BUYING BEHAVIOR IN BRANDED JEWELLERY MARKET: A CASE STUDY OF KERALA

Transcription

1 105 BUYING BEHAVIOR IN BRANDED JEWELLERY MARKET: A CASE STUDY OF KERALA C.R. Kanakachandran, Faculty Member, Department of Commerce and Management Studies Sri C AchuthaMenon Government College, Thrissur, Kerala, India Dr.T.G Saji, Faculty Member, Department of Commerce and Management Studies Sri C Achutha Menon Government College, Thrissur, Kerala, India ABSTRACT This paper investigates the attractiveness of the branded jewellery market in Kerala and identifies the existing gaps between consumer needs and product availability there. The research process involves multivariate statistical techniques such as Factor analysis and Discriminant analysis administered on survey data collected among 300 consumers from different parts of Kerala. Factor analysis found customer convenience, product expertise, value for money, jeweler reputation and after sales service are the principal reasons for a brand choice. Marriage occasion in family is not a discriminating factor in choosing a jeweler. The study suggested more initiatives from the part of jeweler to translate consumer needs and desires in to product design in order to capture significant share in the expanding branded jewellery market of Kerala. Keywords: Branded jewellery, Brand choice, Factor analysis, Discriminant analysis.

2 106 Introduction: Introduction: As a traditional part of Indian culture, jewellery has been associated with wealth and savings. Gold dominates the Indian jewellery market and formulates almost 80 per cent of the market share (IBEF 2012). No wedding in India is solemnized without gold. The potential is huge, as millions of youth wait for D-day (Business Line). One of the major changes that has taken place in India for the past four to five years is the spanning demand for gold and its booming prices. The increasing demand for gold made the Indian Jewellery market more buoyant than before. India consumed 125 tons of gold in pure jewellery form in the April to June quarter of 2012 (ET Bureau 2012). The jewellery retail market is extremely fragmented with over 3,00,000 retailers worldwide and large players only account for a small percentage of global sales. Similarly Indian jewellery industry is constituted with few major regional players and large number of small players. However, there is a revolution-taking place in the jewellery industry and it is the emergence of branding as the powerful force for the future. The smaller representation of the branded jewellery in total jewellery sales of the country itself provide space for those who can build customer brand awareness and differentiate themselves from others. Hence, the jewellery category in India moves towards the branded jewellery as regional players and is focusing to become dominant in the territory. They are seeking rapid expansion including Malabar Gold, Joy Allukkas, Kalyan Jewelers India Pvt. Ltd., Tanishq and many more. Although branded jewellery accounts for less than 10 percent of Rs crore jewellery markets, it is growing in popularly at a tremendous pace of percent annually (Maharashtra Kaleidoscope). The emergence of an affluent class having exposure to designer, wear, fashion accessories and globally branded products could be viewed as a key driver of its growth.moreover; the uncertainties created by the current financial crisis prompt most Indians to consider jewellery as an attractive investment. The increasing demand for branded jewellery in India has motivated us to make study of this kind, which analyses the buying behavior in branded jewellery segment of the industry. The entire study is to investigate the attractiveness of the branded jewellery market in India and to identify any existing gaps between consumer needs and product availability in the branded jewellery market. This will help the market players to develop jewellery collections that are more in line with the consumer needs. Identification of such needs can help the players to develop better marketing or communication strategies to increase their market share in the expanding market of branded jewellery. Since many players in Indian branded jewellery market are from Kerala, a study covering the market of Kerala definitely be a good approximation of Indian market structure.to the best of our knowledge, this is the first study to explore the buying behavior in branded jewellery market segment of Kerala. The rest of the article is organized as follows. Section 2 provides the basics of brand and branding in jewellery market; section 3 reviews some earlier studies on branding; section 4 briefly explains the data and methodology; section 5 reports and discusses the results of analysis; and section 5 concludes the article. Brands and Branding in Jewellery market: The term "branding" refers to the idea of creating an image in customer's mind about who the producer is and what his product consist of as well. The way the producer present himself will help him to develop a brand, and eventually, he will be known for that by the customer. A Jewellery brand is a combination of attributes, both tangible and intangible that resonates with your audience, while differentiating you from competitors. It is a whole package of rational and emotional benefits. It is marketing driven, prioritize innovation design, inspire trust and confidence and understand the shopping experience of the consumers. Earlier confidence in the local jeweler was the hallmark of the gold jewellery trade in India. Nevertheless, later there was a rise in demand for light weight jewellery, which forces the traditional jewelers to go in for branding. Still branded jeweler occupies only a minor share in the market and continues to face a lot of competition from local jewelers. This is because most of the people consider gold still as an investment. However, the jewelers try to change the mindset of the people and motivate them with attractive designs at affordable prices.in order to gain market share, they will have to come up with designs that customers actually demand. We can attribute many reasons why there is a huge opportunity for jewellery brands in future. First, the present fragmented nature of retail market. Branding offers all players an opportunity to differentiate themselves. Second Industry players are spending very low to support brands. Third, the global jewellery market is largely unbranded. This provides space for those who can build customer awareness. Lastly, excellence in design, which seems to be

3 107 more important for a retailer. Today women are increasingly buying for themselves and are more interested in the look and feel of the jewellery they buy. The retailers who can convert consumer needs and desires in to product design will capture more in an expanding market. Being a retail business the jeweler has to invest continuously new methods to increase sales. This can be possible either by promoting customer loyalty which increases repeat purchases or by creating new customers. The acquisition of new customers requires a deep understanding of their purchase process including the factors those influence their decisions. Review of literature: This part first reviews the studies relate to consumer behavior and determinants of brand choice in consumer durable market in a broad way and then tries to bring out the findings of some studies relate to gold market. In fact brand research in Indian jewellery market context is relatively scanty. Bhavaniprasad and Sitakumari (1987),while evaluating the impact of advertising on consumer durables market observed that friends is the main influence followed by relatives and hence they should be given more emphasis while planning promotion strategies by companies. Advertisement is the next major influencing factor for the consumer durables. Azeem (1996) in his study referred that brand name, picture, quality, price, availability, service, design, sound system and numbers of channels were the factors that influenced purchase of durable. Freda (1995) observed that for consumer durable goods, the family members together decide on the product to be purchased, brand and shop. Kumar (2003) shows that the consumers highly enlightened and concerned of quality of the products. The study also reveals that the consumers uniformly, both in urban and rural areas, desire to have quality of the products at reasonable price and trust more the advice of the retailers. In their study, Kempt and Smith (1998) observed that consumer s first usage experience with a brand is a critical factor in determining brand beliefs, attitudes and purchase intention. Rodge (2001) found that the rural consumers give more importance to the advertisements compared to urban consumers. Both rural and urban groups found that all the advertising media are equally important and effective. Gold, although not specifically mentioned as an artifact, is also a valued possession according to its significant role in Indian culture (Dempster, 2006). Gold is an artifact because the status it holds in the Indian culture designates membership to that culture (Craig and Douglas, 2006). (Mulky 2011) suggested gold is much better than other metals including platinum. Gold is an asset being independent of domestic economic conditions, having long term intrinsic value, which helps to hedge purchasing power risks, currency devaluations and equity market volatility (Unity marketing 2006). Among different factors, which can influence the brand choice of consumers in jewellery market, Design, price, uniqueness, nearness of a particular jeweler, shopping experience etc, are prominent. However price is the most significant factor which decides the final purchase (Tanishq 2008). Gold purchase is a part of customs and traditions of Indian society and most often Indian women perceive gold as jewellery but not as an investment (Tariq et al.). On reviewing the available literature it can be found that the research on buying behavior in jewellery market, especially on the branded jewellery market is very few in Indian context. This indeed confirms the need of the present study. Data and Methodology: Data and Sample frame: Qualitative research was carried out to make out the reasons as well as underlying motives of buying branded jewellery, the buying pattern and the profile of the customers in a better way. Qualitative research included depth interviews and survey among 300 consumers from different parts of Kerala. For the selection of the sample, multistage sampling technique was administered. The entire state was divided in to three regions and then from each region, 100 consumers were selected. Methodology: Measurement of variables: Through extensive literature and our intuitive knowledge, we have identified 18 variables that might potentially influence consumers choice of the brand of jewellery. Five point rating scale was used to measure variables. The options given were: Very important (5), Important (4), Neutral (3), Not important (2) and Not at all important (1). The identified variables are:

4 108 Techniques of analysis: Purchase Occasion StoreExperience ProductRange&Variety Recommendation of others Jewellery Repair(PostSale) CreditTerms Discounting Transparency of Practices Exchange/Return Jewellery Design Purity Family Jeweler Brand Name Credibility/Trust Price Awareness Store Location Customization Collected data were principally analysed with the help of multivariate analysis techniques such as Factor analysis and Discriminant analysis. However, before applying them, non-parametric form of dimension test- Binomial test was administered to find out the statistical significance of the variables used in the study to determine consumer loyalty for a particular jewellery brand. Then Factor analysis was used to find the major factors (reasons) for consumers interest or disinterest in buying jewellery. Discriminant analysis was used to classify the consumers in to groups with similar interests and needs. Results and Discussions: Binomial test: Brand loyalty is indispensible part of retail marketing. A retailer has to ensure that he build up such brand loyalty to sustain in the future. For this he should identify the drivers of loyalty for a jewellery brand. Magnitude of various factors contributing brand loyalty in jewellery market were measured by computing weighted mean values of the scores given by five point summated scales (Table1). Out of the 18 variables that are expected to contribute brand loyalty, only store location was secured score of less than three. Importance given by consumers for the variable of credit terms found only moderate. In all other cases, the mean scores are quite above the average score. By using Binomial test, the study tests the null hypothesis of µ less than or equal to three (Importance given by consumers of branded jewellery market to each of the variables under study in their brand choice is not high), against the alternate hypothesis of µ greater than three (Importance given by consumers of branded jewellery market to each of the variables under study in their brand choice is high) at five per cent level of significance. The test results found the importance of all variables except credit terms and store location high in selection of brands by consumers in branded jewellery market of Kerala. Table 1: Binomial test results Variables Mean score Observed proportion Sig. (2-tailed) PurchaseOccasion * StoreExperience * ProductRange&Variety * Recommendationofothers * JewelleryRepair(PostSale) * CreditTerms Discounting * Transparency ofpractices * Exchange/Return * PurchaseOccasion * Jewellery Design * Purity * FamilyJeweller * BrandName * Credibility/Trust * Price *

5 109 Awareness * StoreLocation * Customization * *significant at five percent level Factor analysis: In exploratory Factor analysis administered in the study, we are exploring the dimensions that would have caused correlations among the observed variables explaining the interest or disinterest of consumers in buying branded jewellery. We have used Principal Component Analysis for variable reduction. In this method, the total variance in the data is considered and Eigen Values have calculated. Eigen value represents the total variance explained by each factor. Factors with Eigen value greater than one are considered (Kaiser 1974). We thus reduce number of variables from 18 to 6 important factors (Table 2). Table 2: Total variance explained by factors: Component Initial Eigenvalues Rotation Sums of Squared Loadings Total % of Variance Cumulative % Total % of Variance Cumulative % Then the data is optimized using Varimax rotation method. It is an orthogonal method of rotation that minimizes the number of variables with high loadings on a factor, thereby enhancing the interpretability of the factor. It will tell us if all six factors are relevant and which variables are explained by which factor (Table 3). Table 3: Rotated component matrix Component Jewellery Design Purity Family jeweller Brand name Credibility/trust Price Awareness

6 110 Store location Customization Purchase occasion Store experience Product range Recommendation Jewellery repair Credit terms Discounting Transparency of practices Exchange/ return Based on factor loadings, we have categorized one or more variables into one factor. The following factors were emerged from the analysis. Factor1:Customer Convenience: This factor comprises of four variables -Awareness, Store Location, Customization, and Exchange. All these variables are positively loaded to the factor and together explain convenience of the consumers in materializing sales. This could be a strong push factor for consumers to choose their brand. Factor 2: Product expertise: This factor is constituted by the jewellery design, family name and product range. The success of a jeweler most often is decided by the design of his jewellery, use of his family name and offer products in wide range and variety. Factor 3: Value for money: Normally the consumer in jewellery market perceives the value for the money he paid based on the Purity and Price of the jewellery he purchases. So this factor is conveniently called Value for Money. Factor 4: Jeweler Reputation and Practices: The brand name of the jeweler creates trust and confidence in the mind of the customer. To retain such customer confidence, jewelers pursue Transparent business Practices. Factor 5: After Sales Service/ Customer Satisfaction:The previous experience of the consumers prompts them to recommend the name of the jeweler to their friends and relatives. This could also be due to the initiatives/interests shown by the jeweler in making repair of the products once they sold. Factor 6: Brand, Product Range and Variety: This factor could be dropped as it is redundant and the variables included are better explained in earlier factors. Discriminant Analysis: In Kerala, the people in connection with the marriage occasion in the family make most of the jewellery purchase. Normally there is a conviction that the consumers prefer to buy their jewellery from branded shops at marriage occasions and shop local jewelers in other occasions. After the identification of factors we need to find if marital status is a differentiating factor in the decision for brand selection. For this purpose we use discriminant analysis. At first Box s M test is done to ensure whether discriminant analysis can be run on this data. The results of the test reported in Table 4 confirm the statistical significance of Discriminant function estimated. So we infer that Discriminant analysis can be run on this data. Table 5: Box s M and Wilk s Lambda test results Box s M test results Wilks' Lambda test results Box's M Wilk s Lambda F Approx Chi-square Sig..806 Sig..390 *Tests null hypothesis of equal population covariance matrices High Wilk s Lambda value (Table 4) indicates that the difference between the group variance is very low. Moreover, the test results failed to reject the hypothesis that marriage occasion is not a discriminating factor in brand selection process at any level. Therefore, we can say that consumers in Kerala irrespective of their purpose of their shopping

7 111 show affinity to a particular brand of jewellery. Classification of percent clearly shows that variance in-group purchasing decision is explained by factors (Table 5). It has also been cross validated at percent. Thus, marriage is not a discriminating factor for classification of group influencing the selection of brand for jewellery shopping Conclusion: Original/Cross validated Original Cross validated Table 5: Classification results Marital status Predicted Group Membership Married (%) Unmarried (%) Married Unmarried Married Unmarried This paper is intended to analyze the buying behavior in the branded jewellery segment of Kerala. Based on the data collected from 300 consumers from different parts of the state, the search process primly used multivariate techniques- Factor analysis and Discriminant analysis. Factor analysis identified five important factors which affect consumer interest in branded jewellery segment of Kerala. Consumer convenience, product expertise, value for money, jeweler reputation and after sales service are the factors so identified in the study to generate consumer interest for a specific brand. Discriminat analysis found the purpose (marriage) is not a decisive factor in picking a particular jewellery brand. The study suggests good potential growth for the branded jewellery in Kerala in the years to come. References: [1] Azeem, M.A. (1996), Impact of Multinationals on Indian Television Markets A study. Indian Journal of Marketing Vol. 25, p.7. [2] Bhavaniprasad, G.V. and Seethakumari, K. (1987), Impact of advertising on consumer durable market. Indian Journal of Marketing Vol. 18. pp [3] Business Line, accessed on 17 th January [4] Craig, S.C. and Douglas, S.P. (2006), Beyond national culture: implications of cultural dynamics for consumer research, International Marketing Review, Vol.23(3), pp [5] Dempster, Natalie (2006) The Role of Gold in India, World Gold Council, September, [6] Economic Times Bureau (2012), August 29. [7] IBEF (2012), accessed 11 th January [8] Kaiser, H.F. (1974). An Index of Factoral Simplicity, Psychometrika, Volume.39, pp [9] Kempt M. and Smith K.J Consumer Processing of product trial and the influence of prior advertising: A structural modeling approach. Journal of Marketing Research, Vol.35(8): p [10] Kumar, S. (2003) A study of the consumer behavior with reference to selected products. Finance India 17 (4), pp [11] Maharashtra Kaleidoscope, htm&date=fl2223/&prd=fline&, accessed on 17 th January [12] Mulky, A.G (2011), Market entering strategy in Platinum jewellery category, tejas@iibm An IIM Bangalore Management review. [13] Rodge T.R. (2001). Influence of advertisement on consumer of different age groups and areas. J. Market. Vol. 31(4) pp [14] Tanishq : study of consumer behavior, Oct 13, 2008 [15] Tariq H; Donelda S; McKechnie; Grant, J; and Phillips, J: Shopping for gold a ritual experience. American University of Sharjah, United Arab Emirates. [16] Unity Marketing (2006), The who, what, where, why and how much of jewellery shopping, Jewellery report, June. ****