INDIAN JOURNAL OF MANAGEMENT SCIENCE (IJMS) EISSN 2231-279X – ISSN 2249-0280 105

BUYING BEHAVIOR IN BRANDED JEWELLERY MARKET:

A CASE STUDY OF KERALA

C.R. Kanakachandran, Dr.T.G Saji,

Faculty Member, Faculty Member,
Department of Commerce and Department of Commerce and
Management Studies Management Studies
Sri C AchuthaMenon Government College, Sri C Achutha Menon Government College,
Thrissur, Kerala, India 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.

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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. 40000 crore jewellery markets, it is growing in
popularly at a tremendous pace of 20-30 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
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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:

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Purchase Occasion Jewellery Design

StoreExperience Purity
ProductRange&Variety Family Jeweler
Recommendation of others Brand Name
Jewellery Repair(PostSale) Credibility/Trust
CreditTerms Price
Discounting Awareness
Transparency of Practices Store Location
Exchange/Return Customization
Techniques of analysis:
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 4.17 0.50 .000*
StoreExperience 3.51 0.50 .000*
ProductRange&Variety 3.56 0.50 .000*
Recommendationofothers 3.67 0.50 .000*
JewelleryRepair(PostSale) 3.55 0.50 .000*
CreditTerms 3.14 0.50 .233
Discounting 3.39 0.50 .000*
Transparency ofPractices 3.35 0.50 .000*
Exchange/Return 3.21 0.50 .036*
PurchaseOccasion 2.47 0.50 .000*
Jewellery Design 3.51 0.50 .000*
Purity 3.75 0.50 .000*
FamilyJeweller 3.51 0.50 .000*
BrandName 3.37 0.50 .000*
Credibility/Trust 3.26 0.50 .000*
Price 3.64 0.50 .000*

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Awareness 3.32 0.50 .005*

StoreLocation 3.28 0.50 .000*
Customization 3.41 0.50 .000*
*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:

Initial Eigenvalues Rotation Sums of Squared Loadings
Component
Total % of Variance Cumulative % Total % of Variance Cumulative %
1 4.177 29.963 29.963 3.265 17.581 17.581
2 2.293 16.408 46.371 2.784 15.467 33.048
3 1.838 10.000 56.371 2.178 12.102 45.150
4 1.592 8.844 65.215 2.023 11.239 56.389
5 1.385 7.693 72.908 1.866 10.364 66.753
6 1.214 6.745 79.653 1.604 7.809 74.562
7 .890 4.943 84.596
8 .778 4.323 88.919
9 .635 3.530 92.449
10 .509 2.829 95.278
11 .432 1.399 96.677
12 .388 1.154 97.831
13 .219 0.886 98.717
14 .204 .846 99.563
15 .122 0.322 99.885
16 .097 .0.082 99.967
17 .080 .031 99.998
18 .026 .146 100.000

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
1 2 3 4 5 6
Jewellery Design .271 .865 .068 -.086 .042 .167
Purity -.472 .035 .668 .148 -.059 -.009
Family jeweller .216 .836 -.016 .227 .020 -.150
Brand name -.048 .000 -.269 .602 .269 .511
Credibility/trust -.168 .342 -.370 .455 -.188 -.137
Price -.179 -.089 .654 .181 .061 .116
Awareness .831 .178 -.073 -.121 .114 .177

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Store location .742 .094 .000 -.221 -.216 -.047

Customization .763 .368 -.050 .120 -.309 -.190
Purchase occasion .106 -.139 .054 .182 -.859 .148
Store experience -.449 -.597 .273 .219 .063 .188
Product range -.165 .432 -.250 .282 .408 .410
Recommendation -.125 -.523 .367 .232 .496 .210
Jewellery repair -.345 -.341 .277 .156 .525 -.260
Credit terms .000 .050 -.122 -.027 .259 -.867
Discounting -.205 -.099 -.529 .202 .092 .250
Transparency of practices -.109 -.025 .095 .893 -.103 .026
Exchange/ return .677 .226 -.105 .502 -.244 -.195

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 20.468 Wilk’s Lambda 4.763
F Approx. 1.412 Chi-square 4.763
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

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show affinity to a particular brand of jewellery.

Classification of 60.60 percent clearly shows that variance in-group purchasing decision is explained by factors
(Table 5). It has also been cross validated at 57.90 percent. Thus, marriage is not a discriminating factor for
classification of group influencing the selection of brand for jewellery shopping

Table 5: Classification results

Predicted Group Membership
Original/Cross validated Marital status
Married (%) Unmarried (%)
Married 65.60 34.40
Original
Unmarried 34.20 65.80
Married 59.60 40.40
Cross validated
Unmarried 41.60 58.40
Conclusion:
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.

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