06-10-2012, 11:02 AM
MARKET RESEARCH ON LUXURY RETAIL IN BANGALORE
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Introduction
Luxury goods market in India is a growing sector and is valued at around $4.35 billion. The entire luxury market has grown at an average rate of 13% from 2007 to 2010,with luxury products growing at 22%, luxury services declining at 5% and assets growing at 18%. With this rate of change, the luxury goods market in the country is set to touch US$14.7 billion by 2015 .The Indian Luxury Market forms only 2% of the global share. The growth of luxury market is based on the GDP per-capita growth and the number of High Networth Individuals (HNI) in a country. Other factors like consumer attitudes and behaviour, real estate growth also play a major role in the growth of luxury market. In 2010, India had 127,000 millionaires, which is an increase of 50.9% when compared to the previous year . Every year more than 16,000 more people are getting added to this.
Even though Indians are earning more, it is not the only reason behind the enormous growth in luxury market. It is also due to the desire to flaunt their wealth and status. With the world becoming a smaller place and all the information exchange, the Indian Consumer now has knowledge about many of the leading global brands. This has resulted in an increase in the willingness and desire to own luxury products of these brands.
Methodology
Market Research, in brief, refers to all types of research activities conducted in the field of marketing within the similar process. MR is a function which links the consumer, customer and the public to the marketer through information that is used to identify and define marketing opportunities and problems; refine and evaluate marketing actions, monitor marketing performance and improve understanding of marketing as a process .
Problem Definition
This phase involves defining the problem. It is an important phase because it gives a direction to the whole project. It is defined based on the requirements of the company. The problem was to look at the buying patterns and consumer behaviour of customers who shop for luxury products and come up with a feasible product and brand classifications for the company.
Primary Research
The primary research involved designing questionnaire keeping in mind the problem statement. The other aspect to keep in mind is the analysis of the questionnaire. The questions were designed in such a way so that it leads to the intended objectives of the survey. The survey was conducted by talking to the respondents personally, on phone and also through e-mail. The respondents were from all around Bangalore. The respondents were mainly contacted at the following places:
1. Luxury shopping malls and outlets like UB City, Guess etc.
2. Clubs like The Cosmopolitan Club, Indiranagar Club etc.
3. Luxury housing societies and villas
4. Various software offices
Analysis
From the findings stated above, apart from a differentiating factor, people concentrate on prestige and quality. So, for prestige factor the store needs to have very well-known luxury brands and the same goes for the quality factor also (in the initial stages).
For the people who want to be different from any other person, each product has to be different from the other. So the products should be designer and custom made. Whether to go ahead with such a product range or not depends on the company’s financial plan because the margins involved are high, but the sales can be quite low.
Luxury Market in Bangalore
Shoppers in Bangalore have very limited options when it comes to luxury goods. The most favoured destination is the UB city mall which houses various luxury brands like Louis Vuitton, Jimmy Choo, and Rolex etc. While this mall is known for its grandeur and the brands it offers, it is very well behind the DLF Emporio in Delhi. The other options Bangaloreans have are the surrounding areas of UB city and Indiranagar. These two locations do not offer much of a variety but are slowly picking up. Whitefield is also all set to become one of the high income catchments of Bangalore. In the following chapters, the location analysis is given.
Recommended Business
From Figure 4-3, we see that there are four products which made to the top of the list in respondents’’ minds when we spoke about their favourite luxury product. They are:
• Interiors
• Beverages (including fine foods)
• Jewellery
• Electronic Gadgets
Let us consider jewellry first. The advantage with jewellry is that it a high return business. But the problem with is huge. There are very well established players from centuries in the jewellry market and people tend to go to the established jewellry makers like C. Krishniah Chetty & Sons, Chemmanur, Asmi, Nakshatra etc. So, this area of luxury market is not so feasible or it may but will take a lot of time in attracting customers. The break even times would go very high.
Secondly, in the electronic gadgets market, the price structure varies and people generally tend get these item from abroad or book them online at Amazon or the like. So this also was not considered to be a feasible option.
The beverages and fine foods market is a relatively untapped market in Bangalore. The only options available are Spar, Wine & Cheese, Madhuloka, Drops and the like. These options are not specially created for the luxury customers. In addition, Spar is a low end store but with all the available options. So, it would be profitable to have a store which caters especially to the luxury segment with all the features fine foodsstore and generally offers.
The interiors market in Bangalore is very scattered. The major players are @Home, Home Town, Good Earth, Mother Earth, Atmosphere, Floating Walls, FabIndia and few private designers, but not really catering to the luxury niche. With a lot of infrastructure developments and many housing projects coming up in and around Bangalore, home interiors business in the “Garden City” is bound to grow.
Meat
Beef is one of the popular types of meat, which is used to prepare food recipes, across the globe. This meat is obtained from cow and is one of the much sought-after types of red meat. Another popular meat, that it is consumed by people world-wide, is chicken. Though, a type of poultry, it is considered as a healthy meat and can be found as an indispensable ingredient in most of the regional cuisines of the world. Pork is another choice, as far as types of meat are concerned. Pork is derived from pig and is classified as red meat. However, this meat is less fatty than beef and is leaner. Sheep meat is also a staple food in some parts of the world and is consumed in many regions. Sheep meat is otherwise known as mutton (meat of mature sheep) or lamb (immature sheep). This is also a type of red meat.
Nowadays, meat production and packaging is one of the flourishing industries, which use advanced techniques of raising, breeding and butchering animals. Even packaging of meat is done with the help of modern technology. We have different kinds of meat, as per the cuts. Meat is also classified as per the growing and feeding factors. As per such classification, meat can be divided into conventional, organic, natural and grass-fed ones.