Brand Genesis

Vision and Mission

Vision To be a world-class, innovative and progressive organisation and to build Indias most desirable brands. Mission To create wealth for all our stakeholders by building highly successful businesses based on a customer-centric approach, and to contribute to the community. Values and Standards
Total customer orientation Customers take precedence over all else, always. Employee appreciation We value and respect Titanians and endeavour to fulfil their needs and aspirations. Performance culture and teamwork At Titan Industries, high performance is but a way of life and is nurtured by teamwork. Creativity and Innovation Driven by innovation and creativity, we focus on smarter approaches and newer technologies. Passion for excellence In all our pursuits, we ceaselessly strive for excellence. Corporate Citizenship We ensure that a part of our resources is invested in environment and community betterment. Strategies Titan has adopted strategies that are in sync with the companys objectives. These strategies are reflected in all their activities from their production innovation to marketing and communications. Marketing Mix Strategies A glimpse Product o Successfully identified the changing trends in the lifestyle of the Indian consumer and launched the relevant brands over a period of time.

Emphasis on product quality and finishes, Titan majorly uses Gold and stainless steel. o Strong brands for each segment of the market, suit each ones needs and traits. o Targeted various age groups, for various occasions
o

Product Price Pyramid Titans portofolio of products spanning 3 distinct price-bands that can be defined, in general, as Popular, Mid, and Premium.

Premium The first consisted of the high income / elite consumers who were buying a watch as a fashion accessory not as a mere instrument showing time. They were also willing to buy a watch on impulse. The price tag did not matter to this segment. Mid The next segment consisted of consumers who preferred some fashion in their watches but to them price did matter. While they had the capacity to pay the price required for a good watch, they would not purchase a watch without comparing various offers in the market. Popular The third segment consisted of the lower-income consumers who saw a watch mainly as a time-keeping device and bought mainly on the basis of price. Place Titan watches are sold through over in over 2,300 cities and internationally in over 30 countries including the UK, Spain, Greece and countries in the Middle East and Asia Pacific. By the exclusive outlets selling Titan brands, called The World of Titan, it changed the boring perception of consumer about watch stores. o Uses an MIS to intensify the distribution system, since 1999.
o

Titan is available at: Exclusive Brand Outlets (WOT), company owned Exclusive Brand Outlets (WOT), franchisee owned Exclusive Brand Outlets (Fastrack)

Exclusive Brand Outlets (Tanishq) Exclusive Brand Outlets (Sonata) Multibrand Watch Outlets Titan Service Centres Titan Watch care centres

Promotion Titan is best known for its advertisements and communications with customers. From using celebrity as endorsers to positioning watches as fashion accessories, the brand adopted pull strategy rather than the traditional push strategies by other watch retailers/brands in the country.

Industry Analysis
Industry Overview - Indian Watch Industry The Indian watch industry was born in the year 1961 with the commissioning of the watch division of HMT. The first watch model manufactured by HMT was the Janata model in the year 1962. HMT was the leader in the watch market till the Tatas formed Titan Watches in association with Tamil Nadu Industrial Development Corporation in the year 1987.They took a major strategy decision, which later changed the face of the Indian watch market- to manufacture only quartz watches. Liberalization in 1992 and the removal of quantitative restrictions due to WTO has opened the doors for many foreign brands in the Indian market viz. Tissot, Swatch, Omega, Rado, TAG Heuer, Rolex and many others. The import duties on watches are falling which makes the Indian market look attractive for the global majors like Casio, Swatch and Citizen.

Five Forces Analysis Indian Watch Industry

The five forces model, as developed by Michael E Porter, illustrates the biggest factors that may enter into the strategic decision making process.

Industry growth rates have introduced watches are high, and relative market shares varies Strategic stakes are high DETERMINAN Low switching costs TS OF High inventory costs SUPPLIER constitute major POWER (LOW) portion of Variable No strong Costs (VC) suppliers Increasing use of credit Lack of card payments also bargaining result in high VC power Rise of China, Taiwan as

THREAT OF NEW ENTRANTS (LOW) High R&D and Technological requirements RIVALRY AMONG Existence of many brands in the industry, that lack product EXISTING FIRMS differentiation unorganized and organizes (HIGH) Leading brands of diverse categories, like UCB, Levis, Merc-Benz

DETERMINA NTS OF BUYER POWER (HIGH)

Low switching costs Price sensitivity

THREAT OF SUBSTITUTE PRODUCTS (MEDIUM)

No direct substitute to product (watch) May include direct purchase from manufacturer, online purchases, mobile phones and custom-made watches None of these are significantly prevailing in India Touch and feel psychology of Indian consumers

Threat of New Entrants The Indian watch market has shown a dramatic increase in the number of brands available in the market, due to removal of quantitative restrictions. The industry has also witnessed leading apparel, automobile and accessory brands introduce watch lines and collections. Barriers to entry are not many, but the new entrant has to have an offering, which can be positioned and differentiated from the other players in the market. This differentiation could be either through price or function or the emotional appeal. The prime barrier for entry, thus, is to build a unique brand image and price its products competitively. Threat of Substitute Products There are no such substitutes to watch as a product. However, in terms of the brands and companies offering variations for watches such as pendant watches and jewellery watches, some sort of substitution has developed. Rich consumers prefer to purchase watches more as a fashion accessory rather than simply for its typical use. Another substitute to consider could be substituting the purchase from a retailer/ retail store. Customers have the option to purchase directly from the manufacturers of watches or to purchase through the internet. Both of these are not significantly popular in India, which further reduces the threat of substitution. Determinants of Supplier Power The major firms in the watch industry in India are Titan, HMT, Timex and Citizen. HMT has its own fully integrated operation for production of its watches. Timex established its state-of-the-art precision Tool room in 1992 to support production of its watches. Titan has its own production facilities for which it has invested roughly 120 crore rupees over the years, the manufacturing capacity of which is 6 million units. Also there has been a rise of low cost producers in China and Taiwan which has provided an opportunity for watch makers to outsource watch manufacture at low cost, just as Titan has done to outsource the components for Dash. Due to the large supply of watch movements available, there is little supplier power in the watch market. Determinants of Buyer Power The Indian watch buyers are very price sensitive, especially in the lower end of the market. There is still a huge untapped market in India with market penetration of only 20units per thousand people while the world average is more than 100. At the same time, there is a segment of people who are willing to pay a premium for watches with good performance and with a recognized brand name. So understanding the buyers preferences is very crucial in this industry in order to gain a substantial market share. Rivalry among Existing Firms There are many companies in the Indian watch market. However, the product ranges offered by them are diverse. This makes the competition

very stiff and complex. At the lower end of the market, is the Value for Money concentration, which differentiates the players targeting the segment. The strategic stakes for the producers are very high. Titan Ltd., the largest company in terms of market share in the organized sector, has also faced losses in the quarter ended June 2001 despite an increase in the market share due to macroeconomic situation. This shows that a lead in market share does not guarantee a significant increase in sales growth. HMT faced a similar situation when Titan was introduced in the 1980s which lead to a sharp fall in its market share.

The Present Watch Market Scenario The Indian watch market is today of 40 million units, out which 60% is in the unorganized sector, in which the maximum number of watches are sold are below Rs.300. Quartz watches form two thirds of the organized sector and the rest is split between mechanical and digital watches. Even in the organized sector, three fourth of the sales by volume comes from watches that are priced below Rs.1000. Plastic as such is not acceptable to average Indian consumers, especially those from the small towns and rural areas who regard it as cheap and flimsy. They want toughness-which translates into a good quality metal model at a reasonable price. Watch is one of the consumer durables whose replacement rate is very high. The replacement rate of watch is 33.8%(Source: India market demographics report, 1998). This is also due to the fact that the estimated scrap rate of wrist watches is 7.8%, which is applicable after 6 years (Source: India market demographics report, 1998). So due to high scrap rate, outdated models and the shift from the mechanical watches to the quartz watches is causing a very high replacement demand for watches. This along with the low penetration levels represents the untapped market potential for watches in India. Major brands in the Indian watch market The major players in the Indian watch market include HMT, Titan and Timex. Other players are Westar, Shivaki, Maxima, SITCO. International leading brands such as Cartier, Piaget, Omega, Tiffanys and Corrum, Gucci, Longines, Casio, Citizen, Tag Heuer and Esprit have also made an entry into the Indian market. Titan has been consolidating its market share over the past decade. Timex watches, which entered in India with collaboration with Titan, now independently has also gainedsubstantial market share. Segmentation of Indian Watch industry Based on price Mass (Rs.350-600), Popular (Rs.600-900), Premium (Rs.900-1500), Super-premium (Rs.1500-8000) Connoisseur segments (above Rs.8000) Based on user category Mens watches Womens watches Youth watches Kids watches Sports watches

Market Analysis
PESTLE Analysis (For the watch Industry)
Political and Legal

[] the Indian timewear industry is not able to grow to its full potential; thanks to government restrictions on foreign direct investment (FDI). ('FDI restrictions holding back growth of watch market', January 2011) All India Federation of Horological Industries (AIFHI) and Technopak Advisors says the watch industry, one of the oldest in India, has a penetration level of just 27 per cent and the market size is much less compared to other countries, due to unfavourable government regulations and policies. FDI restrictions are not allowing international brands to have complete control over watch retailing. This is in favour for Titan and other domestic brands to gain maximum market share.

Economic The economic factors that have a favourable impact on the Indian timewear industry are: Globalization Increase in the PPP of indian people. Increase in the disposable income

Prices of gold-plated watches vary depending upon the karatage of the gold (e.g. 14 kt or 18 kt) and the thickness of the plating - measured in microns. Titan Nebula offers 18k gold-plated watches, and its prices are on the rise due to the rise in gold prices, that has affected the watches and jewellery industry globally. Socio Cultural People have changed their attitude towards watches, from mere timekeeping devices to a lot more. The transitions that have occurred in the past few decades are:

Perception of watches as life style products Worn as accessories Trend to give watches as gifts Having multiple watches, to suit different requirements The need to match watches with apparel. Watch as a symbol of status

Technological

Prevailing and new technologies have played a huge role in transforming the watch industry. The movement (mechanical/ electronic) and the display (digital/ analog) have created a world of difference in watch brands. The introduction of additional features like calendar/ alarms etc have added to it. Edge, a sub-brand of Titan is claimed to be the slimmest watch in the world and has gained immense popularity and acceptance for it.

SWOT Analysis - Titan STRENGTHS

WEAKNESSES

Targets all segments Promoted watches as a fashion accessory Has watches of all price ranges Wide presence throughout India and overseas One of the few Indian brands to make a mark in the Global market Quality Brand image Customer service and after sales service International tie-ups with Hugo Boss and Tommy Hilfiger.

Waterproof watches not a part of its offerings. Rural India does not form a substantial part of customer base. Kids are fascinated with mobile phones these days and incidentally, they show the time No watches specifically for senior citizens

Cus

OPPORTUNITIES

THREATS
From competitors a) Japanese - Citizen, Casio b) Swiss- Rolex, Omega, Rado,

Under-penetrated market for watches as only 35% (approximately) of Indian population possesses watches. Watches positioned as a fashion wear rather than just utility products. With a changing consumer attitude, people like to possess multiple watches for different occasions and events. Huge market in the

Tissot, Tag Heuer etc. Chinese watches Increasing purchases from Grey markets Mobile phones and wall clocks could become a substitute to watches The fashion trend keeps on changing People may perceive International brands as of

exchange business. Introducing waterproof watches. Rural market may be tapped. Have more International collaborations Growth of Indian watch market is very fast & huge opportunity in organized watch market. Can introduce a collection/ sub brand targeted at senior citizens.

superior quality That the Indian market is open to imports, it maybe difficult for the Indian players to maintain a sustainable growth.

Porters Generic Strategy (source: Porter, 1985, p.12)

COMPETITIVE ADVANTAGE Lower Cost Differentiation

Broad Target COMPETITIVE SCOPE Narrow Target

1. Cost Leadership

2. Differentiation

3A. Cost Focus

3B. Differentiation Focus

According to Porter, there are three generic strategies that a company can undertake to attain competitive advantage: Cost Leadership, Differentiation, and Focus. Titan has tried to achieve a balance of cost focus and differentiation focus through design. Cost Focus In the lower end (Popular segment) of the market, it seeks to achieve a cost advantage by exploiting the differences in cost behaviour. Example: The Titan Sonata gold plated watches are popular with the Indian middle class. Their collections start at ` 395 in a leather strap and ` 550 with a gold plated metal strap. Design Focus In the middle and higher end (Mid and Premium segment) of the market, it seeks differentiation by providing better designs, like no other watchmaker. Example: The Titan Raga No other Indian watch brand for women has such delicate and international designs. The Helia model in Ragas Diva Collection has a radiant dial mirror its many selves in dazzling details. Your aura of indulgence, graced by glowing enamel and ornate motifs. Available in yellow gold, steel, and rose-gold finish on metal. (Raga Diva Collection)

Generic

Opportunities

Threats

Strategy
Can pass on cost benefit to customers Higher profits/ margins Higher bargaining power with suppliers The factors that lead to cost leadership can also provide entry barriers Able to charge a premium price for its products in the market. Higher brand loyalty Influence and make the demand inelastic Capitalize on marketing skills Acts as a means of creating your own market to some extent. Higher margins can help the retailer to deal with powerful suppliers. Exploit market as it has less competition Drastic price differences could affect image quality of brand Brand could be associated as low price low quality

Cost Leadership

Extra costs to promote the product/ product category. Higher cost can lead to high prices Difficult to estimate if the extra costs entailed in differentiation can actually be recovered from the customer through premium pricing. Threat of new entrants Perception of differentiation may vary between buyers and sellers Lower volumes leading to less bargaining power with suppliers

Differentiati on

Focus

Product

Ability to pass on higher costs to customers as there Portfolio Analysis are less or no substitutes

Product Life Cycle

Like human beings, products and brands also have a life-cycle. The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures. (Day, Autumn 1981)

The picture above shows which stage in the PLC, each of the four World of Titan stores which I have visited for the purpose of this project, are. Titan, as a brand is in the maturity stage of the PLC, as is the Watch Industry in India. Incidentally, Titan entered the watch market when the industry was in its growth stage nearing maturity. The brand changed the way watch retailing is done in the country and now, after two decades, the industry is in its maturity stage.

Ansoff Growth Matrix

The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth strategy. Ansoffs product/market growth matrix suggests that a business attempts to grow depend on whether it markets new or existing products in new or existing markets. Titan has all four of these in some form: Market Penetration By constant advertising of the Titan brand itself, reinforcing its brand identity and changing its themes and captions regularly to connect with the target audience. Product Development Titan launched Zoop, the kids watch brand. Earlier it had Dash, but it had to kill the brand as there was no market for the brand at the time. Now, the segment is receiving tremendous importance and Titan re-introduced it as Zoop. Market Development Titan has tried to find a new market for its existing product. Eg: Repositioning Sonata brand for a more young appeal, by which the brand wanted to capture the youth segment. Diversification Titan has diversified into Jewellery and Eyewear, in the brand names of Tanishq and Titan Eye + respectively. Existing Product Existi ng Marke t New Marke t Market Penetration New Product Product Development

Market Development

Diversificati on

If Titan has to develop either a new product/ new market, according to me there is a potential for the brand to foray into watches for the senior citizens. Currently. No brand in India (and hardly, in the world) caters to this segment. This would be a form of diversification as the brand will then be launching a new product by catering to a new segment altogether.

Segmentation
Levels of Segmentation
SEGMENT MARKETING Segments and then targets more than one segment serving the needs of customers in that particular segment, thereby catering to various categories of customers. o Mass Introduction of Sonata o Mid Introduction of Regalia o Luxury Introduction of Nebula

NICHE MARKETING A study conducted to understand the demographics on the watch consumption market in India revealed that almost 42% of them were youth. Titan then re-introduced Fastrack as offering affordable and stylish watches, starting at ` 700.

LOCAL MARKETING Although Titans major business is in India and it has international presence with most collections identical everywhere, some of their products which are available in UK have images of eminent personalities on their dial like M.K. Gandhi, Mr. Jawaharlal Nehru etc. so that the customers can identify the product with those dignitaries.

Bases of Segmentation

Basis

Variable
Age Gender Marital Status

Brand/ Collection
Fastrack Raga Bandhan Royale, Nebula Raga, Fastrack Sonata, Timex

Target
Teenagers/ Youth Women Couples First Class Second Class Third Class

Demographi c

Social Class

Income Psychograp hic

By offering watches at different price ranges ( ` 500, < ` 1500, < ` 3k, < ` 5k, < `
10k, > ` 10k )

Nebula, Aurum Lifestyle Attitude Raga, Gold-steel Sonata, Timex Fastrack

Luxury Mid-premium Mass Happy-go-lucky

"move-on" Benefit Behavioural Geographic Occasions Sonata, Timex Nebula/ Steel Fastrack Regalia/ Raga Value-for-Money Formal Casual Evening

Pictures on UK watch dials.

Positioning
Titan has always been an aspiration brand, providing high quality products. With its numerous sub-brands catering to different segments, the challenge that Titan faces is to create a strong brand image. It follows different positioning strategies; these strategies can also be analyzed as given below:

POSITIONING STRATEGY
Attribute User Benefit Competitor Price

SUBBRAND
Classique Raga Regalia Dash Fastrack Fastrack Digital Tanishq Titan (Europe) Sonata

DESCRIPTION
Elegant, sophisticated Feminine, Unique "Magic in Gold" Fun and smart children Vibrant, cool and young Functional, as well as attractive Increased prices to compete with brands like Tissot, Omega Value for Money Starts at ` 275/-

Perceptual Mapping The perceptual map below uses two factors: price and design of the various watch brands available in the Indian market.

- Dominated by Titan Watches

FORM AL/ CLASS IC Omega Raym ond Sonata HM T Maxi ma LOW PRICE Tissot Citiz en Weil Nebul a Xylys HIG H PRI CE Rado Longi nes

Tag Heuer Espr it Fastrac k Swat ch Fossil Tommy Hilfiger FASHI ON/ SPORT Y Hugo Boss C Dior DKNY

Giordano

Pricing Decision Titan consists of watches that cater to various segments and categories; and their pricing strategy is also in accordance to their products and the features offered by them cashing in on monopoly, unique features, outstanding performance and the name Titan. Titans primary pricing objective is to kill competition. Being an Indian manufacture and infusing the advantages of the Indian market with the

dynamics of the western market, the company has carved itself a place difficult to achieve by foreign players. The other objectives for pricing are: SURVIVAL In some cases, Titan prices watches according to the features and the value delivered by them. For example, a simple steel watch is priced at around ` 600 to ` 1,100. This unique combination of simplicity and good styling is to keep the brand going with its offering being value for money. MARKET SHARE In India, 70% of the sales of watches comes from the lower segment. By pricing Sonata at ` 275 onwards and backing it with a TATA guarantee, no one can match its value. Titan watches found internationally are priced equal to Global players like Calvin Klein where a customer pays about 4 times a value of the world watch hence penetrating the market with low prices to international players to gain market share. MARKET SKIMMING In the Indian watch industry, there was no one before Titan to offer pure gold watches, watches in pairs, Jewellery watches, though it was common in other countries. Titan has customized these offerings with the Indian touch in its designs, the products and looks. Hence it is able to skim the market with certain products at higher ranges. PRODUCT-QUALITY RELATIONSHIP Quality and leadership are synonymous to Titan. It seeks to achieve a balance between both through its value for products compared to their prices. Price Bands (Average): Brand/ SubBrand Price Range Fastrack ` 600 - ` 4,000 Sonata ` 275 - ` 1,400 Titan Bandhan ` 1,675 - ` 8,085 Titan Edge ` 4,500 - ` 7200 Titan Flora ` 6,200 - ` 7,500 Titan Heritage ` 5,000 - ` 10,000 Titan Nebula ` 10,000 - ` 75,000
o

Brand/ SubBrand Titan Octane Titan Orion Titan Purple Titan Raga Titan Regalia Titan WWF Titan Zoop

Price Range
` ` ` ` ` ` ` 2,700 - ` 8,500 4,000 - ` 8,000 3,500 - ` 7,000 1,420 - ` 6,000 1,725 - ` 7,770 3,000 - ` 3,500 450 - ` 900

Titan offers fine quality, unique designs, international features etc. Yet, its prices are competitive. Thus their pricing strategy is in line with the companys strategies. o In its marketing plan, Titan comes out with discounts on the MRP of the watches every year. In order to gain maximum sales at the time, the retailer gets a special allowance from Titan, if the store picks up more than a certain quantity.

Titan promotes sales by adding a free warranty or service contract to its watches and this is backed up by the name TATA which is especially needed to convince and march ahead in the lower segment market.

Fishbein Model Analysis

The cognitive component of a three part model, measuring beliefs, attitudes and behaviours is generally assessed by using a version of the multiattribute or Fishbein model: Ao=[SUM] Bi Ei where: Ao = the overall attitude toward object o Bi = the strength of the belief that object o has some particular attribute i Ei = the evaluation of the goodness or badness of attribute i For the following Fishbein analysis, the attributes taken are: After Sales Service Brand Image Design Longevity Overall satisfaction and Value for Money

Sample size: 20 Question type: Closed-ended question, ranking Titan After Sales Service Brand Image Design Longevity Overall Satisfaction Value for Money Bi 1.3 1.6 1.5 1.02 1.4 -0.5 Ei -1 1 2 1 2 1 Ao -1.3 1.6 3 1.02 2.8 -0.5 5.32 Timex After Sales Service Brand Image Design Longevity Overall Satisfaction Value for Money Bi 1.3 1.6 1.5 1.0 2 1.4 -0.5 Ei 1.3 0.9 1 1.2 1.1 2 Ao -1.69 1.44 1.5 1.224 1.54 -1 3.014

The total of this survey goes to show that Titan is rated almost twice as good as Timex in terms of the attributes taken. o However, a closer look at each of the attributes and the responses received reveals that customers feel that the Longevity of a Timex watch is higher than a Titan watch o Also, that customers perceive Timex watches as more value for money purchases. o Customers are twice as satisfied with Titan designs than Timex, which could be the reason why customers perceive Titan is more expensive. Suggestions:

o Titan must position itself as an affordable item; not budget but, a Value for Money purchase. o Titan invests in its quality and R&D, however customers are not completely satisfied with its longevity, advertisement messages should focus on the quality of the product. Even after enormous expenditure on marketing, the brand image of a Titan is close to that of a Timex. The brand manager must ensure either the perceived brand image of Titan is high or that of competing brands in way lesser.