marketing charges and margins in jewellery...
TRANSCRIPT
MARKETING CHARGES AND MARGINS
IN JEWELLERY INDUSTRY
In modern marketing system, the marketing area of a product
becomes so wide that the commodity reaches in the hands of ultimate
consumers passing through different marketing channels. This is also
done in case of Jewellery. In case of Jewellery the marketing cost
starts from manufacturer's/wholesaler's level and ends at the point
when the Jewellery reaches in the hands of the buyers.
These marketing channels have their eminent importance but it
is a bare fact that each and every marketing channel, used for
physical distribution of a product has its own cost. So it becomes
inevitable to go through all the expenses and margins at different
levels of marketing, so that it may clearly be judged whether these
expenses and margins are justified, and every marketing channel is
getting its share in a justified manner.
(A) MARKETING CHARGES
A number of marketing charges are incurred by different
marketing intermediaries involved in the business of Jewellery. A
brief description of these charges is given below:
141
STORING EXPENSES These expenses are incurred only at manufacturer's
/wholesaler's level. In fact the wholesaler has to store the
manufactured Jewellery for some time for which he has to incur
some expenses and it forms the part of their marketing charges.
STAFF SALARY & OTHER EXPENSES These expenses are incurred by manufacturer /wholesaler as
well as by retailer. The owner of the firm has to pay the salary to his
staff and various other expenses like dress, bonus, refreshment etc.
The amount of these expenses depends upon the size of the firm. All
these expenses which are incurred on the staff form the part of
marketing charges.
OFFICE EXPENSES Generally the wholesaler has to maintain his office from where
he runs his wholesale business. To run this office he has to incur
some expenses which form the part of his marketing charges. It was
observed that these offices are established on the less important
location because only the retailers and agents make their approaches
to them and the ultimate buyers do not make any purchase from
them.
TRANSPORTATION COST
Transportation cost is also a very important cost contributing to
the marketing charges in case of Jewellery industry. This is the cost
which is concerned with bringing raw material i.e. gold from one
142
place to another place and carrying the finished products from
manufacturers to wholesalers and retailers. Only in few cases the
jewellers provide transportation facility to some specific customers
from their shop to their place.
SHOWROOM EXPENSES
Showroom expenses are also of great importance in case of
marketing expenses. Show room is a place where direct marketing of
the product is being made by the jewellers. The ambience of the shop
must be so nice it may prove helpful in attracting customers. These
expenses include shop rent, if shop is rented, and if it is own at least
opportunity cost of the amount blocked in shop, furniture, electricity,
security and other maintenance charges. It was observed that
showrooms are established only by retailers.
ADVERTISEMENT
It is the expenses made by the jewellers to promote their sales.
It includes advertisement made in the news papers, televisions and
other Medias. Distribution of various gift items on various auspicious
occasions such as Deepawali, Holi, Iid, X-max day, Valentine Day,
Akshya Tritya etc. is in very much practice in Meerut district.
Jewellers also invite various celebrities to inaugurate their Jewellery
designs in their showrooms. It is also another way of making their
shops advertised. Also the packing material which is provided by the
jewellers is also in printed form making their shop name advertised.
All these expenses form the part of marketing charges at retailer’s
level.
143
ENTERTAINMENT EXPENSES Generally the retailers entertain their customers by providing
them tea, coffee, snacks, cold drink etc. These expenses depend upon
the size of showroom and the number of customers. All these
expenses are the part of marketing charges at retailer’s level.
PACKING EXPENSES
Packing plays a vital role in case of Jewellery marketing.
Actually Jewellery is a costly item and is beloved especially by
ladies. Due to this reason it demands for attractive packing so that it
may increase the grace of the selected pieces by the buyers and they
may feel good by purchasing it. The packing is made as per the size
and price of the Jewellery items. If a customer buys Diamond
Jewellery the packing is found in some special form which gives its
different looks as compared to the packing of gold Jewellery. It was
observed that all the packing expenses are incurred by the retailers.
INSURANCE EXPENSES
Insurance expenses are incurred by both
manufacturers/wholesalers and retailers. They have to get
their stock insured against fire, theft, robbery or any other
calamity. These expenses form the part of marketing charges.
CREDIT EXPENSES
These expenses are incurred only by retailers. In some cases the
retailers have to sell their Jewellery on credit and they receive the
payment after some time. During this period they have to bear the
144
interest loss. In few cases the debtors do not make the payment
and the jewellers have to treat it as bad debt. Though such loss is
not the part of marketing expenses yet it affects the margins of
jewellers directly.
OTHER EXPENSES
Apart from the above expenses Jewellers have to incur some
other expenses like security expenses, theft by customers, repair
expenses, collection charges etc. All these expenses form the part of
marketing charges at retailers’ level.
AGENT COMMISSION
Generally the big jewellers import the Jewellery of some
specific designs from out side the state and from abroad. In such case
they have to get the services of commission agents and the due
commission is paid to them for their services which becomes part of
marketing charges.
MARKETING CHARGES AT MANUFACTURER'S/WHOLESALER'S LEVEL
The following table nos. from 7.1 to 7.4 are showing the marketing
charges incurred at manufacturer's/wholesaler's level in case of 18 carat,
20 carat, 22 carat and 23 carat Jewellery in Meerut District:
145
Table No. 7.1
MARKETING CHARGES AT MANUFACTURER'S / WHOLESALER'S LEVEL
[In case of 75% (18 carat) Jewellery per 10 gms.]
S.No.
Heads of Expenses
Amount Rs. %age
1. Storing Expenses 55.20 24.17 2. Staff Salary & Other
Expenses 20.00 8.75
3. Office Expenses 75.00 32.84 4. Transportation 18.00 7.88 5. Insurance Expenses 60.20 26.36 6. Total 228.40 100.00
Source: Personal Survey.
The above table no. 7.1 reveals that in case of 75% (18 carat)
Jewellery the manufacturers/wholesalers pay Rs. 228.40 as marketing
charges per 10 gms of Jewellery. Out of these charges they make an
expenditure of Rs. 55.20 (24.17%) on storing the Jewellery, Rs. 20.00
(8.75%) as staff salary and other expenses, Rs. 75.00 (32.84%)as office
expenses, Rs. 18.00 (7.88%) on transportation and Rs. 60.20 (26.36%) on
insurance of the Jewellery. All these expenditures may be said quite
justified at this level.
146
Table No. 7.2
MARKETING CHARGES AT MANUFACTURER'S /
WHOLESALER'S LEVEL [In case of 83.33% (20 carat) Jewellery per 10 gms.]
S.No.
Heads of Expenses
Amount Rs. %age
1. Storing Expenses 55.20 22.48 2. Staff Salary & Other
Expenses 28.00 11.40
3. Office Expenses 80.00 32.57 4. Transportation 15.50 6.31 5. Insurance Expenses 66.90 27.24 6. Total 245.60 100.00
Source: Personal Survey.
The above table no. 7.2 reveals that in case of 83.33% (20 carat)
Jewellery the manufacturers/wholesalers pay Rs. 245.60 as marketing
charges per 10 gms of Jewellery. Out of these charges they make an
expenditure of Rs. 55.20 (22.48%) on storing the Jewellery, Rs. 28.00
(11.40%) as staff salary and other expenses, Rs. 80.00 (32.57%) as office
expenses, Rs. 15.50 (6.31%) on transportation and Rs. 66.90 (27.24%) on
insurance of the Jewellery. All these expenditures may be said quite
justified at this level.
147
Table No. 7.3
MARKETING CHARGES AT MANUFACTURER'S /
WHOLESALER'S LEVEL [In case of 91.66% (22 carat) Jewellery per 10 gms.]
S.No.
Heads of Expenses
Amount Rs. %age
1. Storing Expenses 55.20 20.00
2. Staff Salary & Other Expenses 36.80 13.33
3. Office Expenses 92.00 33.33
4. Transportation 18.40 6.67
5. Insurance Expenses 73.60 26.67
6. Total 276.00 100.00
Source: Personal Survey.
The above table no. 7.3 reveals that in case of 91.66% (22 carat)
Jewellery the manufacturers/wholesalers pay Rs. 276.00 as marketing
charges per 10 gms of Jewellery. Out of these charges they make an
expenditure of Rs. 55.20 (20.00%) on storing the Jewellery, Rs. 36.80
(13.33%) as staff salary and other expenses, Rs. 92.00 (33.33%) as office
expenses, Rs. 18.40 (6.67%) on transportation and Rs. 73.60 (26.67%) on
insurance of the Jewellery. All these expenditures may be said quite
justified at this level.
148
Table No. 7.4
MARKETING CHARGES AT MANUFACTURER'S / WHOLESALER'S LEVEL
[In case of 95.83% (23 carat) Jewellery per 10 gms.]
S.No.
Heads of Expenses
Amount Rs. %age
1. Storing Expenses 55.20 19.31 2. Staff Salary & Other
Expenses 36.80 12.87
3. Office Expenses 92.00 32.17 4. Transportation 25.00 8.74 5. Insurance Expenses 76.95 26.91 6. Total 285.95 100.00
Source: Personal Survey.
The above table no. 7.4 reveals that in case of 95.83% (23 carat)
Jewellery the manufacturers/wholesalers pay Rs. 285.95 as marketing
charges per 10 gms of Jewellery. Out of these charges they make an
expenditure of Rs. 55.20 (19.31%) on storing the Jewellery, Rs. 36.80
(12.87%) as staff salary and other expenses, Rs. 92.00 (32.17%) as office
expenses, Rs. 25.00 (8.74%) on transportation and Rs. 76.95 (26.91%) on
insurance of the Jewellery. All these expenditures may be said quite
justified at this level.
149
MARKETING CHARGES AT RETAILER’S The following table nos. from 7.5 to 7.8 are showing the marketing
charges incurred at retailer’s level in case of 18 carat, 20 carat, 22 carat
and 23 carat Jewellery in Meerut District:
Table No. 7.5
MARKETING CHARGES AT RETAILER’S LEVEL
[In case of 75% (18 carat) Jewellery per 10 gms.]
S.No. Heads of Expenses
Amount Rs. %age
1. Showroom Expenses 75.50 19.82
2. Staff Salary and Other Expenses 60.50 15.88
3. Advertisement Expenses 40.00 10.50
4. Entertainment Expenses 28.70 7.54
5. Packing Expenses 18.40 4.83
6. Insurance Expenses 60.20 15.81
7. Credit Expenses 22.58 5.93
8. Other Expenses 75.00 19.69
9. Total 380.88 100.00
Source: Personal Survey.
The above table no. 7.5 reveals that in case of 75% (18 carat)
Jewellery the retailers pay Rs. 380.88 as marketing charges per 10 gms of
Jewellery. Out of these charges they make an expenditure of Rs. 75.50
(19.82%) as showroom expenses, Rs. 60.50 (15.88%) as staff salary and
150
other expenses, Rs. 40.00 (10.50%) on advertisement, Rs. 28.70 (7.54%)
on entertainment, Rs. 18.40 (4.83%) as packing expenses, Rs. 60.20
(15.81%) on insurance, Rs. 22.58 (5.93%) as credit expenses and Rs. 75
(19.69%) as other expenses. Excluding Other expenses, all these
expenditures may be said quite justified at this level. Other expenses may
be reduced to some extent.
Table No. 7.6
MARKETING CHARGES AT RETAILER’S LEVEL
[In case of 83.33% (20 carat) Jewellery per 10 gms.]
S.No.
Heads of Expenses
Amount Rs. %age
1. Showroom Expenses 105.00 22.84
2. Staff Salary and Other Expenses 70.50 15.34
3. Advertisement Expenses 60.00 13.05
4. Entertainment Expenses 30.50 6.63
5. Packing Expenses 18.40 4.00
6. Insurance Expenses 66.90 14.55
7. Credit Expenses 25.10 5.46
8. Other Expenses 83.33 18.13
9. Total 459.73 100.00
Source: Personal Survey.
The above table no. 7.6 reveals that in case of 83.33% (20 carat)
Jewellery the retailers pay Rs. 459.73 as marketing charges per 10 gms of
151
Jewellery. Out of these charges they make an expenditure of Rs. 105
(22.84%) as showroom expenses, Rs. 70.50 (15.34%) as staff salary and
other expenses, Rs. 60 (13.05%) on advertisement, Rs. 30.50 (6.63%) on
entertainment, Rs. 18.40 (4.00%) as packing expenses, Rs. 66.90
(14.55%) on insurance, Rs. 25.10 (5.46 %) as credit expenses and Rs.
83.33 (18.13%) as other expenses. Excluding Other expenses, all these
expenditures may be said quite justified at this level.
Table No. 7.7
MARKETING CHARGES AT RETAILER’S LEVEL
[In case of 91.66% (22 carat) Jewellery per 10 gms.]
S.No.
Heads of Expenses
Amount Rs. %age
1. Showroom Expenses 138.00 22.06
2. Staff Salary and Other Expenses 110.40 17.65
3. Advertisement Expenses 128.80 20.59
4. Entertainment Expenses 36.80 5.88
5. Packing Expenses 18.40 2.94
6. Insurance Expenses 73.60 11.76
7. Credit Expenses 27.60 4.41
8. Other Expenses 92.00 14.71
9. Total 625.60 100.00
Source: Personal Survey.
152
The above table no. 7.7 reveals that in case of 91.66% (22 carat)
Jewellery the retailers pay Rs. 625.60 as marketing charges per 10 gms
of Jewellery. Out of these charges they make an expenditure of Rs. 138
(22.60%) as showroom expenses, Rs. 110.40 (17.65%) as staff salary
and other expenses, Rs. 128.80 (20.59%) on advertisement, Rs. 36.80
(5.88%) on entertainment, Rs. 18.40 (2.94%) as packing expenses, Rs.
73.60 (11.76%) on insurance, Rs. 27.60 (4.41 %) as credit expenses and
Rs. 92 (14.71%) as other expenses. Excluding Other expenses, all these
expenditures may be said quite justified at this level.
Table No. 7.8
MARKETING CHARGES AT RETAILER’S LEVEL [In case of 95.83% (23 carat) Jewellery per 10 gms.]
S.No.
Heads of Expenses
Amount Rs. %age
1. Showroom Expenses 138.00 21.77
2. Staff Salary and Other Expenses 110.40 17.41
3. Advertisement Expenses 128.80 20.32
4. Entertainment Expenses 36.80 5.80
5. Packing Expenses 18.40 2.90
6. Insurance Expenses 76.95 12.14
7. Credit Expenses 28.85 4.55
8. Other Expenses 95.80 15.11
9. Total 634.00 100.00
Source: Personal Survey.
153
The above table no. 7.8 reveals that in case of 95.83% (23 carat)
Jewellery the retailers pay Rs. 634 as marketing charges per 10 gms of
Jewellery. Out of these charges they make an expenditure of Rs. 138
(21.77%) as showroom expenses, Rs. 110.40 (17.41%) as staff salary and
other expenses, Rs. 128.80 (20.32%) on advertisement, Rs. 36.80 (5.80%)
on entertainment, Rs. 18.40 (2.90%) as packing expenses, Rs. 76.95
(12.14%) on insurance, Rs. 28.85 (4.55 %) as credit expenses and Rs.
95.80 (15.11%) as other expenses. Excluding Other expenses, all these
expenditures may be said quite justified at this level.
COMPARATIVE STATUS OF MARKETING CHARGES AT DIFFERENT LEVELS IN JEWELLERY INDUSTRY
OF MEERUT DISTRICT The following table nos. from 7.9 to 7.12 are showing the
comparative analysis of marketing charges incurred by different
intermediaries in jewellery industry of District Meerut:
155
The above table no. 7.9 is showing the comparative status of
marketing charges of 75% (18 carat) Jewellery per 10 gms. The table
reveals that the total marketing charges are Rs. 609.28 out of which Rs.
228.40 i.e. 37.49% is paid by manufacturers/wholesalers and the rest Rs.
380.88 is 62.51% is paid by retailers. On analyzing the figures head wise
this fact comes into light those storing expenses, office expenses and
transportation expenses are exclusively incurred at manufacturers &
wholesalers level. Likewise, showroom expenses, advertisement
expenses, entertainment expenses, packing expenses, credit expenses and
other expenses are incurred only at retailer’s level. So far staff salary and
other expenses are concerned these are paid 24.84% by
manufacturers/wholesalers and 75.16% by retailers. Likewise, Insurances
expenses are incurred 50% at manufacturer's/wholesaler's level and 50%
at retailer’s level.
157
The above table no. 7.10 is showing the comparative status of
marketing charges of 83.33% (20 carat) Jewellery per 10 gms. The table
reveals that the total marketing charges are Rs. 705.33 out of which Rs.
245.60 i.e. 34.82% is paid by manufacturers/wholesalers and the rest Rs.
459.73 is 65.18% is paid by retailers. On analyzing the figures head wise
this fact comes into light those storing expenses, office expenses and
transportation expenses are exclusively incurred at manufacturers &
wholesalers level. Likewise, showroom expenses, advertisement
expenses, entertainment expenses, packing expenses, credit expenses and
other expenses are incurred only at retailer’s level. So far staff salary and
other expenses are concerned these are paid 28.43% by
manufacturers/wholesalers and 71.57% by retailers. Likewise, Insurances
expenses are incurred 50% at manufacturer's/wholesaler's level and 50%
at retailer’s level.
159
The above table no. 7.11 is showing the comparative status of
marketing charges of 91.66% (22 carat) Jewellery per 10 gms. The table
reveals that the total marketing charges are Rs. 901.60 out of which Rs.
276 i.e. 30.61% is paid by manufacturers/wholesalers and the rest Rs.
625.60 is 69.39% is paid by retailers. On analyzing the figures head wise
this fact comes into light those storing expenses, office expenses and
transportation expenses are exclusively incurred at manufacturers &
wholesalers level. Likewise, showroom expenses, advertisement
expenses, entertainment expenses, packing expenses, credit expenses and
other expenses are incurred only at retailer’s level. So far staff salary and
other expenses are concerned these are paid 25% by
manufacturers/wholesalers and 75% by retailers. Likewise, Insurances
expenses are incurred 50% at manufacturer's/wholesaler's level and 50%
at retailer’s level.
161
The above table no. 7.12 is showing the comparative status of
marketing charges of 95.83% (23 carat) Jewellery per 10 gms. The table
reveals that the total marketing charges are Rs. 919.95 out of which Rs.
285.95 i.e. 31.08% is paid by manufacturers/wholesalers and the rest Rs.
634 is 68.92% is paid by retailers. On analyzing the figures head wise this
fact comes into light those storing expenses, office expenses and
transportation expenses are exclusively incurred at manufacturers &
wholesalers level. Likewise, showroom expenses, advertisement
expenses, entertainment expenses, packing expenses, credit expenses and
other expenses are incurred only at retailer’s level. So far staff salary and
other expenses are concerned these are paid 25% by
manufacturers/wholesalers and 75% by retailers. Likewise, Insurances
expenses are incurred 50% at manufacturer's/wholesaler's level and 50%
at retailer’s level.
(B) MARKETING MARGINS
In jewellery business marketing margins are earned by
different marketing intermediaries. These intermediaries are
manufacturers/wholesalers and retailers. The following chart depicts
the marketing margins clearly:
MARGIN OF JEWELLERS
GROSS MARGIN NET MARGIN
162
GROSS MARGIN Gross margin of the jeweller is basically the difference
between selling price received from the buyers and payment made to
Karigars for labour and material. It is merely the difference between
selling price and prime cost.
NET MARGIN Net margin of the jeweller comes after deducting total cost of
manufacturing and marketing charges from the selling price. This is
the margin which comes in the form of net profit to the jewellers. It
can be said that it is the difference between gross margins –
marketing charges.
MARKETING MARGINS AT
MANUFACTURER'S/WHOLESALER'S LEVEL The following table nos. from 7.13 to 7.16 are showing the
marketing margins earned at manufacturer's/wholesaler's level in case of
18 carat, 20 carat, 22 carat and 23 carat Jewellery in Meerut District:
163
Table No. 7.13
MARKETING MARGINS AT MANUFACTURER'S & WHOLESALER'S LEVEL
[In case of 75% (18 carat) Jewellery per 10 gms.]
S.No.
Particulars
Amount Rs. %age
1. Sales 16700.00 100.00 2. Less: Manufacturing Cost 16200.00 97.01 3. Gross Margin 500.00 2.99 4. Less: Marketing Charges 228.40 1.37 5. Net Margins 271.60 1.62
Source: Personal Survey.
The above table no. 7.13 is showing that in case of 75% (18 carat)
Jewellery, the gross margin at manufacturer's/wholesaler's level is Rs. 500
i.e. 2.99% of their sales price. On the other hand the net margin of the
same is Rs. 271.60 i.e. 1.62% of their sales price. This margin may be
considered quite genuine at this level.
164
Table No. 7.14
MARKETING MARGINS AT MANUFACTURER'S & WHOLESALER'S LEVEL
[In case of 83.33% (20 carat) Jewellery per 10 gms.]
S.No.
Particulars
Amount Rs. %age
1. Sales 18550.00 100.00 2. Less: Manufacturing Cost 18066.00 97.39 3. Gross Margin 484.00 2.61 4. Less: Marketing Charges 245.60 1.32 5. Net Margins 238.40 1.29
Source: Personal Survey.
The above table no. 7.14 is showing that in case of 83.33% (20
carat) Jewellery, the gross margin at manufacturer's/wholesaler's level is
Rs. 484 i.e. 2.61% of their sales price. On the other hand the net margin of
the same is Rs. 238.40 i.e. 1.29% of their sales price. This margin may be
considered quite genuine at this level.
165
Table No. 7.15
MARKETING MARGINS AT MANUFACTURER'S & WHOLESALER'S LEVEL
[In case of 91.66% (22 carat) Jewellery per 10 gms.]
Source: Personal Survey. The above table no. 7.15 is showing that in case of 91.66% (22
carat) Jewellery, the gross margin at manufacturer's/wholesaler's level is
Rs. 568 i.e. 2.77% of their sales price. On the other hand the net margin of
the same is Rs. 292 i.e. 1.42% of their sales price. This margin may be
considered quite genuine at this level.
S.No.
Particulars
Amount Rs. %age
1. Sales 20500.00 100.00 2. Less: Manufacturing Cost 19932.00 97.23 3. Gross Margin 568.00 2.77 4. Less: Marketing Charges 276.00 1.35 5. Net Margins 292.00 1.42
166
Table No. 7.16
MARKETING MARGINS AT MANUFACTURER'S & WHOLESALER'S LEVEL
[In case of 95.83% (23 carat) Jewellery per 10 gms.]
S.No.
Particulars
Amount Rs. %age
1. Sales 21500.00 100.00 2. Less: Manufacturing Cost 20866.00 97.05 3. Gross Margin 634.00 2.95 4. Less: Marketing Charges 285.95 1.33 5. Net Margins 348.05 1.62
Source: Personal Survey.
The above table no. 7.16 is showing that in case of 95.83% (23
carat) Jewellery, the gross margin at manufacturer's/wholesaler's level is
Rs. 634 i.e. 2.95% of their sales price. On the other hand the net margin of
the same is Rs. 348.05 i.e. 1.62% of their sales price. This margin may be
considered quite genuine at this level.
MARKETING MARGINS AT RETAILER’S LEVEL The following table nos. from 7.17 to 7.20 are showing the
marketing margins earned at retailer’s level in case of 18 carat, 20 carat,
22 carat and 23 carat Jewellery in Meerut District:
167
Table No. 7.17
MARKETING MARGINS AT RETAILER’S LEVEL [In case of 75% (18 carat) Jewellery per 10 gms.]
S.No.
Particulars
Amount Rs. %age
1. Sales 17500.00 100.00 2. Less: Manufacturing Cost 16700.00 95.43 3. Gross Margin 800.00 4.57 4. Less: Marketing Charges 380.88 2.18 5. Net Margins 419.12 2.39
Source: Personal Survey. The above table no. 7.17 is showing that in case of 75% (18 carat)
Jewellery, the gross margin at retailer’s level is Rs. 800 i.e. 4.57% of their
sales price. On the other hand the net margin of the same is Rs. 419.12 i.e.
2.39% of their sales price. This margin may be considered quite genuine
at this level.
168
Table No. 7.18
MARKETING MARGINS AT RETAILER’S LEVEL [In case of 83.33% (20 carat) Jewellery per 10 gms.]
Source: Personal Survey .
The above table no. 7.18 is showing that in case of 83.33% (20
carat) Jewellery, the gross margin at retailer’s level is Rs. 900 i.e. 4.63%
of their sales price. On the other hand the net margin of the same is Rs.
440.27 i.e. 2.26% of their sales price. This margin may be considered
quite genuine at this level.
S.No.
Particulars
Amount Rs. %age
1. Sales 19450.00 100.00 2. Less: Manufacturing Cost 18550.00 95.37 3. Gross Margin 900.00 4.63 4. Less: Marketing Charges 459.73 2.37 5. Net Margins 440.27 2.26
169
Table No. 7.19
MARKETING MARGINS AT RETAILER’S LEVEL [In case of 91.66% (22 carat) Jewellery per 10 gms.]
S.No.
Particulars
Amount Rs. %age
1. Sales 21700.00 100.00 2. Less: Manufacturing Cost 20500.00 94.47 3. Gross Margin 1200.00 5.53 4. Less: Marketing Charges 625.60 2.88 5. Net Margins 574.40 2.65
Source: Personal Survey.
The above table no. 7.19 is showing that in case of 91.66% (22
carat) Jewellery, the gross margin at retailer’s level is Rs. 1200 i.e. 5.53%
of their sales price. On the other hand the net margin of the same is Rs.
574.40 i.e. 2.65% of their sales price. This margin may be considered
slightly high at this level which should be brought down to some
reasonable level.
170
Table No. 7.20
MARKETING MARGINS AT RETAILER’S LEVEL [In case of 95.83% (23 carat) Jewellery per 10 gms.]
S.No.
Particulars
Amount Rs. %age
1. Sales 23000.00 100.00 2. Less: Manufacturing Cost 21500.00 93.48 3. Gross Margin 1500.00 6.52 4. Less: Marketing Charges 634.00 2.75 5. Net Margins 866.00 3.77
Source: Personal Survey.
The above table no. 7.20 is showing that in case of 95.83% (23
carat) Jewellery, the gross margin at retailer’s level is Rs. 1500 i.e. 6.52%
of their sales price. On the other hand the net margin of the same is Rs.
866 i.e. 3.77% of their sales price. This margin may be considered quite
genuine at this level.
COMPARATIVE STATUS OF MARKETING MARGINS AT DIFFERENT LEVELS IN JEWELLERY INDUSTRY
OF MEERUT DISTRICT The following table nos. from 7.21 to 7.24 are showing the
comparative analysis of margins earned by different marketing
intermediaries in jewellery industry of District Meerut:
171
Table No. 7.21
TOTAL MARKETING MARGINS AT DIFFERENT LEVELS
[In case of 75% (18 carat) Jewellery per 10 gms.]
S.No.
Particulars
Amount Rs. %age
1. Manufacturers & Wholesalers Net Margins 271.60 39.32
2. Retailers Net Margins 419.12 60.68
3. Total Net Margins 690.72 100.00
Source: On the Basis of Table nos. 13 &17. The above table no. 7.21 is indicating that in case of 10 gms
Jewellery of 75% (18carat), the net margins at manufacturer's/wholesaler's
level is 271.60 i.e. 39.32% of the total net margins in Jewellery business
in the area selected for the study. Likewise, the retailer’s net margin is Rs.
419.12 i.e. 60.68% of the total net margins at this level. These margins at
both the levels are quite genuine.
172
Table No. 7.22
TOTAL MARKETING MARGINS AT DIFFERENT LEVELS
[In case of 81.33% (20 carat) Jewellery per 10 gms.]
S.No.
Particulars
Amount Rs. %age
1. Manufacturers & Wholesalers Net Margins 238.40 35.13
2. Retailers Net Margins 440.27 64.87
3. Total Net Margins 678.67 100.00
Source: On the Basis of Table nos. 14 &18.
The above table no. 7.22 is indicating that in case of 10 gms
Jewellery of 83.33% (20carat), the net margins at manufacturer's
/wholesaler's level is 238.40 i.e. 35.13% of the total net margins in
Jewellery business in the area selected for the study. Likewise, the
retailer’s net margin is Rs. 440.27 i.e. 64.87% of the total net margins at
this level. These margins at both the levels are quite genuine.
173
Table No. 7.23
TOTAL MARKETING MARGINS AT DIFFERENT LEVELS
[In case of 91.66% (22 carat) Jewellery per 10 gms.]
S.No.
Particulars
Amount Rs. %age
1. Manufacturers & Wholesalers Net Margins 292.00 33.70
2. Retailers Net Margins 574.40 66.30
3. Total Net Margins 866.40 100.00
Source: On the Basis of Table nos. 15 &19.
The above table no. 7.23 is indicating that in case of 10 gms Jewellery of
91.66% (22carat), the net margins at manufacturer's/wholesaler's level is
292 i.e. 33.70% of the total net margins in Jewellery business in the area
selected for the study. Likewise, the retailer’s net margin is Rs 574.40 i.e.
66.30% of the total net margins at this level. These margins at both the
levels are quite genuine.
174
Table No. 7.24
TOTAL MARKETING MARGINS AT DIFFERENT LEVELS
[In case of 95.83% (23 carat) Jewellery per 10 gms.]
S.No.
Particulars
Amount Rs. %age
1. Manufacturers & Wholesalers Net Margins 348.05 28.67
2. Retailers Net Margins 866.00 71.33
3. Total Net Margins 1214.05 100.00
Source: On the Basis of Table nos. 16& 20. The above table no. 7.24 is indicating that in case of 10 gms
Jewellery of 95.83% (23carat), the net margins at manufacturer's
/wholesaler's level is 348.05 i.e. 28.67% of the total net margins in
Jewellery business in the area selected for the study. Likewise, the
retailer’s net margin is Rs. 866 i.e. 71.33% of the total net margins at this
level. At this level retailer’s margins are considerably high which should
be reduced to a justified level.
In case of branded Jewellery it was observed that the manufacturers
establish their outlets at the heart places of different cities and they do not
engage any marketing intermediaries. They incur the marketing charges at
their own level which comes about 3% of the price of the jewellery and
marketing margins remain about 2% at manufacturer’s level and about 3%
at outlet level. As the whole business of branded Jewellery is controlled
by the head office, so it was not feasible to conduct a detailed study about
marketing charges and margins.
175
In case of diamond jewellery it was noted that it is sold on piece
basis keeping in view the quality and carat of the diamond. The marketing
charges remain almost as in the case of gold jewellery while marketing
margins remain about 4% of the price of the diamond Jewellery at
manufacturer’s level and about 6% at retailer’s level. The detailed analysis
of marketing charges and margins is not feasible in this case because this
Jewellery is not manufactured in the area selected for the study.
Thus it can be concluded that a number of marketing charges are
incurred at manufacturer's/wholesaler's and retailer’s level. These
expenses are Storing Expenses, staff salary and other expenses, office
expenses, transportation expenses, showroom expenses, advertisement
expenses, entertainment expenses, packing expenses, insurance expenses,
credit expenses and other expenses. It was further noted that storing
expenses, office expenses and transportation expenses are incurred
exclusively at manufacturer's /wholesaler's level. On the other side,
showroom expenses, advertisement expenses, entertainment expenses,
packing expenses, credit expenses and other expenses are incurred
exclusively at retailer’s level. Staff salary and insurance expenses are
incurred at both the levels.
It was further observed that in case of in case of 18 carat, 20 carat
and 22 carat the marketing margins are quite genuine but in case of 23
carat Jewellery the marketing margins remain slightly high at retailer’s
point which should be brought down to the justifiable level.
* * *