Post Graduate Program in Management

2019-2020

Consumer Behaviour
Final Report

Submitted to: Prof. U Venkat, Ph.D.

Submitted by:

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Acknowledgement

With much gratitude and respect, we extend our profuse thanks to Prof. Umashankar
Venkatesh, PhD. for empowering us with this opportunity to undertake this research and
broaden our knowledge on the subject at hand. This project has shaped our views on the process
and execution of research on a previously untapped industry and undertaking the mammoth
task of formulating the research question, objectives and then analyse the data that has been
collected.

This report is focused on the effect of social class on branded jewellery purchase behaviour of
women in the age group of 30-45 year in Tier 1 cities. This report would not have been possible
without the collective effort of every member of our team as no efforts have been spared during
the course of this project. We wish to provide due and equal credit to every member of our
team. We would additionally like to thank each and every respondent who took the time out to
fill our extensive questionnaire, without whom this project would not have been possible.
We sincerely hope that you will enjoy reading this report as much as we have enjoyed
conducting the research and drafting this report.

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Table of Contents

Executive Summary …………………………………………………………. 4

Introduction ………………………………………………………………….. 5
Literature Review ……………………………………………………………. 6
Objectives of Study ………………………………………………………….. 7
Nature of Data ……………………………………………………………….. 7
Evaluation of Data …………………………………………………………… 8
1. Effect of household income on type of jewellery purchased ……………… 8
2. Online Vs. Offline ………………………………………………………….10
3. Choice of Jewellery based on educational background & occupation ……. 12
Conclusion …………………………………………………………………… 14
Recommendations …………………………………………………………….15
References …………………………………………………………………… 17
Annexures – Questionnaire ………………………………………………….. 18

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Executive Summary

According to 2016 report China bought 613.5etric tons of gold making it the largest
purchaser of hold India is not lagging far behind with a consumption of 463.1 metric ton it is
the second largest market for gold in the world with the rapidly increasing disposable income
of the middle-class driving demand for the sector.
India's love of gold goes back thousands of years. Today, Indian households have the largest
private gold holdings in the world, standing at an estimated 24,000 tonnes. There's even an
expression: "In India, a marriage is not a marriage without gold." During the Diwali festival,
which normally begins in October, it is considered auspicious to give gold jewellery as a gift.
The Indian middle class is expected to rise to 547 million by 2025 and this rise of the young
Indian woman will lead to increased demand for jewellery.
This report aims to understand the target group’s buying preferences and their social lifestyle.
We aim to develop a hypothesis where we will try to explain effects of different factors like
income, profession, educational qualification, etc on the buying behaviour of Indian women
in the age group of 30 – 45.
We conducted a comprehensive primary research with 78 respondents from tire 1 cities like
Hyderabad, Kolkata, Delhi, Mumbai, Chennai, etc regarding their buying behaviours,
lifestyle traits and demographics. By A thorough analysis of the compiled data we came to
few conclusions like -
1. People prefer gold above all other jewelleries
2. Tanisq has the highest market share among the branded shops although people still prefer
to buy or make jewellery from local shops.
3. Educational qualification plays very less role.
4. Very few people buy gold online
5. Purchasing of course depends on one's income and profession

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Introduction
Jewellery has always remained an integral part of the Indian lifestyle over the years. Different
empires who conquered India for the past many years have made an incredible and distinctive
contribution to the jewellery styles. The Gems and Jewelry sector is one of the fastest-growing
sectors in the Indian economy and plays a significant role in the country’s GDP by contributing
around 7 percent. We gained edge across the international market by providing high-quality
design and low manufacturing costs. It employs 4.5 million people which is forecasted to reach
8.2 million people by 2022.

The major segments of Gems and Jewellery across the Indian market and its contribution:
 Gold – World’s largest consumer of Gold and our gold market comprises of 80 percent
of the total Jewellery market
 Diamonds – The world’s largest centre for cutting and polishing diamonds which
exports around 75 percent of the polished diamonds in the world. For every 14
diamonds sold, 12 diamonds are getting connected to India
 Silver – One of the largest importers and consumers in the world
India is one of the largest
exporters of gems and
Jewellery that contributes
to about 16 percent of total
merchandise export and
has grown at a CAGR of
over 14.2 percent since the
last 50 years. Almost half
of our Jewellery exports
are consumed by the
United States. India
registered its total gold
exports as US$12.03
billion and imports as US$
291.19 million in the
financial year 2019 which
is changing over nine years.

India consumes around 29 percent of global Jewellery consumption and the sector contains
more than 3 lakh players in which the majority being small players. These players focus not
only on traditional jewellery but also on modern jewellery to attract all kinds of buyers by
catering to their needs. Indian households consume more traditional Jewellery on the wedding
as well as other occasions. Modern designs such as lightweight Jewellery, concrete Jewellery
are preferred among the women that can be worn daily. For instance, the gold sales on
Dhanteras in 2019 was recorded as around 30 tonnes.

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Literature Review
Understanding Consumer Buying Behaviour of Jewellery: An Exploratory Factor
Analysis Study:
Consumer buying decision is a process which is dependent an individual's psychology, social
structure and family. Predicting and understanding the dynamic buying behaviour of an
individual is difficult therefore, the purpose of this research is to understand the consumer's
buying behaviour when jewellery is purchased. This research was performed in Rohtak,
Haryana in the time period: January to June 2018. Responses of a structured questionnaire was
collected from the buyers, and these were analysed on a five-point Likert scale. Exploratory
factor analysis was performed to extract the factors which provided insight on the customer
decision making process. It was concluded that there are four factors which help in
understanding the decision-making process, and these factors are Perceived Quality, Payment
Options, Locality of Shop/Outlet and recommendations. Through this research it was
confirmed that perceived quality is the most influencing component for the customer decision
making process followed by promotion and payment options.

A Study on the Purchase Behaviour of Indian Women When Buying Diamond Jewellery
from Different Retail Formats:
The objective of this research is to understand the marketing implications of sale of diamond
jewellery to women in different age groups through organized retail formats. A descriptive
format was followed. Women from different age groups were surveyed through a structured
questionnaire and one-on-one interviews were also taken. It was found that Indian women
bought precious jewellery such as diamond and gold for special occasions and to maintain a
social status at a social event. They put their trusted only on known brand outlets. Attributes
like service offered from the jewellers at these branded outlets was of high concern and resulted
in higher customer satisfaction. Working women purchased more jewellery in greater numbers,
and more instances of impulse purchases. Further area of research is to be done to find out why
traditional stores are not doing well in comparison to branded jewellery stores.

A study on consumer behaviour towards jewellery products in Tiruchirappalli district

Jewellery in India always had a great importance. It signified wealth, status, respectability of
the wearer's identity. It was closely associated with religion, health and fortune. The objective
of this study is to understand the consumers buying behaviour when influenced by factors such
as price, purity and design. Descriptive research design was used for this research by preparing
a structured questionnaire to collect primary data from customers in and around Tiruchirappalli.
The collected data was analysed using chi-square test to prove the hypothesis and percentage
analysis was computed for categorical data. It was found that Majority of the respondents were
women belonging to the age group of 41-50, monthly family income of less than Rs. 25000.
They preferred to buy earrings, purchase jewellery once in a year, and average time spent to

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buy a jewellery was 40 minutes. They preferred product quality, and also advertising was a
major influencing factor to purchase jewellery.

Objectives of Study

To determine the effect of social class on choice of jewelry brands among ladies of 30-45 years
age, residing in Tier – 1 cities

Nature of Data
The following paragraphs include the information regarding the type of data, mode of
collection, the sample size taken, description of the same and the shortcoming while collecting
the data.
The mode of collection of data is through primary survey. The sample size of the data collected
is 77, which consists opinion of females on their jewellery preferences and biased on purchase
of particular type of precious metal. Also, this study is performed by considering the opinion
of females of Tier I cities i.e. Delhi, Mumbai, Bangalore etc.
The major shortcoming of the data is that convenience sampling has been done to generate data
via online survey method. Therefore, clearly, not every entry had an equal opportunity of being
selected and analysed.

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Evaluation of Data
1. Effect of household income on type of jewellery purchased
The respondents were divided into four social classes based on yearly household income as:
 Lower Class : less than ₹6 Lac
 Lower Middle Class : ₹6 Lac – ₹12 Lac
 Upper Middle Class : ₹12 Lac – ₹30 Lac
 Rich Class : more than ₹30 Lac

Below is the division of household income level among our respondents:

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Here purchase different types of jewellery was analysed across social classes. It was observed
that Gold was the most purchased jewellery across the different classes, except the rich class.
The trend observed was that as income level of the household increases, percentage of gold
purchased reduces and purchase of diamond increases. This shows that people aspire to
purchase diamond if they have the buying capability, and associate it with wealth and status.

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2. Online Vs. Offline

The respondents from all the tier 1 cities, were asked to choose their preferred way to buy
jewellery. Also, we have asked them to mention the store they would prefer to go buy / shop
online. Here is a unique infographic about Online Vs Offline.

As per the above Pie – Chart, 92% out of the 77 respondents prefer to go to the store and buy
jewellery whereas only, 8% out of the 77 respondents prefer to purchase from the online store
or application.
As seen in the bar graph below, It is recorded that 28 people prefer buying gold from the
local gold shop. As it is a multiple choice question where one can choose more than one
option, 72 responses were recorded for all the branded jewellery, where customer can go to
these stores, experience it and the purchase it. And, 28 responses were recorded pointing out
that people also prefer to buy gold from the local gold shops which include – shop owned by
someone familiar, same shop since generations etc. Also, 10 responses were recorded which
tell that people prefer buying gold from online website or application like – Carat Lane,
Bluestone and Senco etc.
By this qualitative analysis, it is observed that respondents in the tier 1 cities still prefer
Offline buying that Online buying.

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3. Choice of Jewellery based on Educational Background and occupation

As per the survey done, we have observed that most of the respondents are educated, amongst
them people who have done post graduation is of higher percentage when compared to others
like under graduation, graduation and Ph.D.. The inference that can be taken from the
infographic is that the group is well educated and knows what to buy, when to buy as per their
needs and want.

Also, we have noted the occupation of both the spouses from the house. It is observed that most
of them are working for the corporate services than the government service. This tells that the
income of the household is higher as both are working for private sector which in turn leads to
buying of more and more jewellery.

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Conclusion

Though we have segregated respondents based on household income, it was observed that Gold
was the most purchased jewellery across the different classes. While in the rich class, it is
observed that the percentage of gold purchased reduces and purchase of diamond increases.
This shows that people aspire to purchase diamonds as they believe that diamonds are the status
symbol.
In terms of purchases, we have observed that people prefer to buy jewellery offline when
compared to online. Among the offline purchases, it is seen that most of the people buy
jewellery from the local stores that going to any branded stores as mentioned earlier. The
reasons to choose local gold shops can be anything from low making charges offered, some
sort of customised schemes offered and trust factor.
Coming to the educational qualification and the occupation of both the spouses, it is observed
that most of them are educated and living in Tier 1 cities. Also, under choices of preference to
work, corporate comes first and then comes business and government sectors. Based on the
income received in their respective professions is leading to purchase of type of metal.

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Recommendations
 According to our research, Gold continues to be the most preferred type of jewellery.
According to a recent report by The Economic Times, the demand for gold has risen by
10-20% and people are preferring light weight jewellery over heavy ones. Suvankar
Sen, executive director, Senco Gold & Diamond, said, “Gold coin as an investment
option has gone up across all ages. The encouraging thing is that the young generation,
especially men, are buying gold as a saving instrument across mediums -- online or
offline” This was a new trend that was spotted this year during Akshaya Tritiya.
According to our research, after gold, diamond was the second most preferred choice
of jewellery. According to a recent report by The Economic Times, Diamond jewellery
is witnessing good demand in the Dhanteras-Diwali season. Vijay Jain CEO, ORRA
said, "Both the run up to Dhanteras and Dhanteras has been positive. While gold has
seen a positive trend over last year platinum and diamond jewellery growth rates have
been in excess of 30 percent." Thus, brands should continue to focus on their gold and
diamond jewellery offerings and focus should be on light weight jewellery.
 According to our research, only 8% women said that they have bought jewelry online,
remaining 92% have not bought jewelry online. According to a recent report by The
Economic Times, people prefer buying gold coins available online on e-commerce
platforms like Amazon India, Paytm, Snapdeal, etc over going to their neighborhood
jeweler. It is because the ease of doorstep delivery that these websites offer. We
recommend that online brands like Carat Lane, Blue Stone, etc should change their
marketing strategies to penetrate deep into the online business. Brands should also make
use of digital platforms and social media pages, hoping that the move will attract
younger customers. According to a recent report by The Economic Times, ORRA has
completely shifted to the digital platform, ORRA's chief executive Vijay Jain said that,
"The strategy behind completely shifting to digital marketing was based on the brand's
belief that ORRA is already recognized as amongst India's top retail brands. Given the
longer purchase cycle (lower frequency than most categories), it's better to focus on
consumers who are contemplating jewellery purchases for Diwali. Digital media allows
for micro segmenting and the use of data analytics to sharpen the targeting.” ORRA is
doing a mix of brand building and tactical communication on YouTube. The brand has
taken its digital media plan across a host of platforms including display networks,
Google AdWords and YouTube.
 Almost 38 percent of the responses received for the jewelry store preferences came out
to be Local stores, according to our research. Major jewelry stores/sites across the
country/world got lower preferences compared to local stores. We recommend market
players to periodically update the latest trends in the store and can team up with top
jewelry designers for discovering the innovative designs. These types of new jewelry
should be pitched more to the customers and should get valuable feedback from them.
This feedback should be sent regularly to the design team by the salesperson for
understanding customer preferences based on demographics. This kind of constant real-
time feedback loop system helps to customize the design of particular jewelry within a
short period of time

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 According to our research, 92 percent of people have not used to buy jewelry online.
These people are more inclined to brick and motor stores. Middle-income people (6 -
12 Lakhs) accounts for nearly 46 percent of total respondents, according to our research.
Middle-income people are expected to account for nearly 46 percent of households in
2025 from 37 percent of households in India in 2018, according to the BCG report.
These people might prefer their local stores because of beliefs built over the years. We
recommend market players to target the middle-income people with their strategies
such as providing buyback guarantee and financial facility. Buyback guarantee can be
given for a certain type of jewelry within specific days after the purchase based on
specific terms and conditions. EMI at zero interest can be provided as a form of the
financial facility to the customers who cannot afford to pay at once. These strategies
help to increase the number of customers in both traditional as well as digital platforms.

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References

 Singh, Bhanwar (2018), Understanding Consumer Buying Behaviour of Jewellery: An

Exploratory Factor Analysis Study, RESEARCH REVIEW International Journal of
Multidisciplinary
 Rai, Manish & Gopal, R (2007), A Study on the Purchase Behaviour of Indian Women When
Buying Diamond Jewellery from Different Retail Formats, IOSR Journal of Business and
Management
 Chitradevi, T (2017), A study on consumer behaviour towards jewellery products in
Tiruchirappalli district, International Journal of Applied Research
 Ram Sahgal, “Gold demand up 20%, but buyers prefer light-weight jewellery,” Economic
Times,May08,2019,https://economictimes.indiatimes.com/markets/commodities/news/gol
d-demand-up-20-but-buyers-prefer-light-weight-
jewellery/articleshow/69227451.cms?from=mdr, accessed November, 2019.
 Sutanuka Ghoshal, “Spike in diamond jewellery demand on Diwali,” Economic Times,
November06,2018,https://economictimes.indiatimes.com/markets/commodities/news/spik
e-in-diamond-jewellery-demand-on-diwali/articleshow/66523982.cms?from=mdr, accessed
November, 2019
 Ariba Khaliq, “Investing in gold funds vs buying gold jewellery: which is smarter?”, Economic
Times , November 05, 2019, https://economictimes.indiatimes.com/tdmc/your-
money/navigation/financial-planning/gold/investing-in-gold-funds-vs-buying-gold-jewellery-
which-is-smarter/articleshow/71919621.cms, accessed November,2019.
 Sutanuka Ghoshal, “Jewelers like ORRA and Gitanjali embrace digital media as a preferred
choice of marketing, “Economic Times, November 07,2015,
https://economictimes.indiatimes.com/industry/cons-products/fashion-/-cosmetics-/-
jewellery/jewellers-like-orra-and-gitanjali-embrace-digital-media-as-preferred-choice-for-
marketing/articleshow/49697907.cms?from=mdr, accessed November, 2019
 India Brand Equity Foundation, “Gems and Jewellery Industry,”
https://www.ibef.org/industry/gems-jewellery-india.aspx, accessed November, 2019.
 Invest India, “Gems and Jewellery sector,” https://www.investindia.gov.in/sector/gems-
jewellery, accessed on November, 2019
 Pankaj Khanna, “How gems and Jewellery sector plays a significant role in the Indian
Economy,” BusinessWorld, June 2, 2018.

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Annexures - Questionnaire
1Q Please enter your name
2Q In which city do you live in?

 Delhi NCR
 Ahmedabad
 Bangalore
 Mumbai
 Chennai
 Hyderabad
 Kolkata
 Pune
 Others
3Q Which type of jewellery do you prefer? (Multiple Choice)

 Gold
 Diamond
 Platinum
 Silver
 Pearl
4Q From where have you bought jewellery? (Multiple Choice)

 Carat Lane
 BlueStone
 Tanishq
 PC Chandra
 Kalyan
 Lalitha Jewellery
 Local Jewellery Shop
 Others
5Q Have you bought jewellery online?

 Yes
 No

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6Q Are you working? If yes, what is your profession?

 Business
 Corporate
 Government Services
 Education
 Freelancing
 No, I am not working right now/ Retired
7Q What is your spouse’s profession?

 Business
 Corporate
 Government Services
 Education
 Freelancing
 No, I am not working right now/ Retired
8Q What is your educational qualification?

 Under-Graduate
 Graduate
 Post-Graduate
 Ph.D.
9Q What is your household’s yearly income?

 Below 6 Lacs
 6-12 Lacs
 12-30 Lacs
 Above 30 Lacs

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