CHAPTER II

COMPANY PROFILE
2.1 MARKET
According to the last report from the World Gold Council, global consumer demand
for gold is at unprecedented levels in 2013. The consumers around the world bought gold
in record amounts in the year, led by demand in China and India. The South Asian
jewellery market is quite different from that of the West. Most of the South Asian
countries consider gold as a tradable investment, in addition to adornment purposes.
Here cultural, adornment and other factors influence the purchase of the gold jewellery.
On the other hand, in Western countries gold is primarily for adornment purposes and
sold at high prices ranging from 100% to 300%. Meanwhile demand for jewellery, the
other component of consumer demand, increased by 29% from 519t to 669t, in China,
and by 11% from 552t to 613t, in India, reaching 2,209t globally, the highest figure seen
since the onset of the financial crisis in 2008. The global market for gems and jewellery
is over USD 100 Billion with a major contribution from India, China, Thailand and
USA. Malabar Gold & Diamonds, the flagship division of Malabar Group, started with a
single showroom in 1993 at Calicut, a city that possesses a unique place in Indian
history. Malabar Gold & Diamonds has grown with over 120 outlets spread acrosseight
countries, ten wholesale units in addition to offices, design centres and factories spread
in India,
GCC and Singapore to become a major player in the jewellery retail market within a
short span of years placing themselves among jewellery retailers worldwide to become
the largest jewellery retailer of Indian origin in terms of business figures. The target
group of the company is mainly middle and lower upper class. The company posted a
turnover of $3.5 billion in 2013 placing them among the top five jewellery retailers
worldwide.

With its uncompromised brand values such as perfection in design, purity, quality and
transparency, Malabar Gold & Diamonds is always aiming for a sustainable market

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share of 20% to 25%. Despite the worldwide turbulence in the last years, Malabar Gold
& Diamonds have been able to maintain their steady revenue growth. This is achieved
through experience in analysing the consumer trends, trust acquired through years of
expertise in serving customers providing them the right product to suit their needs. With
its dexterity in creating designs satisfying classic, contemporary or modern fashion
needs and with their core brand values, Malabar Gold & Diamonds is aiming to be the
top jewellery retailer in the world by 2015.

2.2 ACHIEVEMENTS
Malabar Gold & Diamonds have been able to attain a reputable position as one of the
most trusted brands in India and GCC in its own segment. The company initiated some
unique practices and policies in the industry that are being counted as the major
attainments of the company in the jewellery retailing sector.
Providing ornaments in the cartage, as promised by the brand, catering 100% GIA or
IGI certified diamonds, assuring with Cash Buy Back Guarantee, offering lifetime
maintenance to each product are some of Malabar Gold & Diamonds major initiatives
that have set the trend for whole industry.

2.3 HISTORY
Malabar Group laid its foundation in 1993 pioneered by a group of prospective
entrepreneurs led by visionary personality Mr MP Ahammed at Kozhikode, a city in
the state of Kerala in southern India on the Malabar Coast. During classical antiquity
and the middle ages, Kozhikode was dubbed the City of Spices for its role as the
major trading point of Eastern spices. Malabar is a region which lies along the south
west coast of the Indian peninsula and forms the northern part of the Kerala state. From
historical ages to the present times, Malabar is a word of trust in its truthful trade
ancestry.
From the beginning Malabar Gold & Diamonds has always remained in the forefront
in treating their customers by providing superior quality products and services. The
Malabar Group has grown further and diversified into different sectors such as
jewellery manufacturing and wholesaling, infrastructure developments, IT services,
organic farming and furniture retailing. In addition Malabar Gold and Diamonds, the

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major division of Malabar Group, became a leading player in the jewellery retail market
with over 120 stores worldwide and with a strong presence in India, GCC and
Singapore. The company paid great attention in creating better management policies, an
imitable teamwork and an ideal consumer care. These set them apart in the industry.

2.4 PRODUCT
Malabar Gold & Diamonds sell a wide variety of gold, diamond, pearl, silver and
platinum ornaments of classic, contemporary or modern designs which satisfy
individual needs regardless of age, gender or culture. An astounding range of bridal
collection is also maintained by Malabar Gold & Diamonds. The majority of ornaments
at Malabar Gold and Diamonds outlets are in 22K and diamond ornaments are in 18K.
Malabar Gold and Diamonds sells ornaments that are certified by international agencies
like International Gemological Institute (IGI), Platinum Guild International (PGI), etc.,
ensuring utmost quality. The company has experienced designers and market
researchers to create designs based on current fashion trends.

2.5 RECENT DEVELOPMENTS

In face of rapid commoditisation, especially in the jewellery sector, Malabar Gold
and Diamonds have been able to stay ahead of the industry by introducing some of its
distinctive brands. These
brands serve its well-segmented consumer group.

Mine - Diamond jewellery collection 100% certified by IGI/GIA.

Era - Uncut diamond jewellery inspired by the cultural heritage of India.

Divine - Indian heritage jewellery collection.

Ethnix - Handcrafted designer jewellery.

Starlet - Jewellery exclusive for young customers with variety of fun designs
that are attractive and constructed using child-friendly technology.

Precia - Precious gem jewellery collection.

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Moreover, one of the most effective efforts to deal with the commoditised industry in
the context of India is the Brides of India(BOI) initiative which delves into different
weddings that exist inside Indian cultural diversity. Since the weddings in India are
celebrated under different settings and with specific customs with respect to different
cultures. Brides of India campaign went through four seasons and still is a showcase
of Indian weddings.

2.6 PROMOTION
The company promote themselves through various media including print, TV, Radio,
Outdoor. Also they make use of various online media to promote their products. Direct
Marketing and Tele Marketing are the other successful promotional activities of the
brand. Many personalities in various fields representing different slices of life have been
involved in endorsing the brands high values, purity and trust. Mohan Lal (Indian Film
Celebrity), Hema Malini (Cine Artist, Socialite, Political Activist, and Master
Danseuse), Ilaiyaraja (Award winning Indian Musician and Composer), Suriya
(Celebrated South Indian FIlm Actor), Junior NTR (South Indian Film Actor), Sania
Mirza (Sports Celebrity), Puneeth RajKumar (South Indian Film Actor) represented the
brand. Hindi film actor Kareena Kapoor was recently signed as the Brand Ambassador
who symbolises contemporary India and represents the youth of the country.
One of the notable initiatives of Malabar Gold & Diamonds, the Brides of India, an
innovative and informative advertising campaign celebrating the cultural diversity of
India, completed three seasons.
Other campaigns like Malabar Gold and Diamonds Festival provided customers the
opportunity to win up to 100,000 gold coins and AED 1 million cash back, strengthened
Malabar Gold & Diamonds trust among its worldwide consumers. All of these
promotional activities effectively increased the sales potential as well as the value of the
brand.

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2.7 BRAND VALUES

Malabar Gold & Diamonds strong brand values helped them to become one of the
most trusted retail brands in India, Middle East and Singapore. These are so profound
and honest in fact. They are:

Grounded

Celebratory

Accessible

Prestigious

Forward Thinking

Transparency

Trust

Honouring Commitments
The company is known for developing better policies that meet and exceed the local,

legal and cultural requirements of their customers. As a corporate, Malabar Gold &
Diamonds is always been able to keep their obligation to consumers as well as to the
society. The company strives to integrate its business values and operations in an
ethical and transparent manner to demonstrate its commitment to sustainable
development and to meet the interests of its stakeholders. 10% of their
Groups net profits are set apart to be used for CSR Initiatives.
Malabar Group CSR Initiatives, the social wing of the Malabar Group, focuses on
conceptualising and implementing the Corporate Social Responsibility initiatives for the
Group. The initiatives are directed towards enabling communities through various
projects in the areas of education, medical aid and health care services, woman
empowerment, environmental protection and housing development for less privileged.

CHAPTER III
LITERATURE REVIEW
According to Wheeler, Advertising is any form of paid non-personal presentation of
ideas, goods or services for the purpose of inducing people to buy.
According to William J. Stanton, Advertising consists of all the activities involved in
presenting to a group a non-personal, oral or visual openly sponsored message regarding
a product service or idea. This message is called on advertisement is disseminated
through one or more media and is paid for by an identified sponsor

3.1 Basic Features of Advertising:

On the basis of various definitions it has certain basic features such as:
1.

It is a mass non-personal communication.

2.

It is a matter of record.

3.

It persuades buyers to purchase the goods advertised.

4.

It is a mass rapid communication.

5.

The communication media is diverse such as print (newspapers and magazines)

6.

It is also called printed salesmanship because information is spread by means of

the written and printed work and pictures so that people may be induced to act
upon it.

3.2 Functions of Advertising:

For many firms advertising is the dominant element of the promotional
mix particulars for those manufacturers who produce convenience goods such as
detergent, non prescription drugs, cosmetics, soft drinks and grocery products.
Advertising is also used extensively by masters of automobiles, home appliances, etc, to
introduce new product and new product features its uses its attributes, pt availability etc.

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Advertising can also help to convince potential buyers that a firms product or
service is superior to competitors product in make in quality, in price etc. it can create
brand image and reduce the likelihood of brand switching even when competitors lower
their prices or offer some attractive incentives.
Advertising is particularly effective in certain other spheres too such as:
i)

When consumer awareness of products or service is at a minimum.

ii)

When sales are increasing for all terms in an industry.

iii)

When a product is new and incorporates technological advance not strong and.

iv)

When primary buying motive exists.

3.3 It performance the following functions:

i)

Promotion of sales

ii)

Introduction of new product awareness.

iii)

Mass production facilitation

iv)

Carry out research

v)

Education of people

3.4 TYPES OF ADVERTISING:

Broadly speaking, advertising may be classified into two categories viz., product
and institutional advertising.

a)

Product Advertising:
The main purpose of such advertising is to inform and stimulate the market about

the advertisers products or services and to sell these. This type of advertising usually
promotes specific, trended products in such a manner as to make the brands seem more
desirable. It is used by business government organization and private non-business
organizations to promote the uses features, images and benefits of their services and
products.

Product advertising is subdivided into direct action and indirect action

advertising, Direct action product advertising wages the buyer to take action at once, ice
he seeks a quick response to the advertisement which may be to order the product by

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mail, or mailing a coupon, or he may promptly purchase in a retail store in response to

prince reduction during clearance sale.
Product advertising is subdivided into direct & indirect action advertising &
product advertising aims at informing persons about what a products is what it does, how
it is used and where it can be purchased. On the other hand selective advertising is made
to meet the selective demand for a particular brand or type is product.

b)

Institutional Advertising:
It is designed to create a proper attitude towards the sellers to build company

image or goodwill rather than to sell specific product or service. Its purpose is to create a
frame of mind and to implant feeling favorable to the advertisers company. Its
assignment is to make friends for the institution or organization.
It is sub-divided into three categories: patronage, public, relations and public
service institutional advertising.
i)

In patronage institutional advertising the manufacturer tells his prospects and

customer about himself his policies and lives personnel. The appeals to the
patronage motivation of buyers. If successful, he convinces buyers that his
operation entitles him to the money spent by them.

ii)

Public relations institutional advertising is used to create a favourable image of

the firm among employees, stockholders or the general public.

iii)

Public service institutional advertising jobs public support

3.5 WHY & WHEN TO ADVERTISE:

Advertising as a tool to marketing not only reaches those who buy, but also those
whose opinions or authority is counted for example a manufacturer of marble tiles and
building boards advertises not only to people who intend to build houses but also to
architect and engineers. While the manufacturers of pharmaceuticals products advertise
to doctors as well as to the general public. At time it is necessary for a manufacturer or a
concern to advertise things which it does not sell but which when sold stimulates the
sales of its own product. There are concerns like electric heaters, iron etc. because the
use of these increases the demand for their products.

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Advertising should be used only when it promises to bring good result more
economically and efficiently as compared to other means of selling. There are goods for
which much time and efforts are required in creating a demand by sending salesman to
prospective buyers than by simply advertising them. In the early days of the cash register
in India it was sold by specially trained salesman who called on the prospective users
and had the difficult task of convincing them that they could no longer carry on with the
old methods, and that they urgently needed a cash register. In our country certain
publishers have found it less costly to sell their books by sending salesman from house to
house among prospective buyers than to advertise them. In these two examples the cost
of creating demand would be too high if attempted by advertising alone under such
circumstances advertising is used to make the salesman acceptable to the people they call
upon to increase the confidence of the public in the house. Naturals when there are good
profits competitors will be attracted and they should be kicked out as and when sufficient
capital is available by advertising on a large scale. Immediate result may not justify the
increased expenditure but it will no doubt secure future sales.

3.6 Sales-Effect:
Communication-effect advertising research helps advertisers assess advertisings
communication effects but reveals little about its sales impact. What sales a regenerated
by an advertisement that increases brand awareness by 20% and brand preference by
10%? Advertisings sales effect is generally harder to measure than its communication
effect. Sales are influenced by many factors besides advertising, such as the products
features, price, availability and competitors' actions. The fewer or more controllable
these other factors are, the easier it is to measure advertising's effect on sales. The sales
impact is easiest to measure in direct-marketing's effect on sales. The sales impact is
easiest it is to measure in direct-marketing situations and hardest measure in brand or
corporate-image-building advertising.

3.7 PROGRESS TESTS

These assess the various stages of buyer awareness, preference, buying intention and the
actual purchase in relation to advertising Effort. They are called sales effect tests.

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Measuring Sales Response to Advertising:

Though increase in sales in the true measure of advertising effectiveness, in reality its
difficult to measure the increase that is due to a particular advertisement. It is
rather difficult to correlate the response in sales with the advertising programme.
However, a few methods have been discarded in the following paragraphs which are
generally used to measure the sales response to advertising.

Sales Results Tests:

The additional sales generated by the advertisements are recorded, taking several routes.
Past Sales before the advertisement and sales after the advertisement are noted. The
difference is attributed toad impact. Controlled Experiment: In experimental market, any
one element of marketing mix is changed.
It is compared with the sales of another similar market. The element's presence
observance is a reason for difference in sales. Instead of two markets, the experiment can
be carried on the two groups of consumers. The inventory audit is dealers inventory
before and after the ad is run.

Attitude Tests:
This is an indirect measurement of the post-testing effects of advertisements on attitudes
towards the advertised product or brands. The change in attitude as a result of advertising
is assessed. The assumption is that favourable attitude towards the product may lead
to purchases. Most advertisements are designed to either reinforce or change existing
attitudes. An attitude is a favourable or unfavourable feeling about a product.

Selecting the Media:

Media selection is an important since it costs time space and money various
factors influence this selection, the most fundamental being the nature of the target
market segment, the type of the product and the cost involved. The distinctive

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characteristics of various media are also important. Therefore management should focus
its attention on media compatibility with advertising objectives.

INDOOR

1.Press

OUTDOOR

1. Poster

DIRECT

1. Envelop &

DISPLAY

1. Displays

Postcards
(a) Newspapers

2.Painted

(b) Magazines

displays

(a) Window
2. Booklet
(b) Counter

1. Radio

3.Traveling

2. T.V.

Displays

2. Showroom
4.Sales letters

3. Cinema
4. Video

3. Catalogs

3. Exhibitions

4. Neon signs
5. Samples
5. Electric signs

4. Trade fairs

Modern Advertising Techniques:

Include seven that you should consider:
1.

Email Advertising

2.

Video Advertising

3.

Audio Advertising

4.

Search Advertising

5.

Onsite Advertising

6.

Mobile Phone Advertising

I recently completed a series of posts on these modern advertising techniques. The posts
provide additional information on each technique so Ive linked to them when relevant.

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1. E-mail Advertising:
Email advertising tops this list of modern advertising techniques because it tops the lists
of new and growing advertising expenditures. From small Internet marketers to large
offline and online stores, email advertising is vital to modern advertising and marketing
campaigns.

2. Video Advertising:
Video Advertising can be done on and off line. Many local cable channels offer video
ads and infomercials on a search basis for viewers. So your ad is only seen by people
interested in what you sell. Video marketing is also big on the Internet. Most online
videos are more promotion than advertising, but they play an important role in online
success.

3. Audio Advertising:
Audio advertising, whether across the Internet or the airwaves enables you to target a
narrow market and to deliver relevant and timely messages that encourage an immediate
response.
Although second to video online, offline audio advertising (radio advertising) provides
all the benefits of online audio advertising. And if you advertise on highly targeted
stations and shows, it isnt that expensive.

4. Search Advertising:
Search advertising, like Googles Ad words, can provide much traffic for an online
business, but it can also cost far more than it returns in sales. To use search advertising
effectively, you need to constantly test your ads. Then rewrite and redesign them from
your test results. Theres both skill and science to search advertising. So before you jump
in, read some e books and study the search engines documents about their pay per click
programs.

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5. Onsite Advertising:
Onsite advertising can be considerably less expensive than search advertising. Generally
a click from an ad on site costs less than the same click from a search. With Googles
new Ad Planner, it will be easy to target a market with ads across the Internet. You can
even pick the sites that you want to carry your ads and deny ones that you dont.

6. Mobile Phone Advertising:

Mobile phone advertising is projected to grow from just under 500 million in 2006 to a
almost 5 billion by 2011.And why not. Its interactive, unobtrusive, and immediate. Most
people have their mobile phones with them all the time. So they can react instantly to
banner phone ads that catch their attention.