UNIVERSITY OF MUMBAI

PROJECT ON:

A STUDY ON DIAMOND MARKET IN INDIA WITH SPECIAL

REFERENCE TO SOUTH MUMBAI

LALA LAJPAT RAI COLLEGE OF MANAGEMENT

MAHALAXMI, MUMBAI – 400034

SUBMITTED BY:

KAVISH SHAH

SYBMS B – SEMESTER IV

PROJECT GUIDE:

DR. VINAY PANDIT

ACADEMIC YEAR: 2013-2014

 CERTIFICATE

I, Dr.Vinay Pandit, hereby certify that Kavish Shah of SYBMS (Div – B) of Lala Lajpat Rai
College of Commerce and Economics has successfully completed a Research Project on the
topic ―A STUDY ON DIAMOND MARKET IN INDIA WITH SPECIAL REFERENCE O
SOUTH MUMBAI‖ in the academic year 2013-2014.

The Information submitted is True and original to the best of my knowledge.

________________________ _____________________
Signature of the Internal Guide Signature of BMS Co-
ordinator

________________________ _____________________
Signature of the External Guide Signature of the Principal

Date:

Place:
 DECLARATION

I, Kavish Shah of SYBMS (Div – B) hereby declare that I have completed this project on
―A STUDY ON DIAMOND MARKET IN INDIA WITH SPECIAL REFERENCE OF
SOUTH MUMBAI‖ in the academic year 2013-2014.

This information provided by me is true and original and to the best of my knowledge.

_______________________

Students Signature
 ACKNOWLEDGEMENT

I would like to thank my professor, Dr.Vinay Pandit who gave me this opportunity to make
this Research project through which I gained valuable information on ―RESEARCH ON
DIAMOND MARKET WITH REFERNCE TO SOUTH MUMBAI would also like to
thank all my friends for helping me out and making this project successful. These
acknowledgements are one way where I can actually thank the people who have been
instrumental in the making of this research project. With their help, the project was done
with ease.

Lastly, I would like to thank a lot of people without whose co-operation and support,
working on this project would not have been so pleasurable and interesting.
 EXECUTIVE SUMMARY

The Indian diamond industry thrives in the atmosphere of secrecy and informality that envelops
the diamond trade and has for long been labelled as an unorganized sector of the economy.
However, it resembles a close-knit community composed of thousands of small, medium and large
sized CPD (cut and polished diamonds) units and has grown to become one of the highest

foreign exchange earners for the country. The industry exports cut and polished diamonds worth
US $ 22 billion annually and enjoy a 93 % market share of the global exports of cut and polished
diamond pieces. An in-depth study of the industry reveals that the so called unorganized sector is
in fact highly organized and has great potential to offer useful insights to the field of management
in terms of new forms of organizing, networking, business processing and for doing international
business. It includes insights about the remarkable rise, growth and the unique working of the
industry The Indian diamond industry received significant attention in the media

recently because about a hundred thousand workers lost their jobs in Nov 2008 when panic
followed due to the impact of recession. While we acknowledge the sensitivity and gravity of the
issues and the need of reforms to address them, this paper is an attempt to draw useful insights
for the field of management with a balanced perspective on the industry. Due to the manner in
which the Indian diamond industry has organized itself and grown, coupled with the kind of signals
of recovery which have followed after the severe recession, we believe that this success story of
long waits to be documented in the business management literature.

Diamond is an 'export-led' and 'value added' industry. The industry depends entirely on imported
raw material, namely, rough diamonds, generally referred to in trade parlance as “roughs”. The
diamond exporters have developed a global outlook, as theirs is an export-oriented and import-
dependent industry. In order to excel, they have to overcome necessarily competition from

manufacturing and cutting centers in other countries. India is the biggest diamond cutting and
polishing centre in the world. Our study revealed that a few enterprising Indians who went to
Antwerp agreed to bring to India the left-over’s of diamond rough for polishing.

These were very small pieces of diamonds called as ‘grains of sand’ in diamond terminology. The
entrepreneurs from Gujarat in India, utilized this opportunity to develop indigenous methods of
cutting and polishing of diamonds in small factories (CPD units). The finished product, the
processed diamond was then exported to the globally centralized trading market which existed in
Antwerp. This was like outsourcing of low-valued diamond rough to an under developed

country in those times. The prices of rough diamonds have increased sharply in the recent times

pushing down margins further. Companies have started to look at more technological advance
process to reduce manufacturing cost, predict future trends & understand supplier buyer demand.
Thus this project will help us to understand how much technology has penetrated in the
unorganized sector & how much more can be done to improve it further.
 INDEX

SR .NO PATICULARS PAGE

NO

1 CHAPTER 1: INTRODUCTION 1-7

2 CHAPTER 2: REVIEW OF LITERATURE 8- 16
3 CHAPTER 3: RESEARCH METHODOLOGY 17 - 20
3.1: RESEARCH PROBLEM
3.2: OBJECTIVE OF STUDY
3.3: SCOPE OF STUDY
3.4: HYPOTHESIS FORMULATION
3.5: DATA COLLECTION
3.6: RESEARCH INSTRUMENT
3.7: RESEARCH DESIGN
3.8: SAMPLING PLAN
3.9: RESEARCH LIMITATIONS
4 CHAPTER 4: OVERVIEW ON CLIMATE CHANGE 21- 28
4.1:CAUSES OF CLIMATE CHANGE
5 CHAPTER 5: OVERVIEW ON RAINFALL 28 - 46
5.1: CRITERIA FOR EXTREME RAINFALL
6 CHAPTER 6: DATA ANALYSIS &INTERPRETATION 47 - 55
7 CHAPTER 7: CONCLUSION 56

8 CHAPTER 8: BIBLIOGRAPHY 57
9 CHAPTER 9 : ANNEXURE 58 - 60
 CHAPTER 1: INTRODUCTION

From time immemorial, India is very well known in the world as the birthplace

for diamonds. It has remained the home of diamonds for over two millenniums. It is difficult to
trace the origin of diamonds but history says, that in the remote past, diamonds were mined only
in India. Diamond production inIndia can be traced back to almost 8th century B.C. India in fact,
remained undisputed leader till 18th century when Brazilian fields were discovered in

1725 followed by emergence of South Africa, Russia and Australia. World famous diamonds such as
the Koh-i-noor, The Orloff, The Great Mogul, The Sancy Hope, Florentine, Nassak, Regent, Pitli and
the Nizam etc. were produces of India and many of these world famous diamonds were recovered
from India in 16th & 17th centuries. It is also said that, India was the sole producer and supplier of
diamonds to the world before the discovery of Brazilian fields till

the 17th century and the later emergence of South Africa, Russia and Australia, as major
producers. The success story of the Indian diamond industry is unique. From humble beginnings,
India rose to become the world leader in a span of just two decades. No other export segment of
the country has such a significant share in the world market. It is rightly said, that India has indeed
'democratised' diamonds, which in the past were the exclusive preserve of only the rich and
famous. This achievement of the Indian diamond industry was possible only due to the fortuitous
combination of the manufacturing skills of the Indian workforce and the untiring and unflagging
efforts of the Indian diamantaires, supported by progressive Government policies.

But how did the Indian diamantaires get the diamonds? The answer to this query
lies in the business acumen and core competency of the early Indian diamantaires who migrated
from small towns of Gujarat (specifically Palanpur in Surat and other nearby areas) to Antwerpen
(in Belgium) which was then the diamond hub of the world, a market dominated by the orthodox
Jews of Israel who claimed expertise in the cutting and processing of large diamonds (sized more
than two carats, 1 carat =0.2 grams). The visionary Indian diamantaires started their trade with the
cutting and manufacturing of diamonds of very small sizes, which nobody was ready to process
(less than two carats, especially one carat and lesser) and gradually made it their core competency,
a niche field in which no other country had the mastery in; and coupled with the lowest
manufacturing and labour costs worldwide, India assumed greater market presence in the global
diamond industry.

The area of study of family owned businesses derives its importance from the huge conglomerate
of family run organizations which operate in the diamond industry since many generations (not
only in India, but all the diamond traders globally are family run businesses); the analysis of which
would help to internalize the attributes that have helped them achieve the stupendous

growth. Family-owned businesses play a crucial role in the economy of most countries. Much of
the retail trade, the small-scale industry, and the service sector is run by family businesses.
Worldwide, family-managed businesses employ half the world's workforce and generate well over
half the world's GDP. In the United States, 24 million family businesses employ 62 per cent of the
workforce and account for 64 per cent of the GDP. In India, it is estimated

that 95 per cent of the registered firms are family businesses.

 CHAPTER 2: REVIEW OF LITERATURE

AHMEDABAD: American entrepreneur, Martin Rappaport, known as a maverick within

the diamond industry, will guide diamond industry of Surat on fighting recession, industry
sources said.

Rapaport is the founder of Rapaport Diamond Report and is a member of the World
Diamond Council.

He will be amongst the main speakers on current global scenario of diamond, at the three
day 'Sparkle International Gems and Jewellery Expo' beginning at Surat from tomorrow as
part of the Vibrant Gujarat Global Investor's Summit 2009.

Sitting in his office in the headquarters of Shree Ramkrishna Export in Surat, company
founder Govind Dholakia takes a philosophical view when explaining the Indian diamond
industry’s exceptional growth through the past year. ―Problem is progress,‖ Dholakia
quipped. ―If there is a problem, we see it as an opportunity to progress.‖

As a former Diamond Trading Company (DTC) sightholder, Dholakia brings his own De
Beers experience to illustrate the point. ―We couldn’t understand why we lost our sight in
2008, as we’re a Top 10 manufacturer in India, but we took it positively because we believe
that whatever happens in life, is for the good,‖ he explained. ―And, although we were not a
DTC sightholder, 2009 was a good year for us and we weren’t too affected by the
recession.‖

With DTC boxes selling at extremely low premiums, Shree Ramkrishna was able to buy
large volumes of rough from sightholders and other sources in the market at cheap prices in
the first quarter of 2009. The company took the opportunity to buy rough at 42 percent
below prices seen in 2008, and the subsequent polished was sold at around 75 percent of
2008 prices. ―In my 46 years in the industry, I’ve never seen anything quite like it. It was a
gift from God.‖

The company was not alone in this experience, and others, with the liquidity to do so, took
advantage of the opportunity to buy high volumes of rough while the getting was good.
Akshay Mehta, a director at Blue Star, explained that while the overall market focused on
destocking in 2009, those who kept manufacturing were able to profit in the long run.
The result has left many of the larger, local manufacturers in a strong, liquid position in the
current market — able to ramp up production and expand their operations while their
counterparts in Antwerp, Ramat Gan and elsewhere take a far more cautious approach.

Other prominent speakers at the expo will be CEO Octonus Finland, Sergey Sivovolenko
and Chairman, Rosby Blue Group, Dilip Mehta.

"The fair is being organised to bring all the players on a common platform and exchange
views on how to promote the diamond industry during the time of recession," state
government officials said.

"The objective is to showcase Surat as an emerging destination of diamond jewellery

manufacturing, which so far has been famous globally as centre of excellence for diamond
polishing," former president Surat Diamond Association Praveen Nanavati said.

"Value addition to the polishing industry by setting up jewellery manufacturing units in the
upcoming park at Icchapore will open new job avenues and help uplift the trade sentiment,"
Nanavati said adding "The upcoming jewellery park is expected to house 300 units
specialising in diamond jewellery manufacturing."

Gujarat region Chairman, Gujarat Gems and Jewellery Export Promotion Council(GJEPC),
Chandrakant Sanghvi, said, "The expo will help assessing the real market position and
understand what's in store ahead for the diamantries going forward."

The expo has been organised by the Government of Gujarat in association with Surat
Diamond Association, Gems and Jewellery Export Promotion Council(GJEPC), Gujarat
Chamber of Commerce and Industry and Gem and Jewellery Trade Council of India.

During the three day expo eminent speakers like director World Gold Council Dharmesh
Sodah, Global Business Merchandise head of Tanishq Alpana Parida, regional head Asia
International Diamond and Jewellery Group of ABN-Amro bank Biyananda Pattanayak are
expected to deliver lectures on various issues related to diamond industry, organisers said.
 CHAPTER 3: RESEARCH METHODOLOGY

3.1 RESEARCH PROBLEM

A research process consists of stages or steps that guide the project from its conception
through the final analysis, recommendations and ultimate actions. The research process
provides a systematic, planned approach to the research project and ensures that all aspects
of the research project are consistent with each other.Research studies evolve through a
series of steps, each representing the answer to a key question.

This chapter aims to understand the research methodology establishing a framework of

evaluation and revaluation of primary and secondary research. The techniques and concepts
used during primary research in order to arrive at findings; which are also dealt with and
lead to a logical deduction towards the analysis and results.

3.2 OBJECTIVE OF STUDY

The objective of the report is to study the overall causes behind the current recession
and its effects on the diamond participators which include the dealers, agents, miners,
buyers, sellers, etc. and also study the recovery speed after a crush with recession.


3.3 SCOPE OF THE STUDY

The report signifies the advantages and disadvantages of various exports in different
countries during recession. It also provides information of pricing strategies used to increase
the sales. The further report analysis makes the finding more accurate for the recession
effects on diamond market.

3.4 FORMULATION OF HYPOTHESIS

 H0 -- Recession in diamond market does not affect common man.
 H1 -- Recession in diamond market does affect common man.


 H0 -- Current situation of recession will not affect future diamond design.
H1 -- Current situation of recession will affect future diamond design.
3.5 RESEARCH METHODOLOGY

 Collection of primary data. 


 Collection of secondary data. 

PRIMARY DATA

New data gathered to help solve the problem at hand. As compared to secondary data which
is previously gathered data. An example is information gathered by a questionnaire.
Qualitative or quantitative data that are newly collected in the course of
research, Consists of original information that comes from people and includes
information gathered from surveys, focus groups, independent observations and test
results. Data gathered by the researcher in the act of conducting research. This is contrasted
to secondary data, which entails the use of data gathered by someone other than the
researcher information that is obtained directly from first-hand sources by means of
surveys, observation or experimentation. Primary data is basically collectedby getting
questionnaire filled by the respondents.

SECONDARY DATA

Information that already exists somewhere, having been collected for another purpose.
Sources include census reports, trade publications, and subscription services. There are
two types of secondary data: internal and external secondary data. Information compiled
inside or outside the organization for some purpose other than the current investigation
Researching information, which has already been published? Market information
compiled for purposes other than the

current research effort; it can be internal data, such as existing sales-tracking information, or
it can be research conducted by someone else, such as a market research company or the
U.S. government. Secondary source of data used consists of books and websites . My
proposal is to first conduct a intensive secondary research to understand the full impact and
implication of the industry, to review and critique the industry norms and reports, on
which certain issues shall be selected, which I feel remain unanswered or liable to change,
this shall be further taken up in the next stage of exploratory research

3.6 Research Instrument:

To collect the appropriate data the researcher has used questionnaire as the research
instrument. The questionnaire so formed includes both open ended & closed ended
questions. Close ended questionnaire were used so that appropriate statistics could be
calculated.
Open ended questions were used to find out the reviews of the respondents so that proper
recommendation can be made by the researcher.

3.7 Research Design:

A research design encompasses the methodology and procedure employed to conduct

scientific research. The design of a study defines the study type (descriptive, correlational,
semi-experimental, experimental, review, meta-analytic) and sub-type (e.g.: descriptive-

longitudinal case study), research question and hypotheses, independent and dependent
variables, experimental design if applicable, data collection methods and a statistical
analysis plan. A research design encompasses the methodology and procedure employed to
conduct scientific research. The design of a study defines the study type (descriptive,
correlational, semi-experimental, experimental, review, meta-analytic) and sub-type (e.g.:
descriptive-longitudinal case study), research question and hypotheses, independent and
dependent variables, experimental design if applicable, data collection methods and a
statistical analysis plan.

3.8 Sampling Plan:

Random Sampling has been adopted as a sampling technique.

I have targeted 50 people for the purpose of the research. The target population influences
the sample size. The target population represents South Mumbai region. The people were
from different professional backgrounds. The details of our sample are explained in chapter
named primary research where the divisions are explained in demographics section.

3.9 RESEARCH LIMITATIONS:

Following are the limitations of the present study:

The study is limited only within South Mumbai.

The study was curtailed due to time factor.

The study was curtailed also due to financial constraints.

CHAPTER 4: OVERVIEW OF DIAMOND
MARKET
 Participators of diamond market

Diamond dealer
Most of newcomers try to contact directly miners or local diamond dealers not knowing that
for miners or diamond dealers the newcomer is a potential confidence trickster or fly-by-
night businessman who promises more than usually delivers. He can put a gun to miner's
head and walk away with the parcel or pay with a counterfeit currency. Diamonds are cash
money and nobody has problems to dispose of them and certainly not at a bargain price to
someone unknown. I imagine it's like in any trade; an unknown business partner can be
more trouble than good. In that case, no business no losses!

Diamond cutter
Diamond cutting is the art, skill and, increasingly, science of changing a diamond from a
rough stone into a faceted gem. Cutting diamond requires specialized knowledge, tools,
equipment, and techniques because of its extreme hardness.

The first guild of diamond cutters and polishers (Diamantaires) was formed in 1375 in
Nuremberg, Germany, and led to the development of various types of 'Cut'. This has two
meanings in relation to diamonds. The first is the shape: round, oval and so on. The second
relates to the specific quality of cut within the shape, and the quality and price will vary
greatly based on the cut quality. Since diamonds are very hard to cut, special diamond
bladed edges are used to cut them. The first major development in diamond cutting came
with the "Point Cut" during the latter half of the 14th century. The Point Cut follows the
natural shape of an octahedron shaped raw diamond, eliminating waste in the cutting
process.

Diamond miner
All are working hard to make the best profit they can get from diamonds recovered. They
will visit as many dealers as they can to get the best price for a miner's parcel. Often, they
will have to sale the diamond parcel to a dealer, which advanced them some capital in
anticipation of a future production. The miner is not interested to allow a buyer to pick
through his diamond parcel. He knows that the best price will be obtained when he
negotiates the whole diamond parcel as one transaction
Diamond buyers
The issue of buyers thinking that they will go to mining area with a wad of money and make
killer deals. In some cases they will only buy from miners who own money to dealers or
suppliers and are dishonest enough to sale on the side. It will definitely not make these
dealers or suppliers happy and could even cost a cash buyer his life as a result; the doggy-
dog's-world. Most often, the cash field-buyer will become the easy target of some criminals
and loose his money and life in the same time. The authorities don't encourage the
"travelling diamond buyers" as this type of practice is counterproductive to the collection of
government royalties and the development and stability of diamond business.

Diamond sellers
A "travelling diamond buyer" doesn't have a security and has to deal from hotel rooms or
other places where he meets unknown sellers. He is very often a victim of criminals who
look for and target him. Also, if he is not a victim at a purchase level, he can become a
victim of crocked officials for trading without the license or exporting diamonds without
proper permits. In the best case, he can loose all his money and land in a jail cell in some
faraway country where anything can happen to him.

Diamond brokers
Diamond brokers often work with those looking to purchase higher-end diamonds or rare
stones such as fancy colored diamonds. The purpose of a diamond broker is to have
someone, who’s in the know in the diamond industry, hunting down the most exquisite
diamond for you at the best price. Diamond brokers often go straight to the source for your
diamond, and work directly with either the diamond cutter or wholesaler. Since diamond
retailers jack their prices up on diamonds by 50% to 400%, you save money when you
surpass them. In addition, rather than having to do all the painstaking research yourself, in
order to find the perfect diamond, the broker will do it all for you, thus saving you time and
aggravation.
 WHY PEOPLE INVEST IN DIAMOND MARKETS?
There are compelling reasons for investing in the diamond industry, but none of them
involve diamonds themselves, only the companies which produce and promote them.

As the hardest substance known, diamond has long enjoyed an industrial market as an
abrasive, cutting and polishing medium. This absorbs the off-colour, stones which are half
of total output. But since the development of artificial, industrial quality diamonds in the
1950’s this sector of the market has collapsed. Alone, industrial diamonds would not be
worth mining. The value lies in gems.
 INVESTING IN DIAMOND INDUSTRY ADVANTAGEOUS
Diamonds are a good investment, because diamonds hold their value and they can actually
increase in value over time. But not enough: “Diamonds last forever” and are ―a girl’s best
friend‖.

Trust that invests in high quality diamonds. Investment trusts allow investors to invest in
diamonds without needing to buy and hold the underlying asset. Shares of these trusts are
not actively traded and are less liquid at times when the price of diamonds falls. The first
diamond investment trusts were created in the early 1980s by Thomas McKinnon.

Diamonds are rare, precious, beautiful, mysterious, magical and romantic tokens of love.
Diamonds are a secure investment, but they give you also the feeling of beauty, luxury,
passion and love! No other investment can offer you that much!

Diamonds are especially suitable as tangible assets, because they have the biggest
advantages of all tangible assets:

Protection from inflation, bank bankruptcy, market collapse, currency reforms

Anonymity (no registration required)

World-wide convertibility - diamonds are the only international accepted alternative

currency which has the same value all over the world

Tax free betterment

No maintenance costs

Very prestigious
 4’Cs of diamond
The quality and value of diamonds are measured by four characteristics known as the 4C's.
The 4C's relate to a diamond's cut, colour, and clarity and carat weight. The quality of a
diamond is measured by its cut, colour and clarity. The carat weight measures the size of the
diamond. Of all the 4C's, cut is the characteristic directly influenced by man; colour, clarity
and carat weight are all dictated by nature.

Cut
A diamond in its natural, uncut state is described as a "rough diamond". Its natural
appearance so resembles a glass pebble that most people would pass it by without a second
glance. It is the skill of the diamond cutter that unlocks the brilliance for which diamonds
are renowned. If two identical diamonds are placed side by side and one is less brilliant and
fiery than the other, the fault lies in the cutting. Such a stone cannot demand as high a price
as a well-cut diamond.

Color
A diamond's colour is one of the most important factors in determining its value. The nearer
a white diamond is to being absolutely colorless, the more rare and valuable it is.

Diamonds are graded into categories defined by letters. The colour range from exceptional
whites (categories D, E and F) to tinted colours (categories M to Z). The best way to
pinpoint a diamond's true colour is to place it next to another diamond that has previously
been graded.

Clarity
During the formation of a diamond it is possible for minute particles of non-crystallized
carbon or non-diamond crystals to be caught within the diamond. These imperfections are
called inclusions and provide each individual diamond with unique characteristics.

Inclusions may not always be visible to the naked eye; however they do interfere with the
passage of light through the diamond. Therefore the fewer inclusions a diamond has, the
more valuable it is.

Like colour, clarity is also categorized using international grading scales. The categories of
clarity are based upon the number, size and position of the inclusions within the diamond.
Grading range from flawless, and internally flawless, through very small and small
inclusions, to imperfect. The clarity grading is described as follows:
FL Flawless No internal or external blemishes when examined under a 10x
microscope. Diamonds in this category cannot contain internal
graining that is reflective whitish, coloured, or which significantly
affects transparency.

IF Internally Flawless No internal inclusions but minor surface blemishes which cannot be
removed with polishing. That is, characteristics such as surface
grain lines, natural and extra facets on the crown. Blemishes that can
be removed by minor repolishing separate the internally flawless
from the flawless grade.

VVS1 Very, Very Slightly Minute inclusions, such as reflective internal graining, difficult to
VVS2 Included locate using a 10x microscope

VS1 Very Slightly Included Small inclusions, such as small included crystals which are visible
VS2 using a 10x microscope.

SI1 Slightly Included Inclusions that can be seen easily under a 10x microscope, and may
SI2 also be seen with the naked eye using a white background.
Inclusions in these diamonds cannot be seen through the crown of
the diamond.

SI1 Slightly Included Inclusions that can be seen easily under a 10x microscope, and may
SI2 also be seen with the naked eye using a white background.
Inclusions in these diamonds cannot be seen through the crown of
the diamond.

I1 Imperfect 1 Inclusions can be seen with the naked eye, and are quite obvious
under a 10x microscope.

I2 Imperfect 2 Inclusions can be seen with the naked eye, and may interfere with
transparency and brilliance.

I3 Imperfect 3 Dark inclusions which are very noticeable to the naked eye, and
which interfere with transparency.
Carat

A carat is the unit of measure used to determine the weight of a diamond. The term "carat"
is derived from the original method of using carob tree seeds to weigh diamonds. One seed
from this tree was equivalent to one carat.

The actual weight of one carat is now established at 0.2 grams. To assist in accurately
describing the weight of diamonds each carat is divided into 100 points. Diamonds of less
than one carat in weight are known as "pointers". For example, a 0.15 carat diamond would
be called a "15 pointer".

Diamonds are usually weighed prior to setting for more accurate measurements. Diamonds
are priced per carat, according to their size and quality. Although the carat weight of a
diamond is indicative of its size, it is not necessarily indicative of a diamond's quality.
Therefore, where two diamonds have the same carat weight, the one of better quality will
command a higher price per carat.
 Pricing of diamond
Diamonds may last forever, but their prices change almost weekly.

A diamond is valued by 4 things, color, clarity, cut and, carat weight.

Colors are graded on a letter scale, with D being the best. As one moves down the
scale towards Z, the diamonds become more tinted.

The clarity of a diamond describes the impurities in a diamond. Diamonds labelled

flawless are extremely rare. They have no internal or external impurities, such as
pinpoint inclusions. Internally Flawless diamonds contain only minute external
imperfections that can be removed after a minor repolishing. VVS1 and VVS2 have
"very very small ―imperfections that maybe hard to detect even under a 10x
magnifier. Dust can be mistaken for imperfections in these diamonds. VS1 and VS2
grade diamonds contain imperfections that are slightly larger than those found in
VVS1 and VVS2 diamonds.

The cut quality of a diamond describes the proportions (crown, pavilion and girdle),
polish quality and the symmetry of a diamond. The "fire ―and brilliance of a
diamond depends solely on the cut quality. Cut quality is rated on a scale between 0-
10. A 0 cut is a perfectly cut diamond, which follows the American Gem Society's
Ideal specifications, which will allow maximum brilliancy. A poor cut can ruin the
value of a high quality diamond.

Carat size describes the weight of a diamond. 1 carat is equivalent to 200

milligrams. A carat is then divided into 100 points. Therefore, a 50 point diamond
weights 100 milligrams.
 CHAPTER 5: OVERVIEW OF THE MARKET

SWOT Analysis of the Indian Diamond Industry:

SWOT analysis is the overall evaluation of an industry’s Internal Environment(strengths and

weaknesses), and External Environment (opportunities and threats) to understand the present
status of the company and use it as an aid in strategic planning.

The Internal Environment: The internal environment analysis comprises of the

evaluation of a company’s strengths and weaknesses, with a view to analyse its

current status and the areas where it can correct or strengthen itself.

The strong areas of the Indian Diamond Industry include the large workforce of

skilled craftsmen (about 800,000), lowest manufacturing and labour costs, a

well-distributed marketing network and supportive governmental policies

Weaknesses of the Indian Diamond Industry include areas where it can correct itself, such as low
levels of productivity as compared to places like China, huge stocking of inventory and thus
handling costs and high working capital to be maintained.

The External Environment: The analysis of the external environment is related

to the opportunities and threats that the industry should be prepared for.

The opportunities the Indian diamond industry could utlise include the

growing domestic demand for diamond jewellery and tapping potential newer

markets in Europe and Latin America.

The threats facing the Indian Diamond Industry include the entry of countries
such as China, Sri Lanka and Thailand in the small-sized diamond segment, the

over dependence on single-channel suppliers such as the Diamond Trading

Company (DTC, the marketing arm of the De Beers Group) and most

importantly, the emergence of newer substitutes such as synthetic diamonds

(cubic zircon, HPHT etc.) which are much cheaper than the real diamonds.

IN DEPTH: Indian Diamond Industry

The Indian diamond cutting centers are concentrated in Bombay and Surat, a small town
about five hours away from Bombay. Small boys, sometimes as young as 10 years old,
work in hot sheds chiseling roughs which eventually get sold in the fancy shops on Fifth
Avenue and Bond Street. Their nimble fingers and sharp eyes enable them to cut these
diamonds
in remarkable shapes, but while they earn
well for these skills many of them find their
eyesight getting progressively weaker as
they grow older.
But India has a large labor force and this has
made the country the biggest diamond
cutting center for small roughs. Indeed,
were it not for Indian workers, many of
these small diamonds would be put to
Diamond cutting and polishing workshop in
industrial use rather than jewelry. The
Bombay.
Indian diamond trade generates over 4
billion dollars in exports every year -- this
represents an almost 25 percent value addition to the imports of roughs.
The trade itself is controlled by a handful of companies and families, most of whom hail from the
small town of Palanpur in Gujarat. Many of them are fabulously rich and divide their time between
India, Belgium, Israel and other western countries.
This entire high-skill, high value trade has recently been shaken up by the conflict between the De
Beers-Central Selling Organization (CSO) global diamond cartel, and Argyle of Australia, one of the
biggest players in international diamond trade
 MARKETING MIX

1) Product:

De Beers are in rough diamonds and cut diamonds. De Beers product category can be better
explained with the help of De Beers 4 C’s chart.

Rough Diamonds

DeBeers has its own sales and marketing arm. This is a company called the Diamond Trading
Company (the DTC). DeBeers sells almost half of the worlds rough diamonds through this
marketing arm.

This is almost half of the world rough diamond (rough diamond are those from the mine and
before they are polished for sale to jewelry manufacturers and diamond dealers around the world).

However this include diamonds produced by the Russian company, Alrosa, which DeBeers has an
agreement.

The rough diamonds sold by DeBeers through their arm, DTC, are purchased by the world’s leading
diamantaires known as Sightholders. Sightholders buy tailored assortments or "parcels" of rough
diamonds from a blended “mix” of diamonds from the various mines. These clients are chosen
following assessment against a set of objective selection criteria according to their ability to add
value to diamonds as well as their audited adherence to the DTC’s Diamond Best Practice
Principles, which cover business ethics, the Kimberley Process Certification Scheme and the
industry’s System of Warranties, labour standards, health and safety as well as environment. De
Beers have actively promoted diamonds as being symbolic of eternity and love, and therefore the
ideal jewel for an engagement or wedding ring. Their famously successful advertising campaigns
have included such measures as, showing diamonds as wedding gifts in popular romance films,
publishing stories in magazines and newspapers which would emphasize the romantic value of
diamonds and associate them with celebrities, employing fashion designers and other trendsetters
to promote the trend on radio and, later, television and even enlisting the British Royal Family to
directly promote diamonds.
Cut Chart Color Chart
Clarity Chart Carat Chart

2) Place:
De Beers is active in every category of industrial diamond mining: open-pit, underground, large-
scale alluvial, coastal and deep sea. Mining takes place in Botswana, Namibia, South Africa,
Tanzania and Canada.

Mining in Botswana takes place through the mining company Debswana, a 50-50 joint venture with
the Government of the Republic of Botswana. In Namibia it takes place through Namdeb, a 50-50
joint venture with the Government of the Republic of Namibia. Mining in South Africa takes place
through De Beers Consolidated Mines (DBCM), 74% owned by DeBeers and 26% by a broad based
black economic empowerment partner, Ponahalo Investments. In Tanzania it occurs through a
partnership with the government of Tanzania, 75% owned by De Beers, 25% by the government. In
2007 De Beers began production at the Snap Lake Mine in Northwest Territories, Canada; this is
the first De Beers mine outside of Africa. In July 2008 De Beers opened the Victor Mine in Ontario,
Canada.

The Diavik Diamond Mine

Trading of rough diamonds takes place through the Diamond Trading Company through wholly-
owned and joint venture operations in South Africa (DTCSA), Botswana (DTCB), Namibia (NDTC)
and the United Kingdom (DTC). The various DTCs within the Family of Companies sort, value and
sell approximately 40% of the world’s rough diamonds by value.
The Family of Companies employs about 20,000 people around the world on five continents, with
17,000 employees in Africa. Over 7000 people are employes Botswana, over 7100 in South Africa,
3800 in Namibia, 700 in Canada and over 800 in Group Exploration.

The Family of Companies

The De Beers Family of Companies is involved in most parts of the diamond value chain.
Companies are as follows:

 De Beers Canada
 De Beers Consolidated Mines
 De Beers Diamond Jewellers
 Debswana
 Diamdel
 Diamond Trading Company
 Diamond Trading Company Botswana
 Diamond Trading Company South Africa
 Element Six
 Namdeb
 Namibia Diamond Trading Company
 Williamson Diamonds
De Beers Diamond Jewellers

De Beers retail store on Rodeo Drive in Beverly Hills, California

In 2001, De Beers entered into a retail joint venture with French luxury goods company Louis
Vuitton Moet Hennessy (LVMH) to establish an independently managed De Beers diamond
jewellery company.

The joint venture, called De Beers Diamond Jewellers Ltd sells diamond jewellery. The first De
Beers store opened on Old Bond Street in London and there are now De Beers retail stores in the
following locations:

 London at Bond Street, Royal Exchange and Harrods

 New York City at Fifth Avenue
 Beverly Hills at Rodeo Drive
 Las Vegas at The Forum Shops
 Houston at The Galleria
 McLean, Virginia at Tysons Galleria
 Dallas at NorthPark Center
 Paris at Le Printemps
 Moscow in Russia
 Kiev in Ukraine
 Japan - Tokyo, Osaka, Hakata, Yokohama, Kyoto, Kobe
 Taiwan in Taipei
 Korea in Seoul
 Hong Kong
 Waikiki
 Dubai at Mall of the Emirates, International Financial Center, and Wafi City
 San Francisco in Union Square
3) Price:

De Beers sets the price of its boxes in advance and determines the quality and quantity each
sightholder receives. Price and quantity are nonnegotiable.The sudden emergence of all
these producers meant that De Beers, in an effort to keep prices high, was forced both to
hold back a large portion of its diamonds and to purchase much of the excess supply of its
new competitors--often at inflated prices.For decades, the majority of the world’s diamond
trade was controlled by De Beers. It used its market power to keep the prices high.

One can't blame the DTC for the constant change in the market prices of diamonds.They are
no longer the 80-per-cent-plus dominant force they once were in the market. A lot of things
happen because they really have no control over them. Over the last three years, ever since
the DTC implemented the SOC initiative, most DTC rough would easily fetch a 10 per cent
premium, so non-sightholders were paying substantially higher prices for rough. Today, the
field is more level. The non-DTC rough is cheaper, and that makes it more interesting for
non-sightholders. Some Angolan goods were between 5- and 7 per cent cheaper than DTC
goods. Of course, there is no consistency of supply, but you can now actually make money
on those goods.

Thus,with a view to maintain its profitability De Beers has to charge customers a higher
rate for the rough diamonds.

Those who cut small diamonds have the biggest problems in profitability as rough prices
have increased and there is considerable buyer resistance to higher polished prices. The
worst-hit categories are the weak colour and clarity goods in the 1- to 7-pointer size range.
The manufacturers have no answer - technical or strategy-wise - to this and the overall
result has been a general migration towards processing larger sizes - which leads to
increased competition in those categories. It must be noted here that the ultra small sizes are
doing extremely well with buyers willing to pay spot cash for goods

As the diamond business is in rough times all over the world,De Beers has lost its market
share and worked hard upon setting up its foot again in the market with the continuous
variation in its pricing policy.
4) Promotion:

(Please refer Advertising Campaign on Page No. 53 )

Chapter 6:DATA ANALYSIS & INTERPRETATION

1. Which car (fuel based) do u prefer?

a) Petrol

b) Diesel

c) L.P.G.

Data analysis:

Customers preference No of customers

Petrol 34

Diesel 50

L.P.G. 16
 60
50
50

40 34
30

20 16

10

0
petrol diesel L.P.G.

Column1 Column2 Column3

Interpretation: by the result we came to know that the customers go for diesel one with

sound quality.
2. What do you feel great about your car when compared to other cars in the

market?

a) Fuel efficiency

b) Durability

c) Low maintenance

d) Sound quality

e) Safety

Data analysis:

Customers perspective No of customers

Fuel efficiency 30

Low maintenance 18

Sound quality 22

Safety 30
 40
34

30 26
22
20 18

10

0
Fuel efficiency Low maintenance Sound quality Safety
No of customers

Interpretation: From this question we can position the cars according to the customer’s

perspectives. Many of the VOLKSVAGEN customers are buying the cars by seeing its

Brand Name only. The no. of customers satisfied with the fuel efficiency is very low.
3. What kinds of offers do you like or expect from the dealer?

a) Free insurance

b) Special discount on sale of cars

c) Extending the service period

d) Finance availability with 0% interest

Data analysis:

offers No. of customers

Free insurance 16

Special discount on sale of cars 14

Extending the service period 40

Finance availability with 0% interest 30

 45
40
40
35
30
30
25
20 16
14
15
10
5
0
Free insurance Special discount on sale Extending the service Finance availability with
of cars period 0% interest

Interpretation: By the result of this question we come to know about the various

promotional techniques/offers which attract the customers. From the above analysis

many customers are expecting the extension in the service period from the various

offers given to them.

4. What more do you expect from your dealer?

a) Information about new cars

b) Information about service and mileage

c) Assistance regarding loans and insurance

d) Understanding customer needs

Data analysis:

Expectations of customer No. of customers

Information about new cars 20

Information about service and mileage 36

Assistance regarding loan & insurance 20

Understanding customer needs 24

 40
36
35

30
24
25
20 20
20

15

10

0
Information about new Information about Assistance regarding Understanding
cars service and mileage loan & insurance customer needs

Interpretation: Most of the customers are expecting the information about service and

mileage regarding the cars from the dealer. From the above analysis we come to know

about the customer‟s expectations and their post purchase service demands from the

dealer.
5. Where do you get your car serviced regularly?

a) At authorized service centre

b) At a local workshop near my home

Data analysis:

Place of service No. of customers

At authorized service centre 70

At a local workshop near home 30

 80
70
70

60

50

40
30
30

20

10

0
At authorized service centreAt a local workshop near home

Interpretation: Most of the Volkswagen customers are interested to service their

vehicles only at the authorized dealers. From this we come to know what the importance

of authorized service centers for car is.

6. What other brand(s) will you seriously consider before making this car

purchase?

a) Honda

b) MERC

c) SKODA

d) Volkswagen

Data analysis:

Brand name No. of customers

Honda 24

MERC 30

Skoda 36

Volkswagen 10
 40
36
35
30
30
25 24

20

15
10
10

0
Honda merc Skoda Toyota

Interpretation: Most of the Volkswagen customers are opting for Skoda when they are

asked to consider a brand other than VW. MERC occupies the second place in their

preference.
7. Can you share your experience with after sale service support?

a) Very much satisfied

b) Satisfied

c) Ok

d) Not satisfied

Data analysis

Post service experience No. of customers

Very much satisfied 10

Satisfied 60

Ok 18

Not satisfied 12
 70
60
60
50
40
30
18
20 12
10
10
0
Very much satisfied Satisfied Ok Not satisfied

Interpretation: This question is prepared to know the service levels of the authorized

Dealer. Most of the customers are just telling SATISFIED about the service. Only a very

few customers are very much satisfied with the service. Even some of the customers are

not satisfied with the service given by the authorized service men.
8. Which bank do you prefer in getting financial help while purchasing a car?

3.10 ICICI

3.11 HDFC

3.12 SBI

3.13 Others

Data analysis

Name of the bank No. of customers

ICICI 42

HDFC 12

SBI 40

Others 6
 45 42
40
40
35

30

25

20

15 12
10
6
5

0
ICICI HDFC SBI Others

Interpretation: Most of the customers prefer ICICI and SBI banks for taking financial

help while purchasing a car. Customers are asking for 0% interest on financial help

provided by the banks.

9. How do you feel when an unknown sales person approaches you by knowing

your full details to demonstrate about any product?

I will not respond

Lost my privacy

Interested in knowing (if I feel a need of it)

Data analysis:

Customer opinion No. of customers

I will not respond 22

Lost my privacy 10

Interested in knowing (if I feel a need 68

of it)
 80
68
70

60

50

40

30
22
20
10
10

0
I will not respond Lost my privacy Interested in knowing of it)
(if I feel a need

Interpretation: This question is prepared indirectly to know about the customer‟s

opinion about the Data Bank maintenance by the VOLKSWAGEN. In reply majority of

the customers gave a positive reply by showing interest in knowing about the cars when

a sales person gives a detailed description about the cars.

10. What’s your opinion on a Brand Ambassador for the cars?

a) Very necessary

b) Not needed

c) Waste of money for manufacturer

Data analysis:

Customer opinion on ambassador No. of customers

Very necessary 86

Not needed 14

Waste of money for manufacturer 0

 100
90 86
80
70
60
50
40
30
20 14
10 0
0
Very necessary Not needed Waste of money for
manufacturer

Interpretation: This question is meant to know about the importance of Brand

Ambassador for a car in the customer‟s point of view. Most of the VOLKSWAGEN

customers think that a Brand Ambassador is very necessary for promoting a car.
11. What’s your opinion on the price list of Volkswagen cars?

a) Affordable by common man

b) Affordable only by rich man

c) Can‟t say

Data analysis:

Customer opinion No. of customers

Affordable by common man 12

Affordable only by rich man 84

Can‟t say 4
 90 84
80

70

60

50

40

30

20
12
10 4
0
Affordable by common manAffordable only by rich man Can’t say

Interpretation: More than 80% of customers think that VOLKSWAGEN cars are

affordable only by rich men. These cars are too expensive for an economic/common

man of the society.

 CHAPTER 7: CONCLUSION

The present research project on the customer awareness and preference of Volkswagen
cars helps to analyze and understand the present market scenario in the city of Lucknow. Merc
and Skoda are the strongest competitors so Volkswagen is required to work on its weaknesses
like offers at the time of convincing customers and giving various financial plans.

At last I would like to say that Volkswagen should maintain and improve its market share
in u.p. by improving its services and providing customer satisfaction
 BIBLIOGRAPHY

http://articles.economictimes.indiatimes.com/2007-07-27/news/27678257_1_strong-sales-
volkswagen-unit-sales

http://articles.economictimes.indiatimes.com/2005-09-06/news/27506412_1_helmuth-schuster-
minister-b-satyanarayana-volkswagen

http://articles.economictimes.indiatimes.com/2014-03-18/news/48330902_1_poland-
volkswagen-leif-oestling

http://articles.economictimes.indiatimes.com/2014-03-13/news/48189402_1_german-automaker-
volkswagen-porsche-cayenne

http://www.reuters.com/article/2014/02/15/us-autos-vw-election-idUSBREA1D1DP20140215

http://www.theguardian.com/media/2013/jun/18/volkswagen-marketing-lost-way-china

http://www.autonews.com/article/20140125/RETAIL01/140129881/vw-parts-ways-with-u.s.-
sales-chief-trivieri

http://adage.com/article/cmo-strategy/vw-s-marketing-chief-stick-brand-voice-shops/291064/
 QUESTIONNAIRE

Please take a few minutes to complete this survey. Your specific answers will be completely
anonymous, but your views, in combination with those of others, are extremely important. This
survey is regarding the comparison of passenger rate in Mumbai with special reference to
Western and Central Railway. The responses given will be used for the academic purpose to
complete my research work.

Q.1 Name

Q2. Gender

 Male
 Female

Q3. Age

 20 and below
 21-40
 41-60
 above 60

Q4. What is your current occupation?

 Student
 Business
 Service
 Housewife
 Professional
 Other, please specify

Q5. What is your current Monthly Income?

 Below 10,000
 10,001-40,000
 40,001-1 Lakh
 Above 1 Lakh
Q5. Which car (fuel based) do u prefer?

a) Petrol

b) Diesel

c) L.P.G.

Q6. What do you feel great about your car when compared to other cars in the

market?

a) Fuel efficiency

b) Durability

c) Low maintenance

d) Sound quality

e) Safety

Q7. What kinds of offers do you like or expect from the dealer?

a) Free insurance

b) Special discount on sale of cars

c) Extending the service period

d) Finance availability with 0% interest

Q8. What more do you expect from your dealer?

a) Information about new cars

b) Information about service and mileage

c) Assistance regarding loans and insurance

d) Understanding customer needs

Q9. Where do you get your car serviced regularly?

a) At authorized service centre

b) At a local workshop near my home

Q10. What other brand(s) will you seriously consider before

making this car purchase?

a) Honda

b) MERC

c) SKODA

d) Volkswagen

Q11. Can you share your experience with after sale service
support?

a) Very much satisfied

b) Satisfied

c) Ok

d) Not satisfied
Q12. Which bank do you prefer in getting financial help while
purchasing a car?

a) ICICI

b) HDFC

c) SBI

d) Others

Q13. How do you feel when an unknown sales person

approaches you by knowing your full details to demonstrate

about any product?

a) I will not respond

b) Lost my privacy

c) Interested in knowing (if I feel a need of it)

Q14. What’s your opinion on a Brand Ambassador for the

cars?

a) Very necessary

b) Not needed

c) Waste of money for manufacturer

Q15. What’s your opinion on the price list of VOLKSWAGEN

cars?

a) Affordable by common man

b) Affordable only by rich man

c) Can‟t say
 Thanks for taking the time to fill out this questionnaire

and for providing valuable information which will be used for

my project work, market research studies and reports. We do

not share or sell your name, address or any other data with

any outside company for any purpose.

A STUDY ON IMPACT OF CLIMATE CHANGE ON RAINFALL – A SPECIAL REFERENCE
TO INDIAN AGRICULTURE

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