COST AND MARKETING BEHAVIOUR OF...

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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.


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.


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.


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.



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.


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.


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









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.


charges are Rs. 901.60 out of which Rs. 276 i.e. 30.61% is paid by








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.



manufacturers/wholesalers and the rest Rs. 634 is 68.92% is paid by







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


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


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.

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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.

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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


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.





gms). Moreover, the labour charges paid to the Karigars come to

Rs. 1,400 i.e. 7.75% of the total manufacturing cost.


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



gms). Moreover, the labour charges paid to the Karigars come to

Rs. 1,600 i.e. 8.03% of the total manufacturing cost.


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.



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.


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


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.




by retailers.

In this case the net margins at manufacturer's /wholesaler's level 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.


charges are Rs. 901.60 out of which Rs. 276 i.e. 30.61% is paid by


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.



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



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.

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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.

* * *

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