From “Making Charges” to “Crafting Premium”: Determining the Feasibility of a Novel Strategy for Marketing Gold Jewelry

Priya Narayanan

No 580, Working papers from Indian Institute of Management Kozhikode

Abstract: Gold jewelry is ubiquitous in India and is a common form of adornment and savings in the country. Gold jewelry is typically priced based on the quantity of gold in the product with additional “making charges” as a percentage of the quantity of gold. This pricing method is combined with discounts on making charges. This approach to pricing results in relatively low focus on design and aesthetics during purchase. In this research, we question current practices related to making charges and propose a novel strategy to sell gold jewelry by changing consumer perception of making charges. We suggest that, for consumers who intend to use gold for adornment, making charges could be presented as a “crafting premium” which forms an indicator of the value addition carried out on the gold. For customers who buy gold as a financial asset, low making charges will continue to be attractive, but this segment of customers is declining gradually as avenues for investment in gold bars and paper assets linked to gold become more popular.

Pages: 14 pages
Date: 2023-03
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