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COST AND MARKETING BEHAVIOUR OF JEWELLERS
(A CASE STUDY OF MEERUT DISTRICT) Meerut Jewellery market has an important place in Indian
Jewellery market. It has its own identity in the world having customer
loyalty and purity. More over designer Jewellery manufactured in
Meerut District is known for its creative and attractive designing. As
far as the origin of Jewellery market in Meerut is concerned, it started
here around 1908. Till than it did not have it’s identity as a Jewellery
market. Before that gold smith themselves went to the customer’s
house and took order for making the Jewellery as per the specification
of him/her. After making the Jewellery they also made the delivery of it
and collected the money. In most of the cases the Jewellery work was
restricted to make the Jewellery from old design to new design by
melting the old Jewellery. Even in some cases gold was provided by the
customer and Jewellers were given only making charges. It means no
stock of readymade Jewellery was maintained by the jewellers.
At that time Heera Bullian Bank Limited started readymade
jewellery making besides its traditional business of money landing.
After that this work of Jewellery making got converted into a kind of
business. During this period a jeweller Jodha Mal Kailash Chand Jain
and after that Raghunandan Prasad also opened small Jewellery shops
where readymade Jewellery was also available for sale. This was the
turning point of Meerut Jewellery market. After them Manohar Lal
and Radhey Lal started their business and they also contributed a lot
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for the development of Meerut Jewellery Market. After that a number
of jewellers came and started manufacturing and selling gold and
silver Jewellery. Now Meerut is Asia’a largest Jewellery market. At
present Meerut consists the following four main Jewellery markets:
1. Vally bazaar Jewellery market
2. Abu Lane Jewellery Market
3. Bhagat Plaza Jewellery Market
4. Sadar Jewellery Market.
The famous jewellers of Meerut Jewellery Market are-
1. Heera Bullian Bank Limited (1913)
2. Jodhamal Kailash Chand Jain (1914)
3. Raghunandan Prasad Sarraf (1918)
4. Manohar Lal Sarraf & Sons (1918)
5. Jaina Jewellers (1928)
6. Allankar Jewellers (1963)
7. Akash Ganga Jewellery (2000)
8. Raghunandan Jewellers Pvt. Ltd. (2002)
BRANDED JEWELLERY IN INDIA
The concept of branded Jewellery in not very old it took its shape
hardly 10 to 15 years back. 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. Trendy, affordable and lightweight
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Jewellery soon gained familiarity. Branded Jewellery also gained
acceptance forcing traditional jewellers to go in for branding. Due to
the opportunity given by the branded Jewellery market, the number of
gold retailers in the country increased sharply.
Branded players such as Tanishq, Oyzterbay, Gili and Carbon
opened their 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. However, the share of
branded Jewellery in the total jewellery market is still small though it is
growing at a pace of 20 to 30 percent annually.
The branded Jewellery segment occupies only a small share of
the total Jewellery market because of the mindset of the average Indian
buyer who still regarded Jewellery as an investment. Moreover,
consumers trusted only their family jewellers while buying Jewellery.
Consequently, the branded jewellery players tried to change the
mindset of the people and woo customers with attractive designs at
affordable prices.
Titan sold gold Jewellery under the brand name Tanishq, while
Gitanjali Jewels, a Mumbai-based Jewellery exporter, sold 18-carat
gold Jewellery under the brand name Gili.
Gitanjali Jewels also started selling 24-carat gold Jewellery in
association with a Thai company, Pranda. Su-Raj (India) Ltd. launched
its collection of diamond and 22 -carat gold Jewellery in 1997. The
Mumbai-based group, Beautiful, which marketed the Tiffany range of
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products in India, launched its own range of studded 18-carat
Jewellery. D’ Damas Diamonds, Nirvana Diamonds, Tanishiq, Gili,
Nakshatra Diamonds, Asmi, Carbon, Oyzterbay, Trendsmith, Adora
Diamonds, Kiah Diamonds are popular brands of diamond jewellery.
OBJECTIVES OF THE STUDY The main objectives of the study are given below:
1. To enlighten the need, scope and importance of the study
2. To study the importance of Jewellery industry in society.
3. To make the study about the manufacturing process of different
types of Jewellery.
4. To analyze the production costs of different types of Jewellery.
5. To study about the different channels used for the marketing of
Jewellery.
6. To analyze the strategies used at local, national and international
levels of marketing in traditional Jewellery.
7. To study about the charges incurred at different levels of
marketing of Jewellery in traditional Jewellery industry.
8. To study about the margins at different levels of marketing of
Jewellery.
9. To arrive at the logical conclusion and to propose constructive
suggestions for the betterment of Jewellery industry in India.
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LIMITATION OF THE STUDY Though the researcher had to complete her research under certain
limitations like scanty literature, non-cooperative response of
manufacturers and jewellers, difficulty in collecting information from
the official records, time limitations with the researcher, non-
availability of published data etc yet she never compromise with these
problems and continued her efforts for finding the required data and
information. Due to the repeated efforts of the researcher there are no
adverse effects on the results of the study and it could be completed
satisfactorily.
REVIEW OF LITERATURE Review of literature of a subject is helpful in understanding the
conceptual framework and provides a detailed account of work which
was done in the past on that particular subject. It proves helpful to the
candidate in deciding the line of action to start his research study.
Keeping in view all these facts a review of existing literature has been
made by the researcher.
The Review of existing literature provided detailed information
regarding the history of jewellery industry, evolution of branded
jewellery, manufacturing process of jewellery, changing scenario in
jewellery industry in India. All these information helped the
researcher to a lot in completing her research work.
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RESEARCH METHODOLOGY
Following research methodology was adopted in the proposed
research study:
Selection of Area: District Meerut was taken for the purpose of
survey because this District has a prominent place in the field of
manufacturing and marketing of Gold and Diamond Jewellery.
Selection of Sample Units: For the purpose of survey 50 traditional
jewellers and the same number of goldsmiths manufacturing different
types of Jewellery was taken at random bases to study the marketing
process, marketing costs and margins.
Period of Study: Because this study has been conducted at micro
level and it is totally survey based, hence for the purpose to collect the
data regarding costing, marketing charges and margins, the year 2009-
10 was taken for the study.
Collection of Data: Both the primary and secondary data were used
in this research study. Primary Data was collected through personal
interviews form manufacturers and traders of traditional Jewellery
industry and the secondary information were collected from the
published records.
Tabulation, Analysis and Interpretation of Data and Information:
the collected data and information was tabulated in such a manner so
that these may be analyzed and be logically interpreted.
Conclusion and Suggestions: In the end logical conclusions have
been drawn from the study and constructive suggestions have
proposed in the light of the findings.
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HYPOTHESIS Proposed research work was based on the following
presumptions:
Production process of Jewellery is traditional.
Due to manual manufacturing system in Jewellery, generally the cost
of production works out very high.
Hallmark system is not in common practice among the jewellers and
buyers in India.
Marketing charges and margins are charged at very high rate from the
customers by the branded companies in Jewellery industry in India.
A number of factors leave their direct or indirect influence on the
production cost and marketing of Jewellery.
There is a great scope of reducing production and marketing costs in
case of Jewellery manufacturing and its marketing.
A BRIEF VIEW OF MEERUT DISTRICT Meerut district is one of the main districts of U.P. Here people of
different religions live together. Its natural environment is healthy. The
soil is fertile and means of irrigation are available in good amount
because of which it is very much useful for agriculture. Here the market
of agricultural produces and publishing industry is well developed, but
the industrial progress is normal and public and private medical
facilities are at satisfactory levels. The supply of electricity and water
needs to be improved a lot. Banking and transportation facilities are
satisfactory. Administrative services are required to be improved in the
district. Besides these, few revolutionary changes have been taken
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place in the field of technical education for last few years. As far as the
Jewellery Industry in Meerut District is concerned, it is established as
an unorganized sector. There are near about 600 Retailers and around
60 wholesalers in Meerut District who are involved in domestic and
export sale. Out of these retailers and wholesalers only 30 to 35 are
well known and are 100% BIS certified. In fine, it can be said that the
Meerut district can be put in the line of developing districts of the
region.
PRODUCTION PROCEDURE OF JEWELLERY
Jewellery Manufacturing is a matter of creativity. First of all the
design comes in the mind than a blue print of that design is drawn on
paper. Moreover, it is a kind of assembling and jointing various gold
made parts like flowers, small balls and gold leafs, wire etc. In this way
the process of manufacturing Jewellery passes through various
interlinked sub process starting from melting the gold and ends with
polishing the Jewellery. Now a days in Jewellery industry two main
processes of manufacturing are popular i.e. traditional method of
manufacturing and modern method of manufacturing. Jewellery
making is hundred percent a human process whereas modern method of
manufacturing process is some where based on machines too. In
modern method design are made with the help of machines. One other
pattern of manufacturing Jewellery is very popular now a days i.e.
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Kundan Jewellery which is also a Hand Made Pattern and requires a
significant degree of human effort.
In Meerut district manufacturing of Jewellery is categorized into
these main manufacturing terms:
A. Handmade
B. Cast
C. Die Struck
D. Gold Filled and Rolled Gold Plate
E. Gold Electroplate
Jewellery manufacturing process includes most advance
technologies and dedicated research. Jewellery making is a very
composite process undergoing a long and slow procedure making it
tough from the initial point to the finishing point. Each product
undergoes a series of procedures before we get the net product as a
beautiful Jewellery product.
The natural components of Jewellery (stones, metals, and
accessories) passes through multiple processes. These jewellery are
unique and involve a lot of time and skill. Except for personalized
Jewellery which is handcrafted, most of the jewellery are executed by
casting machines.
After the product has passed from the polishing and finishing
departments, it has to undergo for embellishment process. When the
products gets cased and foiled, the required decorative stones of the
correct sizes and weight are cut and made with extreme preciseness and
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are then assorted for the final setting which is done once the products
leave the foiling and finishing department.
It requires immense patience and skill to make the master-model
and to produce an exquisitely casting free from defects and which
needs the minimum of chasing to make it perfect.
Thus, each piece of Jewellery, regardless of its size and weight, passes
through a long and complex manufacturing process forming each piece as
valuable, precious and unique as the process it tolerates.
PRODUCTION PROCEDURE OF DIAMOND JEWELLERY When Diamond jewellery is manufactured a standard production
procedure is generally followed from making rubber mould and ends
with polishing the final piece. It can be exhibited with the help of the
following chart:
CHART SHOWING THE PRODUCTION PROCEDURE OF DIAMOND JEWELLERY
The following steps are involved in manufacturing Diamond
Jewellery:
Blueprint designing
Rubber mould
Wax injection
Casting
Wax setting
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Diamond assortment
Mechanical finish
Assembly
Manual setting
Polishing From the above discussion we just came to know that the there
are variety of Jewellery which are manufactured with the help of
various inputs. But all together it is a combination of in depth
creativity. The Jewellery manufacturing process passes through various
stages and than finally we got some thing worth appreciating.
ANALYSIS OF PRODUCTION COST OF JEWELLERY
The trend was observed in Meerut District is that the Jewellers
running showroom gets order from the customer as per their
specifications and get it manufactured from the gold smith or
‘Karigars’. Here it is worth mentioning that for specific Jewellery there
are different ‘Karigars’ for example ‘Karigars’ for making bangles will
be different from ‘Karigars’ making earrings. In this way Jewellers give
order to different ‘Karigars’. In this regard the required material i.e.
gold is given to ‘Karigars’ for getting the Jewellery manufactured.
In Meerut district four main categories of Jewellery are popular
i.e. 18 carat, 20 carat, 22 carat and 23 carat. These carats are based on
the purity of the gold.
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In case of 18 carat per 10 gms. Jewellery, the manufacturing cost
comes to Rs. 16,200 at the level of jewellers. This cost has been computed
for simple designs of the Jewellery whereas in case of designer jewellery
this cost may vary form 5% to 10% or above in some other specific cases.
In this kind of Jewellery purity is 75% which means that the pure gold
worth comes to Rs. 15,000 (considering gold price @ Rs. 20,000 per 10
gms). Moreover, the labour charges paid to the Karigars come to Rs.
1,200 i.e. 7.41% of the total manufacturing cost. Thus it can be said that
the manufacturing cost of 10 gms. Jewellery comes equal to 81% cost of
10gms. pure gold.
In case of 18 carat Jewellery the total goldsmith cost comes to
Rs. 396 i.e. 33% of the total labour cost given by Jewellers. Thus his
net labour charges remain Rs. 804 i.e. 67% of the total labour cost.
These labour charges seem quite satisfactory at this level.
In case of 20 carat 10 gms. Jewellery, the manufacturing cost
comes to Rs. 18,066 at the level of jewelers. In this kind of Jewellery
purity is 83.33% which means that the pure gold worth comes to Rs.
16,666 (considering gold price @ Rs. 20,000 per 10 gms). Moreover,
the labour charges paid to the Karigars come to Rs. 1,400 i.e. 7.75% of
the total manufacturing cost. Thus it can be said that the manufacturing
cost of 10 gms. Jewellery comes equal to 90.33% cost of 10gms. pure
gold.
In case of 20 carat Jewellery the total goldsmith cost comes to
Rs. 416 i.e. 29.71% of the total labour cost given by Jewellers and his
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net labour charges remain Rs. 984 i.e. 70.29% of the total labour cost.
These labour charges seem quite satisfactory at this level.
In case of 22 carat 10 gms. jewellery, the manufacturing cost
comes to Rs. 19,932 at the level of jewellers. In this kind of Jewellery
purity is 91.66% which means that the pure gold worth comes to Rs.
18,332 (considering gold price @ Rs. 20,000 per 10 gms). Moreover,
the labour charges paid to the Karigars come to Rs. 1,600 i.e. 8.03% of
the total manufacturing cost. Thus it can be said that the manufacturing
cost of 10 gms. Jewellery comes equal to 99.66% costs of 10gms. pure
gold.
In case of 22 carat Jewellery the total goldsmith cost comes to
Rs. 436 i.e. 27.25% of the total labour cost given by Jewellers. Thus his
net labour charges remain Rs. 1,164 i.e. 72.75% of the total labour cost.
These labour charges seem quite satisfactory at this level.
In case of 23 carat 10 gms. Jewellery, the manufacturing cost
comes to Rs. 20,866 at the level of jewelers. In this kind of
Jewellery purity is 95.83% which means that the pure gold worth
comes to Rs. 19,166 (considering gold price @ Rs. 20,000 per 10
gms). Moreover, the labour charges paid to the Karigars come to Rs.
1,700 i.e. 8.15% of the total manufacturing cost. Thus it can be said
that the manufacturing cost of 10 gms. Jewellery comes equal to
104.33% costs of 10gms. pure gold.
In case of 23 carat Jewellery the total goldsmith cost comes to
Rs. 446 i.e. 26.24% of the total labour cost given by Jewellers and his
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net labour charges remain Rs. 1,254 i.e. 73.76% of the total labour cost.
These labour charges seem quite satisfactory at this level.
MANUFACTURING COST OF DIAMOND JEWELLERY
Diamond Jewellery is basically manufactured using 18 carat gold
just to give hardness to the Jewellery. In this case the manufacturing
cost remains same as in case of plain 18 carat gold Jewellery. Only
what differs here is the cost of Diamond that varies according to the
quality, size and weight of the diamond crystal gem.
During her study the research scholar tried to find out the exact
manufacturing cost of branded Jewellery but because of the secrecy
reason she could not get any idea about their manufacturing cost. But it
is very clear that because the manufacturing system of branded
jewellers is entirely different from traditional Jewellers, their
manufacturing cost remain much higher as compared to the same with
traditional jewellers.
MARKETING CHANNELS IN JEWELLERY INDUSTRY
In Meerut District the following marketing channels are found in
case of marketing of Jewellery:
First Structure of Marketing Channel:
Manufacturer(Karigar) … Wholesaler … Commission Agent …
Retailer … Consumer
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This channel is popular where large organizations are involved
and the jewellery is imported from abroad and other states too.
Second Structure of Marketing Channel:
Manufacturer cum Wholesaler … Commission Agent … Retailer …
Consumer
This marketing channel is noticed with different degrees of
popularity in urban, suburban and rural areas of Meerut District .
Third Structure of Marketing Channel:
Manufacturer (Karigars) … Retailer … Consumer
This marketing channel does register its existence in urban areas
but in suburban areas it is very much popular. In other words, the above
structure is followed in suburban areas with highest degree of success.
Fourth Structure of Marketing Channel:
Manufacturer (Karigars) … Consumer
This marketing structure is most popular only in rural areas of
Meerut District because of the favorable circumstances prevailing here.
MARKETING CHANNELS OF JEWELLERY AT
INTERNATIONAL LEVEL In case of International marketing of Jewellery the following
channels were noticed:
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First Structure of Marketing Channel:
Manufacturer … Domestic Middlemen (Export Agencies) …
Middlemen in Foreign Markets (Merchants) … Retailers in Foreign
Markets … Consumers in Foreign Markets
Second Structure of Marketing Channel:
Manufacturers … Middlemen in Foreign Markets … Retail Outlet in
Foreign Markets … Consumers in Foreign Markets
MARKETING BEHAVIOUR AND STERATEGIES OF
JEWELLERS
Marketing behaviour of Jewellers is nothing but a set of strategy
to be adopted for marketing their Jewellery to its ultimate customers. In
this regard whatever may be the technique, policy and strategy adopted
by jewellers to influence and attract their customers comes under the
ambit of marketing behaviour of jewellers. Generally it is believed that
Jewellers behave according to the market as they are supposed to be the
part of the market in which they are dealing, but now the scenario is
completely changed and Jewellers behave according to the different
attitudes of the customers. Now they have started to consider likings
and dislikings of customers while making Jewellery. In some specific
cases Jewellery is manufactured according to the requirements of the
customers. In this way now jewellers are trying to pick up more and
more customer loyalty by providing different types of ‘after sale
service’ like free repair and cleaning of the Jewellery etc.
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Now Jewellers are adopting various modern marketing tools to
make their customers aware about their products which include
E-marketing, gold harvesting schemes, exchange offers only on making
charges, hall mark system etc. Various Jewellery designs along with its
weight and price are displayed on websites. In such a way a customer
can even order Jewellery online. During survey it was noticed that in
Meerut District the implication of such method is limited to a specific
class only. Still today the customers of Jewellery enjoy buying it by
making a feel for touching it personally which inspires and fascinate
them to buy it.
Customers buying behaviour has changed dramatically in the past
few years. Now the customers are well informed and have more
choices about how they spend their money than ever before. They want
to buy the selected pieces of Jewellery which may satisfy their
emotional needs too. Now the competitive landscape has changed and
Jewellery retailers are no longer just competing with each other by the
traditional techniques but with the latest developed strategies like offer
of Branded Jewellery, Financial facilities, Exchange offers, Lucky
Draws, Transportation Facilities, Sponsorship on festivals and other
occasions, Special Offers (Free Gifts), Price Discount, Refreshments,
Personal Attention etc.
Understanding their customers’ needs is the first step for winning
business. In this regard the motivations and different strategies are
involved in the purchase of Jewellery and finally, suggest ways in
which jewellers can work to establish relationship with their customers.
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For this purpose a jeweller is supposed to find out the answers of
some questions and also to find out the answers for making their
marketing strategy. These questions are -
What inspires the customers?
What is customer’s buying process?
After finding the answers of the above questions and knowing
about the buying behaviour and process of the customers; jewellers
make their marketing strategy.
STRATEGIES ADOPTED BY BRANDED AND NON-
BRANDED JEWELLERS
Some most popular strategies are being given below which are
adopted by branded and non-branded jewellers in the Jewellery market
of Meerut District.
Finance facilities
Exchange offer
Lucky draws
Transportation facility
Sponsorship on festivals and other occasions
Special offers (free gifts)
Price discount
Refreshments
Personal attention
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STRATEGIES OF BRANDED JEWELLERY MAKERS
While Jewellery has been evolving as a category in India, It is
believed that the present era is going to be the period of branded
Jewellery. Brands in the Jewellery category will blossom and grow and
this category will fully bloom and make a huge jump in terms of its
acceptance and growth.
It is believed for many years that Jewellery was purchased as an
investment option. The entire thinking was related to appreciation or
using it as a security measure during bad times. However, it is expected
that in coming future branded Jewellery will be purchased and used less
for investment and more for consumption. It will be used as a consumer
product to delight the consumer, fulfill the desires, enhance beauty and
be a part of attire.
The coming time will be the era of branded jewellery because it
will grab a large market of traditional jewellery in India. So it becomes
necessary for the traditional jewellers to make their marketing strategy
in such a manner so that they may be successful to retain the present
cliental and be stand in the market showing their sound existence.
The emphasis is given on design by branded jewellers 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
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seven member in-house design team and also outsourced designs from freelance designers.
The designers visited different parts of the country to get feedback on Tanishq's designs and collected information 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 carat meters which showed the purity of gold.
MARKETING CHARGES AND MARGINS IN
JEWELLERY INDUSTRY In modern marketing system, the marketing area of a product
becomes so wide that the commodity reaches in the hands of ultimate
consumers passing through different marketing channels. This is also
done in case of Jewellery. In case of Jewellery the marketing cost starts
from manufacturer's/wholesaler's level and ends at the point when the
Jewellery reaches in the hands of the buyers.
These marketing channels have their eminent importance but it is
a bare fact that each and every marketing channel, used for physical
distribution of a product has its own cost. So it becomes inevitable to
go through all the expenses and margins at different levels of
marketing, so that it may clearly be judged whether these expenses and
margins are justified, and every marketing channel is getting its share
in a justified manner.
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(A) MARKETING CHARGES
A number of marketing charges are incurred by different
marketing intermediaries involved in the business of Jewellery. A brief
description of these charges is given below: In case of 75% (18 carat) Jewellery per 10 gms the total marketing
charges are Rs. 609.28 out of which Rs. 228.40 i.e. 37.49% is paid by
manufacturers/wholesalers and the rest Rs. 380.88 is 62.51% is paid by
retailers. On analyzing the figures head wise this fact comes into light those
storing expenses, office expenses and transportation expenses are
exclusively incurred at manufacturers & wholesalers level. Likewise,
showroom expenses, advertisement expenses, entertainment expenses,
packing expenses, credit expenses and other expenses are incurred only at
retailer’s level. So far staff salary and other expenses are concerned these are
paid 24.84% by manufacturers/wholesalers and 75.16% by retailers.
Likewise, Insurances expenses are incurred 50% at
manufacturer's/wholesaler's level and 50% at retailer’s level.
In case of 83.33% (20 carat) Jewellery per 10 gms the total marketing
charges are Rs. 705.33 out of which Rs. 245.60 i.e. 34.82% is paid by
manufacturers/wholesalers and the rest Rs. 459.73 is 65.18% is paid by
retailers. On analyzing the figures head wise this fact comes into light those
storing expenses, office expenses and transportation expenses are
exclusively incurred at manufacturers & wholesalers level. Likewise,
showroom expenses, advertisement expenses, entertainment expenses,
packing expenses, credit expenses and other expenses are incurred only at
retailer’s level. So far staff salary and other expenses are concerned these are
paid 28.43% by manufacturers/wholesalers and 71.57% by retailers.
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Likewise, Insurances expenses are incurred 50% at manufacturer's
/wholesaler's level and 50% at retailer’s level.
In case of 91.66% (22 carat) Jewellery per 10 gms the total marketing
charges are Rs. 901.60 out of which Rs. 276 i.e. 30.61% is paid by
manufacturers/wholesalers and the rest Rs. 625.60 is 69.39% is paid by
retailers. On analyzing the figures head wise this fact comes into light those
storing expenses, office expenses and transportation expenses are
exclusively incurred at manufacturers & wholesalers level. Likewise,
showroom expenses, advertisement expenses, entertainment expenses,
packing expenses, credit expenses and other expenses are incurred only at
retailer’s level. So far staff salary and other expenses are concerned these are
paid 25% by manufacturers/wholesalers and 75% by retailers. Likewise,
Insurances expenses are incurred 50% at manufacturer's/wholesaler's level
and 50% at retailer’s level.
In case of 95.83% (23 carat) Jewellery per 10 gms the total marketing
charges are Rs. 919.95 out of which Rs. 285.95 i.e. 31.08% is paid by
manufacturers/wholesalers and the rest Rs. 634 is 68.92% is paid by
retailers. On analyzing the figures head wise this fact comes into light those
storing expenses, office expenses and transportation expenses are
exclusively incurred at manufacturers & wholesalers level. Likewise,
showroom expenses, advertisement expenses, entertainment expenses,
packing expenses, credit expenses and other expenses are incurred only at
retailer’s level. So far staff salary and other expenses are concerned these are
paid 25% by manufacturers/wholesalers and 75% by retailers. Likewise,
Insurances expenses are incurred 50% at manufacturer's/wholesaler's level
and 50% at retailer’s level.
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(B) MARKETING MARGINS In jewellery business marketing margins are earned by different
marketing intermediaries. These intermediaries are manufacturers
/wholesalers and retailers.
In case of 75% (18 carat) Jewellery per 10 gms the net margins at
manufacturer's/wholesaler's level is 271.60 i.e. 39.32% of the total net
margins in Jewellery business in the area selected for the study. Likewise,
the retailer’s net margin is Rs. 419.12 i.e. 60.68% of the total net margins at
this level. These margins at both the levels are quite genuine.
In case of 83.33% (20 carat) Jewellery per 10 gms the net margins at
manufacturer's /wholesaler's level is 238.40 i.e. 35.13% of the total net
margins in Jewellery business in the area selected for the study. Likewise,
the retailer’s net margin is Rs. 440.27 i.e. 64.87% of the total net margins at
this level. These margins at both the levels are quite genuine.
In case of 91.66% (22 carat) Jewellery per 10 gms the net margins at
manufacturer's/wholesaler's level is 292 i.e. 33.70% of the total net margins
in Jewellery business in the area selected for the study. Likewise, the
retailer’s net margin is Rs 574.40 i.e. 66.30% of the total net margins at this
level. These margins at both the levels are quite genuine.
In case of 95.83% (23carat) Jewellery per 10 gms, the net margins at
manufacturer's /wholesaler's level is 348.05 i.e. 28.67% of the total net
margins in Jewellery business in the area selected for the study. Likewise,
the retailer’s net margin is Rs. 866 i.e. 71.33% of the total net margins at this
level. At this level retailer’s margins are considerably high.
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In case of branded Jewellery it was observed that the manufacturers
establish their outlets at the heart places of different cities and they do not
engage any marketing intermediaries. They incur the marketing charges at
their own level which comes about 3% of the price of the jewellery and
marketing margins remain about 2% at manufacturer’s level and about 3% at
outlet level. As the whole business of branded Jewellery is controlled by the
head office, so it was not feasible to conduct a detailed study about
marketing charges and margins.
In case of diamond jewellery it was noted that it is sold on piece basis
keeping in view the quality and carat of the diamond. The marketing charges
remain almost as in the case of gold jewellery while marketing margins
remain about 4% of the price of the diamond Jewellery at manufacturer’s
level and about 6% at retailer’s level. The detailed analysis of marketing
charges and margins is not feasible in this case because this Jewellery is not
manufactured in the area selected for the study.
25
SUGGESTIONS
Here are few suggestions in the light of the conclusion drawn
from the present research study:
It is suggested for the traditional jewellers that they should make
their marketing strategy in such a manner so that they may be
successful to retain the present cliental and be stand in the market
showing their sound existence before branded jewellers.
A Gems and Jewellery Training Centre should be established in
Meerut District in which the persons engaged in this trade should
be trained for the rapid growth of Jewellery business.
Hallmarking should be implemented effectively. In this direction
government should take strict steps to implement the Act made
for this purpose and also the traders should cooperate in this
direction willingly.
To reduce the production cost the manufacturers should make
sincere efforts by using latest manufacturing technologies. Also
the government should take steps to provide regular supply of
power so that the jewellery manufacturing work may not be
retarded at any level.
The manufacturers should make efforts to make light weight
jewellery so that the buyers may enjoy it by paying
comparatively low price for this.
26
Though the marketing charges seem justifiable in this trade, yet
sincere efforts should be made to bring it down to the best
possible level. It will prove helpful in reducing the total cost of
production of different types of jewellery.
Though the marketing margins in case of 18 carat, 20 carat and
22 carat seem justifiable in this trade, yet the manufacturers,
wholesalers and retailers should consider in this direction and
should reduce their margins to some extent. It will reduce the
burden on the pockets of buyers.
In case of 23 carat jewellery the marketing margins are very high
which should be brought down considerably.
To attract more and more customers new designs should be
developed so that the new look may be given to the jewellery as
well as more pleasure to the jewellery buyers.
In case of diamond jewellery there should be quality testing
instruments available in showrooms and the full satisfaction
should be given to the buyers by showing its carat and quality on
diamond testing instruments.
There should be standardization of diamond price like gold so
that there may not be difference between buying and selling it.
Thus the fair dealing will be started in the trade of diamond
jewellery.
27
There should be standardization in Jewellery making charges so
that the variations regarding it at different outlets may be checked
and the buyers may be protected from their exploitation.
Meerut District should be declared an Export Zone and an Export
Centre should be established by the Government so that the
jewellers may promote their business in the direction of export
their jewellery.
MCX trading should be closed immediately so that the jumping
price of gold may be checked.
It is believed that the above suggestions will attract the attention of
the manufacturers and traders engaged in this trade and they will make
efforts to grow the jewellery market in this area. It is also believed that
the government will provide all the necessary facilities to the
manufacturers and jewellers so that they may make this trade more
glorious in the coming future.
* * *
28
CONCLUSION AND SUGGESTIONS CONCLUSION
Here is the main conclusion drawn from the present research
study:
Meerut Jewellery market has an important place in Indian
Jewellery market. It has its own identity in the world having
customer loyalty and purity. More over designer Jewellery
manufactured in Meerut District is known for its creative and
attractive designing.
As far as the origin of Jewellery market in Meerut is concerned, it
started here around 1908. But the Jewellery Industry in Meerut
District is still in unorganized sector.
There are near about 600 Retailers and around 60 wholesalers in
Meerut District who are involved in domestic and export sale. Out of
these retailers and wholesalers only 30 to 35 are well known and are
100% BIS certified.
The total jewellery for these retailers and wholesalers is manufactured
by approx. 28,000 karigars living in different areas of Meerut. Before
2009-10 the estimated output of jewellery per day on average basis
was 100 Kg. amounted to Rs. 12 crore but now when the price of gold
is increasing day by day the turnover in quantity is reduced to 50-60
Kg. /day amounted to Rs. 12-14 crore.
In case of manufacturing of jewellery, Meerut comes at fifth place
whereas Mumbai, Rajkot, Kolkata and Chennai come at first four
29
places respectively. For designing purpose this industry is dependent
on the karigars of Kolkata and Mumbai.
Sophistication has virtually revolutionized the gems and
Jewellery industry with the advent of computers and laser
technology.
Many training institutes are being run by India's Gem &
Jewellery Export Promotion Council and others of the private
sectors.
The production of Jewellery is a very tough and lengthy process
and demands of hard and expertise skill in the field of Jewellery
designing and manufacturing. As in gold and diamond Jewellery
manufacturing a high cost is involved, so no experimental risk
can be taken at any level.
In Meerut district four main categories of Jewellery are popular
i.e. 18 carat, 20 carat, 22 carat and 23 carat. These carats are
based on the purity of the gold. The price of Jewellery is also
fixed on the bases of purity.
In Meerut district the general practice is that the gold is provided
by the Jewellers to the karigars in certain percentage for making
the Jewellery.
In case of 18 carat per 10 gms. Jewellery, the manufacturing cost
comes to Rs. 16,200 at the level of jewellers. This cost has been
computed for simple designs of the Jewellery whereas in case of
designer jewellery this cost may vary form 5% to 10% or above in
some other specific cases.
30
In case of 18 carat Jewellery the total goldsmith cost comes to
Rs. 396 i.e. 33% of the total labour cost given by Jewellers. Thus
his net labour charges remain Rs. 804 i.e. 67% of the total labour
cost. These labour charges seem quite satisfactory at this level.
In case of 20 carat 10 gms. Jewellery, the manufacturing cost
comes to Rs. 18,066 at the level of jewelers. In this kind of
Jewellery purity is 83.33% which means that the pure gold worth
comes to Rs. 16,666 (considering gold price @ Rs. 20,000 per 10
gms). Moreover, the labour charges paid to the Karigars come to
Rs. 1,400 i.e. 7.75% of the total manufacturing cost.
In case of 20 carat Jewellery the total goldsmith cost comes to
Rs. 416 i.e. 29.71% of the total labour cost given by Jewellers
and his net labour charges remain Rs. 984 i.e. 70.29% of the total
labour cost. These labour charges seem quite satisfactory at this
level.
In case of 22 carat 10 gms. jewellery, the manufacturing cost
comes to Rs. 19,932 at the level of jewellers. In this kind of
Jewellery purity is 91.66% which means that the pure gold worth
comes to Rs. 18,332 (considering gold price @ Rs. 20,000 per 10
gms). Moreover, the labour charges paid to the Karigars come to
Rs. 1,600 i.e. 8.03% of the total manufacturing cost.
In case of 22 carat Jewellery the total goldsmith cost comes to
Rs. 436 i.e. 27.25% of the total labour cost given by Jewellers.
Thus his net labour charges remain Rs. 1,164 i.e. 72.75% of the
31
total labour cost. These labour charges seem quite satisfactory at
this level.
In case of 23 carat 10 gms. Jewellery, the manufacturing cost
comes to Rs. 20,866 at the level of jewelers. In this kind of
Jewellery purity is 95.83% which means that the pure gold
worth comes to Rs. 19,166 (considering gold price @ Rs.
20,000 per 10 gms). Moreover, the labour charges paid to the
Karigars come to Rs. 1,700 i.e. 8.15% of the total
manufacturing cost.
In case of 23 carat Jewellery the total goldsmith cost comes to
Rs. 446 i.e. 26.24% of the total labour cost given by Jewellers
and his net labour charges remain Rs. 1,254 i.e. 73.76% of the
total labour cost. These labour charges seem quite satisfactory at
this level.
Diamond Jewellery is basically manufactured using 18 carat gold
just to give hardness to the Jewellery. In this case the
manufacturing cost remains same as in case of plane 18 carat
gold Jewellery. Only what differs here is the cost of Diamond
that varies according to the quality, size and weight of the
diamond crystal gem.
Because the manufacturing system of branded jewellers is
entirely different from traditional Jewellers, their manufacturing
cost remain much higher as compared to the same with traditional
jewellers.
32
A number of distribution channels are used at national and
international level for the marketing of different kinds of
jewellery. They serve several specialized functions that enable
manufacturers to make their goods available to their consumers at
the place according to their requirements.
Customers buying behaviour has changed dramatically in the past
few years. Now the customers are well informed and have more
choices about how they spend their money than ever before. They
want to buy the selected pieces of Jewellery which may satisfy
their emotional needs too.
Now the competitive landscape has changed and Jewellery
retailers are no longer just competing with each other by the
traditional techniques but with the latest developed strategies like
offer of Branded Jewellery, Financial facilities, Exchange offers,
Lucky Draws, Transportation Facilities, Sponsorship on festivals
and other occasions, Special Offers (Free Gifts), Price Discount,
Refreshments, Personal Attention etc.
It seems that the coming time will be the era of branded jewellery
because it will grab a large market of traditional jewellery in
India.
Now the emphasis is given on design by branded jewellers because local jewellers could offer to design any pattern according to the customer's specifications.
In case of 75% (18 carat) Jewellery per 10 gms the total marketing
charges are Rs. 609.28 out of which Rs. 228.40 i.e. 37.49% is paid by
33
manufacturers/wholesalers and the rest Rs. 380.88 is 62.51% is paid
by retailers.
In this case the net margins at manufacturer's/wholesaler's level is
271.60 i.e. 39.32% of the total net margins in Jewellery business in
the area selected for the study. Likewise, the retailer’s net margin is
Rs. 419.12 i.e. 60.68% of the total net margins at this level. These
margins at both the levels are quite genuine.
In case of 83.33% (20 carat) Jewellery per 10 gms the total marketing
charges are Rs. 705.33 out of which Rs. 245.60 i.e. 34.82% is paid by
manufacturers/wholesalers and the rest Rs. 459.73 is 65.18% is paid
by retailers.
In this case the net margins at manufacturer's /wholesaler's level is
238.40 i.e. 35.13% of the total net margins in Jewellery business in
the area selected for the study. Likewise, the retailer’s net margin is
Rs. 440.27 i.e. 64.87% of the total net margins at this level. These
margins at both the levels are quite genuine.
In case of 91.66% (22 carat) Jewellery per 10 gms the total marketing
charges are Rs. 901.60 out of which Rs. 276 i.e. 30.61% is paid by
manufacturers/wholesalers and the rest Rs. 625.60 is 69.39% is paid
by retailers.
In this case the net margins at manufacturer's/wholesaler's level is 292
i.e. 33.70% of the total net margins in Jewellery business in the area
selected for the study. Likewise, the retailer’s net margin is Rs 574.40
i.e. 66.30% of the total net margins at this level. These margins at
both the levels are quite genuine.
In case of 95.83% (23 carat) Jewellery per 10 gms the total marketing
charges are Rs. 919.95 out of which Rs. 285.95 i.e. 31.08% is paid by
34
manufacturers/wholesalers and the rest Rs. 634 is 68.92% is paid by
retailers.
In this case the net margins at manufacturer's /wholesaler's level is
348.05 i.e. 28.67% of the total net margins in Jewellery business in
the area selected for the study. Likewise, the retailer’s net margin is
Rs. 866 i.e. 71.33% of the total net margins at this level. At this level
retailer’s margins are considerably high which should be reduced to a
justified level.
In case of branded Jewellery it was observed that the manufacturers establish their outlets at the heart places of different cities and they do not engage any marketing intermediaries. They incur the marketing charges at their own level which comes about 3% of the price of the jewellery and marketing margins remain about 2% at manufacturer’s level and about 3% at outlet level.
In case of diamond jewellery it was noted that it is sold on piece basis keeping in view the quality and carat of the diamond. The marketing charges remain almost as in the case of gold jewellery while marketing margins remain about 4% of the price of the diamond Jewellery at manufacturer’s level and about 6% at retailer’s level.
During survey it was observed that Hallmarking of gold jewellery is made compulsory but it is not implemented effectively by all the jewellers.
It was observed that jewellery making charges differ from design to design and showroom to showroom.
35
SUGGESTIONS
Here are few suggestions in the light of the conclusion drawn
from the present research study:
It is suggested for the traditional jewellers that they should make
their marketing strategy in such a manner so that they may be
successful to retain the present cliental and be stand in the market
showing their sound existence before branded jewellers.
A Gems and Jewellery Training Centre should be established in
Meerut District in which the persons engaged in this trade should
be trained for the rapid growth of Jewellery business.
Hallmarking should be implemented effectively. In this direction
government should take strict steps to implement the Act made
for this purpose and also the traders should cooperate in this
direction willingly.
To reduce the production cost the manufacturers should make
sincere efforts by using latest manufacturing technologies. Also
the government should take steps to provide regular supply of
power so that the jewellery manufacturing work may not be
retarded at any level.
The manufacturers should make efforts to make light weight
jewellery so that the buyers may enjoy it by paying
comparatively low price for this.
36
Though the marketing charges seem justifiable in this trade, yet
sincere efforts should be made to bring it down to the best
possible level. It will prove helpful in reducing the total cost of
production of different types of jewellery.
Though the marketing margins in case of 18 carat, 20 carat and
22 carat seem justifiable in this trade, yet the manufacturers,
wholesalers and retailers should consider in this direction and
should reduce their margins to some extent. It will reduce the
burden on the pockets of buyers.
In case of 23 carat jewellery the marketing margins are very high
which should be brought down considerably.
To attract more and more customers new designs should be
developed so that the new look may be given to the jewellery as
well as more pleasure to the jewellery buyers.
In case of diamond jewellery there should be quality testing
instruments available in showrooms and the full satisfaction
should be given to the buyers by showing its carat and quality on
diamond testing instruments.
There should be standardization of diamond price like gold so
that there may not be difference between buying and selling it.
Thus the fair dealing will be started in the trade of diamond
jewellery.
37
There should be standardization in Jewellery making charges so
that the variations regarding it at different outlets may be checked
and the buyers may be protected from their exploitation.
Meerut District should be declared an Export Zone and an Export
Centre should be established by the Government so that the
jewellers may promote their business in the direction of export
their jewellery.
MCX trading should be closed immediately so that the jumping
price of gold may be checked.
It is believed that the above suggestions will attract the attention of
the manufacturers and traders engaged in this trade and they will make
efforts to grow the jewellery market in this area. It is also believed that
the government will provide all the necessary facilities to the
manufacturers and jewellers so that they may make this trade more
glorious in the coming future.
* * *