DIFFERENCE BETWEEN LUXURY BRANDS AND REGULAR BRANDS (JEWELLERY INDUSTRY) CASE STUDY: Repositioning of Ganjam as a luxury brand.

Submitted in partial fulfilment of the requirement for the award of the degree of Bachelors of Business Management of Christ College, Autonomous BY NIDHI.B 07D-1863 UNDER THE GUIDANCE OF MRS.PHINU JOSE,

THE DEPARTMENT OF MANAGEMENT STUDIES CHRIST COLLEGE, AUTONOMOUS BANGALORE 560029 2009-2010

CERTIFICATE

This is certify that Ms. Nidhi.B, 07D-1863, is a bonafide student of VI Semester BBM programme studying in this Institution. She has prepared and submitted a project report titled difference between luxury brands and regular brands in the jewellery industry, along with a case study, in partial fulfillment for the requirement for the award of the degree of Bachelors Of Business Management [BBM] programme of Christ College, Autonomous, for the Academic Year 20092010.

This project has not formed the basis for the award of any Degree of Diploma of any other university or institute.

Jain Mathew Head of the Department Place: Bangalore Date: Department of Management Studies Christ College, Bangalore

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GUIDE CERTIFICATE This is to certify that, this project titled, difference between luxury brands and regular brands in the jewellery industry, along with a case study, submitted to Christ College, Autonomous for the award of a degree in Bachelor of Business Management [BBM] as a record of original and independent work carried out by Ms. Nidhi.B, 07D1863, under my guidance and supervision.

This has not formed the basis for the award of any Degree or Diploma by Christ College, Autonomous or any other University.

Mrs.Phinu Jose Place: Bangalore Date: Project Guide Christ College, Bangalore

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DECLARATIONI, Nidhi.B, hereby declare that this project report, difference between luxury brands and

regular brands in the jewellery industry, along with a case study, submitted to ChristCollege, Autonomous, is a record of original and independent work carried out in partial fulfillment of the requirement for the award of a degree of Bachelors Of Business Management [BBM].

I also declare that this representation has not been previously published or submitted as a project report for the award of any Degree or Diploma of Christ College, Autonomous or any other University.

Place: Bangalore Date:

Name: Nidhi.B Reg. No: 07D1863

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ACKNOWLEDGEMENTI would like to express my profound gratitude to all those who have been instrumental in guiding me through my research .I express our sincere thanks to Dr. Fr. Thomas C. Mathew, Principal of Christ College and Mr. Jain Mathew, Head of Department, Management Studies for their encouragement and support. I extend my gratitude to Mr.Suresh Subramaniam, Marketing advisor of Ganjam who gave me an opportunity to be an intern in such an organisation that has helped me gather so much information about marketing in Ganjam and hence prepare my research report. I also thank all the marketing staff at Ganjam who took me through all the processes in the organisation and helped me understand the luxury industry on which my study was based. I am deeply grateful to Mrs.Phinu Jose, Project Guide, Department of Management Studies, Christ College, for the cooperation extended by her to conduct this study, advising us on the project report and furnishing the required information. I would also like to thank the faculty for their constant support. Last, but not the least I would like to thank my parents and friends for their constant help and support.

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TABLE OF CONTENTSSL.NO CONTENT CHAPTER 1 INTRODUCTION1.1 Introduction to the topic 1.2 Introduction to the industry 1.3 Introduction to the company 1.4 Review of Literature

PG.NO8 29 34 44

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CHAPTER 2 RESEARCH DESIGN2.1- Title of the study 2.2- Objectives of the study 2.3- Scope of the study 2.4- Type of research 2.5- Sample size and sampling method 2.6- Data collection methods 2.7 - Statistical tool used 2.8- Limitations of the study 2.9- Respondents profile. 53 53 54 54 55 57 58 59 59

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CHAPTER 3 DATA ANALYSIS AND INTERPRETATION3.1- Table and analysis 3.2- Chart and interpretation 62 62 76

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CHAPTER 4 SUMARY OF FINDINGS CHAPTER 5 - BIBLIOGRAPHY AND ANNEXURE5.1 Bibliography 5.2 - Annexure

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CHAPTER 1 INTRODUCTION

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1.1 INTRODUCTION TO THE TOPIC

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MEANING OF LUXURY

Luxury can be defined as a material object or service conducive to sumptuous living, usually a delicacy, elegance, or refinement of living rather than a necessity. India has never been a stranger to luxury, nor to creators and crafters of luxurys symbols. The worlds most famous couturiers, jewellers and chronographers have always been part of the fabulous lifestyles of Indias elite, even before independence. In this reference, India is regarded as one of the leading future luxury retailing destinations in the world. Ganjam also has been a luxury brand and knows that what sets it apart is solely defined by the statements it makes, the discerning eye it has for distinctive and exclusive life. No one has to search for it it is merely its second nature.

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THE CONCEPT OF LUXURY

Luxury goods are said to have high income elasticity of demand: as people become wealthier, they will buy more and more of the luxury good. This also means, however, that should there be a decline in income its demand will drop. Income elasticity of demand is not constant with respect to income, and may change sign at different levels of income. That is to say, a luxury good may become a normal good or even an inferior good at different income levels, e.g. a wealthy person stops buying increasing numbers of luxury cars for his automobile collection to start collecting airplanes (at such an income level, the luxury car would become an inferior good). Certain manufactured products attain the status of "luxury goods" due to their design, quality, durability or performance that are remarkably superior to the comparable substitutes. Thus, virtually every category of goods available on the market today includes a subset of similar products whose "luxury" is marked by better-quality components and materials, solid construction, stylish appearance, increased durability, better performance, advanced features, and so on. As such, these luxury goods may retain or improve the basic functionality for which all items of a given category are originally designed. There are also goods that are perceived as luxurious by the public simply because they play a role of status symbols as such goods tend to signify the purchasing power of those who acquire them. These items, while not necessarily being better (in quality, performance, or appearance) than their less expensive substitutes, are purchased with the main purpose of displaying wealth or income of their owners.

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MARKET CHARACTERISITICS Some luxury products have been claimed to be examples of goods, with a positive price elasticity of demand: for example, making a perfume more expensive can increase its perceived value as a luxury good to such an extent that sales can go up, rather than down. Although the technical term luxury good is independent of the goods' quality, they are generally considered to be goods at the highest end of the market in terms of quality and price. Classic luxury goods include haute couture clothing, accessories, and luggage. Many markets have a luxury segment including, for instance, automobile, wine, bottled water, tea, and chocolate. Luxuries may be services. The hiring of full-time or live-in domestic servants is a luxury reflecting disparities of income. Some financial services, especially in some brokerage houses, can be considered luxury services by default because persons in lower-income brackets generally do not use them. LUXURY BRANDS A luxury brand or prestige brand is a brand for which a majority of its products are luxury goods. It may also include certain brands whose names are associated with luxury, high price, or high quality, though few, if any, of their goods are currently considered luxury goods. Another market characteristic of luxury goods is their very high sensitivity to economic upturns and downturns, high profit margins as well as prices, and very tightly controlled brands. For example, following a nearly crippling attempt to widely license their brand in the 1970s and 1980s, the Gucci brand is now largely sold in directly-owned stores. The Burberry brand is generally considered to have diluted its brand image in the UK in the early 2000s by over-licensing its brand, thus reducing its cachet as a brand whose products were consumed only by the elite.

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LVMH (Louis Vuitton Moet Hennessy) is the largest luxury good producer in the world with over fifty brands, including Louis Vuitton, the brand with the world's first designer label. The LVMH group made a profit of 2bn on sales of 12bn in 2003.

MARKET SIZE

The luxury goods market has been on an upward climb for many years. Apart from the setback caused by the 1997 Asian Financial Crisis, the industry has performed well, particularly in 2000. In that year, the world luxury goods market which includes drinks, fashion, cosmetics, fragrances, watches, jewelry, luggage, handbags was worth close to US$170 billion and grew 7.9 percent. The largest sector in this category was luxury drinks, including premium whisky, Champagne, Cognac. This sector was the only one that suffered a decline in value (-0.9 percent). The watches and jewelry section showed the strongest performance, growing in value by 23.3 percent, while the clothing and accessories section grew 11.6 percent between 1996 and 2000, to US$32.8 billion. North America is the largest regional market for luxury goods: unlike the modest 2.9 percent growth experienced by the Western European market, the North American market achieved growth of just under 10 percent. The top ten markets for luxury goods account for 83 percent of the market, and include the U.S., Japan, China (and Hong Kong), Germany, Italy, France, UK, Brazil, Spain, and Switzerland.

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MARKET TRENDS The three dominant trends in the global luxury goods market are: Globalization Consolidation Diversification.

Globalization is a result of the increased availability of these goods, additional luxury brands, and an increase in tourism. Consolidation involves the growth of big companies and ownership of brands across many segments of luxury products. Primary examples include LVMH and Gucci, which dominate the market in areas ranging from luxury drinks to fashion and cosmetics. Leading global consumer companies, such as Procter & Gamble, are also attracted to the industry, due to the difficulty of making a profit in the mass consumer goods market.

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Characteristics of the luxury industry1. Luxury means different things to different people Luxury has no certified origins. But luxury branding is said to have taken birth in the west with the appearance of high-end brands.

2. Luxury is a product category in itself This can be best explained by the fact that both an expensive watch and an artwork can be considered to be luxury items. Therefore, all luxury marketers are not just competing in their technically defined product categories (like manufacturers of refrigerators compete amongst themselves) but for the wallet share of luxury goods in total. 3. The meaning of luxury had changed Luxury has moved from its old meaning of ownership (also known as conspicuous consumption - Conspicuous consumption is a term used to describe the lavish spending on goods and services that are acquired mainly for the purpose of displaying income or wealth rather than to satisfy a real need of the consumer. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status. Invidious consumption, a necessary corollary, is the term applied to consumption of goods and services for the deliberate purpose of inspiring envy in others) of objects to the new meaning of the experience / fulfilment derived from possessing a certain object. 3

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4. Aura is more important than exclusivity Exclusivity is something that cannot be ensured to a great extent and neither is it the prime requirement of a luxury consumer. The consumer bases his decisions on the relevance of the aura of the brand to his fulfilment or actualization needs. 5. Classification of luxury consumers SRI Consulting Business Intelligence places consumers in 3 groups according to what luxury means to them:

Luxury is Functional these consumers tend to buy luxury products for their superior functionality and quality. Consumers in this segment, the largest of the three, tend to be older and wealthier and are willing to spend more money to buy things that will last and have enduring value. They buy a wide array of luxury goods, from artwork to vacations, and conduct extensive pre-purchase research, making logical decisions rather than emotional or impulsive. Messages that highlight product quality and are information-intensive are powerful with this group. Luxury is Reward these consumers tend to be younger than the first group but older than the third. They use luxury goods as a status symbol to say Ive made it! They are motivated by their desire to be successful and demonstrate this to others. Luxury brands that have widespread recognition are popular; however they dont wish to appear lavish or hedonistic in their appearance. They want to purchase smart luxury that demonstrates importance while not leaving them open to criticism. Marketing messages that communicate acceptable exclusivity resonate with this group. Luxury is Indulgence this group is the smallest of the three and tends to include younger consumers and slightly more males than the other two groups. Their purpose for luxury goods is to lavish themselves in self-indulgence. They are willing to pay a premium for goods that

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express their individuality and make others take notice and are not overly concerned with product longevity or possible criticism. They enjoy luxury for the way it makes them feel; therefore have a more emotional approach to purchases. They respond well to messages that highlight the unique and emotional qualities of a product.

6. Trading up A mass of wealthy people have emerged the world over, give rise to a large section of consumers who are now moving to luxury / premium brands, thereby creating greater business opportunity for luxury marketers. 7. Emergence of luxury brands Sea of luxury brands have emerged giving a wide choice to consumers, in all segments of luxury goods. 8. Trading down Today, fashion brands are giving luxury brands competition because of marketing mix and branding strategies, which make it acceptable to pair these two brands. This is something that was not practiced before. eg. Wearing an Armani shirt with a pair of GAP jeans 9. Factors at play In luxury marketing there is a subtle interplay between three factors that most strongly influence the luxury consumer to buy: product brand; dealer or stores brand or service providers reputation; and price/value relationship

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10. Customer loyalty is more important that brand awareness Rather than focus on measuring the brand awareness of a luxury company, measuring customer loyalty is far more significant a metric regarding the success or failure of corporate strategy to connect with the luxury consumer.

Luxury in IndiaTo be successful in India, it is both necessary to gauge the financial potential as well as the mindset of the Indian luxury consumer. This will help in bringing forth the right product offerings to the Indian consumer as well as targeting them better. Qualitative Insights 1. According to a study by American Express, Inside the Affluent Space, the mindset of the Indian consumer is a desire to prove that Ive made it. This can be related to the luxury categorization which is based on the fact that luxury is seen as a reward, both for achievements in life as well as showcasing these achievements to others. 2. The Luxury Marketing Council Worldwide has established a chapter in India, with the aim of promoting luxury in India. Their task will also be to build synergy between various luxury brands interested in India by way of sharing of consumer insights as well as best practices. 3. Even the Asian region is not uniform in its preference for luxury in terms of need fulfilment. Therefore, it becomes important to delineate the needs of the Indian consumer from the other Asian regions to target them better. This agenda gains importance because many Indians look at acquiring luxury from places such as Hong Kong, Tokyo, China etc.

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4. Hindustan Times has been at the forefront of driving the luxury revolution in India by organizing two Indian Luxury Conferences in the last 4 years. To add to it, it also brings out a monthly supplement of luxury goods available in India, thereby creating awareness for the luxury brands.

Quantitative Insights 1. As far as quantitative estimates are concerned, there will be 135,000 millionaires (in US dollar terms) in India by 2009. 2. The affluent market is set to grow at a rate of 13% in India, and by 2009, there will be approximately 1.1 million affluents here. 3. The wealth potential of Indias affluents was to the tune of US$ 203 billion as of 2005.

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Strategies for Luxury Marketing in IndiaThere are conventional foundations for ensuring success of a brand and they are listed below in brief: 1. The brand must be expansive Which means it should be full of innovation opportunities for the marketer and in terms of satisfying the divergent needs of the luxury consumer 2. The brand must tell a story It is this story, of either heritage or performance or other aspects that goes on to build the aura of a brand over time. The story always accentuates the identity of the brand. 3. The brand must be relevant to the consumers needs Depending upon the mindset of the luxury class, it is imperative for a brand to satisfy those needs, whether they be for recognition or functional use etc. 4. The brand must align with consumers values A brand that does not concur with the basic values of a consumers society has a small chance of succeeding because luxury items are forms of expression or identification for a luxury consumer. This makes it difficult for the consumer to adopt the brand in such cases. 5. The brand must perform Irrespective of which category the brand belongs to, a performance assurance is a must for the brand if it wishes to be in the evoked set of luxury consumers, considering the price being paid for luxury.

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It can be noted that for jewellery, 40% brand loyalty is present in the luxury segment.

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RE-DEFINING THE CONCEPT OF LUXURYLuxury brands have often been associated with the core competences of creativity, exclusivity, craftsmanship, precision, high quality, innovation and premium pricing. These product attributes give the consumers the satisfaction of not only owning expensive items but the extra-added psychological benefits like esteem, prestige and a sense of a high status that reminds them and others that they belong to an exclusive group of only a select few, who can afford these pricey items. The luxury sector targets its products and services at consumers on the top-end of the wealth spectrum. These self-selected elite are price insensitive and choose to spend their time and money on clothes and accessories that are plainly opulence rather than necessities. For these reasons, luxury and prestige brands have for centuries commanded an unwavering and often illogical customer loyalty. Several luxury and prestige brands such as Louis Vuitton, Burberry and Chanel were launched in the nineteenth and early twentieth centuries when a strict social class system defined society and royalty and aristocracy reigned supreme. During this period, designers like Christian Dior, Louis Vuitton and Gucci. Gucci designed clothes, luggage and leather goods exclusively for the noble men and women of society. Their work was an art form that took several weeks and sometimes months to produce and this was all a part of the luxury and prestige experience. During this period, it was the norm to literally dress in one brand from head-to-toe. In the present 21st century environment, the story is different. The luxury scene has changed due to several factors. First a mass class of wealthy people have emerged the world over. At the beginning of the century, luxury consumers were a small segment of the population who all looked the same. In the last three to four decades however, a vast amount of wealth has been amassed by individuals due to several economic, social, and technological breakthroughs. Secondly, there has emerged a sea of luxury brands and this has affected the high entry barrier that the industry guarded for centuries. It has also given luxury consumers more choice than ever before. Thirdly, the rapid growth of digital,

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information and communications technology has given consumers more variety in luxury product offering, easier access to view the choices and lower switching costs especially on the Internet. This has empowered the consumers to become more individualistic, experimental and bold enough to mix luxury and high-street fashion in one outfit; something that their mothers and grandmothers would have considered a taboo in the past. The result of this change is the phenomenon of trading-up and trading-down. The new wealthy mass class who are enjoying their ability to trade up to acquiring luxury products practice trading-up. Trading-down is the practice of mixing the use of luxury items with fashion brands. This practice is also popularly called the democratisation of luxury. Therefore it is no longer a surprise to find a wealthy celebrity wearing jeans from H&M, earrings from Chanel, shoes from Coach, a shirt from Zara and a bag from Louis Vuitton. Luxury consumers have unconsciously formed a pedestal for fashion brands to stand side by side with luxury brands. The so-called fashion brands such as H&M, Zara, Mango, Gap and TopShop are redefining their branding and marketing strategies to reflect a luxurious appeal to the consumer. As a result of this, for the first time in their history, luxury brands are facing competition from the lesser mass fashion brands that are gradually edging into the lives of luxury consumers. Luxury brands have always had well-defined territories along which they operate and there has never been any question that they hold the strings in determining their consumers behaviours until now. The mass fashion brands are showing that they have understood the language of differentiation and individualism and are able to offer the luxury consumer alternatives to their luxury products or complimentary goods at better price-value. They have also developed sophisticated operations techniques to spin off their products in a short time. This has enabled the mass brands to graduate from mass to mass-premium brands, as they like to be referred. While they are still fantastic consumer brands, they are no longer low-end or middle-end brands. They have understood that it is no longer a problem for a young wealthy Duchess to combine a 50 pair of jeans from Zara with a 3,000 bag from Vuitton and a 5,000 J12 watch from Chanel, and they are exploiting this development. This goes to say that the 22

luxury bag or watch alone is not solely required to enable the consumer fulfil the needs of esteem. Another factor that has enabled the christening of the fashion brands as premium brands is the manipulation of the marketing mix strategies to be similar to those of the luxury brands. A typical example is the introduction of limited edition clothes and accessories by high street brands such as the UKs Marks and Spencers or the recent wave of high advertisement expenditure in fashion magazines like Vogue and Harpers & Queen, which were previously the sole domains of luxury brands. Viewing a Top Shop advertisement beside Chanel or Hermes advertisement in Vogue undoubtedly does something to the mind of the consumer. In addition, the mass-premium brands now open in the best locations in fashion capitals of New York, Paris, Milan and London. They now act and speak as if they are really the high-end brands that set the trends. They have become aggressive in their manner of communication to their target audience, who are largely luxury consumers. Another example is the teaming up of legendary luxury fashion designer and Designer of the House of Chanel, Karl Lagerfeld with H&M to design a limited edition womens wear collection in November 2004. This collaborative effort would have been unthinkable ten years ago.

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The crucial questions are:

Are luxury brands now mass brands like fashion brands? Are fashion brands becoming luxury brands? Where can we draw the line between luxury and fashion brands?

According to industry experts, luxury and prestige brands such as Rolex, Louis Vuitton and Cartier represent the highest form of craftsmanship and command a staunch consumer loyalty that is not affected by trends. These brands create and set the seasonal trends and have the ability to sell an item for 20,000 and another for 200 to different consumer groups. They are also capable to pulling all of their consumers with them wherever they go. Premium brands are those brands like Polo Ralph Lauren, Calvin Klein and Tommy Hilfiger that aspire to be luxury and prestige brands but their marketing mix strategies are more attuned to a mass market, albeit a luxury mass market. Some experts also call this group, mass-premium brands while others have termed them mass-luxury brands and yet some others refer to them as high-end brands. This category has perhaps witnessed the greatest changes from the consumer and aggressive competition from global fashion brands like Zara and H&M. Fashion brands on the other hand are those that dress the masses. A recent evolution brought about by competition has created a significant change in the fashion brands category. Brands like Zara, H&M and Gap can no longer be considered as merely fashion brands, in the same boat as any high street fashion brand as they have elevated their offerings and strategies. In order to differentiate themselves from the massfashion brands, they now refer to themselves as Premium Fashion brands. They are playing a key role in the trading-down phenomenon of the luxury consumer.

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The difference between luxury brands and fashion brands is not only in the aspects of product quality and pricing but also applies to availability and exclusivity of the products. Fashion brands are for the mass market, whether they are of high quality or not. Luxury brands are for a distinct narrow market and are defined by high quality, differentiation and precision in product design and manufacture. A brand is either a luxury brand or it is not. There is no go-between. If a brand does not set out to target the high-end market, then it is difficult to become a luxury brand. Economists think of a luxury product as something that people "outspend" their income increases. This means that if your income increases by, say 10%, people will increase their spending on a luxury product at a rate greater than 10%.

So what brands are the true luxury brands? Heritage and tradition have always played a vital role in this sector. This is the reason that the industry is emphasizing the differences between luxury and prestige brands, premium brands and fashion brands. The traditional view of luxury has been affected by the recent changes in the consumer landscape. Despite this, the true luxury and prestige brands such as Louis Vuitton, Chanel, Hermes, Cartier, Rolex and Gucci, remain unwavering and not compromising their core values and continuously influencing their consumers thinking, albeit a more mass consumer base. These brands have strategies that address the difficult paradox of the combination of exclusivity and availability and to appeal to many while appearing to be right for only a special few. Finally, a simple test can be used to ascertain that a brand is a true luxury and prestige brand. If you move the Louis Vuitton boutique 30km away, will the consumer be ready to follow the store 30 km away to the new location? If you take the H&M boutique 30 km away, will the consumer go an extra 30 km for a pair of H&M trousers or will they find an alternative?

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DIFFERENCE BETWEEN A LUXURY BRAND AND A REGULAR BRAND(From a sellers point of view and a customers point of view) A luxury brand differs from a regular brand in various ways. From a sellers point of view the difference is seen in the quality of the product. For example, Ganjam sticks to F-VVS benchmark in quality. From a customers point of view, the difference comes in positioning the brand. The brand is positioned in such a way that it occupies a higher and distinct position in the minds of customers. In short, a regular brand is rational and a luxury brand is emotional i.e. a regular brand fulfils a customers necessity but a luxury brand touches the emotional aspect.Luxury branding is a whole new ball-game altogether, both from the perspective of the marketer as well as the luxury consumer. It therefore becomes important to view it both in relation and isolation from the regular goods marketing.

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Difference between regular & luxury goods

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HOW ONE BRAND ACHIEVES THE STATUS OF A LUXURY BRAND

Luxury builds in a customers mind over years. A luxury brand is not created overnight. Every luxury brand usually ahs a history attached to it which would have helped it in becoming a luxury brand. And if one may notice, majority of the luxury brands are old brands and have been in the market for a long time (exceptions exist). A luxury brand has to be subtle at all times and communicate very gently with the public. A loud marketing strategy is not a characteristic of a luxury brand.

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1.2 INTRODUCTION TO THE INDUSTRY

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The jewellery industry in India is one of the most booming industries present. It contributes more than 15% of the country's total exports and provides employment to 1.3 million people directly and indirectly. Gold jewellery forms around 80% of the Indian jewellery market, with the balance comprising fabricated studded jewellery that includes diamonds as well as gemstone studded jewellery. India consumes nearly 800 tonnes of gold accounting for about 20% of the world gold consumption, of which nearly 600 tonnes goes into making jewellery. The Indian jewellery market, estimated to be $13.5 billion in fiscal year 2006, accounts for 8.3% of world jewellery sales, according to a study by KPMG. India is the world's largest diamond processing (cutting and polishing) country with an estimated 1 million processors handling more than 57% of the worlds rough diamonds by value. According to industry estimates, 11 out of 12 diamonds set in jewellery are cut and polished in India. Processing is done on rough diamonds in full range of sizes and qualities, including stones larger than 10 carats. In terms of carat, India's share in this sector is about 80% of the world market. Employing more than 90% of the global diamond industry workforce, India also accounts for 90% of the volume of diamonds processed in the world. Exports from the jewellery industry fetched $17.1 billion in 2006 against $16.64 billion in 2005, showing a growth of 26%. While diamonds accounted for 64% of the total exports, gold jewellery accounted for 30.47%, and coloured gem stones and others accounted for 1.44% and 1.04% respectively last year. Cut and polished diamond segment exports were $10.90 billion, while gold jewellery exports fetched $5.21 billion last year. Coloured gemstone exports yielded $246.48 million last year, against $232.35 million in 2005. The growth momentum has continued into the current fiscal year. The gems and jewellery export industry grew by a robust 27% export during the first half of the 30

current fiscal at $9.4 billion, as compared to $7.4 billion in the corresponding period of 2006, according to the Gems and Jewellery Export Promotion Council (GJEPC). The growth in diamond exports was 28%, in jewellery it was 21% and in coloured gemstones it was 22%. The major destinations for exports have been the U.S., UAE, Hong Kong, Belgium and Israel. In fact, the U.S., UAE and Hong Kong together accounted for more than 70% of the total exports in the previous fiscal year. The increasing levels of disposable household income have resulted in record consumption levels in the domestic market. Indian jewellery demand rose by 70% during the first half of 2007 compared with the same period last year. Jewellery demand increased to 387 tonnes from 227 tonnes during the period. Gold consumption during the first six months of 2007 grew by 70% to 528 tonnes compared to 307 tonnes in the same period last year. Indias total gold consumption in 2006 was slightly over 700 tonnes. While jewellery accounted for around 73% of gold demand, investments in the forms of coins and bars accounted for the rest.

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GROWTH IN THE JEWELLERY INDUSTRY IN INDIAIndia's fascinating success story in the gems and jewellery industry continues to glitter. In the last few years, there has been a massive growth in the purchasing parity of the middle class and surging income levels in India. This has resulted in the rising consumption growth of gems and jewellery by about 11 percent in the five-year period this year. The Indian gem and jewellery industry has registered 22.27 percent growth rate amounting to total exports of US$ 20.8 billion (INR 84,058.19 crores) in 2007-08 against US$ 17.1 billion (INR 77,100.12 crores) in the previous year. The gem and jewellery sector accounted for 13.41 percent of Indias total merchandise exports. The Gem and Jewellery Export Promotion Council (GJEPC) released the financial results for 2007-08 on April 15. Export of cut and polished diamonds which was the performance driver for the period in consideration amounting to nearly 68 percent of the export basket, grew from US$ 10.9 billion (INR 49,156.28 crores) in 2006-07 to US$ 14.2 billion (INR 57,061.45 crores) in 2007-08. Hong Kong emerged as the largest export market for cut and polished diamonds with a share of 35 percent while the US and UAE stand at second and third position with 24 percent and 13 percent share respectively. Export of coloured gemstones and others grew from US$ 246.4 million (INR 1112.33 crores) in 2006-07 to US$ 276.42 million (Rs 1112.32 crores) in 2007-08. The export of gold jewellery rose by 8.07 percent with total exports amounting to US$ 5622.41 million (Rs 22624.59 crores) in 2007-08 as compared to US$ 5202.48 million in 2006-07 (Rs 23478.81 crores).

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Efforts from Government:In March 2008, Jairam Ramesh, minister of State for Commerce led a delegation to Angola and Namibia so that India can directly source rough from these countries. A Joint Working Group has been formed between Namibia and India to prepare a detailed plan for long term partnership in the diamond sector. The Indian government is also planning to set up factories and training institutes. The delegation in Angola, talked over plans for ENDIAMA, a diamond mining company, to shortly open an office in India. Angola has invited Indian diamond companies to set up factories and training institutes in Angola. The council has invited the president of Angola as the chief guest for Mines to Market 2009. The industry is well-supported by government policies and the banking sector around 50 banks provide nearly $3 billion in credit to the Indian diamond industry. In addition, India is expected to have a diamond bourse soon

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1.3 INTRODUCTION TO THE COMPANY

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GANJAM A LUXURY BRAND INTRODUCTION

Sought after by collectors the world over, Ganjam jewellery is a harmonious unity of the old and new. Their designs are borne from experience and expertise coming together to create jewellery that defies traditional concepts and styles of craftsmanship. The jewellery is crafted in Metals that blend with each other in a unique, inimitable style and in precious stones that are hand-picked with an eye that needs to see a thousand or more to select those very few that are perfectly matched. Ganjam jewellery is hand-crafted without compromising time or expense, the very best that human skill can achieve. And all this comes together to create a brand whose designs are recognised across the world, having won The World Gold Council Virtuosi twice, The Perles de Tahiti International Trophy, and having been commissioned by The Platinum Guild International to create the masterpiece for their world-wide exhibitions in 2007-2008.

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HISTORY OF GANJAM16th Century Ganjams origins date back to the heyday of the Vijayanagar Empire, when they were trading in musk and precious gemstones on the East coast of Orissa. They had to flee, as a result of invasion, setting out on a long and eventful trek ultimately settling down again at Hampi. 1889 Ganjam Nagappa opens a business in the small town of Bangalore and becomes the Royal Jeweller. During the reign of Maharaja Jayachama Rajendra Wodeyar of Mysore the firm receives the Royal Appointment. Ganjam soon establishes itself as the pre-eminent diamond jeweller of Karnataka. 1971 Ganjam open their first emporium in Bangalore, the predecessor of the current flagship showroom in Infantry road. 1998 Ganjam pioneers the working of Platinum in India and within a decade, are commissioned by the Platinum Guild International to create a special masterpiece for display at the international jewellery fair in Basel. , Switzerland in 2007. This had become the inspiration for their new Riverdance collection. 2009 Ganjam opens a boutique at DLF emporium in Vasant Kunj, New Delhi. This adds to their existing boutiques in The Leela Palace galleria in Bangalore and The Taj Mahal Palace Hotel in Mumbai. Internationally, Ganjam sponsors The Ganjam Jaipur Trophy at Guards Polo Club in Windsor Great Park UK and is exhibited to illustrate traditional skills of craftsmanship at The Lucca Preziosa in Italy.

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PR IN GANJAMPublic relations can be crudely defined as an unpaid form of advertising or an unpaid form of gaining visibility. PR is a genuine, authentic effort on behalf of the company to maintain good relations with the media, public and stakeholders. PR in the case of Ganjam gains more importance as it is a luxury brand. PR within the luxury segment is planned in a very restricted framework. Word of mouth plays a very important role in the case of Ganjam. For them, its a very serious affair. Few of the policies they keep in mind are: They keep their PR totally genuine and authentic. It is completely unpaid. They believe that if it is paid it is as good as marketing. Observing the clear difference between marketing and PR and knowing exactly when what is necessary is a very important aspect for Ganjam. They are also very careful about what is to be seen, when it is to be seen and how it should be seen by the public. They do not believe in being seen everywhere, all the time. They subtly choose the right location and occasion. Media Relations is given utmost importance in Ganjam. They like to pamper the media people as they believe that usually customers are targeted and the media is given least importance. Personal touch is very important for Ganjam. They believe that thats the most effective way of reaching out to the public and also in keeping good relations with the media people. They have a set of Dos and Donts that they always follow and are very selective about the publications and magazines that they choose. The most popular ways in which they maintain public relations are by organising sports events, musical events and events that do not focus on money-making but focus on promoting some form of art.

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GANJAM AS A LUXURY BRANDWHY GANJAM IS CALLED A LUXURY BRAND Ganjam is now a luxury brand because of a very determined decision made by Mr.Umesh Ganjam. He decided that people should not buy Ganjam jewellery to adorn themselves but they should buy it to own a Ganjam! He did not want people to buy it out of necessity but for a hint of luxury.

NEED FOR RE-POSTIONING GANJAM AS A LUXURY BRAND

Initially Ganjam did not portray itself as a luxury brand. In the beginning Ganjam was scattering to the masses with bulk jewellery. Its target audience was so different that it once even had a campaign advertising the fact that it now has an A/C showroom. Initially the Ganjam family had a small place outside their home and they traded jewellery there. Even back then they were famous for the quality of their products. It was only later that they shifted gears and over time it has become a luxury brand. It never started off with that intention The sole reason for the re-positioning was Mr.Umeshs decision to take it one step higher. It is said that one builds a luxury brand when he thinks he has made enough money but is looking for something more than just money i.e. personal satisfaction. So even in the case of Ganjam this was proved right.

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WAYS IN WHICH GANJAM STARTED COMMUNICATING TO THE PUBLIC THAT IT IS A LUXURY BRAND.

One of the main aspects of luxury in a luxury brand is quality. A luxury brand is answerable to the society as when people pay a higher price their expectations automatically increase. Hence, the first change that was incorporated in Ganjam was the quality standards and it stands as the first jeweller in the country to upgrade to the f-colour standard. Then, Ganjam decked up the design studio and approached famous designers. They made sure that the designers style would match Ganjams style and their ideologies would match. The marketing strategies changed along with their approach. The first step in this direction was the change in the advertising agency. Ganjam used to consult an Indian agency but somewhere down the lane felt that Indian agencies did not get the exact concept of luxury and a concept like this actually did not exist in India. Hence they started consulting a UK-based agency was happy that the ideas now matched. They began a campaign that read- Heighten your senses and eventually removed even that line from their campaign. Being a luxury brand, they believe that the lesser they say, the more they can convey and till date they follow that strategy.

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CHALLENGES FACED IN THE PROCESS

Luxury as a concept does not exist in India and this caused most of the problems. Firstly, hiring the right personnel was not easy as people all over India were not very familiar with the concept of luxury. Intensive training programmes had to be conducted and Mr.Umesh also spent a lot of time travelling abroad to find good employees. Then problems were faced with the Indian agency as they felt here, the concept of luxury would not be clearly communicated to the public and they had to shift to a UKbased agency. Because the concept of luxury was unknown here, targeting and capturing the local audience was quite a task. CHALLENGES STILL BEING FACED: Limited Target audience : A luxury brand is not sought after as much as a regular brand is as not everyone aims at buying a luxury brand. Hence, the target audience is reduced to a great extent. Limited advertising: A luxury brand does not opt for extensive marketing or promotion and hence have to try in subtle ways to advertise and get recognized in order to emphasize their presence in the market.

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FACTORS THAT HELPED IN THE RE-POSITIONING At that time, the Bangalore market started booming and a lot of IT crowd came into Bangalore bringing in a lot of youth. Hence Ganjam tried to attract this crowd and tackled new customers. It was also noticed that now people are much more conscious of what jewellery they pick and the demand for designer jewellery is increasing day by day ADVANTAGES TODAY:

Higher status: The main advantage of being a luxury brand is that it gets a higher status and a reserved position in the minds of people. It is an honor to be a luxury brand. Distinct brand recognition: A luxury brand is not just another brand and is recognized distinctly as a luxury brand and also a better brand. Pride of owning a luxury brand: A luxury brand automatically achieves a higher status and hence people would want to own one as a matter of pride.

IMPORTANCE OF DISTINCT BRAND DIFFERENTIATION BETWEEN A REGULAR AND A LUXURY BRAND It is very difficult to balance between what Ganjam was and what it is now. Gears should never be shifted quickly as it will not be a smooth ride. Similarly, Ganjam has to slowly bring in the distinct difference between what it was and what it is now. It is almost like walking on a tight rope. A slight imbalance in this process will ruin everything. To help bring in this difference, Ganjam opened a boutique in Bangalore, Delhi and Mumbai as a boutique clearly differentiates itself from a showroom.

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CAUSES PROMOTED BY GANJAMGanjam has sponsored several events, each of which was dedicated to a special cause. Few of them are: PAKSHI This was an event organised at The Leela, Bangalore, in January,2005. It was actually a succession of an event that was planned called wings of love which unfortunately did not reach its final stage due to the occurrence of the Tsunami. It was an event to raise awareness of endangered birds and their habitats in collaboration with Bird Life International. The craftsmen prepared various kinds of models of birds with different materials. In order to showcase the same, Pakshi was organised. BMDP This was a Bone Marrow Donor Programme that was held in October, 2005. Ganjam was one of the sponsors of the event which was held in Singapore. WINGS OF LOVE This event was to promote the protection of endangered birds and was held in Japan in 2005 and the same in Malaysia in 2006.

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EVENTS BY GANJAM In 1998, Ganjam pioneered the working of Platinum in India and within a decade, are commissioned by the Platinum Guild International to create a special masterpiece for display at the international jewellery fair in Basel. , Switzerland in 2007. This had become the inspiration for their new Riverdance collection. In 2006, Ganjam organised the Lucca Preziosa where they displayed their heritage collection of jewellery. In 2009, Ganjam sponsored The Ganjam Jaipur Trophy at Guards Polo Club in Windsor Great Park UK .

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1.4 LITERATURE REVIEW

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A literature review is a body of text that aims to review the critical points of current knowledge and or methodological approaches on a particular topic. Literature reviews are secondary sources, and as such, do not report any new or original experimental work. Most often associated with academic-oriented literature, such as theses, a literature review usually precedes a research proposal and results section. Its ultimate goal is to bring the reader up to date with current literature on a topic and forms the basis for another goal, such as future research that may be needed in the area. A well-structured literature review is characterized by a logical flow of ideas; current and relevant references with consistent, appropriate referencing style; proper use of terminology; and an unbiased and comprehensive view of the previous research on the topic. The literature review is a critical look at the existing research that is significant to the work that you are carrying out. Some people think that it is a summary: this is not true. Although you need to summarize relevant research, it is also vital that you evaluate this work, show the relationships between different work, and show how it relates to your work. In other words, you cannot simply give a concise description of, for example, an article: you need to select what parts of the research to discuss (e.g. the methodology), show how it relates to the other work (e.g. What other methodologies have been used? How are they similar? How are they different?) and show how it relates to your work (what is its relationship to your methodology?).

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ARTICLE 1 - ABSTRACTEXPANDING A LUXURY BRAND WITHOUT LOSING ITS CACHET!SOURCE: National Jeweler; 3/16/2003, Vol. 97 Issue 6, p27, 2/5p

In times of recession, luxury brands have deciphered the code to success. Though their revenues are slightly affected, they believe expansion is the secret to retaining customers and not facing the same plight as others in times of economic depression. Expanding the customer base and increasing product range seem to solve many problems of the highly acclaimed luxury brand Harry Winston. While indulging in expansion strategies, it is very essential to remember that keeping the core identity of the brand intact is of utmost importance. In the process of expansion if brands lose their identity or divert the customers attention from the main element of the brand, it may prove to be dangerous. While brand image is given top most priority at the time of deciding new expansion strategies, customer service is looked into carefully.

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ARTICLE 2 ABSTRACTINDIA ATTRACTING LUXE PLAYERSSOURCE: By: Zargani, Luisa. WWD: Women's Wear Daily, 12/27/2006, Vol. 192 Issue 133, p2-2, 2/3p, 2 color;

Despite a limited retail space and a cumbersome economic system, India has been successful in reaching the zenith in the luxury industry. According to a study by luxury goods consultant Armando Branchini for the luxury goods association Altagamma, consumption of international luxury products and brands in India is expected to triple in the next five years. In 2005, the total market size for upscale and luxury products in India was estimated at $14.8 billion, and Branchini said he estimated a 14 percent annual growth rate of the market. By 2010, India is expected to have 150,000 families with an income level of $250,000 per year or higher. It is also interesting to note that jewellery constitutes 27% of the luxury industry in India. The sales of luxury products are rapidly increasing and companies are doing everything they possible can to seize this moment. The need to display the best brands and look the best is increasing day by day in India. Surprisingly, this holds true for the young and the old. The manacles that were binding the country have finally been broken leading to a revelation of new ideas and a change in the mindset, proving highly advantageous to the luxury industry

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ARTCILE 3 ABSTRACTINDIA JEWELLERY INDUSTRY ADJUSTS TO U.S. ECONOMIC WOES

SOURCE: JCK; Jan2009, Vol. 180 Issue 1, p80-84, 5p

This article touches upon the effort of the jewellery industry in India to adjust to U.S. economic crisis. According to Sanjay Kothari, the jewellery exports from the special economic zone in Mumbai that promotes rapid economic growth using tax and business incentives to increase exports (SEEPZ) to the U.S. has declined by 30% during the first six months of 2008. In relevance, some manufacturers have moved out of SEEPZ and set up shop in other areas to take advantage of the burgeoning domestic market. According to him, India's jewellery market has been hit especially hard. Though most of the brands have been affected, few try to pick the positive aspects of the economic downturn and have already started finding new strategies to face this situation.

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ARTICLE 4 - ABSTRACT

THE NEW GUIDELINES TO LUXURY BRAND MARKETING.

SOURCE: Media: Asia's Media & Marketing Newspaper; 9/22/2006, p23-23, 1/2p, 5 colour

The article presents new directions to luxury brand marketing. Brands today can create experience through distinctive limited-edition products and services, and cobranding which allows brands to communicate across different platforms. Money is no object when consumers are fulfilling a passion. Further, living up to the image of the luxury consumer is no longer important. The affluent are becoming more confident and are more comfortable indulging in the ordinary. The article touches upon five topics Creating an experience, importance of passion, not having to think, adding a precious element to the ordinary and exclusivity. When it comes to luxury brands only selling is not enough; it is more important to create an experience. The other important aspect is that when customers are out looking for luxury brand money does not matter. It is the passion towards the product. Hence it is important to take care of their needs and demands. To add on, people dont like to waste too much time to think about buying the product. Thinking about all little details does not appeal to them and hence product that can cater to all their needs need to designed. The last two things to be kept in mind is exclusivity and making the product precious in every aspect.

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ARTICLE 5 ABSTRACTTHE PRICE OF LUXURYBrand Strategy; Nov2008, Issue 227, p46-47, 2p

The article reflects on how luxury brands keep their customers during global economic slowdown. He compares the two consumer segments, the super-rich who are not affected by the economic downturn, and the aspirationals who are attracted to the luxury and focus on brand names in their buying decisions. The author believes that companies should be aware that consumers' willingness to pay higher does not mean that they have to raise their prices. First it is very important to decide the target group. Only then can the company decide which strategy it has to use to attract the target group. A study we recently undertook revealed that more than half of the price-setting decisions among luxury brands are informed by the cost of manufacture and predecessor product prices. Twenty per cent are set because of competitor price levels and just a third is given a level according to their perceived consumer value. But only adjustments in the price will not help the luxury market as it is way beyond than just prices. Service is equally vital in this segment.

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CHAPTER 2 RESEARCH DESIGN

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Research can be defined to be search for knowledge or any systematic investigation to establish facts. The primary purpose for applied research (as opposed to basic research) is discovering, interpreting, and the development of methods and systems for the advancement of human knowledge on a wide variety of scientific matters of our world and the universe. Research design can be thought of as the structure of research -- it is the "glue" that holds all of the elements in a research project together. We often describe a design using a concise notation that enables us to summarize a complex design structure efficiently. The research process consists of the following steps :

PROBLEM RECOGNITION AND DEFINITION CREATING THE RESEARCH DESIGN SAMPLING DATA COLLECTION DATA ANALYSIS VALIDITY AND RELIABLILITY SUMMARY

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2.1 TITLE OF THE STUDYA study of the difference between luxury and regular brands. CASE STUDY Ganjam The repositioning of Ganjam as a luxury brand.

2.2 OBJECTIVES OF THE STUDYThe main objectives of this study are To gain more knowledge about the luxury industry especially in the jewellery segment. To differentiate a luxury brand from a regular brand in terms of the marketing. To understand peoples perception of luxury brands, especially jewellery luxury brands. To study in detail the case of repositioning of Ganjam as a luxury brand and analyse the challenges faced in the process. To analyse on the whole the way a luxury brand is thought of and the ways in which it differs from a regular one.

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2.3 SCOPE OF THE STUDYThis research extends up to all people who are aware about luxury brands and understand the difference between luxury brands and regular brands. It not only includes customers of luxury brands and especially jewellery brands but also people who are keenly observing the luxury segment. Customers of Ganjam in particular constitute an essential part of the research. The study was limited to Bangalore only and all the respondents were from Bangalore only.

2.4 TYPE OF RESEARCHThe type of research here is basic research.Basic research or fundamental research (sometimes pure research) is research carried out to increase understanding of fundamental principles. Many times the end results have no direct or immediate commercial benefits: basic research can be thought of as arising out of curiosity. However, in the long term it is the basis for many commercial products and applied research. Basic research is mainly carried out by universities.

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2.5 SAMPLE SIZE AND SAMPLINGSAMPLE SIZE

The sample size of a statistical sample is the number of observations that constitute it. It is typically denoted n, a positive integer (natural number). Typically, all else being equal, a larger sample size leads to increased precision in estimates of various properties of the population, though the results will become less accurate if there is a systematic error in the experiment. This can be seen in such statistical rules as the law of large numbers and the central limit theorem. Repeated measurements and replication of independent samples are often required in measurement and experiments to reach a desired precision.

The sample size here is 50Sampling is that part of statistical practice concerned with the selection of individual observations intended to yield some knowledge about a population of concern, especially for the purposes of statistical inference. Researchers rarely survey the entire population for two reasons: (1) The cost is too high and (2) The population is dynamic, i.e., the component of population could change over time. There are three main advantages of sampling: (1) The cost is lower, (2) Data collection is faster, and (3) It is possible to ensure homogeneity and to improve the accuracy and quality of the data because the data set is smaller. Each observation measures one or more properties (weight, location, etc.) of an observable entity enumerated to distinguish objects or individuals. Survey weights often need to be applied to the data to adjust for the sample design. Results from probability theory and statistical theory are employed to guide practice. In business, sampling is widely used for gathering information about a population.

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Process The sampling process comprises several stages:

Defining the population of concern Specifying a sampling frame, a set of items or events possible to measure Specifying a sampling method for selecting items or events from the frame Determining the sample size Implementing the sampling plan Sampling and data collecting Reviewing the sampling process

Simple random sampling In a simple random sample ('SRS') of a given size, all such subsets of the frame are given an equal probability. Each element of the frame thus has an equal probability of selection: the frame is not subdivided or partitioned. Furthermore, any given pair of elements has the same chance of selection as any other such pair (and similarly for triples, and so on). This minimises bias and simplifies analysis of results. In particular, the variance between individual results within the sample is a good indicator of variance in the overall population, which makes it relatively easy to estimate the accuracy of results. However, SRS can be vulnerable to sampling error because the randomness of the selection may result in a sample that doesn't reflect the makeup of the population. For instance, a simple random sample of ten people from a given country will on average produce five men and five women, but any given trial is likely to over represent one sex and under represent the other. Systematic and stratified techniques, discussed below, attempt to overcome this problem by using information about the population to choose a more representative sample. SRS may also be cumbersome and tedious when sampling from an unusually large target population.

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2.6 DATA COLLECTION METHOD

PRIMARY DATA SECONDARY DATA

In primary data collection, you collect the data yourself using methods such as interviews and questionnaires. The key point here is that the data you collect is unique to you and your research and, until you publish, no one else has access to it. There are many methods of collecting primary data and the main methods that have been used in this research include:

questionnaires interviews

Secondary data is data collected by someone other than the user. Common sources of secondary data for social science include censuses, surveys, organizational records and data collected through qualitative methodologies or qualitative research. Primary data, by contrast, are collected by the investigator conducting the research. Secondary data analysis saves time that would otherwise be spent collecting data and, particularly in the case of quantitative data, provides larger and higher-quality databases than would be unfeasible for any individual researcher to collect on their own. In addition to that, analysts of social and economic change consider secondary data essential, since it is impossible to conduct a new survey that can adequately capture past change and/or developments.

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2.7 STATISTICAL TOOL USEDQUESTIONNAIREA questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. Questionnaires have advantages over some other types of surveys in that they are cheap, do not require as much effort from the questioner as verbal or telephone surveys, and often have standardized answers that make it simple to compile data. However, such standardized answers may frustrate users. Questionnaires are also sharply limited by the fact that respondents must be able to read the questions and respond to them. Thus, for some demographic groups conducting a survey by questionnaire may not be practical. As a type of survey, questionnaires also have many of the same problems relating to question construction and wording that exist in other types of opinion polls.

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2.8 LIMITATIONS OF THE STUDYThe limitations of the study are as follows: The study was limited to luxury brands specifically hence narrowing down the research to a great extent. Very few people are well-versed with luxury brands and actually understand the difference between luxury brands and regular brands. Jewellery luxury brands in specific had to be studied and details regarding the same were very limited. Since it was a very specific topic only 50 respondents could be approached.

2.9 RESPONDENTS PROFILE

Fifty respondents were asked to fill up questionnaires. The Respondent population was as follows: Youth ( between 19 and 30) 20 Older population (between 31-55) - 30

The Respondents were limited to Bangalore.

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CHAPTER 3 DATA ANALYSIS AND INTERPRETATION

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The process of the collection, organization, and interpretation of numerical data, especially the analysis of population characteristics by inference from sampling is known as Data Analysis and Interpretation. Scientific data collection involves more care than you might use in a casual glance at the thermometer to see what you should wear. Because scientists build on their own work and the work of others, it is important that they are systematic and consistent in their data collection methods and make detailed records so that others can see and use the data they collect. But collecting data is only one step in a scientific investigation, and scientific knowledge is much more than a simple compilation of data points. The world is full of observations that can be made, but not every observation constitutes a useful piece of data. For example, your meteorologist could record the outside air temperature every second of the day, but would that make the forecast any more accurate than recording it once an hour? Probably not. All scientists make choices about which data are most relevant to their research and what to do with that data: how to turn a collection of measurements into a useful dataset through processing and analysis, and how to interpret those analyzed data in the context of what they already know. The thoughtful and systematic collection, analysis, and interpretation of data allow it to be developed into evidence that supports scientific ideas, arguments, and hypotheses.

Following is the graphical representation and interpretation of the survey conducted with the help of a Questionnaire.

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RESULTS OF THE SURVEY

THE REASONS FOR DIFFERENCE BETWEEN A LUXURY BRAND AND A REGULAR BRAND

9 8 Number of people 7 6 5 4 3 2 1 0 Marketing Design or look Quality Price Reasons for difference

Reasons for difference Number of people -

MARKETING 2

DESIGN 2

QUALITY 8

PRICE 8

It can be interpreted that most of the people feel that the primary aspect of differentiation between a luxury brand and a regular brand is the quality and price of the product.

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THE WAYS IN WHICH ONE CAN DIFFERENTIATE A LUXURY BRAND FROM A REGULAR BRAND

30 25 Number of people 20 15 10 5 0 Look Price Packaging

Ways of differentiation Number of people -

LOOK

PRICE

PACKAGING

14

26

10

Here people feel that the way in which they can easily differentiate a luxury brand from a regular brand is by looking at the price. Some people also feel that the ay a product looks also can determine whether it is a luxury brand or a regular brand.

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INDICATION OF LUXURY BRAND AS GOOD QUALITY

25

20 Number of people 15 10 5 0 Yes No Cant say

Answers Number of people -

YES 20

NO 16

CANT SAY 14

From the above graph it can be noted that a general assumption is that if it is a luxury brand, it indicates better quality. But surprisingly, similar number of people disagree to the same.

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PURCHASING A LUXURY BRAND CREATES AN EXPERIENCE

30 25 Number of people 20 15 10 5 0 Yes No Cant say

Answer Number of people -

YES 26

NO 12

CANT SAY 12

The way in which a luxury brand is portrayed itself shows that people want to buy luxury brands as it creates an experience.

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SIMILARITY OF FREQUENCY OF ADS OF LUXURY BRANDS AND REGULAR BRANDS

35 30 Number of people 25 20 15 10 5 0 Yes No Cant say

Answer Number of people -

YES 10

NO 30

CANT SAY 10

It is a known fact that luxury brands do not advertise as much as regular brands. This itself is a very important factor that helps differentiate it from other brands. Luxury brands rely on their brand image and do not opt for extensive marketing strategies.

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REASONS FOR PURCHASING A LUXURY BRAND

30 25 Number of people 20 15 10 5 0 Quality Experience Sake of owning a luxury brand

Reasons -

QUALITY

EXPERIENCE

SAKE OF OWNING A LUXURY BRAND 8

Number of people-

16

26

Majority of the respondents seem to buy a luxury brand as they believe it creates an experience and also somewhere believe that the quality of a luxury brand is higher than that of a regular brand.

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REASONS AS TO WHY OTHERS MAY BE PURCHASING LUXURY BRANDS

30 25 Numberof people 20 15 10 5 0 Quality Experience Sake of owning a luxury brand Others

Reasons -

QUALITY

EXPERIENCE

SAKE OF OWNING A LUXURY BRAND 26

OTHERS

Number of people -

8

10

2

Keeping their own ideas aside, people feel that other people purchase luxury brands for the sake of owning a luxury brand. Other reasons such as brand preference and loyalty are given least importance. Quality may also be one of the reasons as to why people purchase luxury brands.

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DIFFERENCE IN THE MARKETING OF LUXURY BRANDS

25

20 Number of people

15

10

5

0 Frequency of ads Quality of ads Brand ambassadors Others

Difference Number of people -

FREQUENCY OF ADS 19

QUALITY OF ADS 20

BRAND AMBASSADORS 9

OTHERS 2

Maximum number of respondents feel that luxury brands follow a different marketing strategy in terms of frequency and quality of ads. They advertise much lesser and even when they do, one look at the ad will tell us that it is a luxury brand. Few people give credit to any brand ambassador associated with the brand, (if any).

OPINION ON INCREASING NEED FOR OWNING A LUXURY BRAND

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30 25 Number of people 20 15 10 5 0 Yes No Cant say

Answer Number of people-

YES 24

NO 14

CANT SAY 12

Almost 50% of the respondents feel that day-by-day the need for owning a luxury brand is increasing. In todays world, everyone wants to be distinct and majority of them feel, owning a luxury brand will help them achieve that distinction.

WOTHINESS OF PRICES ASSIGNED TO LUXURY BRANDS

70

30 25 Number of people 20 15 10 5 0 Yes No Cant say

Answer Number of people-

YES 4

NO 24

CANT SAY 22

Luxury brands are always assigned much higher prices when compared to regular brands and however welling people are to pay for them, majority of them agree that luxury brands are not worth the prices assigned to them. And many of them feel that it is hard to tell whether it is justified for luxury brands to be priced so high.

DIFFERENCE IN THE MARKETING OF LUXURY BRANDS AND REGULAR BRANDS

71

25

20 Number of people

15

10

5

0 Yes No Cant say

Answer Number of people -

YES 20

NO 10

CANT SAY 20

Taking into consideration all facts about luxury brands , people found it very easy to decide that there is a huge difference in the marketing of luxury brands and regular brands.

MORE CHANNELS OF DISTRIBUTION MAY MAKE THE PURCHASING OF LUXURY BRANDS EASIER

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20 18 16 Number of people 14 12 10 8 6 4 2 0 Yes No Cant say

Answer Number of people -

YES 18

NO 18

CANT SAY 14

While 18 of them felt more channels of distribution will make it easier for them to gain access to luxury brands, the same number of people felt it wouldnt make much of a difference.

LUXURY BRANDS IN JEWELLERY: BETTER IN QUALITY AND DESIGN THAN REGULAR BRANDS

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25

20 Number of people

15

10

5

0 Yes No Cant say

Answer Number of people -

YES 16

NO 14

CANT SAY 20

When a question specifically regarding jewellery luxury brands was asked, 16 of them felt jewellery brands in the luxury segment were of higher quality and better design when compared to regular brands.

BUYING A LUXURY BRAND IN TIMES OF RECESSION

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30 25 Number of people 20 15 10 5 0 Yes No Cant say

Answer Number of people -

YES 10

NO 14

CANT SAY 26

Finally getting to the practicality of buying a luxury brand even in times of recession, more than 50% of them were unable to make up their mind and would be able to decide only when they are confronted with a situation. But of the remaining, majority decided it would be wiser not to spend their money on luxury brands in times of recession.

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CHAPTER 4 SUMMARY OF FINDINGSAfter conducting the survey and interacting with a lot of people regarding the difference between luxury brands and regular brands, the following points can be listed as a summary to the entire study: Luxury brands believe in not shouting out loud to the public about their products. They rely on their brand image and the history of the brand. 76

The way in which a luxury brand positions itself in the minds of the public is completely different and is portrayed in a more sophisticated manner. The casual touch present in regular brands is missing. Luxury has changed a lot , especially in the Indian market and is bound to change more. The Indian luxury market is expected to grow rapidly in the next few years. The perception of consumers towards luxury brands is distinct and one major distinguishing factor is the price of luxury brands. Through the survey, it was also learnt that a lot of people cannot clearly distinguish between a luxury brand and a regular brand especially when the brands are offering similar features.

The Case Study of Ganjam shows that when a brand is being re-positioned as a luxury brand, it undergoes tremendous change. It is almost like a new brand is being created. The way in which it was portrayed to the public changes, the means and frequency of advertising changes and even the products dont remain the same. It is a tedious process and has to be carefully executed; even a small mistake can ruin the brand image of the brand forever.

The luxury industry in India especially has grown a lot in the past few years, people have started recognising the difference. This gives a lot of opportunity for growth in this segment.

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The starting point for identifying successful luxury brand strategies in India has been established by identifying certain salient aspects of luxury brands that remain constant as well as identifying the stage of mindset of the Indian consumer towards these brands. The focus is now towards how soon luxury brands will enter the market to gain a first mover advantage, which is of significant importance in India. Apart from how soon, we primarily focus on how will luxury brands cater to the mainly aspirational needs of the Indian consumer. A word of caution that goes for luxury marketers, irrespective of their brands and geographical presence The luxury consumer is always looking for newer ways to satisfy his continuously changing needs. Hence, the need to keep a close tab through insightful research is of prime importance. As far as India is concerned, given the rapidly accelerating affluence of the masses, the scenario is set to witness a boom. The ones who will be riding the wave will be the ones whove kept their ears open to each and every word of their each and every customer. After all, in the luxury business, no marketer can afford the luxury of treating its consumers as a loosely bunched segment.

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CHAPTER 5 BIBLIIOGRAPHY AND ANNEXURE

5.1 BIBLIOGRAPHY79

Magazines Vogue Gem and jewellery magazine Art of jewellery magazine JCK magazine Internet unitymarketing.com brandchannel.com britishluxurycouncil.com wikipedia.com google.com

Books Luxury Brand Management: A World of Privilege - by Michel Chevalier , Gerald Mazzalovo Luxury World: The Past, Present and Future of Luxury Brands - Mark Tungate

Articles Eight Things That Every Marketer Needs to Know about the New Luxury Market; Pam Danziger The Changing Face of Luxury; Patricia Graham and Marcus Matthews The Unmistakable sign language of luxury; Hindu Business Line.

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QUESTIONNAIRE ON PERCEPTION OF LUXURY BRANDS- How does a luxury brand differ from a regular brand? - How can one differentiate between a luxury brand and a regular brand? By the look of it By the price By the packaging

- Does a luxury brand always mean better quality? Yes No Cant say - Does buying a luxury brand create an experience? Yes No Cant say - Do you see as many ads of luxury brands compared to those of regular brands? Yes No Cant say

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- Why would you buy a luxury brand? For better quality For an experience For the sake of owning a luxury brand Other -Why do you think other people buy luxury brands? For better quality For an experience For the sake of owning a luxury brand Other

- What is the difference in the marketing of luxury brands? - Is the need for owning a luxury brand increasing day by day? Yes No Cant say - Do you think luxury brands are worth the prices assigned to them? Yes No Cant say -Do you find a difference in the marketing of luxury brands and regular brands? Yes No

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Cant say - If there are more channels of purchasing luxury brands, such as more retail stores and online shopping service, it will make it easier to purchase luxury brands. Yes No Cant say

-Do you think luxury brands in jewellery are better in quality and design compared to regular jewellery brands? Yes No Cant say - In times of recession would you still think of buying luxury brands? Yes No Cant say

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ARTICLES

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ARTICLE 1 Expanding a Luxury Brand without Losing CachetTHE ECONOMIC CLIMATE and world situation may be fragile, but for upscale brands, the outlook is brighter than it may appear. Though affluent consumers continue to be selective about spending, examining the winners in today's volatile marketplace shows that expansion, not hunkering down, is the way to strengthen a luxury brand. Luxe marketers do face challenges. A handful of influential celebrity customers can generate mass demand overnight. But what keeps the brand sticky, once the fad passes? And what will keep core clients loyal if they think a venerable brand is losing status by expanding too far in the direction of "luxury lite"? For prestige marketers, the challenge remains, how can you grow a luxury brand without diluting its prestige? For an answer, consider the recent success of Fifth Avenue jeweller Harry Winston. President and CEO Patricia Hambrecht describes the company's growth strategy: "We grew our business by expanding our customer base and enlarging our product offering while remaining true to the core values of the brand: quality of gemstones, simplicity of design, excellence of craftsmanship." The marketing plan involved burnishing the jewellers luxe image and, at the same time, opening its doors to younger, less affluent customers, defining Harry Winston as "a company where both our brand and our products are viewed as exclusive but not elitist." So, practically speaking, how can a luxury brand maintain its cachet while reaching out to new customers? I put the matter to Hambrecht, Burberry President and CEO Rose Marie Bravo and Ed Kelly, president and CEO of American Express Publishing. Here are eight suggestions we collectively came up with: 85

1. Maintain the core identity of your brand. Don't lose the essence of the brand, "even as you expand and make it relevant to today," Bravo said. 2. Build on your core competencies. Don't abandon what you do best or sacrifice quality and service. That's what built your brand's reputation--and loyal following--in the first place. 3. Use brand extensions to penetrate your core market as well as reach out to new market segments. 4. Establish a clear, consistent brand image. Strictly limiting distribution channels--the number and type of sales outlets--and controlling all aspects of the selling environment are other ways to preserve brand mystique. 5. Create synergies between audience segments. 6. Use a mix of advertising, public relations and media to change customer perceptions. Old customers need reassurance that the brand hasn't lost its value, while new customers want assurance that it's not the same old brand. 7. Market a lifestyle, not a product line. Look for opportunities to deepen the emotional bond between your customer and brand. 8. Set trends; don't follow them. "Young," "fresh," and "accessible" are bankable assets for a luxury brand--so long as marketers also keep in mind the cardinal rule for maintaining brand cachet: Remain true to your core values.

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ARTICLE 2 India Attracting Luxe PlayersDespite limited retail space, a cumbersome bureaucracy and high import duties and taxes, India is emerging as one of the most alluring markets for the luxury goods industry. According to a study by luxury goods consultant Armando Branchini for the luxury goods association Altagamma, consumption of international luxury products and brands in India is expected to triple in the next five years. In 2005, the total market size for upscale and luxury products in India was estimated at $14.8 billion, and Branchini said he estimated a 14 percent annual growth rate of the market. By 2010, India is expected to have 150,000 families with an income level of $250,000 per year or higher. "There are one million very wealthy people, between 6 [million] and 7 million very affluent, 9 [million] to 10 million affluent and 14 [million] to 15 million upper middle class," he said. Jewellery accounts for 27 percent of the luxury retail market in India, followed by designer wear, accounting for 16 percent of the total. Recent trends show that spending has shifted toward handbags and footwear and that female consumers are earning and spending more, according to the research. "Despite higher prices of luxury goods in India, the younger consumer is strongly impressed with the international luxury brands and aspires to possess them," said Branchini. "India should move fast and catch the moment," said Michele Norse, chief executive officer of Salvatore Farrago, during a conference about the Asian nation organized last month by Altagamma. Norse, who said he first visited the country 31 years ago and "loves" it, pointed to an "unbelievable" bureaucracy, a lack of infrastructure and a poor knowledge of India as some of the main reasons for unnecessary delays and a stilted growth rate.

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"Most people don't know India, and Indians themselves don't really know their own country because they don't travel," said Norse, who urged his peers to control their businesses there directly out of that country. "It's a major mistake to run your business from Hong Kong, for example," he said, noting how easy it is to be distracted by larger markets in terms of revenues. Norse said India needs foreign investment over the next five or six years to develop roads, shopping malls and attract tourists. "The Indians don't have that sense of urgency, it's their mentality, versus, for example, the Chinese, who are much more aggressive," he said. Joey Kaempfer, founder and chairman of real estate developer McArthur Glen, said in other countries in Asia he generally gets "requests each week to partner to create new outlets." In India, on the other hand, "we are banging on their door, but there is no response. [Indians] have a more independent mind- set," said Kaempfer. Francesco Trapani, chief executive of Bulgari, said that while China is more mature, "future investments in India will drastically change [the country]," although not in the short term. Gildo Zegna, ceo of the Ermenegildo Zegna Group, viewed both China and India as "opportunities - you cannot go to one and miss the other, although they have a very different state of maturity." Zegna, too, lamented the lack of real estate spaces and said the people should work on improving the country's image abroad, promoting it as a luxury resort tourist destination, improving its airports and luxury hotels. "This would really help us," he said. However, Zegna praised the new laws that allow overseas companies to own a majority of their single-brand stores in India. "We had a franchisee in the late 1990s but were not happy, and the new legislation helped us relocate our store," he said. In 2007, the firm will open stores in Mumbai and in New Delhi. "Indian customers are the most loyal, buying our brand from Singapore to London," Zegna added.

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Indeed, the scenario in India is quickly changing thanks to the landmark change in the store ownership law, a revision that was promoted by Kamal Nath, India's minister of commerce and industry. Nath was present at the conference and was part of a group of 125 Indian entrepreneurs who traveled to Italy, meeting with local politicians and executives. Italy's prime minister, Romano Prodi, is expected to travel to India in February, and an Altagamma delegation is scheduled to visit India in early 2007. "Italy is India's fourth-largest trading partner, but this is not good enough. There is a vast potential, with 25 million people entering middle class and reaching out to quality [and] who are able to recognize design skills," said Nath, who pointed to a common heritage between the two countries, which have depended on skilled artisans, manual craftsmanship and creative design to build their reputation. "This is a very natural partnership," said Nath. 'There are proud people in the country, looking at the future to redeem themselves from the history of poverty," he said. Nath himself was proud of his country's democracy, where there are no intellectual property issues and laws are implemented, he said. "We respect trademark legislation, and our government never accepts counterfeits." Leonardo Ferragamo, ceo of Palazzo Feroni Finanziaria, which controls diversified investments for the Ferragamo family, and chairman of Altagamma, said "counterfeits are not relevant" in India, which promotes "creative and not imitative" design. Ferragamo said he was hopeful the remaining barriers that limit access to the Indian market will give way to free trade and a more reciprocal exchange that will "be advantageous for India," as well. "There is a change in the mind-set, an openness taking place and a tidal wave of aspiration," said Anuradha Mahindra, editor and publisher of Verve, India's premiere fashion and lifestyle magazine. "There are 500 million people aged 18 to 30, a whole generation with aspirations to be part of the best in the world, who want to be part of the international fraternity, carrying the best bags and wearing the best suits." Mahindra said Indians' craving for celebrities, developed by the Bollywood film world, is an added asset for the luxury goods industry.

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ARTICLE 3 INDIA JEWELRY INDUSTRY ADJUSTS TO U.S.ECONOMICWOESWhen an economic downturn disrupts the buying habits of the world s largest consumer economy, its effects ripple far and wide. India's jewellery market has been hit especially hard. Sanjay Kothari, former chairman of the Gem & Jewellery Export Promotion Council, said that jewellery exports from SEEPZ (the special economic zone in Mumbai that promotes rapid economic growth using tax and business incentives to spur exports) to the United States fell by 30 percent during the first six months of 2008. In a country where jewellery accounts for 15 percent of exports and SEEPZ accounted for more than 40 percent of jewellery exports, that's a grim figure. More recently, the demand for diamonds has dropped so dramatically that in October Vasant Mehta, the newly elected chairman of GJEPC, made a plea for the country's diamond manufacturers to reduce their supplies. "They are suffering," Kothari said to reporters during the India International Jewellery Show (held Aug. 7-1 l)."Business with the USA is going down because of the economic condition in the U.S." In response, Kothari said, some manufacturers that were exporting to the U.S. market have moved out of SEEPZ and set up shop in other areas to take advantage of the burgeoning domestic market. "Big companies started operating outside SEEPZ so they can do business with the India market," he said. In addition, Kothari said, manufacturers are entering other export markets, primarily neighbouring countries, the Middle East, and Europe. GJEPC is working to attract trade with other countries, particularly China and Thailand. And GJEPC continues to encourage more business with the United States through its annual Indo/US Jewellery Business Relationship Development Conference, which brings U.S. retailers to India to show them the breadth and depth of India-made jewellery. Manufacturers interviewed by }CK at IIJS confirm Kothari's view, noting that companies can find good deals for manufacturing sites inside SEEPZ. Almost everyone said they expect the economic problems in the United States to run until 2010. These opinions, however, were based on economic 90

conditions prior to the near collapse of the worldwide financial markets in October. But these manufacturers, as of August, are not fretting. Instead, they're changing strategy and focusing on domestic and other international markets. This was evident at IIJS, which enjoyed plenty of foot traffic throughout the show, particularly during the weekend, and where most exhibitors reported good business from their domestic and regional customers. The show also has a waiting list of nearly 400 domestic and international exhibitors. In addition, the country continues to diversify its jewellery product by augmenting mass-market jewellery with designer jewellery, offering small-scale production of high-end products for the international market. GJEPC supports this effort and set up a show for design-oriented jewellery called IIJS Signature. The second edition will be held Feb. 20-23 in Goa. High-end design was also evident at IIJS through its annual ABN Amro Solitaire Design Awards, a jewellery design competition that culminated in an awards presentation and fashion show. The industry also is taking on a larger role in the Indian business