Literature Review 4
Sample Questionnaire 6
This proposal contains brief details regarding the subject of gold purchasing in general. The introduction contains details about gold as a commodity in general and what position it holds among other metals and how useful it is regarding economy. The Literature review has a deeper approach to the subject exploring the trends of demand and purchasing of gold. How the demand of gold is generated and maintained throughout the world and their causes. There is also inclusion about how gold is purchased and sold among countries. The methodology contains terminology regarding research terms and a questionnaire for primary research conduction.
Gold is one of the rarest metals found on planet earth. It is not only used to make jewellery but also in various applications of technology. The yellow shine created by gold has continued to tempt people throughout generations. It has been used as currency in ancient times and still continues to a major part of economy for a country. The majority of the consumer demand for gold arises from countries like India, America, China and Turkey. India evidently is the largest marketplace for gold jewellery in the world with 552 tons of gold in the year 2012. (World Gold Council, n.a.) India also has one of the highest consumption ratios of gold out of which 75% is turned to gold jewellery. In the present economic scenario, the consumption of gold is minimized by increased import duty. Despite this, the demand for gold and its consumption continues to persist at a normal rate and gold continues to be a part of the economy for countries. Increased marketing of gold has illuminated consumers to be conscious about the quality standards of gold which is done by hallmarking. Gold has been considered to be one of the safest investments due to its consistent and increased prices due to its rarity and importance. It is also included in various customs in certain cultures and considered auspicious and mandatory part of their customs which leads to consumption of gold by them. There have been changes in the retail of gold as initially gold was purchased through jewellers or banks but due to growth in retail markets, branded jewellery has seen a rise. Consumer behavior regarding gold purchase has to be analyzed from a closer viewpoint to arrive at a proper conclusion. (Balaji & Maheswari, 2014)
Consumer Behavior: The mental process conducted by individuals look for a product, select a specific product and the disposal rate and satisfaction they get out of the use of the product which amounts to regular purchase of the purchase of the product constitutes the term known as consumer behavior. (Perner, n.a.)
Current global trends in gold indicate that 45% of gold is consumed for jewellery and that ratio is expected to increase with the amount of increase in the urban middle class population in the largest consumers. 9% is consumed by central banks which is an unexpected change as the ratio was 2% in 2010 which got to 9% in 2012. (World Gold Council, 2013)This is due to the benefits to the reserve portfolio noticed by banks. The ratio of gold consumption for investments has been one third of the global investment and this type of ratios are observed more during times of financial stress. The ratio of consumption of gold for technological purposes has been 7% which is normal and consistent due to its negligible need for technological purposes. (World Gold Council, 2013)
Source: World Gold Council (2013)
For observing consumer behavior, we have to neglect technology and central banks as a factor as the entities purchasing it are either government bodies or they purchase gold for necessity in procedures. (World Gold Council, 2013)The role of the consumer is evident in purchase of gold jewellery and investments. Gold jewellery is purchased abundantly in India and china due to the factor that gold jewellery is a critical part of the ritual of both the cultures. Spikes are observed in gold jewellery purchases during certain occasions which play a key role in certain cultures. (Tariq, Mckenie, Grant, & Phillips, n.a.)Gold consumption for investment purposes is observed because gold is considered to be a safe and fruitful investment option and due to its ever present role in world economies. (Shweta, 2010)
There are various different ways of investing in gold. Some people prefer to buy gold coins of specific weights, gold ETF, gold mining futures, bullion gold and the most popular way- buying gold jewellery. (Summit, 2014) There were certain operational and regulatory changes implemented by the World Gold Council from time to time regulating and permitting the purchasing gold from time to time. Mass purchasing and selling of gold between countries is not permitted freely and the amount has to be disclosed to the World Gold Council otherwise it is counted as smuggling. (World Gold Council, 1999) It is observed that in strong economies, equity prices increase in motion but consumers tend to purchase more due to auspicious occasions or technological devices which increase the performance of gold in international markets and keep the performance of gold steady throughout the year. Currently there has been a global high physical demand for gold. This happens during a crisis or war-like situation where consumers look towards gold as a safe investment rather than other sources. Although it is evident that demand in Asia hasn’t increased due to the high gold prices. (Summit, 2014)
As this topic is specific towards the behavior analysis consumers towards gold, primary and secondary research both have to be included in the research.
Primary research: Primary research is first-hand research which involves the process of approaching the people involved and asking them questions from a predesigned questionnaire and data is collected and organized to make it presentable.
Secondary Research: Secondary research is research from books, journal articles, reports, conference proceedings and newspapers to collect data from organizations and government to arrive at a proper conclusion.
The secondary research will also include the website of World Gold Council at is the primary regulatory committee globally regarding gold.
1) What is your age?
i) 20-30 ii) 30-40 iii) 40-50 iv) above 50
2) What is your marital status?
i) single ii) married
3) What is your gender?
i) Male ii) Female
4) In what form do you prefer to buy gold?
i) Jewelry ii) Investment iii) gold biscuits iv) gold coins
5) Why would you choose to buy gold?
i) to benefit from price fluctuation ii) as it a safe investment iii) for conserving it for future iv) for family occasion
Balaji, K., & Maheswari, D. R. (2014). A Paradigm Shift in the Buying Behavior of Indians Towards Gold Jewellery – A Theoritical Approach with Reference to the Growth of Branded Retailers. Indian Journal of Applied Research , 11-13.
Perner, L. (n.a.). Consumer Behavior: The Psychology of Marketing. Retrieved August 4, 2014, from http://www.consumerpsychologist.com/: http://www.consumerpsychologist.com/index.html
Shweta, B. (2010). How to Invest in Gold. RupeeTalk.
Summit. (2014, July 7). Strong Trends for Investing in Gold. Retrieved August 4, 2014, from http://summitpreciousmetals.com/: http://summitpreciousmetals.com/strong-trends-investing-gold/
Tariq, H., Mckenie, D. S., Grant, J., & Phillips, J. (n.a.). Shopping for Gold as a Ritual Experience. Sharjah: American University of Sharjah.
World Gold Council. (1999, September 26). After the Gold Standard, 1931-1999. Retrieved August 4, 2014, from http://www.gold.org/: http://www.gold.org/sites/default/files/documents/after-the-gold-standard/1999sep26.pdf
World Gold Council. (n.a.). Global gold jewellery market. Retrieved August 4, 2014, from ww.gold.org: ww.gold.org/jewellery/global-gold-jewellery-market
World Gold Council. (2013). Gold Demand. Retrieved August 4, 2014, from http://www.gold.org/: http://www.gold.org/supply-and-demand/demand