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Competition

They face competition from-

y

 CJ exporters

y Sungold jewellery

y Tanishq

y  Imitation Jewellery

y Gitanjali Gems

y

 Sundardas Zaveri

y  India Diamond

y PC Chandra Jewellers

y Shreeji Jewels

Target Countries

Primary market- New York 

Secondary market- Hong

Kong, Bangkok.

However when the company

started off their traditional

market was USA and Japan.

They still export to those

countries in minimal quantity.

10-15 years after the company

was formed their target

markets also included the gulf 

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countries.

Distributing Strategies

Indirect Exporting 

The company follows indirect method of exporting in their operations. The principaladvantage of indirect exporting for a company is that it provides a way to penetrateforeign markets without the complexities and risks of direct exporting. Several kindsof intermediary forms provide a range of export services. Our company primarilyuses Export agents/ Commission Agents (Aadhatiyas) . An export agent, is a tradingcompany that acts for local manufacturers, usually representing a number of non-competing manufacturers.

The foreign principal advises this agent and says that it wants certain products at

certain prices. Agent stationed locally goes looking for them, asking for quotationsfrom several different local suppliers.

In return for obtaining export order from abroad, the export agent receives a

commission of up to 5% from us.

Unlike the export merchant, the agent does not become the owner of the goods andtherefore does not assume the risk of not being able to s ell them abroad.  An export agent is usually retained on one or two years renewable basis with anexport agency agreement. The function of the export agent is to appraise the export potential of the localmanufacturer's products, advertise them abroad, look for foreign buyers, obtainexport orders, and advise on, or arrange for, the documentation, shipping andinsurance once a sale has been made.

Pricing Strategies

Premium Pr icing: As diamonds are high value commodities premium pricing is used

for this product. This pricing is used when there is uniqueness about the product.

Premium pricing is the practice of keeping the price of a product or service artificially

high in order to encourage favourable perceptions among buyers, based solely on

the price. The practice is intended to exploit the (not necessarily justifiable) tendency

for buyers to assume that expensive items enjoy an exceptional reputation or 

represent exceptional quality and distinction.

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The use of premium pricing as either a marketing strategy or a competitive practice

depends on certain factors that influence its profitability and sustainability. The

disadvantages of this pricing strategy includes violation of the ACC C.

Such factors include: 

y Information asymmetry (e.g., when buyers have no independent basis to test

claims of "exceptional quality" for a particular product or service -- assuming

the concept is well-defined to begin with);

y Market status as a Luxury good or a Superior good; and

y Market dynamics such as the level of competition and entry barriers.

Cost-plus pr icing -Cost-plus pricing is a pricing method used by companies. It is

used primarily because it is easy to calculate and requires little information. There

are several varieties, but the common thread in all of them is that one first calculates

the cost of the product, then includes an additi onal amount to represent profit. It is a

way for companies to calculate how much profit they will make. Cost-plus pricing is

often used on government contracts, and has been criticized as promoting wasteful

expenditures.

The method determines the price of a product or service that uses direct costs,

indirect costs, and fixed costs whether related to the production and sale of the

product or service or not. These costs are converted to per unit costs for the product

and then a predetermined percentage of the se costs is added to provide a profitmargin.

1. Easy to calculate

2. Minimal information requirements

3. Easy to administer 

4. Tends to stabilize markets - insulated from demand variations and competitive

factors

5. Insures seller against unpredictable, or unexpected la ter costs

6. Ethical advantages7. Simplicity

8. It is readily available

9. Price increases can be justified in terms of cost increases

PRICE= COST + GROSS PROFIT

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Promotion strategies

The i ti t tegies  sed them  e Trade f airs and media  

Trade Fairs 

 A trade f air   

trade show, trade exhi ¡   ition or  expo) is an exhi ¡   ition organi¢  

ed so that£  

ompanies in 

a specific industry can showcase and demonstrate their  latest products, service,study activities 

of r ivals and examine recentmarket trends and oppor tunities. In contrast to consumer f airs, only 

some trade f airs are open to the public, while others can only be attended by company 

representatives  

members of the trade, e.g. prof essionals) and members of the press, theref ore 

trade shows are classified as either   ¤  Public" or  "Trade  ¥   nly".

There was an ar ticle about the company in a trade magazine:

TRADE SHOWS ± REVIEWSIIJS 2008: Despite the initial apprehensions the Show turned out to beresounding success in terms visitor footfall and business transacted. ; JAS¶08: Blend of of B2B andB2C elements generates buzz-- and business Scintillating Jewellery unveils ethnic Rajasthani bracelet with diamond

Media C verage¶s 

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Magazine Co er age¶s 

Location of production facilities

The production facility will be located at a central factory in Goregaon.

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Capacity of existing facilities

The number of units manufactured by them per day depends on size, design and the

item itself. Approximately 100-200 grams in terms of weight is their average per day

production and in terms of carat it is 500-1000 carats per day.

Plans for expansion

There are various types of expansion strategies. The firm has planned to use the

strategy of market development.  For this strategy ± existing products/new markets,

this happens when a firm decides to sell its existing products into new geographical

markets or new

market segments

(another defined

target market). For 

example, it could

mean selling an

existing computer 

model to a new

market overseas or alternatively, selling it

to a new market

segment (e.g.

second-hand market).

The firm would also

need to spend on

sales and marketing to persuade consumers in new markets to purchase the

product/services.

 At present they have their bases in Chhattisgarh, Madhya Pradesh, Assam, Uttar 

Pradesh, Rajasthan, Mumbai and Himachal Pradesh. However now the company¶s

core management team is planning to expand its operations through innovative

techniques and target markets in the south like Tamil Nadu, Kerala, Chennai and

Karnataka.

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Personnel strategies

The company has four departments under the owners

1)Purchase department:

This department is not located within the company premises however at a separate

location. This department hires extremely skilled individuals as purchase of the

rough diamonds is the most intricate part of their business activity.

2) Sales department:

This department too is located at an external location along with the purchase

department. The skills required for the workforce in this department are good

relations with the commission agents. They should also be aware of the financial

conditions prevalent in the country and should posses good negotiation skills to fetch

higher prices for the diamonds.

3)Ma

nuf actur ing 

and Assortment/Gr 

ading dep

artment:

Majority of the workforce is employed in this department. It is the most important of 

all the departments. They assort and grade the diamonds according to their weight,

size, colour, texture and carats. They inspect the purity of the diamonds check

whether the diamonds meet the requirements of the 4 C¶s. They also classify the

flaws if any as black flaws or white flaws. The head of this department is the chief 

under whom there are three seniors with ten employees under each senior.

HIRING PATTERN

Ten years before the company used to hire their workforce on the basis of social

background and family values or any closely known network as it is a family oriented

business. However at present the hiring is done mainly on the basis of corporate

references or a professional approach as diamonds are high value products. Due to

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globalisation cer tain skills, technical

knowledge, exper ience in diff erent fields 

and financial knowledge has become 

extremely impor tant in their  process. While 

recruiting employees the human resource 

depar tment handles only the recruitment of 

the ancillary workf orce who require cer tain 

qualifications .A, . .A and BA¶s).

owever  f or the technical management

apar t f rom the owners the company recruits 

highly skilled dermatologists. The 

organisation structure of the company has improved due to commoditisation of 

diamonds.