Branded Gold Jewellery Market in India
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Details
Themes: Brand Management
Period : 1990-2002
Organization : Gili, Tanishq, Carbon, Oyzterbay and Trendsmith
Pub Date : 2002
Countries : India
Industry : Jewellery
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Case Code : BSTR041
Case Length : 16 Pages
Price: Rs. 500;
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Gold Jewellery Becomes Fashion Accessory Contd...
In the late 1990s and early 2000s, with the increase in the number of designers from design schools such as the National Institute of Fashion Technology (NIFT), a wide range of new designs became available. In addition, the growing number of manufacturers needed a retailing platform with global and national reach. All these led to the proliferation of branded jewellery players.
Strategies for Wooing CustomersTanishqIn the late 1990s, players in the branded gold jewellery market formulated strategies for wooing customers. According to Jacob Kurian (Kurian), Chief Operating Officer of Tanishq, the challenges were many. As the jewellery market was highly fragmented, lacked branding, and allowed many unethical practices to flourish, Tanishq worked hard on a two-pronged brand-building strategy: cultivate trust by educating customers about the unethical practices in the business and change the perception of jewellery as a high-priced purchase. Said Kurian, "We are changing the attitudes of customers from blind trust to informed trust."11 |
According to Kurian, the first part of the strategy was "to provide a point of differentiation in a highly commoditized category - which is the whole point of branding."12 The second part of the strategy was to project Tanishq as an unimpeachable mark of trust. According to Kurian, "If differentiation plays the role of primary attraction, trust takes care of lifelong loyalty."13
One way to create differentiation was through design. The emphasis had to be on design 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. (Refer Exhibit I for Tanishq's design).
For this, Tanishq set up a seven member in-house design team and also outsourced designs from freelance designers. The designers travelled the length and breadth of the country to get feedback on Tanishq's designs and learn 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 caratmeters which showed the purity of gold. In fact, Tanishq's USP was the purity of its gold. Accordingly, the company's ad campaigns emphasised the purity aspect of all Tanishq ornaments. (Refer Exhibit II for Tanishq's Ad Campaign) In November 2002, Tanishq introduced a new collection of jewellery called 'Lightweights.' The collection featured neckwear, earrings, bangles, rings and chains in 22 karat gold with prices starting at Rs 1,100.
It also launched Lightweight Diamonds, with prices starting at Rs 3,000. Tanishq focused not only on urban markets, but small town markets as well. Real estate was less expensive in the small towns than in large urban centres. Besides, competition from stores in small towns was less stiff than competition from the large jewellery stores in the metropolitan cities. According to Kurian, the best returns on investment came from small towns.
Carbon
Carbon's focus had always been to move jewellery from the vault to the dressing table and bring the selling of jewellery out of heavily guarded jewellery stores. This was achieved by persuading a few lifestyle stores to add branded jewellery to their vast array of products. Besides selling from lifestyle stores, Carbon also sold its products as gift items over the internet.
11] Tata.com/ tanishq.
12] A&M, January 15, 2001.
13] A&M, January 15, 2001.