Three years ago, 10 gm of gold wore a price tag of Rs 14,500. Today it is close to Rs 30,000. Little wonder, the consumption of the yellow metal is slowing in the country — gold consumption in India dropped 7 per cent in 2011 to stand at 933 tonne, according to the World Gold Council (WGC). A close look at the WGC figures show the demand for gold jewellery was down 14 per cent at 567.4 tonne while investment demand was up 5 per cent at 366 tonne. The demand for gold jewellery was also affected by the high import duty on the metal.
Of course, the spurt in gold prices in 2011 happened globally and was due largely to the slide in the US economy initially, followed by the debt problems in the European countries, but Tata Group’s jewellery brand Tanishq sees this as the right time to hardsell its latest collection of affordable diamond jewellery. The company has just unveiled a new television campaign for the range, priced between Rs 10,000 and Rs 25,000, which signs off saying, “Now diamonds are man’s best friend too.”
Not that diamond prices have remained steady at their earlier levels. Sandeep Kulhalli, vice-president, retail and marketing, Tanishq, explains the imperative to advertise the company’s diamond collection at this moment: “Diamond prices rose more than 80 per cent in the past year. In such a circumstance, we really do not want customers to shy away from buying jewellery.”
The time is not just appropriate, the future looks bright too. India ranks No. 4 in diamond consumption — behind the US, Japan and China — today and the market is growing at 50-60 per cent. Analysts say that India, along with China, could dominate diamond consumption in the next few years. Traditionally, the US, Japan and Europe were considered the strongest markets for diamond jewellery.
New ground
The advertising of Tanishq has treaded familiar ground till now trying to cement its position as the default choice for the Indian women, irrespective of the occasion. It had also roped in celebrities (Amitabh and Jaya Bachchan and Asin) to show how the right jewellery can make moments in a woman’s life more beautiful.
This time Lowe Lintas, the creative agency on the account, has explored a new way to make its point — that diamond jewellery is not necessarily unaffordable. So the ad shows two young husbands engaged in an animated discussion on how to recoup their losses now that their wives have gone on a diamond shopping spree. When the wives are through with their shopping their husbands are pleasantly surprised to see the bill amount. Obviously that’s much lower than what they expected.
Undoubtedly, it is the man who will be happiest to know that the diamonds he must get for the special woman in his life will now be so much more affordable. Arun Iyer, national creative director of Lowe Lintas, explains the task the agency had at hand. “Diamonds are perceived as expensive and before buying them one has to plan and cut down on other expenses,” he says. “Our job was to contradict this perception, primarily held by men.”
With the new collection, Tanishq is also targeting a new set of customers — mostly middle-class families — that have always aspired to buy diamonds but have stayed away because of the high prices. “Trends show that the first-time or new diamond customers opt for entry-level items like earrings, rings and pendants. Our new collection primarily comprises these things,” Kulhalli adds. That also explains the low price points.
The new collection can also be seen as a step to boost sales. A look at the results for the March 2012 quarter (financial year 2011-12), declared by parent company recently makes things clearer. The jewellery business reported a sales growth of 29.6 per cent from the year-ago quarter. However, volumes are estimated to have dropped about 7 per cent. Experts are of the opinion that the sales growth was primarily led by higher gold realisations. With gold prices going through the roof, making affordable diamond jewellery widely available to customers is one way to improve volumes, they point out.
In the 60-second TVC, Lowe has used a generous dose of humour to achieve just that — market the collection as the perfect gift for your loved ones without burning a hole in the pocket. Kulhalli thinks the TVC rightly addresses both the issues at hand — to prevent existing customers from being daunted by rising prices and win over prospective ones. “The feedback from our customers has been good and our stores have seen footfalls increase,” he says.
At Rs 1,50,000 crore, the Indian jewellery market is big and competitive and that’s one thing that keeps Tanishq on its toes. This new collection follows the sub-brand Mia, launched only a few months back. There are more collections in pipeline, Kulhalli says, adding, “We plan to set up 45 new stores across the country. We keep experimenting and launching new collections and thus we are ahead of the curve. Tanishq is currently growing faster than the industry.”
Half a century ago, “Gentlemen Prefer Blondes”, a box office sensation from Hollywood starring Marilyn Monroe and Jane Russell, immortalised the relationship between diamonds and the fairer sex through the sensuous song “Diamonds are a girl’s best friend”. Now Tanishq wants to show how all the women who share the same passion can add pieces of jewellery to their collection, albeit on a modest scale.
