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An Analysis Of The Gift Market Within India Marketing Essay

Paper Type: Free Essay Subject: Marketing
Wordcount: 4347 words Published: 1st Jan 2015

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On the basis of the literature review and study of the gifting industry, there is a need to introduce a newer and more innovative way to gift for individuals as well as corporate houses. The research establishes the need for personalization [3] , creativity and uniqueness to enhance the value of a gift. [4] It helps communicate clearly how much meaning and value the recipient holds in the givers life. A gift which is personalized as per the recipients interests, personality and hobbies makes it a more memorable experience and is likely to lead to greater ’emotional connect’ between individuals and enhanced, more loyal business relationships for corporates [5] .

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In spite of the added advantages of a personal and well thought of gift, people and corporate houses are either hard pressed for time and are ready to pay a premium for ‘convenience’ and saving ‘time’ or they are at loss of ‘how to express and what to communicate’ through a gift. Thus, establishing a need for service provider to fulfill the above need gaps.

From a research perspective an attempt will be made to understand in the importance of personalization in gifting and the role of gist service providers in the process of gifting.,

2.2 Research Gap

Research for gifting amongst individuals throws light on what is gifting, what parameters do people look at before giving a gift, the trends and attitudes of certain target groups towards gifting, anxiety in the gifting process. Among corporates the research currently studies how corporate gifts help increasing and enhancing business relationships and marketing efforts. There is a need to study specific parameters that enhance the value of the gift and the gifting process. Through this project and the preliminary research, gaps in the gifting industry for individuals and corporates will be identified and researched further in detail

2.3 Nature of study

The flow that will be followed to arrive at an entrepreneurial opportunity and business concept in the Indian gifting industry for the Venture Incubation project will include a literature review on the gifting industry and primary and secondary research to support the concept proposed. After this a business plan will be developed and tested in the market. Finally an experiential report of the same will be given.

2.4 Deliverables of the Venture incubation project

Research findings

An innovative package and concept to provide gifts in a unique manner and provide convenience to the individuals and corporates in the process of gifting

Validation report – by testing and implementing product and service offerings in the market

Literature review

3.1 What is gifting?

The following is a study of the meaning of gifting and the unique trends in consumer behavior related to ‘gift giving’. Challenges to retailers and the negative effects of ‘gifting’ have also been studied to understand what are the influential factors affecting a ‘gift giver and recipient’.

‘Why we shop, Emotional rewards and retail strategies, by author Jim Pooler(2003), explains ‘Gifting’ as a form of ‘Shopping from the heart’. He states ‘People will spend far more money to please another person with a gift than they will spend on shopping for themselves’. According to his study,’ Gifting’ represents one of the most illogical shopping behaviors.

Why are people so anxious to please others with gifts?

Pooler (2003) describes ‘Gifting’ as a tool to make a statement about one’s feelings. This in turn leads to strengthening of an ’emotional bond’ between the giver and the recipient. The emotion or expense in a gift is considered a measure of one’s respect, esteem or love for one another.

Example- a child drawing a card for his mother’s birthday or a lover writing a poem or a person spending hours looking for the perfect gift is making an emotional investment and represents what one person thinks of the other.

‘Gifts act as a tool for expression’ especially when articulating one’s feelings become difficult. In such a case, they act as mediator between the two people involved. According to Unitymarketingonline, the Greeting Card, Stationery, Gift Wrap & Party Goods and Paper Crafting Report 2007 is a $37.4 billion market [6] .The greeting card industry which specifically represents a $7.5 billion industry in the US market, thrives, on its ability to provide emotional expression. Greeting cards are also commonly used to accompany gifts well. [7] This multi-billion dollar industry offers real advantages of helping one’ express their deep emotions briefly’ besides saving time, effort, money and providing convenience. [8] According to Danziger, with 70 % of American household purchasing greeting cards, it makes it the third most frequently purchased product that people do not need. This directly implies the power of the ‘gifting’ and ’emotional consumerism’.

‘Gifting is a two way process’ -A challenge disguised as an opportunity for the marketer and retailer in the gift business is the understanding that a ‘gift’ is meant and directed both towards the receiver and the giver. According to Pooler (2003), ‘A customer is always seeking re-assurance that the given gift will bring him/her as much emotional satisfaction as the person for whom he is buying it’. Thus, gifts at one level bring personal satisfaction and are self-indulgent in nature.

‘People are irrational when they gift’- Another advantage for the marketer in the ‘gifting’ business is the irrational and unjustified expenditure a consumer is willing to make on it, so as long as it makes ’emotional sense’. Thus, customers are largely price insensitive, especially if the strength of the relationship between the receiver and giver is strong. This allows retailers t tap into the potential of high margin products.

‘Gifting is largely occasion specific’-Lastly, occasions and holidays such as – anniversaries, Valentines days and in India religious festivals such as Diwali and Dhanteras represent an area of ‘gifting’ where demand is literally inelastic. Not purchasing a gift on such days is unthinkable. Occasions such as Valentine’s, Anniversaries, Mothers day, where a son, husband, boyfriend is in a situation where he must make a purchase act as a major opportunity for specialty stores selling – chocolates, flowers, and jewelery. Male shoppers are more ready to high prices and do not look for bargains in such situations thus presenting an advantageous scenario for retailers.

‘Gifting leads to anxiety’- David B Wooten has explored the negative effects of gifting by detailing the emotional trauma a giver goes through in the process of choosing the ‘perfect gift’ for the recipient. Some of the factors that up the stress levels while gifting are: [9] 

Effect of the gift on the recipient- The giver is constantly thinking about the reaction of the recipient towards the gift and the consequential effect on their relationship.. This is possible when the effect of the gift on the recipient is positive and helps build and strengthen the relationship between the giver and the recipient. Thus, this represents an opportunity for retailers or gift service providers, who can make the experience of giving gifts simple and tension free.

Obligation to reciprocate sparks tensions (Mauss1954)

Disparities and comparison between gifts may lead to negative emotional outcomes (Belk and Coon 1993). This may be due to absence of set parameters or guidelines before exchanging gifts.

Differences and expectations -Green and Alden (1988) cited differences between individual goals and group expectations as sources of anxiety among givers. Sherry et al. (1993) cited the unattainable expectations that recipients impose upon givers as a possible. Both act as sources of anxiety as the consequences of such differences and expectations are likely to be negative.

Inappropriateness of gifts- can lead to frustration, social embarrassment, threaten social ties and likely to leave long lasting bitter memories. (Sherry et al. 1993).

Recipient woes- Otnes et al. (1992)have points out different types of recipients “Difficult” and ‘Picky’ ones have expectations that are either hard to meet and ‘Unfamiliar’ ones have expectations that are hard to determine Such recipients impede a gift givers efforts .

‘Dark side of giving’ [10] – Concerns about gift interpretation and the fact that a giver cannot control these interpretations gifts suggest that that scholarship on self-presentation and social anxiety can help illuminate what has been called a “dark side” of giving.

‘Retailers challenge and opportunity’ -Keeping in mind the above frustrations and anxiety that goes on in the mind of the consumer. It poses as a real challenge for marketers, retailers and new gift service providers to mitigate these anxieties. This may be providing convenience, better consumer insight, and personalized gifts. There seems to be a need for specialists in the ‘gifting service’


The expanded model of anxiety in Gift Giving proposed by Wooten in this research (Figure 1) explains the sources of the anxiety in gift giving . This brings out why retailers and marketers must try and mitigate these emotional anxieties

NOTE.-All effects are positive unless otherwise noted. The letters G, R, and S denote characteristics of givers, recipients, and situations, respectively.

Figure 1.1-Study of trends, attitudes and behavior of youth towards gifting. Megha Nainwal, Batch of 2004, MICA,

3.2 Gifting Industry- World and Indian Market

The world gift market represents an industry in excess of $300 billion. It accounts for 10% of world consumer economy, which is equivalent to spending one out of every ten dollars on buying gifts. [11] 

The Indian gift market is still in nascent stages with per unit consumption being very low as compared to developed markets of US and Europe ( 0.5 as against 30+) [12] .The Indian Gift Market is a Rs.1000 crore gift market is looking up to progress at a rate of 10% (2007 estimates) [13] . A large part of this gift market is unorganized, thus making correct estimates of the size of the market difficult. The Premium and Gift Market is mostly concentrated out of the major cities. Mumbai is the largest centre, followed by New Delhi, Bangalore, Hyderabad, Chennai and Ahmedabad. [14] 

The Indian Gift market comprises of organized retail stores, local and regional players and social organizations as well. In the organized sector, the two leading players in the specialized gifting stores include – Archies and Hallmark.

The Indian market is highlighted by important festivals such as Diwali and Holi for ‘gift giving’ , however, westernization of culture has led to occasions such as Valentine’s day, Mother’s day, Father’ s day becoming popular gift giving occasions.

3.3 Gifting market- Social, shopping and gifting trends

The following represent changing social, shopping and gift giving trends in the market:

1) General increase in gift purchasing budget- According to Unity Marketing online- The Ultimate Guide to the American Gift Giving Market. The  Report 2007:The Who, What, Where, How Much and Why of Gift Giving & Shopping , the typical gift giver spent $2,643 on gift purchases in 2006, with an additional $78 spent on gift cards, wrapping paper, ribbons and other gifting accessories.  This represents an increase of 13.5 percent over the average amount spent by gift givers in 2005.

2) Gifting 365 days a year-According to,Pam Danziger, president of Unity Marketing and author of Shopping:  Why We Love It and How Retailers Can Create the Ultimate Customer Experience ,People are spending more for gifts on occasions that occur throughout the year rather than holiday occasions such as Christmas. 42 percent of gift shoppers’ annual budgets were spent buying gifts for gifting occasions, as compared to 38.5 percent in 2005.  There is no longer a single gifting ‘season.

3) Corporate Gifting, a tool to enhance marketing and PR efforts- In the recent years Corporate gifting has emerged as an important tool in the market communication mix of companies. In the corporate world, gift giving can be a double-edge sword (Pachter, 1995).A corporate gift if tactfully presented can help improve business relationships with customers and employees, create goodwill, develop new relationships and promote the company’s business.

The three identified categories of corporate gifts are:

Low value, High volume – to promote company’s name

Standard gifts, suit most occasions and not occasion specific- They are perceived to be of higher value and presented in a more personal way

Luxury gifts-high value, low volume products that address an individual and carry prestige based on strong brands (Mintel, 1997).

There has been a shift in business gifting from it being a sales promotion tool to corporate gifting being used to build relationships. The total value of the promotional industry including corporate gifts and incentives was 10.1 billion in 2001 (Mintel, 2000, p. 16).

Corporate gifting requires an organization to keep role, purpose, budget and recipient in mind while gifting. Secondly, the choice, occasion and timing of gift are important. Lastly, cross cultural implications of’ gift giving’ must be taken into account, because in some countries a gift may be considered a bribe.

Corporate gifts should be chosen with care and maintain a personal touch. Research shows people appreciate personalized products especially if they use them regularly. Most successful gifts today are personalized or have a personal touch; they are more creative and more memorable [15] . One study estimates that more than one quarter of all business gifts today are imprinted with the recipient’s name or monogram (Feder, 1998).

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D’Souza and Sansbury’s (2000) research on business gift-giving in India gives some interesting insights. Asked about ‘gift giving’ 86 percent of respondents said they viewed it as ‘a norm that businesses should practice. Additionally, the research shows it is common to accept gifts to close a deal and gifts often serve as a tool for strengthening supplier relationships. The research also talks about ‘reciprocity’, which is considered a universal moral standard (Steidlmeier, 1999) particularly in Asian business context to build trust, respect and show appreciation (Stafford, 1997).

3) Emerging specialized consumer segments-Gender separation as a trend is likely to find stores making specialty sections for men and women. Additionally, demographic targeting as per psychographic buying behavior will be important to meet consumer needs individually.

Gift buyers can be segmented on the basis of their purchase behavior. The typical American ‘Gift Shopper’ can be divided into the following personalities [16] 

Emotional Ethel/Ed most involved gift giver and shopper and spends the most time and enjoys the process as well. Both men and women fall into this segment almost equally..

Practical Patty Plans her gift shopping and is likely to make checklists and be practical about her purchases. She spends more than the average gift shopper.

Gift-Challenged Charlie Wants and feel the duty of giving gifts but finds the process difficult in terms of finding and selection. He spends less than average on gift purchases.

Just-in-Time Justin- gives importance to gifting and spends average on his purchases. He knows what to buy, however always waits till the last minute. The men and women ratio is 60 :40

Such segments mark a need for retailers and marketers to make efforts in meeting demands of these niche segments with specialized products and individually assess each consumers needs. Traditional, generic products for ‘gifting’ are likely to lose out and there will be a rise in personal , customized products.

4) The evolution of the shopping hierarchy and Gifting for ‘self’ [17] – The traditional pyramid of shopping is evolving, as we find that the pie of ‘shopping for self actualization, personal fulfillment and emotional gratification increases’.

Elaborating the fourth level of shopping for esteem needs, it is about people feeling good about themselves and the situation they are in life. And this feeling is derived from the things they own and purchase.

The fifth level of shopping is extremely indulgent in nature and people are willing to spend a lot to acknowledge themselves and make one self feel good. ‘Gifting’ being a ‘self- indulgent’ activity as described in the research above, will fall in this level of shopping.

Additionally, experiential shopping such as travel, cruises, spa treatments also fall in this category. These experiences are purchases purely for the value of the experience and not to show-off. According to a study among Attitude amongst Indian Youth on Gift purchase, 92% of the respondents between age 18 to 30 year olds bought gifts for themselves. [18] 

As the economies of the world progress and disposable income rises, most people will tend to fall in the category of shopping for self actualization. Access to internet to purchase time and convenience or buying tickets to a cruise that provides self actualizing experiences via – dance shows, rock climbing walls, concept restaurants will be the norm.

Fig 1.2 – Jim pooler (2003), Why we shop, Emotional rewards and retail strategies Evolution of the levels of shopping,, pg 141

5) Experiential gifting [19] – Not much importance has been given to ‘experience gifts’ however, the UK marketplace alone, represents experiences bought as gifts from specialist experience companies (for example, Virgin Experience Days, Experience World) around £239 million per annum (Mintel). Additionally, there is also an unknown figure for gifts bought from individual leisure, activity, entertainment, hospitality and tourism suppliers. Trade and lifestyle magazine evidence (Consumers Association, 2002; Knight, 2003) suggest that the intangible experience is an increasingly popular gift choice – Unity Marketing’s Gift Tracker survey in the USA describes it as a “hot gift category” for the future (Souvenirs, Gifts, & Novelties, 2005, p. 92)

People are purchasing ‘experiences’ to share and make memories with the people they love and even for themselves. As a marketer there is an unfulfilled need gap in the industry for such gifts especially in the Indian markets.

6) Internet shopping gaining ground [20] – People prefer Internet shopping for many reasons. Convenience of shopping from home, more and better access of information, reduces hassle of travelling and shopping from stores and they don’t particularly care about the in-store experience. The value- adds of internet shopping mitigates the disadvantages such as giving up experiencing the product, personal service and immediate physical transaction of goods. Online shopping statistics out in February 2009 show a significant annual increase of 13%. [21] 

According to a Nielsen study in 2008, India emerged as the 3rd biggest nation when it comes to online shopping and using a credit card online. Also, 85 per cent of the world Internet users purchasing goods or services online use credit cards as the most common form of payment. As competition increases it will become more and more important for websites to become favorable, memorable and unique in the minds of the consumers.

7) Choosing a ‘thoughtful’ gift – The ‘Long Tail Gifting’ phenomena explains ,consumers will be looking for more and more unusual gifts that reflect a person’s real interests. [22] . According to an Indian study on youth attitude toward gifting, the following were analyzed to be the most important factors influencing the decision of ‘choosing a gift’. Gifting what a recipient would like as per his tastes/interests, occasion, permanent reminder, unique, surprise value, individuality and personalization.

All these factors spell a trend towards gifting something ‘different and suited to the receiver’s personality’. It is no longer enough to gift traditional gift items. Additionally, Indian businesses such as www.pringoo.com and www.craftmygift.com in addition to many other personalized gifting websites all around the world suggest a growth in this category. One can personalize any item from a mug to a mouse pad to even a wine bottle label. Gifts and Accessories, the only sourcing tool for novelties, states that “Personalized product industry has very bright promising future ahead for a simple reason that everybody loves a personal message or their name on a product.”

Gift recipient would like


Strength of relationship






Permanent reminder






Surprise value




Express Individuality




Novelty /Humor


Themselves like to receive




Brand make


Fig 1.3 – Factors in order of importance while choosing a gift [23] 

8) Time is money – As work pressures continue, more and more consumers will find themselves spending more money to buy time. The case of working women must be kept in mind who will find themselves multi-tasking and more willing to spend greater portions of the household income to save time. [24] 

This implies the need for service providers to provide convenience to consumers in terms of time and effort spent. As marketer/retailer, one can charge a premium for providing such services.

9) The new old – Consumers will find themselves producing homemade, hand crafted gifts such as wood carvings, paintings etc. [25] 

10) New Gifting categories such as ‘Virtual gifting’- Facebook applications such as Farmville, restaurant city and free gift applications will emerge. Other examples of emergent categories include green gifts for the environmentally concerned.


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