Page 28 - DECO405_MANAGERIAL_ECONOMICS

Unit 2: Market Demand

testing the purity of jewellery through the Karat meter, a buyback guarantee as well as Notes
other exchange schemes. Each move by Tanishq has shown its confidence in its own
product. This has in turn inspired confidence in its customers, who are loyal. Usually,
when the price of gold bullion increases people tend to curb/postpone their purchases of
gold ornaments. However, the demand for Tanishq jewellery is independent of this price
factor because each piece of jewellery represents a promise of quality and purity, each
piece is something different and new, each piece is something special. As such the income
and substitution effects do not adversely affect the demand for Tanishq jewellery, and
price has title impact overall. But it has also been observed that an escalation in the gold
price, diamonds seem to have caught the fancy of the customer and the promotional offers
are being designed to provide customers with significantly enhanced value.
Designs Offered
The average Indian has always been very discerning when it comes to the purchase of
jewellery. However, with the spread of globalization customers want the best quality in
terms of designs. Best quality is provide to meet the international standards. Creativity is
the buzzword. Tanishq's primary customer, the urban Indian woman, has come along
way. She is smart, educated, and confident of handling career and family, and looking to
secure value for her money. Today's urban women no longer wear jewellery only at
weddings and formal occasions. They require trendy accessories that match her attire and
reflect her personality. In this context the demand is vast and widespread in terms of
prices. The women of today want the best of everything and have become more and more
and more selective in their choices. The brand's designs address the needs of the modern
woman. Tanishq had crafted award-winning designs in 18 karat and 24 karat gold and
gemstone jewellery. It's new range looks beautiful and yet is affordable and feels light.
Promotional Schemes
With cutthroat competition in the market, every company comes up with schemes to woo
the customers. These offers are all the more visible during the festival season. Purchase of
jewellery can happen any time of the year like - for birthdays, anniversaries, gifting,
impulse purchases, etc. and of course for marriages as well. Therefore, in absolute terms,
there is no lean period for jewellery - the jewellery market can be stimulated throughout
the year through a host of well-designed marketing inputs. Tanishq to promote its brand
comes up with all kinds of schemes like a jewellery exhibition which brings fresh talent to
the forefront, launched a nationwide jewellery design competition on May 22nd 2004, 'Get
Gold free with Diamonds' promotional offer across all 66 exclusive Tanishq boutiques in
India. Its also specially designed the three crowns for the Ponds Femina Miss India Contest
this year. It reached out to the target group through exclusive working women's meets,
where well known career women spoke about issues relevant to working women. In
addition, 'Tanishq Collection-G' ran joint promotions with brands such as L'Oreal and
Wills Lifestyle, which it believed appeal to a similar set of consumers. Tanishq has successful
stimulated demand for jewellery throughout the year through launches of new jewellery
collections, a range of exchange programs and other offers (such as our recently concluded
"Impure to Pure" exchange offer) and a number of in-store events. As a result of these
efforts, even while the market for jewellery declined by more than 15% last year, Tanishq
grew by 40% for the third successive year. Amongst the most recent initiatives of Tanishq
has been the targeting of the wedding market by making special offers on wedding
jewellery. This promotional scheme has had the masses thronging in, in very large numbers.
It also got the 4th Annual Lycra Images Fashion Awards in the Jewellery category.
Discounts
Discounts play a major role in determining the demand for a product. Tanishq periodically
offers discounts. In 2002 it offered a vast gamut of discounts in its showrooms in Bihar
during the festival of Dhanteras resulting in sales of 5 crore in one particular store.
During its fifth anniversary celebrations Tanishq offered discounts to customers, and the
response was so overwhelming that extra security was called to handle the crowd even
before the store opened. At select points of time in the year Tanishq also offers 20%-40%
discount on making charges, which is also a large crowd puller. Contd...

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