India's Gold Jewelry Market and Industry

Student number: 2

Background:

Company

Tanishq is the jewelry division of India's leading watchmaker, Titan Industries, a subsidiary of the Tata group, one of the most respected businesses. Tanishq was India's only national jeweler; it sold gold and gem-studded jewelry in boutiques across India. Initially, Tanishq had targeted a more western consumer, which had evoked a "nice but not me" reaction from Indian women. Tanishq failed at launching the 18 karat studded jewelry which led them to launch the 22 karat jewelry which was preferred by the locals. At the time, a skunkworks project team within Tanishq had launched GoldPlus, a more modest brand positioning to serve the plain gold wedding jewelry market in India's smaller cities and rural locations. The launching of GoldPlus created a division in the company between those that wanted to tap into the rural market and those that wanted to stick to Tanishq. This tension was apparent at the company's meeting, which led the two senior manager confused about their final decision whether to go with GoldPlus or not.

India's gold jewelry Market and Industry

First let's start with examining the Indian jewelry market. The Indian jewelry market is huge to be considered the largest of the world. The wedding jewelry market consisted of 70 % of the jewelry market. Moreover, exhibit 3 on page 15 indicates India's rapidly growing market for gold industry, which proved that the total consumption was raised from a total of 272 tons in 1990 to a total of 1096 tons in 2003. As we can infer from the case, the jewelry market is very complex and highly segmented. The consumer behavior driven mainly by the country's culture plays an important role in segmenting the market. The Indian gold jewelry is more toward the traditional jewelry and based on the 22 karat gold. The main suppliers for gold were traditional local jewelers. There was no main big company that sold jewelry. Indian consumers are very loyal to their local jewelers/ goldsmiths, and any brand entering the market must break this traditional consumer buying process and make consumers switch their loyalty from the goldsmith to retailers.

Planned Structure

* Tanishq Strengths and Weaknesses

* Tanishq Opportunities and threats

* GoldPlus Strengths and Weaknesses

* GoldPlus Opportunities and Weaknesses

* GoldPlus Value proposition

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Tanishq strengths and weaknesses:

On the one hand, Tanishq was perceived in India as a premium brand. The capital that the Tata and the Titan group have, helped Tanishq to maintain its position in the market despite the challenges that it encountered. Besides, Tanishq proved to be an innovative company through the Karatmeter that helped customers to check the purity of the gold at their presence. This helped the Tanishq build a more informed trust with their potential customer instead of a blind trust that they had with their traditional local jeweler. At the top of that, Tanishq's modern style and designs created differentiated and unique products that appealed some customers and added values and benefits to the end user. What was extremely important and noticeable was the excellent and outstanding marketing strategy that the firm trailed.

On the other hand, despite all the strengths that Tanishq possess, few weaknesses existed. The first weakness that the company encountered was the "not for me" customer perception, Tanishq was considered as a finest brand. It takes lot of time to change this consumer perception. It is harder if this behavior is rooted in tradition. Gold retailing is heavily rooted in India's tradition. If we look at the genesis of local jewelers, most of them have a long tradition and their business and clientele has been built over generations. Since the pricing of gold jewelry is tricky and complex, consumers also tended to rely on their traditional store rather than experimenting with new stores. Moreover, Gold perceptions and rituals also affected the company. Gold was perceived as an investment more than a design or a commodity. Especially, for men who were the decision makers in the purchasing process. Men want gold more for investment than anything else. In addition, Tanishq executives didn't give the products more timeframe