a. Market share
India is the largest consumer of gold jewellery in the world (WGC). This can be attributed to many factors such as tradition, culture, economic growth and the notion that gold is a good medium for investment. The industry is valued at over USD 25 Billion, out of which 35% - 40% of the trade is carried out in Tamil Nadu and Gold demand in India will never sink to highly deplorable levels.
Despite the ginormous nature of the industry, surprisingly only 2% of the trade takes place in the organized sector. But the present day trend of customers shifting to organised retailers and increasingly opting for online purchase augurs well for our trade. This shows TMJL is well poised to capitalize on the modern trends through its chain of jewellery retail stores and online purchasing system as the scope and scalability of the company are limitless.
b. Rural story
With an understanding of the market they were in, the promoters wished to reach out to the rural segment and thus began sprawling the showrooms in such areas, in the year 2008. This was done with a view that people in the rural target segment are more likely to save in the form of gold, as they have fewer options of investment than their urban counterparts.
Small retailers trading in these markets are highly unorganised and are,as such, not able to provide any value addition to their products. This is where TMJL scores over its competitors. On the other hand, a decline in the growth of local jewelsmiths has induced these segments to look for alternate means of procuring ornaments, leading customers to consider the organized sector which exhibits an exhaustive collection of exquisitely crafted jewellery.
c. Cluster model
The expansion strategy of the company is not haphazard and follows a regularized cluster model, rather than random expansion. In this method, a primary showroom is established in a tier 2 city, following which relatively smaller branches are opened around the city. This enables the company to provide support to any of its branches as and when needed. As of date, the company has four primary branches located at Madurai, Coimbatore, Salem and Tirunelveli.
d. Synergy optimization
The cluster model brings out the power of synergy and promotes the operations of the company on a holistic basis. By dint of this approach, all branches are able to enjoy common benefits such as utilization of centralized software,buying and advertising, logistic benefits, ability to attract an ethnic group of customers with similar tastes and preferences across its showrooms etc.
Our next move of setting up mini stores which shall act as customer care centers shall expose another dimension of the power of synergy whereby customer need not travel all the way to a particular showroom from his hometown.
The company has a very robust infrastructure in place, at Madurai, where there are separate purchase and corporate offices. With over 900 members on its staff list, the company regularly conducts training sessions and social events to keep them motivated. The company also takes care of its logistics needs through its own dispatch team, combining safety and flexibility. On the information technology front, the company utilizes internationally acclaimed software, SAP. The company also has an in-house software development team, and a tier 3 certified data centre which helps provide round-the-clock support to all its branches. The company is also constantly expanding its infrastructural prowess to provide support to an increasing number of branches.
f. Marketing strategy
To cater to the tastes and preferences of its target segment, the company directs its marketing strategies to appeal to their emotional and sentimental values. Given the rapid and deep penetration of social media in the lives of people, the role played by an advertisement in influencing the purchase decision cannot be written off and is needed to counterbalance the marketing strategies of competitors and stand out through such means.
The company takes an active role in local and regional festivities. Competitions are often conducted in and around newly opened branches to promote the company's presence in that area. Such competitions also enable social interaction between the public and staff members, which aid them in understanding customer sentiments a little better.
a. Industry Scenario
Global demand for gold has been rising and it is likely there will always be expectations with regard to supply and demand, as long as consumers are ready to invest in the yellow metal in the years to come. This trend is confirmed by the supply and demand pattern exceeding several hundred billion US dollars, as vouched by the World Gold Council’s Gold Demand Trends. Of late, there has been a flutter in decision-making of various financial institutions to invest in gold, with mutual fund and other investing modes having seen an increase in volume, resulting in higher demand for gold. In fact people around the globe are keen on investing in gold for the sole purpose of exchange and to improve the country’s economic and financial outgrowth from the angle of world trade organizations, including an economic parity accessible by the World Bank, IMF and other monetary institutions worldwide.
The HR policies and procedures of the company are geared towards the development and encouragement of human capital. The company has transparent processes for rewarding performance and retaining talent. Skill Gap Analysis and other systems are also in place to identify the training interventions required. Priority is also given to succession planning and talent management.