Case Study - Branded Jewellery - The Gold Rush

In the late 1990s, the Indian jewellery market witnessed a shift in consumer perceptions
of jewellery. Instead of being regarded as only an investment option, jewellery was being
prized for its aesthetic appeal. In other words, the focus seemed to have shifted from
content to design. Trendy, affordable and lightweight jewellery soon gained familiarity.
Branded jewellery also gained acceptance forcing traditional jewellers to go in for
branding. Given the opportunities the branded jewellery market offered; the number of
gold retailers in the country increased sharply. Branded players such as Tanishq,
Oyzterbay, Gili and Carbon opened outlets in various parts of the country. Traditional
jewellers also began to bring out lightweight jewellery, and some of them even launched
their in-house brands.

Brand Strategies for Wooing Customers

Tanishq
In the late 1990s, players in the branded gold jewellery market formulated strategies for
wooing customers. According to Jacob Kurian (Kurian), Chief Operating Officer of
Tanishq, the challenges were many. As the jewellery market was highly fragmented,
lacked branding, and allowed many unethical practices to flourish, Tanishq worked hard
on a two-pronged brand-building strategy: cultivate trust by educating customers about
the unethical practices in the business and change the perception of jewellery as a high-
priced purchase. Said Kurian, "We are changing the attitudes of customers from blind
trust to informed trust."11 To increase its marketshare, Tanishq formulated a strategy for
luring people away from traditional neighborhood jewellers. Tanishq's strategy was to
create differentiation and build trust. According to Kurian, the first part of the strategy
was "to provide a point of differentiation in a highly commoditized category – which is
the whole point of branding."12 The second part of the strategy was to project Tanishq as
an unimpeachable mark of trust. According to Kurian, "If differentiation plays the role of
primary attraction, trust takes care of lifelong loyalty."13 One way to create differentiation
was through design. The emphasis had to be on design because local jewellers could offer
to design any pattern according to the customer's specifications. For a national brand a
generic design concept with regional variations had to be evolved. For this, Tanishq set
up a seven member in-house design team and also outsourced designs from freelance
designers. The designers travelled the length and breadth of the country to get feedback
on Tanishq's designs and learn about customer preferences. On the basis of this feedback,
each showroom could select the designs it would carry. To stay ahead of competition
from local jewellers, Tanishq decided to focus on quality control. In 1999, it introduced
caratmeters which showed the purity of gold.
In fact, Tanishq's USP was the purity of its gold. Accordingly, the company's ad
campaigns emphasised the purity aspect of all Tanishq ornaments. In November 2002,
Tanishq introduced a new collection of jewellery called 'Lightweights.'

The collection featured neckwear, earrings, bangles, rings and chains in 22 karat gold
with prices starting at Rs 1,100. It also launched Lightweight Diamonds, with prices
starting at Rs 3,000. Tanishq focused not only on urban markets, but small town markets
as well. Real estate was less expensive in the small towns than in large urban centres.
Besides, competition from stores in small towns was less stiff than competition from the
large jewellery stores in the metropolitan cities. According to Kurian, the best returns on
investment came from small towns.

Carbon
Carbon's focus had always been to move jewellery from the vault to the dressing table
and bring the selling of jewellery out of heavily guarded jewellery stores. This was
achieved by persuading a few lifestyle stores to add branded jewellery to their vast array
of products. Besides selling from lifestyle stores, Carbon also sold its products as gift
items over the internet. Like Tanishq, Carbon laid emphasis on design.
Most of its designs were contributed by students at the National Institute of Fashion
Technology (NIFT) through the diploma programme which the company sponsored. In
addition, Peakok's team of six designers, (headed by Rajeswari Iyer, an alumnus of a
German design school who had worked in the U.K., Germany and India) turned out
around 180 to 200 styles in a year, with 75 designs per style.

At any point in time, there were around 600 designs of Carbon on sale, and on an
average, 300 to 400 pieces per design were sold. In 2002, Carbon launched its 'Sun Sign'
collection, which was based on the symbols of the Zodiac. This collection was a set of 12
pendants designed in a blend of 18 carat white and yellow gold.
While 18 carat gold was commonly used in Carbon products, some of the designs also
used white gold, titanium and steel. Diamond was the preferred precious stone, but other
colored stones were also used. Comprising items of everyday use, (rings, chains,
bracelets, ear studs, tie-pins and cuff links) Carbon items were an impulse purchases. The
brand had no offtake cycles in the year, like the marriage season, unlike traditional
jewellery. The creation, manufacture and marketing of Carbon was different from the
making and selling of traditional jewellery. Said Rao, "We are attempting here to
eliminate the low productivity, quality inconsistencies and high precious metal loss
associated with traditional jewellery making. We have instituted modern manufacturing
practices such as self- contained small groups in the assembly area, self-inspection by the
operators, the Japanese Kaizen approach to improvements in operational practices and the
like. We have brought down our manufacturing loss of gold to 6.8 per cent. The average
in the traditional Indian jewellery shop is as high as 22 per cent, while the world average
is only 2 per cent."14
As the profile of the average customer likely to purchase a Carbon item was a well-paid
urban professional, 24 to 38 years old, having a credit card, it was decided that Carbon
should not be placed in the usual jewellery shops but made available at `shop-in-shop'
outlets in large lifestyle stores (such as Shoppers Stop, Ebony, Globus, The Bombay
Store, Lifestyle and Taj Khazana) and some premium boutiques (such as the Helvetica in
Chennai). Said Rao, "We are looking at cross-promoting Carbon jewellery with other
branded lifestyle products such as perfumes, clothing and cosmetics."15 Carbon products
were priced between Rs. 2,750 and Rs. 20,000 per piece. While the cost of traditional
jewellery was negotiable, the cost of Carbon items was fixed and nationally uniform.
Oyzterbay
Oyzterbay, with its tag line "Jewellery for the Living", had become synonymous with the
entire gamut of occasions where modern young women would like to wear stylish and
affordable jewellery. Oyzterbay's collection comprised over 1200 designs in 18, 22 and
24 carat gold and sterling silver, with natural colored gemstones. The price of the
jewellery ranged between Rs. 500 and Rs.30000. The initial focus of Oyzterbay was to
give a lifestyle value to jewellery instead of the traditional investment value.
In the second year of its launch, Oyzterbay emphasised on marketing and advertising
strategies to give the necessary thrust for growth. In order to transform itself from a youth
brand to a brand for all occasions, Oyzterbay launched media campaigns in August 2002
highlighting the new look. The new communication strategy focused on addressing the
18 to 34 age group instead of the earlier 18 to 24 age group. The new campaign focused
on positioning Oyzterbay as jewellery for office wear, evening wear or even a fitness
session. The broadening of focus to include an older segment was the result of market
research which showed that the brand appealed to middle-aged working women and
affluent housewives.
The investment in the new campaign was Rs 50 million. Where Oyzterbay scored over
others was its simple and refreshing designs and affordability, making it distinct from the
usual gold jewellery stocked in standard jewellery showrooms and contemporary
jewellery offered by traditional jewellery houses trying to cater to the trend. Priyadarshi
Mohapatra, Marketing Manager, Oyzterbay, said "We began by selecting a completely
different reach - everyday jewellery for the working woman and jewellery for the youth.
We felt that jewellery should be brought out of the locker. So we positioned (it) to
accessorize the dress of the young, college-going crowd, which otherwise sported junk
jewellery. The second segment was the working woman for whom we sought to build a
wardrobe of jewellery by making it affordable, so that she could pick up pieces
regularly."16 Oyzterbay later extended the same brand values to diamonds too, the idea
being to target a niche market. Oyzterbay refurbished its collection every few months,
keeping in mind international trends. By so doing, they were able to offer exclusive
products to clients. As part of the Oyzterbay Summer 2002 collection, it offered
pendants, earrings, finger rings, bracelets, neckwear, and chains with natural gemstones
set in white gold, as white gold was evolving as a fashion statement across the world.
Although Ozyterbay was known for its jewellery in gold and sterling silver embellished
with natural gemstones, it decided to launch 'Your First Diamond', a complete range of
diamond jewellery set in white, pink, and yellow gold. The price of the collection started
from Rs. 500 with the most expensive piece not exceeding Rs. 12,000.

Gili
Gili distributed its jewellery priced between Rs. 500 and Rs. 40,000 through lifestyle and
department stores across the country to increase accessibility among its target segment,
the 15 to 30 age group. The company's products were also made available through a mail-
order catalogue. In 1997, Gili launched a collection of traditional Indian ornaments made
of 18-carat gold. In 1999, the Gili Gold range was introduced. This range included rings,
pendants, earrings, necklaces and bangles made of 24-carat gold. All Gili products came
with a guarantee of diamond and gold quality.
When research conducted in February 2000 showed that there was a big gap between the
Rs. 1000 and Rs. 10000 price segment and keeping in view the teenage population, and
the kind of pocket money they had, Gili brought out a collection targeting teens. In 2000,
Gili launched its 'diamond heart collection' targeted at teenagers and priced between Rs
500 and Rs.2500.17

The collection was promoted at college campuses with banners, pamphlets and a few
advertisements targeted at teens. Gili soon realized that just pushing its product was not
enough; it also had to customize its products for special occasions. Following this, it
launched a Diamond Heart Collection specially designed for Valentine's Day. This
collection consisting of tiny, heart-shaped diamond jewellery was well received by teens
Special packaging, catchy advertising and extensive press coverage contributed to the
success of the collection. Gili also made special promotional offers during festive seasons
like Christmas and Diwali. Having captured the low price point market of Rs.2000 to
Rs.10,000, in 2000, the company focused on penetrating the premium market of
customized jewellery. For this, Gitanjali jewels opened a jewellery salon, Gianti, to
provide customized jewellery to clients in India.

Trendsmith
Trendsmith specialized in premium, exclusive and modern looking jewellery distinct
from TBZ's traditional designs. The brand's USP was that every piece of jewellery was
exclusive and unique. There were different collections for babies, teenagers and
weddings. Trendsmith stores had a comfortable ambience and a clutter free display of
products.

According to Samrat Zaveri, Managing Director, Trendsmith "is a store for those with
little time and big pockets." The stores also provided space for other premium jewellery
and accessory brands such as Aashi,18 Blue Fire, Solange,19 Nakshatra, Aura 22,
Mimansa,20 Brilliant and Moksh.21 The prices for these pieces of jewellery started from
Rs. 10,000.
The range comprised finger rings, pendants, bangles, bracelets and neckpieces.
Trendsmith laid emphasis on affordable, fashionable jewellery. It changed its collection
every season. Trendsmith also had a design studio where customers could design their
own jewellery. The company advertised in women's fashion and lifestyle magazines since
the readers of such magazines formed 80 percent of its clientele.
To remain in the public eye, Trendsmith planned to host events whenever it launched a
new collection. The company intended to spend Rs 30 - 40 million annually, on such
events.