2. Introduction
India is a country which is rich in culture and heritage. Gold has played an important part in
India's culture and continues to play an integral part in our lives. Gold plays a pivotal role in
our daily life. It can be clearly said that Indians love for gold is almost a religion. Besides
being a symbol of wealth and status, gold is also used for worship and culture. Indian
jewelery varies from region to region catering to local tastes. In India we have the traditional
and modern methods of making gold. In India, jewelery design has been greatly inspired by
nature : paisley motif of the mango, rice grains, melon and cucumber seeds, etc. The modern
methods have new process which are used in designing ornaments and are far more popular
than the traditional ones.
In the past 20 years India's economy is growing at a rapid rate and the purchasing capacity of
an Indian has increased to a great extent. Every Indian now aspires to buy gold. In
India,nothing is more valuable than purchasing gold. For Indians, gold is wealth, financial
security and also a fashion statement. These factors make India the largest consumer of gold
in the world .
Historical Perspective
The history of gold began in remote antiquity. According to archaeological evidence , man's
first encounter with gold was supposed to be in the 40,000 B.C when experts found traces of
gold in Spanish caves used by the paleolithic man. Initially gold was used as a decorative
item in several cultures around the world. Egyptian cultures was specifically known to be
patrons of the yellow metal and it reflected in their culture immensely. From India's
perspective, Indians from per-historic times had a penchant for adorning themselves with
jewelery made from gold. Ever since time immemorial people used to adorn themselves with
a variety of jewels like necklace,anklets,earrings etc. With the passage of time, people soon
learned the art of polishing gold and silver and to extract semi-precious gems and stones from
the mines. In ancient times gold was used for various purposes like, jewelery-making, barter
system, decoration, coin minting etc.
Jewelery Sector in India
Indian jewelery industry is growing at a fast rate of almost 15%. In India, there are around
15,000 vendors in the gold processing industry and about 450,000 gold smiths spread across
the length and breadth of the country .There are also about 6000 vendors in the diamond
processing industry in India. India’s total consumption of gold in 2011 was around Rs 974
billion. Gold is consumed most in South India(37%),West India(32%) , North India(18%) and
East India(13%) in that order. Around 75% of India's total gold consumption is for jewelery ,
23% for investment and 2% for industrial and decorative use.
Classification of jewelery industry
The jewelery industry can be broadly classified into two types which in turn are further
divided into six types. The pictorial representation of the classification of the industry is
given below
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3. The classification of the jewelery industry is given below:
Competitors in Indian Jewelery Market
There are around 15,000 gold vendors in India. Some of the prominent and reputed ones in
India are listed below
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3
Tanishq
G.R. Thanga Maligai
Saravana Stores Thanga Maligai
Nakshatra
D'Damas
Asmi
Nirvana
Gili
Kirtilal Kalidas & Co
Vummidi Bangaru Jewellers
Gitanjali
Joy Alukkas
Jos Alukkas
Prince Alukkas
Francis Alukkas
Prince Jewelery
Tata Gold Plus
Khazana Jewelery
NAC Jewelers
4. Comparison between Branded and Non-Branded jewelery
Branded Jewelery
Non Branded Jewelery
Name and reputation gives confidence Customers can tailor make their jewelery
to buyer
according to their preferences
It comes with a written lifetime No written lifetime guarantee. Purely based on
guarantee
trust of the customer
Excellent quality and service back up
Minimum effort in packaging and service
Has a more contemporary and stylish Usually bulky and traditional
design
Available in multiple outlets
Available only in traditional jewelery outlets
Consumer Behavior
According to Leon G Schiffman and Leslie Lazar, Consumer Behavior is defined as the
behavior that consumers display in searching for, purchasing, using, evaluating and disposing
of products and services that they expect will satisfy their need. Also according to Philip
Kotler, Consumer Behavior is the study of how individuals, groups and organisations select,
buy, use and dispose goods, services, ideas or experiences to satisfy their need and wants.
Consumer behavior focuses on how individuals make decisions to spend their available
resources on consumption related items. That includes what they buy, why they buy it, when
they buy it, where they buy it, how often they buy it, how often they use it, how they evaluate
it after the purchase, the impact of such evaluations on future purchases and how they dispose
it. It studies characteristics of individual consumers such as demographics and behavioral
variables in an attempt to understand people's wants. It also tries to assess influences on the
consumer from groups such as family, friends, reference groups, and society in general.
Consumer Behavior can also be said to be an amalgamation of various disciplines like
psychology, social anthropology and sociology.
Factors affecting Consumer Behavior
There are several factors which affect Consumer Behavior. They are given below
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Cultural
Social
Personal
Psychological
Factors such as cultural, social, personal, psychological which affect consumer behavior have
other major classification in them which will also play a major role in affecting the behavior
of a consumer to a great extent. The pictorial representation of it is given in the next page.
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5. The visual representation is given below.
Types of Buying Behavior
1. Complex Buying Behavior: Complex buying behavior involves a three-step process;
first, the buyer develops beliefs about the product. Second, he or she develops
attitudes about the product. Third, he or she makes a thoughtful choice. When the
customer is involved in complex buying, they are aware of significant differences in
brands. This is the case when the products are expensive, bought frequently, risky and
highly self expressive. In this case the customer does not know much about that
category. For example, a person buying a personal computer may not know what
attributes to look for. Many product features carry no meaning, unless the buyer has
done some research.
2. Dissonance – Reducing Buyer Behavior: Sometimes the consumer is highly involved
in a purchase but sees little difference in brands. The purchase is expensive,
infrequent, and risky; therefore the consumer is highly involved. In this case, the
buyer will go around to learn what is available, but will buy when he gets a good
price. After the purchase, the consumer might experience dissonance that stems from
noticing certain odd features or hearing favorable things about other brands. The
consumer will be alert to information that supports his or her decision. In this case, the
consumer first acted, then acquired new beliefs, then ended up with a set of attitudes.
Marketing communications should supply beliefs and evaluations that help feel good
about his or her brand choice.
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6. 3.Habitual Buying Behaviour: There are many products which are bought under
conditions of low involvement and the absence of significant brand differences. Take
a simple example of salt. Consumers have little involvement in this product category.
They go to the shop and reach for the brand. If they keep reaching for the same brand,
it is out of habit, riot strong brand loyalty. It is-evident that consumers have low
involvement with most low-cost, frequently purchased products. With these products,
consumer behavior does not pass through the ‘normal sequence of belief, attitude and,
behavior. Consumers do not search extensively for information, evaluate
characteristics and make decisions on which brand to buy. Instead they are passive
recipients of information through television or print ads. The repetition of ads creates
brand familiarity rather than brand conviction. After making the purchase, they may
not even evaluate the choice because they are not highly involved with the product.
For low involvement products, the buying, process begins with brand beliefs formed
by passive learning & is followed by purchase behavior which may be followed by
evaluation.
4. Variety seeking Buying Behaviour : There has some buying situation that an
characterized by low involvement but significant brand differences. In such cases the
consumer often goes into a lot of brand switching. Take the example of chocolates.
The consumers has some beliefs about chocolates, chooses a brand of chocolates
without much evaluation, & evaluates the product during consumption. Next time, the
consumer may reach for another brand out of a wish for a different taste. In this case
the brand switching occurs for the sake of variety rather than dissatisfaction.
Decision Making
Decision making is referred to the series of steps which helps us in shortlisting one
alternative out of many alternatives.
Decision making involves the following:
Objectives must first be established
Objectives must be classified and placed in order of importance
Alternative actions must be developed
The alternative must be evaluated against all the objectives
The alternative that is able to achieve all the objectives is the tentative decision
The tentative decision is evaluated for more possible consequences
The decisive actions are taken, and additional actions are taken to prevent any adverse
consequences from becoming problems and starting both systems (problem analysis
and decision making) all over again
• There are steps that are generally followed that result in a decision model that can be
used to determine an optimal production plan.
• In a situation featuring conflict, role-playing is helpful for predicting decisions to be
made by involved parties.
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7. Decision Making Process
Need Recognition and Problem Awareness
This is the stage when consumer recognizes a problem or need. The need can be triggered by
internal or external stimuli when one of the person's needs rises to a level high enough to
become a drive.
Information Search
Once the consumer has recognized a problem, they search for information on products and
services that can solve that problem. Belch and Belch (2007) explain that consumers
undertake both an internal (memory) and an external search.
Sources of information include:
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Personal sources
Commercial sources
Public sources
Personal experience
The relevant internal psychological process that is associated with information search is
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8. perception. Perception is the process by which an individual receives, selects, organizes, and
interprets information to create a meaningful picture of the world. Consumers' tendency to
search for information on goods and services makes it possible for researchers to forecast the
purchasing plans of consumers using brief descriptions of the products of interest.
Evaluation of alternatives
At this time the consumer compares the brands and products that are in their evoked set. The
evoked set refers to the number of alternatives that are considered by consumers during the
problem-solving process. Sometimes also known as consideration , this set tends to be small
relative to the total number of options available. Consumers evaluate alternatives in terms of
the functional and psychological benefits that they offer. The marketing organization needs to
understand what benefits consumers are seeking and therefore which attributes are most
important in terms of making a decision. It also needs to check other brands of the customer’s
consideration set to prepare the right plan for its own brand.
Purchase Decision
Once the alternatives have been evaluated, the consumer is ready to make a purchase
decision. Sometimes purchase intention does not result in an actual purchase. The marketing
organization must facilitate the consumer to act on their purchase intention. The organization
can use a variety of techniques to achieve this. The provision of credit or payment terms may
encourage purchase, or a sales promotion such as the opportunity to receive a premium or
enter a competition may provide an incentive to buy now. The relevant internal psychological
process that is associated with purchase decision is integration. Once the integration is
achieved, the organization can influence the purchase decisions much more easily.
Post Purchase Evaluation
Post-purchase evaluation processes are directly influenced by the type of preceding decisionmaking process. Directly relevant here is the level of purchase involvement of the consumer.
Purchase involvement is often referred to as the level of concern for or interest in the
purchase situation, and it determines how extensively the consumer searches information in
making a purchase decision.
Reasons why Indians buy gold
There are several reasons why Indians buy gold. Some of them are listed below :
1) Gold is considered an equivalent for liquid cash: Gold is highly liquid and portable as a
security or asset. It can be converted to cash anytime when an emergency arises and is
considered a friend in need.
2) Gold is considered as Status Symbol: Especially in India, gold symbolizes wealth. In
Indian weddings the gold the bride brings in show her family's status and wealth and forms
part of the dowry given to bride. It is believed that a bride wearing 24k gold on their wedding
day brings luck and happiness throughout her married life.
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9. 3) Gold is a very good investment: Gold is an asset which has consistently increased in
value and thereby considered as a safe and secure investment. Gold is considered an effective
alternative which helps to reduce portfolio risk.
4) Gold is considered as a good gift item: It is precious and worthy across all cultures and
times. The gold jewelry is given as gifts during weddings, festivals and other special
occasions.
5) Gold has great religious significance: Gold is the symbol of the Hindu Goddess Lakshmi
and considered highly auspicious. Gold is brought or presented on festivals like Dhanteras
and Akshaya Tritiya. Toe rings are never made of gold as it represents the goddess of wealth
and should not be soiled by touching a human's feet.
6) Great Ornamental Value: No Indian woman can resist gold ornaments. Women of every
age and time have always loved wearing gold ornaments. Moreover, gold ornaments are
never out of fashion. It also may be remembered that wedding rings are also traditionally
made of gold to mark a long lasting relationship.
7) Great value as Heirloom: Gold jewelry is something which can be passed down from one
generation to the other as ancestral property.
8)Importance placed to events such as Akshaya Tritya:According to the Hindu Calendar,
Akshaya Tritiya is a very auspicious occasion for new beginnings. Buying gold is also a
popular activity as it is the symbol of wealth and prosperity. Gold bars, coins and gold
jewelery bought and worn on Akshaya Tritiya signify never diminishing good fortune. During
the period both banks and jewelers promote gold sales aggressively, offering the best prices
and discounts. Customer demand during Akshaya Tritiya surges due to a belief that gold
purchases go a long way in securing the future.
9)Gold used for wedding purpose : The one event that drives most of that demand is an
Indian wedding. There may be no wedding like an Indian wedding. The events can last for
days with music and dancing and traditions that go back centuries. Everywhere you look,
there's a collection of colors, flowers and food. And then there is also gold. Here it's a symbol
of purity that also shows off the couple's wealth and well being.
Reasons for Kerala's obsession with gold
Kerala is one state in India which accounts for nearly one-third of India's total gold sales.
This is due to a large number of factors which are listed below.
1. Ability of Kerala based NRI's to invest large amount of money in gold.
2. Willingness to invest in gold .
3. Dowry system widely prevalent in Kerala.
4. Part of lifestyle.
5. Survey has proved that Kerala women do not like wearing the same jewelery on all
occasions. So they buy new ones frequently.
6. Stare Government patronage to the sale of gold industry.
7. Influence of elders in decision-making.
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10. Statistical Data related to gold buying behavior
A survey was conducted by the ATR Institute of Jewelery Design regarding the gold buying
behavior amongst Indians. The survey was conducted amongst 550 respondents drawn from
10 Indian cities. Questionnaire method was adopted for field research and the data collected
were analyzed using statistical software such as SPSS and MS -EXCEL. The following
findings were obtained from the survey:
1.Indian city-wise gold buying behavior/trend
Product
Fashion
Jewelery
B'lore Chennai Cochin
Delhi
Hyd
Jaipur Kolkata Mumbai
0.00%
4.00%
4.00%
0.00%
0.00%
Gold
Jewelery
studded 13.00% 0.00%
with color
gemstones
7.00%
5.00%
7.00%
0.00% 15.00% 2.00% 38.00%
5.00%
7.00%
4.00%
0.00% 65.00% 9.00% 22.00%
Gold
Jewelery
studded
with
diamonds
Plain Gold
jewelery
Pearl
Jewelery
Platinum
Jewelery
Platinum
Jewelery
studded
with
diamonds
Silver
Jewelery
Synthetic
Diamond
Jewelery
10
0.00%
CBE
45.00% 2.00%
2.00%
0.00%
0.00%
71.00% 95.00% 56.00% 55.00% 87.00% 98.00% 11.00% 89.00% 36.00%
0.00%
0.00%
4.00%
0.00%
0.00%
2.00%
2.00%
0.00%
0.00%
5.00%
3.00%
9.00%
9.00%
2.00%
0.00%
5.00%
0.00%
2.00%
5.00%
0.00% 15.00% 16.00% 0.00%
0.00%
0.00%
0.00%
2.00%
2.00%
0.00%
0.00%
2.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2.00%
0.00%
0.00%
0.00%
0.00%
0.00%
11. 2.Occasions on which jewelery in bought in India
3.Brands trusted most and purchased by customers
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12. 4.To whom is the jewelery usually bought
5.Ornaments most likely to buy
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14. 8.Influences in choice of jewelery store
Conclusion
Gold has played an important role in the life of Indians from time immemorial. They have
been an integral part of our culture and it is evident that gold is not alone used for jewelery
but for other purposes as well. Times and cultures have changed, people's perceptions have
changed, tastes have changed, people's outlook have changed, but the approach of people
towards gold has not changed and gold still continues to be an indispensable part in the life of
an Indian.
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15. References
1. The Midas Touch, Business Standard
2. “Marketing Management” by Philip Kotler, Kevin Keller, Abraham Koshy, M Jha
3. “Organization Behaviour” by Jit S Chandan
4. “Consumer Behaviour” by Leon G Schiffman and Leslie Lazar
5. “The Consumer Survey” by Ved Prakash Sharma
6. The Real Price of Gold (National Geographic)
7. http://www.mbaknol.com/
8. http://en.wikipedia.org/
9. http://www.slideshare.net
10. http://www.tutor2u.net
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