ACKNOWLEDGMENT

I would like to thank the following people,

without whom I would not have been able to
complete this M com. Project Report.

I convey my sincere thanks to my Faculty

Guide MR. ANURAG TIWARI for providing me
the constant support and guidance to carry
out my project effectively and efficiently.

I would also like to convey my gratitude to all

faculty members and staff for their support
and guidance.
• Name of the student: AISHWARYA JADIYA
•Roll Number: 511221020003

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 CERTIFICATE
This is to certify that AISHWARYA JADIYA ,a
student of M Com (2023-24)batch , at RDDC,
Banda, has undertaken the project on
"CONSUMER BEHAVIOUR ON INDIAN LUXURY
MARKET "

The survey, data collection, & analysis work for

preparing the project has been carried out by the
student in partial fulfillment of the requirements
for the Award of Master of Commerce under my
guidance and supervision. I am satisfied with the
work of AISHWARYA JADIYA.

Date:

(Faculty Mentors) Name: MR.ANURAG TIWARI

(Signature):

2
 Executive Summary

It is a widely accepted principle of business that to

be more profitable and survive an organisation
must understand and stay close to its consumers
to provide products and services consumers will
purchase. Many companies today have
recognised the importance of consumers and use
sophisticated approaches to understand
consumer behaviour which form the basis of
marketing strategies. Therefore an understanding
of the theory of consumer behaviour and its
application to business and marketing is a vital
element of a business education. The Consumer
Behaviour for marketing project aims at giving the
us an understanding of factors influencing
consumer behaviour which can be used in the
development of more effective marketing
strategies in the future.

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AIMS:-

To enable us to understand and analyse the key

theories, models and factors which influence
consumer behaviour and apply them to the
development of marketing strategies and the
marketing mix within an international context.
Learing outcomes—

On the successful completion of the project, we

will be able to:

1. Analyse the role of consumer behaviour in

marketing strategy formulation for consumers
markets in an international context.

2. Demonstrate a clear understanding of the major

models of consumer and organisational decision
making processes, the key theories about
constructs and variables in the model, and their

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relationships which introduce variations into the
process.

3. Analyse and apply these consumer behaviour

constructs to strategic and tactical marketing
decisions in an international context in the areas
of segmentation, positioning and the development
of the marketing mix.

4. Have an ethical sensitivity regarding the social

legitimacy of consumer influence and consumer
response to corporate activity.

5. Interact effectively within a team, recognise,

support or be proactive in leadership in a
professional context and manage conflicts

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 Introduction

Consumer behaviour

Consumer behaviour is the study that focuses on

how, what, when and why people buy.
It is a study that blends elements from
psychology, sociology, anthropology, marketing
and economics. It attempts to understand the
consumer's decision making process, both
individually and in groups based on social and
economic division.
It studies characteristics of individual consumers
such as demographics, psychographics, and
behavioural variables in an attempt to understand
people's wants.

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Topics under this study include, but are not limited
to, affect, mood, and
emotion; explicit and implicit attitudes; social
identity; self-concept and self-presentation;
attachment, commitment, trust, and loyalty;
consumer-marketer relationships; motivation,
goals, and regulatory focus; conscious and
deliberative information processing and
reasoning; unconscious, automatic, and intuitive
information processing; consumption and culture;
consumer decision-making; organisational buying;
technology and consumption; consumption value;
post-consumption reactions and appraisals;
measuring consumption outcomes; and design
and aesthetic issues. It also tries to assess
influences on the consumer from groups such as
family, friends, reference groups, and society in
general

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 Importance of studying
consumer behaviour

Perhaps the most challenging concept in

marketing deals with understanding why
consumers do what they do (or don't do).
But such knowledge is critical for marketers since
having a strong understanding of consumer
behaviour will help shed light on what is important
to the consumer and also suggest the important
influences on consumer decision-making.
Using this information, marketers can create
marketing programs that they believe will be of
interest to consumers.
The reason for studying consumer behaviour
seems very simple - to understand the consumers'
mindset and the factors that influence it.
But, just that much is not enough;

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need to study consumer behaviour in detail,
looking into the smallest nuances of it so as to
identify what exactly the consumer desires
because in today's times with so much of
competition in every market segment we cannot
afford to take the consumer for granted. With a
range of choices in every product,
if the consumers' desire is not looked after they
will surely move on to any one of the competitors.
According to a recent study:

• Out of 11000 products introduced by 77

companies, only 56% are present 5 years later.

• Only 8% of product concepts offered by 112

leading companies reached the market. Out of
that 83% failed to meet marketing objectives.

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 INTRODUCTION UNDER
LUXURY MARKET :-

—Luxury brands are not bought based on

rationale or convenience, however rather are a
result of desire. Consumers buy feelings,
experiences and identity along with the physical
product.

— This report talks about the consumer behaviour

towards luxury brands and the factors that affect
their behaviour. It includes points from both
consumer and brand sides.

The luxury market in India has seen significant

growth over the past decade, driven by increasing

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disposable incomes, urbanization, and a growing
middle class.

Understanding consumer behavior in this market

is crucial for marketers aiming to capitalize on this
burgeoning segment. This study explores the
various factors that influence consumer behavior
in the Indian luxury market, examining
demographic, psychological, and cultural
dimensions.

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Thoughts of consumers towards purchasing-
-BEFORE BUYING-
1. Need recognition
2. - Information research
3.- Evaluation of alternatives
-WHILE BUYING-
1. Purchase timing
2. - Purchase amount
3. - Income
-AFTER BUYING-
1. Post purchase evaluation of decision

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 Major factors affecting consumer
behavior

CONSUMER SIDE
- Income
- Social status/ Impressing others

BRAND SIDE
- Exclusivity/Rarity
-Premium price
- Perceived quality
- Brand loyalty

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 As we can see there are a number of internal and
external influences that can affect a consumer's
decision/behaviour with respect to a product. Discussing
the above in detail would give a holistic perspective on
consumer behaviour.

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QUALITATIVE FACTORS (BRAND SIDE)

1. EXTRAORDINARY:- Uniqueness and

creativity of the brand. For example Fendi
has a uniquely quirky collection.

2. PERSONAL& PERFORMANCE:- Providing

a high quality of consumer experience,
making him feel exclusive is performance.
Robert Cavalli does a great job at it.The
mix of emotional values of the brand is its
persona.

3. PUBLIC RELATIONS:- Luxury brands do

concentrate on PR but in a different, more
subtle way in comparison to mass brands.
luxury brands use celebrities in a different

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 way.Examples of this strategy may be
accessorizing celebrities for fashion
show’s or red carpet events.

4. SYMBOLISM :- "There can be no luxury

brand without roots, without a history."
(Kapferer and Bastien) It is not just the
brand communication but also the luxury
consumer's mind is said to be
appreciative of the brand's heritage and
tradition.

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 INCOME AS A GAME- CHANGER

- Income of the consumer is a game changer in the

luxury market.

- With a slight increase in income of consumer, huge

change could occur in the luxury market.

- For example, Apple iPhone was initially a luxury

product. But these days, almost every second person
possesses an Apple gadget.

- Another example, smart phone was a luxury product,

but now, it's almost a necessity good and even rickshaw
pullers possess them.

- This is a plus point for the industry, that the lifestyle

quality of people continuously increases.

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Above showing diagram shows about the indian
apparel and luxury goods and there volume bt
sub-sectors , And its also given about the
apparel and garments has had tge highest
number of deals , followed bt footwear, textile
and manufacturers and others

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 TYPE OF LUXURY BRAND as a
game-changer

This is a specially interesting theory,

basically an extension of the idea that’s
"Luxury is understood differently by
different people.

Considering a few examples of luxury

lifestyle, like luxury travel, luxury
automobiles and electronics, luxury
watches, luxury fragrance or luxury wearing.
These types also play a foremost role in
deciding what product the consumer goes in
for and why.

- Cruise travels were known to be a luxury in

early times, now most people can afford
them and they go for cruises to enjoy an

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experience of travel cum stay situation along
with entertainment on board. Similarly, spas
and massages were a treat known only to
the elite, but they now are a comfort and
relaxation solution to many.

Usually, the more you spend on a product,

the higher quality it offers. However,
purchases of high end luxury watches and
automobiles would be more reasoned for
status rather than comfort.

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 RELATIONSHIP
BETWEEN BRAND IMAGE AND DEMAND
The relationship between brand image and
demand is significant and multifaceted. Here
are some key points explaining this
relationship:

1. **Perceived Value and Quality**: A strong,

positive brand image often leads to higher
perceived value and quality among
consumers. When consumers believe a brand
is high quality, they are more likely to
purchase its products, increasing demand.

2. **Consumer Trust and Loyalty**: A favorable

brand image builds consumer trust and
loyalty. Loyal customers are more likely to

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make repeat purchases and recommend the
brand to others, thereby boosting demand.

3. **Price Premium**: Brands with a strong

image can often charge premium prices for
their products. Consumers are willing to pay
more for products from brands they perceive
as superior, increasing revenue and
potentially demand even at higher price
points.

4. **Market Differentiation**: A distinct and

positive brand image helps a brand stand out
in a crowded marketplace. This differentiation
can attract more consumers, thereby
increasing demand.

5. **Emotional Connection**: Brands that

cultivate a strong emotional connection with

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consumers often experience higher demand.
Emotional branding can lead to stronger
consumer relationships and increased loyalty.

6. **Word of Mouth and Recommendations**: A

positive brand image encourages
word-of-mouth marketing and
recommendations. Satisfied customers are
likely to share their positive experiences,
influencing potential customers and
increasing demand.

7. **Advertising Effectiveness**: A strong

brand image enhances the effectiveness of
advertising campaigns. Consumers are more
likely to respond positively to marketing
efforts from a brand they already perceive
favorably, which can boost demand.

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8. **Brand Extensions**: Companies with a
strong brand image can more successfully
launch new products or enter new markets.
Consumers are more likely to try new
products from a brand they trust, increasing
overall demand across different product lines.

In summary, a positive brand image can

significantly enhance consumer perception,
trust, and loyalty, leading to increased demand
for a brand’s products or services.

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As shown in the graph, the better the brand
image, the more admirable is the status and
since status is one of the major factors for
demand of the luxury brand, hence the two
are in direct relation.

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 RELATIONSHIP BETWEEN TRADITION
AND INNOVATION

- On another note, the luxury industry's

needs a recipe for success which strikes a

delicates balance between honoring the

past and inventing the future. With a stroke

of magic, creativity is fused with heritage,

skilled :* craftsmanship is combined with

tailored & efficiency, and uncompromising

quality coincides with fashion, growth ink

up with profits.

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Fine taste of Indian consumers (2017-2024)

Future prospects of luxury products market

in india

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 RELATIONSHIP BETWEEN MASS AND
COMMUNICATION

- Maintaining the balance between mass and

class is a challenge. The dilemma is, "At what
point does a brand become so attainable to so
many that it no longer represents luxury?"
This means that keeping the pricing - absolutely
accurate can be tricky, in the sense that it must be
a deal to the
prospective consumer but not so affordable.

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HOWEVER:

-How does a brand deliver the message of

exclusivity?

-How does it evidence the price of the product it

claims is absolutely deserving?

-How does it showcase its brand image in a way

that the consumer is driven to say that, "This
crazy price of that product is 100% worth it" ?

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 REGIONAL SPECIFICS:
Indian consumer of luxury market

- India is generally labelled as a fashion/trend

follower country, because of being dominated
by international brands. However, Indian
luxury market is expected to cross $18.3
billion by 2016 from the current level of $14.7
billion growing with a compound annual
growth rate (CAGR) of about 25 per cent,
according to a Assocham study. (ref: The
Hindu)

- The factors that have fuelled the luxury

industry's growth are the rise in disposable
income, brand awareness amongst the youth
and purchasing power of the upper class in
Tier-ll & Tier-Ill cities

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- Considering luxury market, about 60% of
their buying revolves around one major factor:
flaunting status, which is an implication of
famous Indian society theory 'Log kya
kahenge'.

- For example, weddings in India are known for

the amount of spending, or rather luxurv
spending one does is enormous.

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 THE EFFECTS OF ONLINE MARKET ON
LUXURY BRANDS

Online market and luxury brands:-

- The pervasive belief was that luxury

shoppers, with their discriminating taste and
preference for high-priced goods, wouldn't
buy expensive things online; they would
always opt for the personalized customer
service and tactile shopping experience that
exclusive mono brand stores provide.

- That thinking has evolved in recent years.

The online luxury shopping players have
understood that the growing demand of the
luxury in India cannot be just satiated with
selling offline channel.

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With increasing awareness amongst the
people, they are now looking for global
fashion trends and brands directly from
international runways and global streets.

In the past two years, leading e-commerce

businesses are roping in global luxury brands
to strengthen their portfolios.

Amazon, Myntra, Sanpdeal etc, are tying up

with global brands like Furla, Tumi, Diesel,
Mango and many more brands to fulfil the
growing demand of luxury products in India.

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HOW BRANDS ARE TARGETING INDIAN
SHOPPERS ONLINE

- The high disposable income in combination

of other key growth drivers has led to better
business opportunities for luxury brands in
India. Instead of pursuing the disposable
income curve blindly, they have come up with
innovative ways to target Indian shoppers.

- 1. Social Media : A study suggests that on an

average an internet user spends
approximately 25% of time on leading social
networking sites like Facebook, Twitter others.
The online luxury brands are developing

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innovative and appealing content to engage
the potential customers. Social media
advertising enables them to reactively and
proactively target the potential customers.
- 2. Online Partnership - The online
partnership with different brands allows the
luxury markets to create a one stop shop
destination for their customers, while also
bringing some of the exclusive luxury brands
to Indian market. It also allows the company to
expand their target customer base and to
reach and engage more people
.- 3. Discounts and Deals - The online luxury
shopping sites mostly always come up with
innovative offers and discounts that have
made the luxury brands attainable for the
consumers. Discounted rates have also led
people to buy high-street luxury products
without feeling the pinch.
Whether it is luxury watches, apparels,
accessories or home products, all the high

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end products are available on prices that are
reachable by the growing middle class
population of India.
- 4. EMI, Cash On Delivery and other - Buyers
are looking for more convenience and more
value for their hard earned money. They are
not just looking for more competitive prices
but also more perks.
The bigger players have grasped this need of
the Indian buyers and offer the convenience
features like easy EMI, Cash on Delivery, free
return and free delivery policies.
This has radically affected the loyalty and
confidence of the Indian buyers.
- List of sites for luxury brands in India
1. Jabong
2. Myntra
3. Elitity
4. Amazon
5. Darveys
6. Ebay

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 RESERCH UNDER INDIAN LUXURY
MARKET

The Indian luxury market has seen significant

growth over the past decade, driven by
increasing disposable incomes, a growing
middle class, and a heightened desire for
premium products and experiences.

Here are some key points and trends in the

Indian luxury market:

1.Market Size and Growth:

● MARKET SIZE : The Indian luxury market

is estimated to be worth over USD 30
billion, with expectations to grow at a
compound annual growth rate (CAGR) of
around 10-15% over the next few years.

● SEGMENTS: The market comprises

several segments including luxury goods
(apparel, accessories, watches, jewelry),
luxury cars, luxury real estate, and luxury
services (hospitality, travel, and dining).

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2.CONSUMER DEMOGRAPHICS :

● AFFLUENT CONSUMERS: The primary

consumers of luxury goods in India are
high-net-worth individuals (HNWIs) and
ultra-high-net-worth individuals (UHNWIs).

● YOUNG POPULATION: A significant

portion of the luxury market consists of
younger consumers (millennials and Gen
Z) who have high spending power and a
penchant for premium brands.

● TIER 2 AND 3 CITIES: While metro cities

like Mumbai, Delhi, and Bangalore remain
major hubs, there is increasing demand
from tier 2 and 3 cities, driven by rising
incomes and aspirations.

3. CHALLENGES:

● Economic Fluctuations: The market is

sensitive to economic downturns, which
can impact consumer spending on luxury
items.

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 ● Counterfeiting: The prevalence of
counterfeit luxury goods remains a
challenge, affecting brand reputation and
consumer trust.

● Regulatory Environment: High import

duties and complex regulatory
frameworks can pose hurdles for
international luxury brands entering the
Indian market.

4. KEY PLAYERS:

● International Brands: Brands like Louis

Vuitton, Gucci, Chanel, and Rolex have a
strong presence in India.

● Domestic Brands: Indian luxury brands

such as Ganjam, Ritu Kumar, and
Sabyasachi are also prominent, offering
products that blend traditional
craftsmanship with contemporary
designs.

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 5. FUTURE OUTLOOK:

The Indian luxury market is expected to

continue its growth trajectory, driven by
economic expansion, increased urbanization,
and the evolving lifestyle aspirations of Indian
consumers. Brands that can effectively cater
to the unique preferences of the Indian market,
leveraging digital platforms and emphasizing
sustainability, are likely to thrive in this
dynamic environment.

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 CONCLUSION OF CONSUMER
BEHAVIOUR IN INDIAN LUXURY
MARKET

The consumer behavior in the Indian luxury

market is marked by a dynamic and evolving
landscape driven by rising affluence,
increased brand consciousness, and a
growing preference for exclusive and
high-quality products.
Indian consumers, particularly the younger
generation, are increasingly valuing unique
and personalized experiences over mere
ownership of luxury goods.
The digital revolution has significantly
influenced shopping behaviors, with online
platforms and social media playing a crucial

41
role in shaping perceptions and driving
purchases.
Additionally, there is a growing awareness of
sustainability and ethical practices,
influencing consumer choices in favor of
brands that align with these values.

Regional differences also play a significant

role, with metropolitan cities showing mature
luxury consumption patterns while Tier 2 and
Tier 3 cities emerge as high-growth markets.

Overall, the Indian luxury market presents vast

opportunities for brands that can adapt to
these changing preferences and understand
the cultural nuances of Indian consumers.

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