments also fall in
this category. These experiences are purchases purely for the value of the experience and
not to show-off. According to a study among Attitude amongst Indian Youth on Gift
purchase, 92% of the respondents between age 18 to 30 year olds bought gifts for
themselves. [18]
As the economies of the world progress and disposable income rises, most people will
tend to fall in the category of shopping for self actualization. Access to internet to
purchase time and convenience or buying tickets to a cruise that provides self
actualizing experiences via - dance shows, rock climbing walls, concept restaurants will
be the norm.
Fig 1.2 - Jim pooler (2003), Why we shop, Emotional rewards and retail strategies
Evolution of the levels of shopping,, pg 141
5) Experiential gifting [19] - Not much importance has been given to 'experience gifts'
however, the UK marketplace alone, represents experiences bought as gifts from
specialist experience companies (for example, Virgin Experience Days, Experience
World) around 239 million per annum (Mintel). Additionally, there is also an
unknown figure for gifts bought from individual leisure, activity, entertainment,
hospitality and tourism suppliers. Trade and lifestyle magazine evidence (Consumers
Association, 2002; Knight, 2003) suggest that the intangible experience is an
increasingly popular gift choice - Unity Marketing's Gift Tracker survey in the USA
describes it as a "hot gift category" for the future (Souvenirs, Gifts, & Novelties, 2005, p.
92)
People are purchasing 'experiences' to share and make memories with the people they
love and even for themselves. As a marketer there is an unfulfilled need gap in the
industry for such gifts especially in the Indian markets.
6) Internet shopping gaining ground [20] - People prefer Internet shopping for many
reasons. Convenience of shopping from home, more and better access of information,

reduces hassle of travelling and shopping from stores and they don't particularly care
about the in-store experience. The value- adds of internet shopping mitigates the
disadvantages such as giving up experiencing the product, personal service and
immediate physical transaction of goods. Online shopping statistics out in February
2009 show a significant annual increase of 13%. [21]
According to a Nielsen study in 2008, India emerged as the 3rd biggest nation when it
comes to online shopping and using a credit card online. Also, 85 per cent of the world
Internet users purchasing goods or services online use credit cards as the most common
form of payment. As competition increases it will become more and more important for
websites to become favorable, memorable and unique in the minds of the consumers.
7) Choosing a 'thoughtful' gift - The 'Long Tail Gifting' phenomena explains ,consumers
will be looking for more and more unusual gifts that reflect a person's real
interests. [22] . According to an Indian study on youth attitude toward gifting, the
following were analyzed to be the most important factors influencing the decision of
'choosing a gift'. Gifting what a recipient would like as per his tastes/interests, occasion,
permanent reminder, unique, surprise value, individuality and personalization.
All these factors spell a trend towards gifting something 'different and suited to the
receiver's personality'. It is no longer enough to gift traditional gift items. Additionally,
Indian businesses such as www.pringoo.com and www.craftmygift.com in addition to
many other personalized gifting websites all around the world suggest a growth in this
category. One can personalize any item from a mug to a mouse pad to even a wine bottle
label. Gifts and Accessories, the only sourcing tool for novelties, states that
"Personalized product industry has very bright promising future ahead for a simple
reason that everybody loves a personal message or their name on a product."

Gift recipient would like


9%
Strength of relationship
8%

Quality

8%

Occasion
8%

Permanent reminder
7%

Functionality
7%

Uniqueness
7%

Surprise value
7%

Budget
7%

Express Individuality
7%

Personalization
7%

Novelty /Humor
6%

Themselves like to receive


6%

Handcrafting
5%

Brand make
1%
Fig 1.3 - Factors in order of importance while choosing a gift [23]
8) Time is money - As work pressures continue, more and more consumers will find
themselves spending more money to buy time. The case of working women must be kept
in mind who will find themselves multi-tasking and more willing to spend greater
portions of the household income to save time. [24]
This implies the need for service providers to provide convenience to consumers in
terms of time and effort spent. As marketer/retailer, one can charge a premium for
providing such services.
9) The new old - Consumers will find themselves producing homemade, hand crafted
gifts such as wood carvings, paintings etc. [25]
10) New Gifting categories such as 'Virtual gifting'- Facebook applications such as
Farmville, restaurant city and free gift applications will emerge. Other examples of
emergent categories include green gifts for the environmentally concerned.