Primarily, Indian gem and jeweller industry follows three business models—Independent store, which includes having one to 10 showrooms; multiple store comprises that has more than five but less than 25 stores across the nation and the Chain store format is having more than 25 stores across the country and the world.%% Irrespective of what business model is followed, a few aspects, which can be rightly called the cornerstones of any business are—business strategy, advertisement and publicity, labour force, education and turnover. Through the story Preeti Srivastav finds out more about order of priority that is followed for the above mentioned vital business aspects in different business models.%% While some may argue that deciding of a business model is a personal choice, after all any business starts from a personal decision, a few may say that the decision is influenced or controlled by external factors like market conditions and trend, hence cannot be categorized as personal decision. There are three basic business models in the Indian Gem and Jewellery industry—namely—Independent store, Multiple store and Chain store. The article is an attempt to do some comparative study of all the three models and find out the difference in their priority (Business Strategy, Advertisement, Education, Labour and Turnover) and work pattern. During the research we also found out that many business houses are open to the idea of transition and don’t mind a switch from one model to the other. Change and profit remain the driving force.%% The oldest and most popular business model in India, Independent Store format includes brands that have less than 10 stores across the country/world. The model has its root in history, when gem and jewellery was more like any other business, started by a family for living. Changing time and taste of the consumer has lead to a new glamorous avatar of the jewellery business in India. This model is usually carved out of a family, where the business (in terms of number of showrooms) is expanded only to accommodate the number of heirs. In this model, the business is looked after by the family members with the help of a small number of staff. The owner is a regular at the store and hence shares a personal relation with the customer.%% Many of the businesses that come in the category of Multiple Store format may be assumed to be in the process of adopting chain store format. However, many may choose to restrict to a specific number of stores as well. It is usually seen that this category brands have their stores in neighbouring cities or states to ensure smooth functioning, for example, the brand that has its base in North India, usually opens other showrooms in other North Indian states. This not only lessens the distance thereby making the management easy, but also helps as there is not huge difference in taste of the consumer. The category goes beyond the number of heirs and needs hiring of talent from the market to manage stores or even franchising the business. Many opt for centralized functioning under which, though the store in other state is looked after by an employee, the decisions are taken at the main store only. %%

The next category in discussion is the Chain Store format, which is seen as the next upcoming thing. The format not only helps the business expand on a wider level but also takes the brand beyond the family name. Many chain store format are either already registered as public limited company or intend to get there. Even if some may not intend to go public, the format at least helps them reach out to the wider audience both national and international. The format needs highly professional set up for smooth functioning as the stores are located far and wide and are managed by hired professionals, as number of stores may outnumber the family members. Consumers’ taste differs from area to area and hence needs special attention. The brand may or may not replicate their success formula. %% {{Independent Store format}} {{Subash Bhola, Bholasons Jewellers}} $$ A trusted name in the gem and jewellery industry that works on improving what they have rather than expanding and taking additional responsibility. The brand has been able deliver the best to their customers and keeps them happy with personal attention. %% {{What is your business strategy? What role it plays in an independent store format?}} $$ Though terms like vision, goals, focus play an important role in designing business strategy for any firm, we from the independent store category may not pay attention to these. Our focus, goal, vision changes from day to day and depends highly on customer behaviour. There is no organised format neither we have fixed days of brainstorming sessions to design our business strategy. We function at personal level with the customer and hence too much or pre-planning may not work for us. Our focus shifts with time and requirements of the customer, hence flexibility can be one permanent trait of our strategy.%% {{How important is advertisement for independent store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web?}} $$ We invest 10% of our profit on the advertisement. For independent store, local print and outdoor publicity does the job. Because we concentrate on a few stores, which are usually in the same city as well, we don’t need national level publicity. In past word of mouth was the strongest mean of publicity, but nw as it’s important to make your presence felt, both big and small banners need to advertise. We usually go for print ads in local newspapers and magazines. We have not yet thought of going for radio or internet. Traditional media like print fulfills our requirements and also fits in our budget. Television advertisements rates are expensive and because we don’t have to reach to a national wide audience, that will also not be of much use to us.%% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific?}} $$ Importance of education cannot be ruled out in any sphere. Be it general education or jewellery specific, it definitely makes life easier. An educated owner and educated employees wil be in much better position to assess the market, read customer’s mind and understand their taste and thus deliver what is desired. Also, as I have mentioned earlier that we have flexible strategy, education will help us understand keep ourselves abreast with various developments in business tools, designs and so on. Jewellery education is also important, especially for the staff so that we not only sell a piece to the customer but also should be able to satisfy any kind of query that customer puts up, like—certification, difference in making charges etc. It is also easy and quick to deal with a well-informed customer.%%

{{What role labour force plays in your business? Is maintaining labour force important to maintain quality of the product? }} $$ Labour force is the backbone of any business. Be it artisans or my store staff, I need to maintain them so that I deliver consistently. Competition forces us to maintain the labour force so that the business functions smoothly and we give quality service to the customer. Also, attrition rate, which is now not much, but may pose a threat, as people are always on look out for good artisans and salesmen. Hence, we always try to give good work environ and packages. In independent stores, the salesmen develop a personal relation with the customers and we may lose business if we don’t keep our staff happy.%% {{How important is the turnover and how do you divide your turnover in the following heads—manufacturing, machines, labour, advertisement, renovation or anything else? }} $$ No matter how fierce the competition gets, profitability is always important. Hence turnover is of immense importance for any business. In the business of gem and jewellery, the turnover differs from material to material. In gold the turnover is six times of the investment, while in small diamond it is only two times. Solitaire fetches us six times of the investment. To sustain in the market, keeping in mind the changing times and market conditions, profitability is one thing that cannot be compromised on. Apart from inventory, 20% to 30% goes in renovation, which is not an annual thing. Publicity and advertisements takes 10% of the turnover.%% {{What are other benefits and drawbacks of independent store format? }} $$ Everybody has their own set of parameters for life. I know there are disadvantages of following this model, but I am happy that I am doing what I wanted to do and this fits perfectly in my plan of life. Such businesses are self-driven, self-managed and has an upper hand in terms of relationship with the customers. All my regular customers know me and we meet like friends. And jewellery industry is all about inter-personal relation only. It depends on future generations as what to make of the business, however, talking in present, I am satisfied.%%

{{Multiple Store $$ Shrikant Zaveri, Tribhovandas Bhimji Zaveri }} $$ A renowned name in the industry, Tribhovandas Bhimji Zaveri (TBZ) follows the multiple-store format with 19 showrooms strategically located across 13 cities in six states. Though the number of stores is small, but presence of the brand pan India makes it a national name and its business and marketing strategy is that of a chain store format. %% {{What is your business strategy? What role it plays in a multiple store format?}} %% We are a specialty jewellery retailer and primarily deal in gold, diamond and platinum jewellery studded with the precious and semi precious stones. Our primary target is to cater to the wedding segment along with offering a wide range of products for daily wear and fashion use. The company follows a ‘hub and spoke’ retail format, in which the ‘hub’ is the large format store (having stores of approximately 3000 sq feet or larger) and the ‘spoke’ forms the small format store that ranges between 1000 and 3000 sq feet. Overall this model helps in optimising the return on investment (ROI).%% {{How important is advertisement for multiple store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web?}} $$ In retail, advertisements play an important role to generate customer footfalls. In order to be constantly present at all strategic touchpoints and gain top of the mind recall, the company relies on advertising at a national level. This drives the customer flow into the stores. As far as medium of advertisement is concerned it purely depends on the spread of the retail network and the campaign objective. Media choices are based on the campaign objectives.%% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific? }} $$ Education is important as it adds scientific, methodological approach towards work, however business acumen is something natural. Education or professional training helps in sharpening the skills, enhancing the productivity and reducing the errors in the work. We train our staff and ensure that when a customer walks out of our store, he/she is also more informed about their investment. %% {{What role labour force plays in your business? Is maintaining labor force important to maintain quality of the product? }} $$ Employees are an integral part of the organisation. All the employees have a definite role to play in the organisation while working towards achieving the objectives and goals set at the company level. An ideal employer attracts right talent to the company, nurtures and encourages them to deliver high performance to achieve high organisational growth.%% {{How much is your turnover and what impact it has on the business? Maximum investment of the total turnover goes in what—manufacturing, machines, labour, advertisement or anything else? }} $$ In the financial year 2012, we did business worth Rs 13855 million. While Maximum part of the turnover was invested in buying raw material (gold and diamonds), other heads were also taken care and allotted the pre-decided share. %% {{How does functioning in multiple store format helps?}} $$ Multiple store format helps in achieving economies of scale and higher inventory turn. %%

{{Chain Store}} $$ {{T S Kalyanaraman Managing Director, Kalyan Jewellers }} $$ The Kalyan Group boasts of 38 stores pan India. Primarily a South Indian brand, Kalyan forayed into the West part of the country with its newly opened store in Ahmedabad and it further plans expansion to reach out to the flamboyant North Indian consumers. It has been a household name in four South Indian states. {{What is your business strategy? What role it plays in a multiple store format?}} $$ Business strategy plays a very important role in any business, big or small. Our strategy has been a simple one from day one, that is, to be--fair, transparent and honest to our customers. We also understand and acknowledge the starpower and we always approach popular film stars to educate our customers. Innovation and quality service is also part of our strategy and hence we brought in ideas like ‘rate tag’ that contains all information like making charges, content and its measures and all. We also started service centres under the name ‘My Kalyan’. In these centers customers were able to remit monthly gold scheme, enquire about the different designs and making charges of the ornaments, can remit advance for marriage purchases and so on. Now we have 250 My Kalyan centers in south india and 100 more are in pipe line.%% {{How important is advertisement for multiple store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web? }} $$ We spend roughly 1% of our turnover on advertisement. We believe that jewellery advertising is not only about good imagery and pretty women. There are a lot of things that the customer needs to know about gold and diamond jewellery, like—quality, pricing and so on. It’s the responsibility of every retailer to educate the customer about these through advertising. No matter how much we insist on glamour and celebrity quotient in our ads, we ensure that the actual message is loud and clear and helps the customer take better decision. Last financial year we had spent around 100 crores for ads.%% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific? }} $$ As stated earlier, educating customers and staff has been a part of our strategy since beginning. Generally speaking, education always facilitates clear communication, which is important in our profession. We have periodic training and refreshment programmes for the staff and their performance is evaluated by our dedicated CRM team through our call centre. Apart from general education, we emphasise on educating the staff about the business and the products, hence we take approximately six months and over a lakh to train a candidate. %% {{What role labour force plays in your business? Is maintaining labour force important to maintain quality of the product?}} $$ No matter what industry one belongs too nothing can be precious than human. We have over 4,000 staff members working with us. The entire middle management has been with us since our early days and are internally promoted and developed. They are one of our biggest strengths today. Our staff is almost the face of the business for our customers, so it’s our foremost duty to give their stimulating and conducive environment so that they perform without stress and grow. %% {{How much is your turnover and what impact it has on the business? Maximum investment of the total turnover goes in what—manufacturing, machines, labour, advertisement or anything else?}} $$ Last financial year we had a turnover of Rs 9437 crores. Mostly, we invest in inventory, advertisement, staff and service to the customers. %%

{{Balram Garg, P C Jewellers }} P C Jeweller owns 30 stores across the country and is one of the nationally recognised brand. Owned by first generation jeweller, Balram Garg, the brand is a Public Limited company and is all set to further widen their realm.%% {{What is your business strategy? What role it plays in a multiple store format?}} $$ It was a long cherished dream and intent to have a chain of PC Jewellers stores and well achieved. However, the journey taught us a lot of things and therefore we base our strategies on the lessons that we have learnt, customer’s taste and requirement and market trend. Now that PC Jewellers is making its presence felt pan India, we make sure that we don’t force people to buy what we are good at or what we have. Instead we emphasis on giving what they need hence first strategy is to incorporate the local taste. Our strategy, though broadly remains same, changes depending on location of the store and size of the organised and unorganised sector. While we cater to the local taste, we also maintain uniqueness and freshness by introducing new designs.%% {{How important is advertisement for multiple store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web?}} $$ Marketing your brand is the driving force that pulls the vehicle. With so much of information explosion, everybody wants to claim space in customer’s mind, which is impossible without being in sight. So to be there on mind one has to be in sight. For the chain store format, wide advertisement on national level is important. We go for time buying in national channel as we have our stores in multiple states in the country. Television is the most important medium of publicity that I choose for my business, however, print and outdoor publicity tools are also aptly used. We spend 1 per cent of our turnover in advertisements and publicity through various means. %% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific?}} $$ We have our stores in metro cities, tier-one cities and tier-two cities. The importance of education may fluctuate depending on the city, but it cannot be ruled out completely. Talking about general education of the staff, we look for moderately educated staff in tier-two cities, graduates in tier-one cities and metros. However, we invest in training the staff and equipping them with complete knowledge of jewellery, material, stones, making etc. We understand the importance of education and make sure that customer not only be satisfied with the design or pricing, but also knows what is she/he investing into; what brings the difference in making charges; meaning and importance of BIS hallmark, certification of diamonds, Rapaport list and so on. It is indeed a pleasure to deal with a well-informed client, as it becomes easy to make them understand certain things. It will obviously ruin our reputation if customer asks about Rapaport list and the salesman is not able to answer the same so we ensure that our staff is also updated with new things in the market as and when it happens. %%

{{What role labour force plays in your business? Is maintaining labour force important to maintain quality of the product?}} $$ Labour force is the most important thing for us, as we cater to different section of the society and our clientele include people from different states too. So to deliver the best and maintain the variety, we have to hire skillful and creative workforce. Being a nation-wide business, we have an in-house team of artisans for our common jewellery designs. And 35 per cent of our workforce is picked from the area where the store is located to ensure that local flavor is maintained in the designs. For our sales and marketing staff, we design the best of packages, invest hugely in training them to be the best in the market, incentives—to keep them motivated and thus deliver their best. Again, artisans look for work all year round and a chain store business is more capable to give them work, as we have huge demand throughout the year that keeps them busy and earning. Also, because we have stores in so many different city, we can also control attrition to a certain extent, as transfer is possible within the company, if some staff member has genuine reasons to move. Because of the the expansion, we are also able to promote our old staff and thus provide them opportunity to grow with the brand. %% {{How much is your turnover and what impact it has on the business? Maximum investment of the total turnover goes in what—manufacturing, machines, labour, advertisement or anything else?}} $$ Approximately 85 per cent of our turnover goes in inventory, as the reason is obvious, year-round demand. We keep 1 per cent each for advertisements, lease/rental, salary of the employees, two per cent in other expense, 10 per cent in furniture and fixtures. This ratio is maintained all throughout. %% {{What are other benefits and drawbacks of independent store format?}} $$ We are a public limited company and in process to get listed. There are more than just one benefit of adopting the chain store model. Here, the business grows bigger than just the owners’ name and has its own identity. We are also able to contribute directly to the nation’s growth by generating employment opportunity for youth in various cities. We have 50 to 70 employees per store and over 100 artisans. This means one store caters to the needs of around 150 families. Local talent gets a platform through the brand. Not to mention are various taxes. %%

Primarily, Indian gem and jeweller industry follows three business models—Independent store, which includes having one to 10 showrooms; multiple store comprises that has more than five but less than 25 stores across the nation and the Chain store format is having more than 25 stores across the country and the world.%% Irrespective of what business model is followed, a few aspects, which can be rightly called the cornerstones of any business are—business strategy, advertisement and publicity, labour force, education and turnover. Through the story Preeti Srivastav finds out more about order of priority that is followed for the above mentioned vital business aspects in different business models.%% While some may argue that deciding of a business model is a personal choice, after all any business starts from a personal decision, a few may say that the decision is influenced or controlled by external factors like market conditions and trend, hence cannot be categorized as personal decision. There are three basic business models in the Indian Gem and Jewellery industry—namely—Independent store, Multiple store and Chain store. The article is an attempt to do some comparative study of all the three models and find out the difference in their priority (Business Strategy, Advertisement, Education, Labour and Turnover) and work pattern. During the research we also found out that many business houses are open to the idea of transition and don’t mind a switch from one model to the other. Change and profit remain the driving force.%% The oldest and most popular business model in India, Independent Store format includes brands that have less than 10 stores across the country/world. The model has its root in history, when gem and jewellery was more like any other business, started by a family for living. Changing time and taste of the consumer has lead to a new glamorous avatar of the jewellery business in India. This model is usually carved out of a family, where the business (in terms of number of showrooms) is expanded only to accommodate the number of heirs. In this model, the business is looked after by the family members with the help of a small number of staff. The owner is a regular at the store and hence shares a personal relation with the customer.%% Many of the businesses that come in the category of Multiple Store format may be assumed to be in the process of adopting chain store format. However, many may choose to restrict to a specific number of stores as well. It is usually seen that this category brands have their stores in neighbouring cities or states to ensure smooth functioning, for example, the brand that has its base in North India, usually opens other showrooms in other North Indian states. This not only lessens the distance thereby making the management easy, but also helps as there is not huge difference in taste of the consumer. The category goes beyond the number of heirs and needs hiring of talent from the market to manage stores or even franchising the business. Many opt for centralized functioning under which, though the store in other state is looked after by an employee, the decisions are taken at the main store only. %%

The next category in discussion is the Chain Store format, which is seen as the next upcoming thing. The format not only helps the business expand on a wider level but also takes the brand beyond the family name. Many chain store format are either already registered as public limited company or intend to get there. Even if some may not intend to go public, the format at least helps them reach out to the wider audience both national and international. The format needs highly professional set up for smooth functioning as the stores are located far and wide and are managed by hired professionals, as number of stores may outnumber the family members. Consumers’ taste differs from area to area and hence needs special attention. The brand may or may not replicate their success formula. %% {{Independent Store format}} {{Subash Bhola, Bholasons Jewellers}} $$ A trusted name in the gem and jewellery industry that works on improving what they have rather than expanding and taking additional responsibility. The brand has been able deliver the best to their customers and keeps them happy with personal attention. %% {{What is your business strategy? What role it plays in an independent store format?}} $$ Though terms like vision, goals, focus play an important role in designing business strategy for any firm, we from the independent store category may not pay attention to these. Our focus, goal, vision changes from day to day and depends highly on customer behaviour. There is no organised format neither we have fixed days of brainstorming sessions to design our business strategy. We function at personal level with the customer and hence too much or pre-planning may not work for us. Our focus shifts with time and requirements of the customer, hence flexibility can be one permanent trait of our strategy.%% {{How important is advertisement for independent store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web?}} $$ We invest 10% of our profit on the advertisement. For independent store, local print and outdoor publicity does the job. Because we concentrate on a few stores, which are usually in the same city as well, we don’t need national level publicity. In past word of mouth was the strongest mean of publicity, but nw as it’s important to make your presence felt, both big and small banners need to advertise. We usually go for print ads in local newspapers and magazines. We have not yet thought of going for radio or internet. Traditional media like print fulfills our requirements and also fits in our budget. Television advertisements rates are expensive and because we don’t have to reach to a national wide audience, that will also not be of much use to us.%% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific?}} $$ Importance of education cannot be ruled out in any sphere. Be it general education or jewellery specific, it definitely makes life easier. An educated owner and educated employees wil be in much better position to assess the market, read customer’s mind and understand their taste and thus deliver what is desired. Also, as I have mentioned earlier that we have flexible strategy, education will help us understand keep ourselves abreast with various developments in business tools, designs and so on. Jewellery education is also important, especially for the staff so that we not only sell a piece to the customer but also should be able to satisfy any kind of query that customer puts up, like—certification, difference in making charges etc. It is also easy and quick to deal with a well-informed customer.%%

{{What role labour force plays in your business? Is maintaining labour force important to maintain quality of the product? }} $$ Labour force is the backbone of any business. Be it artisans or my store staff, I need to maintain them so that I deliver consistently. Competition forces us to maintain the labour force so that the business functions smoothly and we give quality service to the customer. Also, attrition rate, which is now not much, but may pose a threat, as people are always on look out for good artisans and salesmen. Hence, we always try to give good work environ and packages. In independent stores, the salesmen develop a personal relation with the customers and we may lose business if we don’t keep our staff happy.%% {{How important is the turnover and how do you divide your turnover in the following heads—manufacturing, machines, labour, advertisement, renovation or anything else? }} $$ No matter how fierce the competition gets, profitability is always important. Hence turnover is of immense importance for any business. In the business of gem and jewellery, the turnover differs from material to material. In gold the turnover is six times of the investment, while in small diamond it is only two times. Solitaire fetches us six times of the investment. To sustain in the market, keeping in mind the changing times and market conditions, profitability is one thing that cannot be compromised on. Apart from inventory, 20% to 30% goes in renovation, which is not an annual thing. Publicity and advertisements takes 10% of the turnover.%% {{What are other benefits and drawbacks of independent store format? }} $$ Everybody has their own set of parameters for life. I know there are disadvantages of following this model, but I am happy that I am doing what I wanted to do and this fits perfectly in my plan of life. Such businesses are self-driven, self-managed and has an upper hand in terms of relationship with the customers. All my regular customers know me and we meet like friends. And jewellery industry is all about inter-personal relation only. It depends on future generations as what to make of the business, however, talking in present, I am satisfied.%%

{{Multiple Store $$ Shrikant Zaveri, Tribhovandas Bhimji Zaveri }} $$ A renowned name in the industry, Tribhovandas Bhimji Zaveri (TBZ) follows the multiple-store format with 19 showrooms strategically located across 13 cities in six states. Though the number of stores is small, but presence of the brand pan India makes it a national name and its business and marketing strategy is that of a chain store format. %% {{What is your business strategy? What role it plays in a multiple store format?}} %% We are a specialty jewellery retailer and primarily deal in gold, diamond and platinum jewellery studded with the precious and semi precious stones. Our primary target is to cater to the wedding segment along with offering a wide range of products for daily wear and fashion use. The company follows a ‘hub and spoke’ retail format, in which the ‘hub’ is the large format store (having stores of approximately 3000 sq feet or larger) and the ‘spoke’ forms the small format store that ranges between 1000 and 3000 sq feet. Overall this model helps in optimising the return on investment (ROI).%% {{How important is advertisement for multiple store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web?}} $$ In retail, advertisements play an important role to generate customer footfalls. In order to be constantly present at all strategic touchpoints and gain top of the mind recall, the company relies on advertising at a national level. This drives the customer flow into the stores. As far as medium of advertisement is concerned it purely depends on the spread of the retail network and the campaign objective. Media choices are based on the campaign objectives.%% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific? }} $$ Education is important as it adds scientific, methodological approach towards work, however business acumen is something natural. Education or professional training helps in sharpening the skills, enhancing the productivity and reducing the errors in the work. We train our staff and ensure that when a customer walks out of our store, he/she is also more informed about their investment. %% {{What role labour force plays in your business? Is maintaining labor force important to maintain quality of the product? }} $$ Employees are an integral part of the organisation. All the employees have a definite role to play in the organisation while working towards achieving the objectives and goals set at the company level. An ideal employer attracts right talent to the company, nurtures and encourages them to deliver high performance to achieve high organisational growth.%% {{How much is your turnover and what impact it has on the business? Maximum investment of the total turnover goes in what—manufacturing, machines, labour, advertisement or anything else? }} $$ In the financial year 2012, we did business worth Rs 13855 million. While Maximum part of the turnover was invested in buying raw material (gold and diamonds), other heads were also taken care and allotted the pre-decided share. %% {{How does functioning in multiple store format helps?}} $$ Multiple store format helps in achieving economies of scale and higher inventory turn. %%

{{Chain Store}} $$ {{T S Kalyanaraman Managing Director, Kalyan Jewellers }} $$ The Kalyan Group boasts of 38 stores pan India. Primarily a South Indian brand, Kalyan forayed into the West part of the country with its newly opened store in Ahmedabad and it further plans expansion to reach out to the flamboyant North Indian consumers. It has been a household name in four South Indian states. {{What is your business strategy? What role it plays in a multiple store format?}} $$ Business strategy plays a very important role in any business, big or small. Our strategy has been a simple one from day one, that is, to be--fair, transparent and honest to our customers. We also understand and acknowledge the starpower and we always approach popular film stars to educate our customers. Innovation and quality service is also part of our strategy and hence we brought in ideas like ‘rate tag’ that contains all information like making charges, content and its measures and all. We also started service centres under the name ‘My Kalyan’. In these centers customers were able to remit monthly gold scheme, enquire about the different designs and making charges of the ornaments, can remit advance for marriage purchases and so on. Now we have 250 My Kalyan centers in south india and 100 more are in pipe line.%% {{How important is advertisement for multiple store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web? }} $$ We spend roughly 1% of our turnover on advertisement. We believe that jewellery advertising is not only about good imagery and pretty women. There are a lot of things that the customer needs to know about gold and diamond jewellery, like—quality, pricing and so on. It’s the responsibility of every retailer to educate the customer about these through advertising. No matter how much we insist on glamour and celebrity quotient in our ads, we ensure that the actual message is loud and clear and helps the customer take better decision. Last financial year we had spent around 100 crores for ads.%% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific? }} $$ As stated earlier, educating customers and staff has been a part of our strategy since beginning. Generally speaking, education always facilitates clear communication, which is important in our profession. We have periodic training and refreshment programmes for the staff and their performance is evaluated by our dedicated CRM team through our call centre. Apart from general education, we emphasise on educating the staff about the business and the products, hence we take approximately six months and over a lakh to train a candidate. %% {{What role labour force plays in your business? Is maintaining labour force important to maintain quality of the product?}} $$ No matter what industry one belongs too nothing can be precious than human. We have over 4,000 staff members working with us. The entire middle management has been with us since our early days and are internally promoted and developed. They are one of our biggest strengths today. Our staff is almost the face of the business for our customers, so it’s our foremost duty to give their stimulating and conducive environment so that they perform without stress and grow. %% {{How much is your turnover and what impact it has on the business? Maximum investment of the total turnover goes in what—manufacturing, machines, labour, advertisement or anything else?}} $$ Last financial year we had a turnover of Rs 9437 crores. Mostly, we invest in inventory, advertisement, staff and service to the customers. %%

{{Balram Garg, P C Jewellers }} P C Jeweller owns 30 stores across the country and is one of the nationally recognised brand. Owned by first generation jeweller, Balram Garg, the brand is a Public Limited company and is all set to further widen their realm.%% {{What is your business strategy? What role it plays in a multiple store format?}} $$ It was a long cherished dream and intent to have a chain of PC Jewellers stores and well achieved. However, the journey taught us a lot of things and therefore we base our strategies on the lessons that we have learnt, customer’s taste and requirement and market trend. Now that PC Jewellers is making its presence felt pan India, we make sure that we don’t force people to buy what we are good at or what we have. Instead we emphasis on giving what they need hence first strategy is to incorporate the local taste. Our strategy, though broadly remains same, changes depending on location of the store and size of the organised and unorganised sector. While we cater to the local taste, we also maintain uniqueness and freshness by introducing new designs.%% {{How important is advertisement for multiple store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web?}} $$ Marketing your brand is the driving force that pulls the vehicle. With so much of information explosion, everybody wants to claim space in customer’s mind, which is impossible without being in sight. So to be there on mind one has to be in sight. For the chain store format, wide advertisement on national level is important. We go for time buying in national channel as we have our stores in multiple states in the country. Television is the most important medium of publicity that I choose for my business, however, print and outdoor publicity tools are also aptly used. We spend 1 per cent of our turnover in advertisements and publicity through various means. %% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific?}} $$ We have our stores in metro cities, tier-one cities and tier-two cities. The importance of education may fluctuate depending on the city, but it cannot be ruled out completely. Talking about general education of the staff, we look for moderately educated staff in tier-two cities, graduates in tier-one cities and metros. However, we invest in training the staff and equipping them with complete knowledge of jewellery, material, stones, making etc. We understand the importance of education and make sure that customer not only be satisfied with the design or pricing, but also knows what is she/he investing into; what brings the difference in making charges; meaning and importance of BIS hallmark, certification of diamonds, Rapaport list and so on. It is indeed a pleasure to deal with a well-informed client, as it becomes easy to make them understand certain things. It will obviously ruin our reputation if customer asks about Rapaport list and the salesman is not able to answer the same so we ensure that our staff is also updated with new things in the market as and when it happens. %%

{{What role labour force plays in your business? Is maintaining labour force important to maintain quality of the product?}} $$ Labour force is the most important thing for us, as we cater to different section of the society and our clientele include people from different states too. So to deliver the best and maintain the variety, we have to hire skillful and creative workforce. Being a nation-wide business, we have an in-house team of artisans for our common jewellery designs. And 35 per cent of our workforce is picked from the area where the store is located to ensure that local flavor is maintained in the designs. For our sales and marketing staff, we design the best of packages, invest hugely in training them to be the best in the market, incentives—to keep them motivated and thus deliver their best. Again, artisans look for work all year round and a chain store business is more capable to give them work, as we have huge demand throughout the year that keeps them busy and earning. Also, because we have stores in so many different city, we can also control attrition to a certain extent, as transfer is possible within the company, if some staff member has genuine reasons to move. Because of the the expansion, we are also able to promote our old staff and thus provide them opportunity to grow with the brand. %% {{How much is your turnover and what impact it has on the business? Maximum investment of the total turnover goes in what—manufacturing, machines, labour, advertisement or anything else?}} $$ Approximately 85 per cent of our turnover goes in inventory, as the reason is obvious, year-round demand. We keep 1 per cent each for advertisements, lease/rental, salary of the employees, two per cent in other expense, 10 per cent in furniture and fixtures. This ratio is maintained all throughout. %% {{What are other benefits and drawbacks of independent store format?}} $$ We are a public limited company and in process to get listed. There are more than just one benefit of adopting the chain store model. Here, the business grows bigger than just the owners’ name and has its own identity. We are also able to contribute directly to the nation’s growth by generating employment opportunity for youth in various cities. We have 50 to 70 employees per store and over 100 artisans. This means one store caters to the needs of around 150 families. Local talent gets a platform through the brand. Not to mention are various taxes. %%

Primarily, Indian gem and jeweller industry follows three business models—Independent store, which includes having one to 10 showrooms; multiple store comprises that has more than five but less than 25 stores across the nation and the Chain store format is having more than 25 stores across the country and the world.%% Irrespective of what business model is followed, a few aspects, which can be rightly called the cornerstones of any business are—business strategy, advertisement and publicity, labour force, education and turnover. Through the story Preeti Srivastav finds out more about order of priority that is followed for the above mentioned vital business aspects in different business models.%% While some may argue that deciding of a business model is a personal choice, after all any business starts from a personal decision, a few may say that the decision is influenced or controlled by external factors like market conditions and trend, hence cannot be categorized as personal decision. There are three basic business models in the Indian Gem and Jewellery industry—namely—Independent store, Multiple store and Chain store. The article is an attempt to do some comparative study of all the three models and find out the difference in their priority (Business Strategy, Advertisement, Education, Labour and Turnover) and work pattern. During the research we also found out that many business houses are open to the idea of transition and don’t mind a switch from one model to the other. Change and profit remain the driving force.%% The oldest and most popular business model in India, Independent Store format includes brands that have less than 10 stores across the country/world. The model has its root in history, when gem and jewellery was more like any other business, started by a family for living. Changing time and taste of the consumer has lead to a new glamorous avatar of the jewellery business in India. This model is usually carved out of a family, where the business (in terms of number of showrooms) is expanded only to accommodate the number of heirs. In this model, the business is looked after by the family members with the help of a small number of staff. The owner is a regular at the store and hence shares a personal relation with the customer.%% Many of the businesses that come in the category of Multiple Store format may be assumed to be in the process of adopting chain store format. However, many may choose to restrict to a specific number of stores as well. It is usually seen that this category brands have their stores in neighbouring cities or states to ensure smooth functioning, for example, the brand that has its base in North India, usually opens other showrooms in other North Indian states. This not only lessens the distance thereby making the management easy, but also helps as there is not huge difference in taste of the consumer. The category goes beyond the number of heirs and needs hiring of talent from the market to manage stores or even franchising the business. Many opt for centralized functioning under which, though the store in other state is looked after by an employee, the decisions are taken at the main store only. %%

The next category in discussion is the Chain Store format, which is seen as the next upcoming thing. The format not only helps the business expand on a wider level but also takes the brand beyond the family name. Many chain store format are either already registered as public limited company or intend to get there. Even if some may not intend to go public, the format at least helps them reach out to the wider audience both national and international. The format needs highly professional set up for smooth functioning as the stores are located far and wide and are managed by hired professionals, as number of stores may outnumber the family members. Consumers’ taste differs from area to area and hence needs special attention. The brand may or may not replicate their success formula. %% {{Independent Store format}} {{Subash Bhola, Bholasons Jewellers}} $$ A trusted name in the gem and jewellery industry that works on improving what they have rather than expanding and taking additional responsibility. The brand has been able deliver the best to their customers and keeps them happy with personal attention. %% {{What is your business strategy? What role it plays in an independent store format?}} $$ Though terms like vision, goals, focus play an important role in designing business strategy for any firm, we from the independent store category may not pay attention to these. Our focus, goal, vision changes from day to day and depends highly on customer behaviour. There is no organised format neither we have fixed days of brainstorming sessions to design our business strategy. We function at personal level with the customer and hence too much or pre-planning may not work for us. Our focus shifts with time and requirements of the customer, hence flexibility can be one permanent trait of our strategy.%% {{How important is advertisement for independent store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web?}} $$ We invest 10% of our profit on the advertisement. For independent store, local print and outdoor publicity does the job. Because we concentrate on a few stores, which are usually in the same city as well, we don’t need national level publicity. In past word of mouth was the strongest mean of publicity, but nw as it’s important to make your presence felt, both big and small banners need to advertise. We usually go for print ads in local newspapers and magazines. We have not yet thought of going for radio or internet. Traditional media like print fulfills our requirements and also fits in our budget. Television advertisements rates are expensive and because we don’t have to reach to a national wide audience, that will also not be of much use to us.%% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific?}} $$ Importance of education cannot be ruled out in any sphere. Be it general education or jewellery specific, it definitely makes life easier. An educated owner and educated employees wil be in much better position to assess the market, read customer’s mind and understand their taste and thus deliver what is desired. Also, as I have mentioned earlier that we have flexible strategy, education will help us understand keep ourselves abreast with various developments in business tools, designs and so on. Jewellery education is also important, especially for the staff so that we not only sell a piece to the customer but also should be able to satisfy any kind of query that customer puts up, like—certification, difference in making charges etc. It is also easy and quick to deal with a well-informed customer.%%

{{What role labour force plays in your business? Is maintaining labour force important to maintain quality of the product? }} $$ Labour force is the backbone of any business. Be it artisans or my store staff, I need to maintain them so that I deliver consistently. Competition forces us to maintain the labour force so that the business functions smoothly and we give quality service to the customer. Also, attrition rate, which is now not much, but may pose a threat, as people are always on look out for good artisans and salesmen. Hence, we always try to give good work environ and packages. In independent stores, the salesmen develop a personal relation with the customers and we may lose business if we don’t keep our staff happy.%% {{How important is the turnover and how do you divide your turnover in the following heads—manufacturing, machines, labour, advertisement, renovation or anything else? }} $$ No matter how fierce the competition gets, profitability is always important. Hence turnover is of immense importance for any business. In the business of gem and jewellery, the turnover differs from material to material. In gold the turnover is six times of the investment, while in small diamond it is only two times. Solitaire fetches us six times of the investment. To sustain in the market, keeping in mind the changing times and market conditions, profitability is one thing that cannot be compromised on. Apart from inventory, 20% to 30% goes in renovation, which is not an annual thing. Publicity and advertisements takes 10% of the turnover.%% {{What are other benefits and drawbacks of independent store format? }} $$ Everybody has their own set of parameters for life. I know there are disadvantages of following this model, but I am happy that I am doing what I wanted to do and this fits perfectly in my plan of life. Such businesses are self-driven, self-managed and has an upper hand in terms of relationship with the customers. All my regular customers know me and we meet like friends. And jewellery industry is all about inter-personal relation only. It depends on future generations as what to make of the business, however, talking in present, I am satisfied.%%

{{Multiple Store $$ Shrikant Zaveri, Tribhovandas Bhimji Zaveri }} $$ A renowned name in the industry, Tribhovandas Bhimji Zaveri (TBZ) follows the multiple-store format with 19 showrooms strategically located across 13 cities in six states. Though the number of stores is small, but presence of the brand pan India makes it a national name and its business and marketing strategy is that of a chain store format. %% {{What is your business strategy? What role it plays in a multiple store format?}} %% We are a specialty jewellery retailer and primarily deal in gold, diamond and platinum jewellery studded with the precious and semi precious stones. Our primary target is to cater to the wedding segment along with offering a wide range of products for daily wear and fashion use. The company follows a ‘hub and spoke’ retail format, in which the ‘hub’ is the large format store (having stores of approximately 3000 sq feet or larger) and the ‘spoke’ forms the small format store that ranges between 1000 and 3000 sq feet. Overall this model helps in optimising the return on investment (ROI).%% {{How important is advertisement for multiple store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web?}} $$ In retail, advertisements play an important role to generate customer footfalls. In order to be constantly present at all strategic touchpoints and gain top of the mind recall, the company relies on advertising at a national level. This drives the customer flow into the stores. As far as medium of advertisement is concerned it purely depends on the spread of the retail network and the campaign objective. Media choices are based on the campaign objectives.%% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific? }} $$ Education is important as it adds scientific, methodological approach towards work, however business acumen is something natural. Education or professional training helps in sharpening the skills, enhancing the productivity and reducing the errors in the work. We train our staff and ensure that when a customer walks out of our store, he/she is also more informed about their investment. %% {{What role labour force plays in your business? Is maintaining labor force important to maintain quality of the product? }} $$ Employees are an integral part of the organisation. All the employees have a definite role to play in the organisation while working towards achieving the objectives and goals set at the company level. An ideal employer attracts right talent to the company, nurtures and encourages them to deliver high performance to achieve high organisational growth.%% {{How much is your turnover and what impact it has on the business? Maximum investment of the total turnover goes in what—manufacturing, machines, labour, advertisement or anything else? }} $$ In the financial year 2012, we did business worth Rs 13855 million. While Maximum part of the turnover was invested in buying raw material (gold and diamonds), other heads were also taken care and allotted the pre-decided share. %% {{How does functioning in multiple store format helps?}} $$ Multiple store format helps in achieving economies of scale and higher inventory turn. %%

{{Chain Store}} $$ {{T S Kalyanaraman Managing Director, Kalyan Jewellers }} $$ The Kalyan Group boasts of 38 stores pan India. Primarily a South Indian brand, Kalyan forayed into the West part of the country with its newly opened store in Ahmedabad and it further plans expansion to reach out to the flamboyant North Indian consumers. It has been a household name in four South Indian states. {{What is your business strategy? What role it plays in a multiple store format?}} $$ Business strategy plays a very important role in any business, big or small. Our strategy has been a simple one from day one, that is, to be--fair, transparent and honest to our customers. We also understand and acknowledge the starpower and we always approach popular film stars to educate our customers. Innovation and quality service is also part of our strategy and hence we brought in ideas like ‘rate tag’ that contains all information like making charges, content and its measures and all. We also started service centres under the name ‘My Kalyan’. In these centers customers were able to remit monthly gold scheme, enquire about the different designs and making charges of the ornaments, can remit advance for marriage purchases and so on. Now we have 250 My Kalyan centers in south india and 100 more are in pipe line.%% {{How important is advertisement for multiple store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web? }} $$ We spend roughly 1% of our turnover on advertisement. We believe that jewellery advertising is not only about good imagery and pretty women. There are a lot of things that the customer needs to know about gold and diamond jewellery, like—quality, pricing and so on. It’s the responsibility of every retailer to educate the customer about these through advertising. No matter how much we insist on glamour and celebrity quotient in our ads, we ensure that the actual message is loud and clear and helps the customer take better decision. Last financial year we had spent around 100 crores for ads.%% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific? }} $$ As stated earlier, educating customers and staff has been a part of our strategy since beginning. Generally speaking, education always facilitates clear communication, which is important in our profession. We have periodic training and refreshment programmes for the staff and their performance is evaluated by our dedicated CRM team through our call centre. Apart from general education, we emphasise on educating the staff about the business and the products, hence we take approximately six months and over a lakh to train a candidate. %% {{What role labour force plays in your business? Is maintaining labour force important to maintain quality of the product?}} $$ No matter what industry one belongs too nothing can be precious than human. We have over 4,000 staff members working with us. The entire middle management has been with us since our early days and are internally promoted and developed. They are one of our biggest strengths today. Our staff is almost the face of the business for our customers, so it’s our foremost duty to give their stimulating and conducive environment so that they perform without stress and grow. %% {{How much is your turnover and what impact it has on the business? Maximum investment of the total turnover goes in what—manufacturing, machines, labour, advertisement or anything else?}} $$ Last financial year we had a turnover of Rs 9437 crores. Mostly, we invest in inventory, advertisement, staff and service to the customers. %%

{{Balram Garg, P C Jewellers }} P C Jeweller owns 30 stores across the country and is one of the nationally recognised brand. Owned by first generation jeweller, Balram Garg, the brand is a Public Limited company and is all set to further widen their realm.%% {{What is your business strategy? What role it plays in a multiple store format?}} $$ It was a long cherished dream and intent to have a chain of PC Jewellers stores and well achieved. However, the journey taught us a lot of things and therefore we base our strategies on the lessons that we have learnt, customer’s taste and requirement and market trend. Now that PC Jewellers is making its presence felt pan India, we make sure that we don’t force people to buy what we are good at or what we have. Instead we emphasis on giving what they need hence first strategy is to incorporate the local taste. Our strategy, though broadly remains same, changes depending on location of the store and size of the organised and unorganised sector. While we cater to the local taste, we also maintain uniqueness and freshness by introducing new designs.%% {{How important is advertisement for multiple store business model? What per cent do you invest in advertisement? Which is the best mode—electronic, print, web?}} $$ Marketing your brand is the driving force that pulls the vehicle. With so much of information explosion, everybody wants to claim space in customer’s mind, which is impossible without being in sight. So to be there on mind one has to be in sight. For the chain store format, wide advertisement on national level is important. We go for time buying in national channel as we have our stores in multiple states in the country. Television is the most important medium of publicity that I choose for my business, however, print and outdoor publicity tools are also aptly used. We spend 1 per cent of our turnover in advertisements and publicity through various means. %% {{How education helps run a business? Education of staff, owner and consumer—all three are taken into consideration. Education could be general or jewelllery specific?}} $$ We have our stores in metro cities, tier-one cities and tier-two cities. The importance of education may fluctuate depending on the city, but it cannot be ruled out completely. Talking about general education of the staff, we look for moderately educated staff in tier-two cities, graduates in tier-one cities and metros. However, we invest in training the staff and equipping them with complete knowledge of jewellery, material, stones, making etc. We understand the importance of education and make sure that customer not only be satisfied with the design or pricing, but also knows what is she/he investing into; what brings the difference in making charges; meaning and importance of BIS hallmark, certification of diamonds, Rapaport list and so on. It is indeed a pleasure to deal with a well-informed client, as it becomes easy to make them understand certain things. It will obviously ruin our reputation if customer asks about Rapaport list and the salesman is not able to answer the same so we ensure that our staff is also updated with new things in the market as and when it happens. %%

{{What role labour force plays in your business? Is maintaining labour force important to maintain quality of the product?}} $$ Labour force is the most important thing for us, as we cater to different section of the society and our clientele include people from different states too. So to deliver the best and maintain the variety, we have to hire skillful and creative workforce. Being a nation-wide business, we have an in-house team of artisans for our common jewellery designs. And 35 per cent of our workforce is picked from the area where the store is located to ensure that local flavor is maintained in the designs. For our sales and marketing staff, we design the best of packages, invest hugely in training them to be the best in the market, incentives—to keep them motivated and thus deliver their best. Again, artisans look for work all year round and a chain store business is more capable to give them work, as we have huge demand throughout the year that keeps them busy and earning. Also, because we have stores in so many different city, we can also control attrition to a certain extent, as transfer is possible within the company, if some staff member has genuine reasons to move. Because of the the expansion, we are also able to promote our old staff and thus provide them opportunity to grow with the brand. %% {{How much is your turnover and what impact it has on the business? Maximum investment of the total turnover goes in what—manufacturing, machines, labour, advertisement or anything else?}} $$ Approximately 85 per cent of our turnover goes in inventory, as the reason is obvious, year-round demand. We keep 1 per cent each for advertisements, lease/rental, salary of the employees, two per cent in other expense, 10 per cent in furniture and fixtures. This ratio is maintained all throughout. %% {{What are other benefits and drawbacks of independent store format?}} $$ We are a public limited company and in process to get listed. There are more than just one benefit of adopting the chain store model. Here, the business grows bigger than just the owners’ name and has its own identity. We are also able to contribute directly to the nation’s growth by generating employment opportunity for youth in various cities. We have 50 to 70 employees per store and over 100 artisans. This means one store caters to the needs of around 150 families. Local talent gets a platform through the brand. Not to mention are various taxes. %%