Jewelry-Retail an Industry Study

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Market Analysis

Summary Jewelry manufacturing in the U.S. has seen sharp declines in recent years due to strong foreign competition. Many developing countries are in a good position to provide products at highly competitive prices. As a result, many U.S. firms have chosen to produce goods overseas. Despite the decline in the number of domestic jewelry manufacturing establishments, sales of costume jewelry have seen sharp increases. The [organization] can capitalize on the growing social trend of buying American products, as well as sales from customers who wish to support a worthy cause.

Lisa K. Moore · Market Analysis Writing Sample Copyright 2009 Lisa K. Moore. All rights reserved.

Industry Analysis and Market Growth While the U.S. government classifies and tracks various industries, there is a limited amount of data for NACIS code 339914 and SIC code 3961. Because making costume jewelry requires a modest amount of skill and the start up costs for an entrepreneur are minimal, thousands of hobbyists have taken to designing their own jewelry pieces and selling them via the Internet and craft fairs. It is difficult to determine the true size of the costume jewelry industry. A Google search for the term “handmade jewelry” yielded over seven million results. A Google search for “beaded jewelry” yielded over two million results. Information obtained on NAICS code 339914 shows that there were 655 costume jewelry establishments in 2002, and the value of shipments was over $816 million. These establishments employed 8,129 workers. The number of establishments had decreased 29.2% between 1997 and 2002, while the value of shipments and number of paid employees decreased 36.7% and 44.8%, respectively (U.S. Census Bureau, 2009).

Lisa K. Moore · Market Analysis Writing Sample Copyright 2009 Lisa K. Moore. All rights reserved.

Further research from the Bureau of Labor Statistics showed that the number of workers in the “jewelry and silverware manufacturing” industry decreased 43% between 1998 and 2008. The “accessories and other apparel” industry saw a 53% decrease in its workforce during the same period. While the workforce in both categories decreased over this ten year period, wages for both types of workers increased 37% (BLS, 2009).

Lisa K. Moore · Market Analysis Writing Sample Copyright 2009 Lisa K. Moore. All rights reserved.

The decline in U.S. jewelry manufacturing can be explained by demand for lessexpensive pieces and strong foreign competition. Price competition from overseas has resulted in weaker sales for American manufacturers. In fact, by 1998, approximately 50% of the jewelry sold in the United States was imported (Costume Jewelry Industry Yearbook, 2001). Many jewelry items are produced partially or completely by hand, therefore developing countries are in a favorable position to provide them at very competitive prices. As a result, many U.S. firms have chosen to produce goods overseas. Despite the decline in the number of domestic jewelry manufacturing establishments, sales of costume jewelry rose 5.3% in 2004 in the United States alone according to National Jeweler magazine. Sales of fine jewelry saw an even larger increase in sales with 6.6% growth in 2004, and both segments are expected to experience added revenue in the coming years (Braverman, 2005). Between 2006 and 2007, sales of costume jewelry rose 20% (Foreman, 2007). According to department store jewelry buyer, Tania Wicklow, “[The sector] is… at an all-time high. I don’t think it’s reached its peak (Foreman, 2007).” The [organization] can capitalize on the growing social trend of buying American products, as well as sales from customers who wish to support a worthy cause.

Lisa K. Moore · Market Analysis Writing Sample Copyright 2009 Lisa K. Moore. All rights reserved.

Market Segmentation

Consumer Analysis and Market Segmentation According to the Bureau of Labor Statistics’ 2007 Consumer Expenditure Survey, the ideal...
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