Executive Summary
The gemstones and jewelry industry plays a very important role in the Indian economy, especially due to the popularity of these products in the country. Pearls are part of life in many Indian communities. Many companies are taking advantage of this market by investing in the farming of these products. Lolous is one of these organizations. The company has its origins in the UAE. It has expressed its interest in the Indian pearl market.
The current strategic marketing plan highlights the proposed mode of entry and establishment of the company in India. In addition to the market analysis, the plan highlights how the company can create its niche in the country’s pearl market. The plan postulates an action plan for marketing strategies. It also highlights the required evaluation and control measures. Ultimately, the report acts as a mechanism through which Lolous can deal with competition and benefit from its operations in the Indian economy. The company aims at gaining a significant market share and increasing its profits in the process.
About Us
Lolous is a public sector company in the United Arab Emirates, whose primary business is the farming and culture of saltwater pearls. It started off as a private venture and is now one of the most respected names in the gems industry in the Middle East. It is now a public company fueled by its shareholders and managed by Board of Directors.
Its operations are managed by a Chief Executive Officer (CEO), who oversees the Chief Financial Officer (CFO), the Chief Marketing Officer (CMO) and Chief Operations Officer (COO). The operations of the organization are overlooked by the COO. These include the farming and the culturing operations of the company as well as the freight operations. The CFO overlooks the support departments like, Human Resources, Information Technology and Public Relations. The CMO heads the Sales, Customer Service and the Marketing teams.
Impact Statement
To provide a superior range of products and service to our customers by investing in our people, technology and innovation and catapulting to a dominant position in pearl production.
Vision: Our vision is to be the best and most recognized jewelry brand in all the markets.
Mission: To provide the best products and services to our customers and be well known in the global market as a symbol of excellence.
Country
There are a host of reasons that encourage the export of Pearls to India. India is one of the largest consumers of Gems and Jewelry, accounting for domestic sales of over USD 10 billion, that is 4% of the global Gems and Jewelry market. The import of the Pearls alone enjoys a market of USD 8 million and has been growing at a rate of 12% annually.
The high population of India of 1.233 Billion and a steady GDP of 4.7%, the consumers are favoring jewelry items more than in the past. And with the gold prices on the rise, a middle class customer favors pearl jewelry more than gold or diamond.
1) What customers will we serve?
- The urban dwelling and middle class of the population
2) How to serve these customers best?
- Provide high quality pearl jewelry
- Offer affordable prices
- Grant customers with authentication certificates
3) Two competitors?
- La Peregrina Pearl India
- Punam Gems
Corporate Objectives
As already indicated, the gems and jewelry industry is one of the most popular economic sectors in India. It generates a lot of income for the business organizations operating in this area. The corporate objectives of Lolous are aligned with the needs of this market. It is noted that the market has significant potential for growth, especially in relation to pearls.
The following are some of the corporate objectives behind Lolous operations in India:
- To increase the company’s share in the gem and jewelry market. The aim is to establish market dominance
- To meet the growing demand for gems and jewelry in India by facilitating local pearl farming. The company will avoid dependence on imports
- To become the industry leader in terms of market share and sales volume in relation to pearls and jewelry.
- Increase market presence and brand and product awareness in the states of India.
- To ensure that India acts as a gateway to penetrate into other Asian economies with substantial pearl market.
Marketing Objectives
The marketing objectives are as follows:
- To ensure that by the end of the five year duration, Lolous’ pearl market share in India is at least 20% of the total industry.
- To make sure that Lolous is the preferred pearl producer and seller in the country.
- Stimulate growth in consumption of pearl products in India by more than 20% of the current rate.
Macro Environment Factors
A number of factors are identified in relation to India and Lolous.
Social
The social landscape of India can be considered as patchy at best. There are many social issues that make India a ripe market to do business with and others that need considerable amount of attention and concern from the government. The country suffers from overpopulation, the 3nd highest in the world and the population density which is 33rd in ranking. 21.9 percent of people in the country are poor.
There is great concern towards sanitation issues as well, where one in ten deaths are contributed to poor sanitation and hygiene. Corruption is another area of anxiety, India being ranked 95th in the world. It is also prone to religious violence and terrorism. Despite these cons, there has been improvement in all these areas in the past years.
The number of people living in poverty has reduced over the years. The figure has decreased from 45.3% in 1994 to 21.9% in 2012. There have been initiatives by the government and Non-Government Organizations (NGOs) towards the awareness of sanitation through mass communication and interpersonal communication. The corruption rating of the country has also improved considerably in the last decade. Education has been the priority of the nation with primary education free for all and government driven programs to provide education-to-all.
Technological
The technological scenario in India has been exponentially progressive since its foundation. It has been instrumental in the social and economic growth of the country. India accounts for 10% of R&D expenditure in Asia and are top 5 of the world’s total scientific productivity in the developing nations. It is one of the top ranking countries in the field of basic research.
This spur in the technological landscape has been catalyzed by both the private and government sectors. There have been numerous collaborations of national and international firms with Indian research associations. These initiatives have made India the forerunner in the field of Space Research, Atomic Energy, Biotechnology, Nano-technology, telecommunications, Information Technology, Medical, Life and Material sciences.
The government has allocated USD 1.01 billion to the Ministry of Science and technology, USD 904 million to the Department of Space and another USD 947 million to the Department of Atomic Energy. The manpower is also highly skilled and so cost effective that India has become the outsourcing hub of many international organizations. With this amount of funding and collaborations, along with the large pool of highly skilled professionals, it is no surprise that there science and technology are having a significant impact on India’s present and consequently its future.
Legal & Economic
India has one of the most complex judicial systems in Asia. With the multitude of minorities in the country, the law of India strives to cater to all. It maintains a Common Law system that was in effect during the British rule but has been modified with time. It adheres to the laws of the United Nations for its environmental and human rights laws. There have been certain laws inherited from the International Trade Law that are enforced in India. The family laws of the country are quite complex as all the religions stick to their specific laws.
There are central laws that are imposed by the Central government and State Laws by the State governments. The legal administration is very organized under the Ministry of Justice, consisting of Supreme Courts, High Courts and District courts for Civil and Criminal cases.
The economy of the country is the tenth largest economy in terms of nominal GDP of USD 1.86 trillion and the third largest GDP in terms of Purchasing Power Parity (PPP). The GDP has grown exponentially since the economic reforms in 1991. In 2014, the GDP growth has been estimated at 6.2% and predicted to rise up to 7.1% in 2016. India is the 18th largest exporter and 9th largest importer in the world with respective growth of 44.24% and 72.11% in the last fiscal year.
Political
India occupies a unique place in the global political landscape. It is a parliamentary nation consisting of 8 nationally recognized parties and more than 40 regional parties. The two main parties, Indian National Congress and Bharatiya Janata Party are considered to be liberal and conservative, respectively. The country is ruled by the President of the country, who is the head of state, followed by the Prime Minister, who is the head of government. The constitution of the country has chalked down the rigid terms and conditions for the organization, powers and limitations of central and state governments.
There are two legislatures consisting of an Upper House, representing the states and the Lower House representing the citizens of the country. The immense numbers of political parties are the product of different factions of people base on their religion, region, language and caste. These parties are then formed to cater to one or more sections of these people.
Some of these agendas are openly confessed by these parties, like the National Congress being more vocal on the eradication of poverty, and the BJP supporting free market economy. However, recently, the outcome of these elections have not hindered the economic stability of the nation with the foundations of progress been laid a decade ago by the economic reforms of 1991. There has been constant focus on the social, economic and law and order issues of the country. Therefore, the political landscape has been very stable in the past decade.
Micro Environment Factors
Public (Media)
A country boasting more than eight of the major world religions and more than 20 regionally recognized languages, it is no wonder that India possesses a vast multitude of communication media. It has more than 70,000 printed publications and more than 700 satellite channels. It is the single largest newspaper market in the world with more than 100 million copies in sales per day.
The media is under the control of big investors. Indian media is considered to be free and independent and has been since its inception except for a brief period of emergency in 1975-1977. There are more than 1,500 television stations in India, making it 4th largest in the world and more than 800 radio stations. The telecommunication sector of India is the second largest in the world with respect to the consumers of fixed and mobile devices.
Since the liberalization of the telecom industry in 1981 and the privatization of this sector in 2002, there are now more than 15 major telecom providers and more than 150 Internet Service Providers (ISPs). India has one of the world’s lowest tariff rates and has licenses for 2G, 3G and 4G communication.
Demographics & Competition
India has a unique geographical make-up. It is made up of 28 states. In addition, it has 7 union provinces. Its population stands at 1.23 billion. Only 21.9 percent of people are poor. There are more than 50 spoken languages in the country and host to all the major religions in the world. The average age of the populace is about 26.7. Around 43% of the population lives in urban areas and because of the education-for-all, the literacy rate is 75.09% as of 2013. The road, railway and air travel system is pretty extensive and well managed.
Media and telecommunication is also a strong suite of the nation. With these advancements, India has been the focus of international trade in the region. More and more international organizations are finding the pool of professionals in India to be a cost effective solution to their man power issues. More than 50 major organizations from the IT, Banking and industrial sectors have outsourced their call centre and support services to India. With the vast array of languages and technical skills India has become an industrial and economic hub of Asia. This also gives us the edge of hiring multi-faceted individuals to operate our business within the country.
Culture
Given the immense population of the country, that is a mix of Hinduism, Islam, Christianity, Sikhism, Buddhism and Jainism at the forefront, it is no wonder that the culture of India is a product of more than 4,500 year old legacy. Each religion has grown with different schools of thought with followers of each and having their own cultural impact on the country.
The culture is mostly conservative, where the family system is given precedence. In that, a joint family system is the norm, where family values are given utmost importance. However, now there are more nuclear families that have grown in number in the urban areas. India recognizes all these cultures and is very lenient and considerate to all the festivals of the majorities as well as minorities.
Much of the art and architecture is inherited from the Mughal Age as well from ancient civilization of the Indus. Special attention and regard is given to literature and performing arts as well, Hinduism being the most appreciative of them as it forms an integral part of their religious beliefs, mythology and philosophies. We can say that India has a high context culture, where what is said to a specific group of people affects the conveyed message.
Customer
India is a very versatile and fertile market for trade in almost any kind of product. Given the population distribution of the country in the urban and rural areas, there is a market for any product given the right strategy and marketing. The masses are educated enough to be aware of the value of foreign goods. 31% of the GDP of the country is formed by the import of goods and services.
The urban population in the metropolitan cities is estimated at over 400 million, i.e. about 37.2% of the total population. This is also where 79.89% of the nation’s wealth is also monopolized. Jewelry is revered in Hinduism, with the sales going over 400 tonnes in the country during the festival of Diwali alone. Jewelry is also a favored cultural gift in the southern region of India, where in a single wedding; gold of up to 50 kg is bought on the occasion. The consumers are looking out for other precious stone jewelry to meet their demands and needs.
However, the sale of gold has dropped by 50% in the last year during Diwali and the rising rates of gold have lost it luster on the consumers’ hearts. For this reason people are now favoring jewelry made from precious and semi-precious stones. The influence of the western culture has been a catalyst to sway the mindset of the educated masses towards non-gold jewelry.
Marketing Strategies
Lolous will use a combination of various marketing strategies to realize its corporate objectives in the Indian market. Marketing approaches allow organizations to focus their resources on activities that have the potential to increase profitability. The aim is to increase sales and achieve competitive advantage in the market.
To establish itself in the Indian market, Lolous needs to use a combination of market penetration, growth, and intensification strategies (Gilligan & Wilson, 2009). By adopting this approach, the company will be able to realize its marketing objectives. In addition, it will be able to implement its overall marketing plan. The strategies involve the correct combination of marketing mix elements of product, promotion, price, place, and people.
The following strategies will enhance the realization of Lolous’ corporate and marketing objectives in the Indian gems and jewelry industry:
Increasing advertizing
Advertizing entails calling the public attention to the goods or services offered by a company (Gilligan & Wilson, 2009)). Lolous’ advertisements should encourage the target market to purchase the company’s products (pearls) through manipulation and persuasion. Consequently, consumer behavior will be influenced to ensure that people prefer Lolous’ pearls over those supplied by competitors.
Considering the diversity of the Indian population, advertizing will play a critical role in the realization of Lolous’ objectives. The Indian community is characterized by closely knit social units. In addition, religious ceremonies comprise a major part of life in India. Most families live together, making them perfect targets for the products.
A number of media channels will be utilized for the purposes of advertizing. As already indicated, the major focus of these promotional campaigns is the Indian family. By reaching out to the families, Lolous will effectively embrace the entire Indian population. To this end, the media channels to be used for advertizing will include radio stations, television, lifestyle and beauty magazines, billboards, internet, and newspapers.
E-commerce
The level of technological advancement in India, especially in relation to ICT, portends a great opportunity for Lolous’ products in the country. In essence, the company will benefit by embracing e-commerce.
Basically, e-commerce involves conducting business transactions online (Gilligan & Wilson, 2009). It involves the introduction of an online platform where consumers can order for pearls. The move will boost Lolous presence in India. Pearl consumers will have the opportunity to access Lolous’ products from anywhere in India through different platforms. For instance, consumers may view the goods and place orders from their phones, laptop computers, tablets, and other hand held devices.
Customizing product and support services
To stand out in the market, Lolous will customize its pearls to suit the needs and tastes of the customers. For instance, it will design necklaces as per specifications provided by the customer. In addition, the company will add support services to its products, such as delivery to consumers. The company will also engrave the pearls when requested by the clients to enhance the relationship between the two parties.
Product promotion
To differentiate itself in the market, Lolous will engage in promotion campaigns, such as offering discounts at least three months per year. The months will be April, August, and December. It is a fact that some pearl products are priceless to the owners. As such, Lolous will develop a closer relationship with consumers by helping them to insure their jewelry. Offering customers the choice of returning the product two months after purchase if they feel it does not meet their standards will enhance Lolous’ brand image. It will boost the confidence that consumers have in the company and generate loyalty.
Action Plans
Lolous’ strategic plan will span five years. Within this time, the company intends to gain market dominance by acquiring at least 50% of the pearl market share. However, the organization acknowledges the growing competition in the gems and jewelry industry in India. Each of the marketing strategies will be executed on the basis of its action plan.
Advertisement
Advertisement will be the major undertaking in the implementation of Lolous’ strategic marketing plan. The following table indicates Lolous’ advertisement action plan for a period of one year. The plan will be used as a blueprint for subsequent years over the entire duration. However, adjustments will be made annually to cater for variations in the market.
Table 1: Advertisement action plan
Radio and television advertisements will be carried out throughout the year. The reason is that these media are capable of reaching out to majority of the Indian population. In spite of the costs associated with the channels, the two are the best alternatives in reaching out to the customers. The reason is that majority of people in India have access to television and radio.
Advertisements on newspapers and lifestyle magazines will be made periodically. The channels are not accessible to many people in India. On its part, online advertisement through the company’s website and social media pages will be a continuous process throughout the year. In addition, billboards will be used continuously. They will be placed along roads leading to major cities in all Indian states.
The e-commerce strategy falls under the category of internet marketing since transactions will be conducted online. In addition, the platform will host the company’s website, combining the transactional and advertisement aspects of the business.
Customizing Products, After Sale Services, and Promotions
The three strategies will be executed throughout the marketing period. After sale and product customization will be carried out simultaneously. However, promotions will be offered periodically at quarterly intervals. The cost of customization and after sale services will be subject to changes in sales volumes. The following table indicates the action plan for these marketing strategies:
Table 2: Marketing strategies’ action plan
The company acknowledges that the cost of implementing these strategies may be high. However, the projected returns are expected to cover these costs adequately. In addition, India is a subcontinent with a large population. As such, Lolous should do its best to implement an effective strategic marketing plan in the country. It is also noted that the pearl industry is a lucrative one. As such, stingy marketing plans may reflect negatively on the consumers.
Evaluation and Controls
The success of the strategic marketing plan will be determined using a number of review mechanisms. The strategies employ differing media and approaches. In addition, the content varies from one strategy to the other. As such, review and monitoring will be carried out differently.
Evaluation and Control of Advertisements
Advertisements made on radio, television, lifestyle magazines, and newspapers will be evaluated in a similar manner given that the content is uniform. Television and radio will be reviewed on the basis of the number of responses from the audience.
The company will seek feedback from customers through short questionnaires. The clients will provide information on how they learned about the company’s products. The responses will be used to rectify any problems identified.
The success of internet advertizing will be determined through the number of visitors to the company’s website. The number of followers in Lolous’ social media sites will determine whether or not the channel is able to attract customers to the company’s products.
Evaluation and Control of Promotions
The effectiveness of the promotion offers will be reviewed by analyzing whether or not orders for Lolous’ pearls increase during the three months. If orders remain constant or decline, these promotions would be declared a failure and new approaches explored.
Evaluation and Control of Customizing Products and After Sale Services
The success of these approaches will be assessed by reviewing the response of consumers and stated levels of satisfaction. Once a customer is offered after sale services or a customized product, feedback would be sought from them with regards to their opinions. Positive feedback will indicate success of the initiatives, while negative responses will point to failure. Consequently, steps will be taken to address the various issues raised by customers.
The ultimate measure for Lolous’ strategic plan will involve assessing the extent to which the marketing objectives are achieved. Annual review of the plan will determine its effectiveness. Inefficiencies will be dealt with through continuous yearly reviews of the overall organizational performance. The indicators to be used in this case include revenue generated, sales made, and acquired market share.
Market Analysis
Pearl Market Overview
In India, pearls business is classified under the gems and jewelry industry. According to India Brand Equity Foundation [IBEF] (2014), the country’s domestic market for jewelry and gems was valued at Rs 251,000 crore (US$ 41.61 billion) as of 2013. The industry is expected to grow to between Rs 500,000 and 5300000 crore (US$ 82.94-7.93) by 2018. The sector grew by 12.65% in the period spanning 2013-2014.
Diamond and gold account for the largest market share in the Indian gems and jewelry industry (Poirine, 2003). The country accounts for 20% of global diamond consumption (IBEF, 2014). In addition, 95% of the world’s gems and jewelry exports originate from India, making it the largest exporter of these products (Shor, 2007). The industry’s projected growth in terms of export revenues is expected to reach US$35 billion by 2015.
Target Market
According to IBEF (2014), the domestic demand for pearls in India is growing at a significant rate. For instance, for a very long time, the products were the preserve of the few elites. However, the situation has changed with the growth of the middle and upper class segments. As a result, pearls are becoming popular even with the ordinary members of the population. The prices of these products have also remained relatively stable, making them affordable to the masses. As such, the target market for Lolous’ products is the Indian middle and upper classes.
Actual and Projected Market Analysis for Lolous
The table below illustrates the projections made in the market:
Table 3: Lolous actual market analysis and projections
Source: Author
Overall, the organization is projecting a 20% growth in market share. It is expected that the market conditions will continue to favor the company’s operations. In addition, the domestic demand for pearls in India is expected to maintain a positive growth in spite of declines in other sectors of the economy.
Conclusion
The future of pearl business in India is bright. The conclusion is based on previous market trends and present progress indicators. Lolous stands to benefit from this market if its operations are effectively aligned with the proposed strategic marketing plan.
References
Gilligan, C., & Wilson, R. (2009). Strategic marketing planning. New York: Routledge.
India Brand Equity Foundation. (2014). Gems and jewelry industry in India.
Poirine, B. (2003). Managing the commons: An economic approach to pearl industry regulation. Aquaculture Economics & Management, 7(3), 179-193.
Shor, R. (2007). From single source to global free market: The transformation of the cultured pearl industry. G&G, 43(3), 200-226.