titan-marketing strategies

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INTRODUCTION

Titan, a Tata group company entered the watch market in 187. Since then it has developed into one of the most recognized brands in India. In fact, in a recent survey conducted by A&M, Titan emerged as the top brand in the consumer durable segment.

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HMT, the undisputed leader of the wristwatch market before Titans entry completely

neglected the quartz watch segment. Titan successfully filled this gap. Its wide range of designs, high profile advertising and distribution network helped it gain a substantial market share in a short span of time.

The Titan brand was essentially positioned as a premium brand. As a result the lower segment was left uncovered. After it entered into a joint venture with Timex, it made inroads into this segment too. Internationally, Timex is seen as a mid-priced quality watchmaker. Its association with Titan in India led to wrong segment targeting. Here, the middle and higher income groups were buying its watches. In 18, this association came to an end erasing Titans presence in the lower segment. Since then, it has launched the Sonata range of watches that is in direct competition with the Timex range.

Marketing Data

Market share

From its inception, Titan decided that it would be the shaper of the watch industry and not an adapter. They created competitive advantage through differentiation. They first concentrated on technological leadership. The Tatas took decisions they will

manufacture only quartz (analog and digital) and not mechanicals, and they would set up state-of-the-art plant to manufacture watches in a wide variety of designs and prices. HMT and local players had always looked at the functional utility of the watch. Titan was first in India to introduce the style concept. They projected the watch as a fashion accessory. They clearly identified that their main competitor was not HMT, but the gray market.

A firm differentiates itself from its competitors if it can be unique at something that is valuable to the buyer beyond simply offering low price. Differentiation allows a firm to command a premium price, to sell more of its products at the same price, or to gain equivalent benefits such as greater buyer loyalty. Differentiation leads to a superior performance if the price premium achieved exceeds any added costs of being unique.

At Titan the products were developed in such a way so as to enhance quality and features to increase buyer value. This was the perfect example of differentiation through technological leadership and product technological change.

In the initial years Titan chose to concentrate on the higher end of the market, which was responsive to the style element of the watch. Also this segment of the market was relatively price inelastic. This was done so as to build the brand image of Titan as manufacturer of good quality stylish watches. Over the years the Titan brand and its signature tune Mozarts Fifth Symphony has become one of the most recognized in

Indian consumer durable goods segment.

10s saw the liberalization of the Indian economy. There were two trends in the watch industry after liberalization, viz. the giant of the watch industry changed from HMT to Titan, and small manufacturers have gained strength in the market. Why did this happen? Mainly because times changed, but HMT did not. In fact when the other rivals were running a 100 metres, HMT was walking backwards. HMT lacked a clear market strategy or research. It failed to develop a good network of loyal and honest dealers. There was rampant corruption in the marketing division. HMT also failed to provide a basic feature that any products must always satisfy quality. In fact of all the watches that HMT sold in the market, 40% came back within months for repairs. About 7% of the watches were rejected at the dealers level because of the manufacturing defects. Being

a public sector undertaking, HMT had to dance to the tunes of the political bosses. It was overstaffed and grossly inefficient with 60% of the sales being expended as salaries. Last but not the least, though HMT had about 45% market share in the early 10s, its share in the high margin high growth quartz segment was a mere 18%. This led to a sudden and drastic decrease in HMTs total market share in mid-0s.

During this period, the unorganized sector also grew very fast

almost 55% of the

demand in the total market size of 0 million watches was being met by the unorganized sector. With the import duty reduced to 5% (earlier 50%) and with the import license for watch movement being easy to obtain, many smalltime players cropped up. These small players offered competition to Titan on the price front.

Titan once again showed that it was a shaper and not adapter. Over the years Titan had built a formidable distribution and support network. Titans customer orientation was reflected through their advertising campaigns. Whereas HMT called themselves timekeepers of the nation, Titan told the masses if you have the inclination, we have the time.

Brand share

Domination by unorganized sector and Declining market share

In the premium segment, the company has to face the likes of Omega, Swatch etc., while at the lower-end of the watches segment the company has to compete with the unorganized segment. Moreover, the margins are wafer-thin in the low-price segment.

The company is loosing its grip over the mid-price segment in which it had been an undisputed leader. Its erstwhile partner Timex is giving strong competition and has been gaining market share (increased from 18% to %) at the expense of Titan. Titan has already started price-cuts and exchange offers in this segment to keep its hold over it.

Identification of customer usage

Titan has segmented the watch market and clearly identified clearly the needs of each group. The strategy that Titan has adopted in recent years is that of focus. It has segmented the market into different need groups and tailored its strategy to the exclusion of others. By optimizing its strategy for the target segments, it seeks to achieve a competitive advantage in its target segments.

Market segmentation is concerned with identifying differences in the buyer behaviour, allowing a firm to match its capabilities with distinctive products and related marketing programs. Market segmentation tends to focus on the marketing activities in the value chain in which Titan commands a very formidable position. This also allows Titan to find out how it should serve each segment.

Titan has tried to achieve a balance of cost focus and differentiation focus. By this we mean that in the lower end (Popular segment) of the market, it seeks to achieve a cost advantage by exploiting the differences in cost behaviour. In the mid- and higher-end (Mid and Premium segment) of the market, it seeks differentiation by providing better designs.

To achieve this Titan has segmented the market and launched a brand or a sub-brand

to meet the needs of each segment. Thus it aims to be a market leader in each niche it aims to serve.

Consumer demographics

How has Titan segmented the market?

Titan has segmented the market on the basis of the following variables

Demographic

Age children, young adults, adults

Social class upper, middle and lower

Psycho graphic

Lifestyle professionals, affluent

Personality adventurous, cool, traditional

Behavioral

Benefits functional, attractive, reliable

Occasions gifts, special occasions

Geographical

Region Europe, Middle East

Targeting segments

Titan goes for full market coverage with its different sub-brands. The different market segments that it targets include

Upper premium segment This range includes Tanishq and a new brand (soon to be launched) , Phillipe Charriol. These watches are in the price range of Rs. 0,000- Rs. 1,00,000.

Premium segment This range includes Insignia, Royale, Regalia and the recently launched Nebula. The prices are from Rs.6000-Rs.10,000.

Middle segment This range has Fastrack, Raga and Dash! These watches are priced between Rs. 750- Rs.4000

Lower segment The Sonata and Exacta range caters to this segment. The prices vary between Rs.00-Rs.100.

Speciality segments These are special segments that tend to overlap with the others, because they are not mainly differentiated on the basis of price. For instance, Fastrack Digital caters to those looking for a functional watch, PSI 4000 to the adventurous and thrill seeking.

User positioning Titan caters to several user groups- children (the Dash! Range), sportspersons and adventurers (PSI4000 and Fastrack range). The Fastrack range is seen as being contemporary, sturdy and reliable. The advertising, packaging and merchandising of this range is young, vibrant and cool (the ad line says Cool watches by Titan)

Price positioning

In the overseas market, especially in Europe where it is competing with Swiss and Japanese watches, it is positioning itself as value- for- money reasonably priced (less than Swiss watches and higher than Japanese), attractively styled and of good quality.

The various brands of Titan and the price range in which they fall are tabulated which follows

Brand Price Range No. Of Models(Approx)

Insignia Gents Rs. 750 to Rs. 7750 8

Insignia Ladies Rs. 1600 to Rs. 7500 8

PSI000 Gents Rs. 1780 to Rs. 7500 61

PSI000 Ladies Rs. 800 to Rs. 450 6

Regalia Gents Rs. 180 to Rs. 770 157

Regalia Ladies Rs. 175 to Rs. 7770 168

Royale Gents Rs. 60 to Rs. 810 1

Royale Ladies Rs. 110 to Rs. 80 1

Classique Gents Rs. 850 to Rs. 450 68

Classique Ladies Rs. 565 to Rs. 0 161

Spectra Gents Rs. 1140 to Rs. 180 57

Spectra Ladies Rs. 650 to Rs. 1410

Exacta Gents Rs. 600 to Rs. 1170 48

Exacta Ladies Rs. 55 to Rs. 800 5

FasTrack Gents Rs. 550 to Rs. 140 57

FasTrack Ladies Rs. 850 to Rs. 1050 11

Technology Rs. 50 to Rs. 8170 55

Raga Ladies Rs. 140 to Rs. 4000 1

Nebula Gents Rs. 850 to Rs.1500 8

Nebula Ladies Rs. 550 to Rs. 650 4

Bandhan Rs. 1675 to Rs. 8085 4

Sonata Gents Rs. 5 to Rs. 115 00

Sonata Ladies Rs. 50 to Rs. 1100 6

Sonata Pair Rs. 145 to Rs. 000 10

Dash Boys Rs. 5 to Rs. 5 15

Dash Girls Rs. 50 to Rs. 50 1

Source Tradepost, March 000

New product activity

The outcome of the companys R&D is the worlds thinnest watch, Titan Edge, that is all set to shore up the companys brand equity amidst growing competition. Added to this, Nebula Gold series has been introduced to target the premium segment.

Product Review

Performance and physical characteristics

The various sub brands that collectively make up the time keeping giant we know as Titan

Sonata

This is Titans most basic range, offering reliable, everyday-working watches reasonably priced between Rs 50- Rs 00. A case of socio-economic segmentation. These are perhaps HMTs most direct competitors, offering more or less similar attributes to those offered by HMTs watches.

Nebula

Originally part of the Tanishq line, Nebula became part of the Titan line when Tanishq was made exclusively a jewellery line. One of Titans most expensive range of watches, they are still marketed as solid gold watches under the ad-line, The Jewelers Collection, a case of Geoclustering technique of segmentation. Priced between Rs 6000 -Rs 1,500 these watches are rather obviously targeted at the upper-most end of the market, in competition with brand such as Rolex and Cartier.

Dash!

These are bright, colorful watches aimed at children aged 6-14 years, offering the advantage of a recognized, high quality brand, economically priced at Rs 50 onwards. These watches are marketed under the ad-line Wow Watches from Titan thereby making them instantly appealing to their target audience. Dash! has created an entirely new market segment in the watch industry and dominates it. Recently however, with the entry of Swatch, with their children-oriented Pop-Swatch watches, Dash! finally has some competition. Dash! is still likely to dominate this segment however, as no other brand is quite ready to offer such competitive prices.

Fastrack

These are Titans youth-oriented, style watches, priced between Rs 550-Rs 1500. Incorporating the all-new international frosted look, these watches offer contemporary styles that are fresh and vibrant, for both men and women (Geoclustering segmentation). The all-steel body comes in a variety of frosted finishes- steel, gold ion plated and black ion plated and with PVC, leather and cool metal straps. All watches are highly water resistant, ranging from 50m to 100m. Their ad line, Cool Watches from Titan speaks volumes about the segment it is targeted at. Fastrack recently launched its digital range as well, and now counts among its main competitors Sitco and Casio (in the digital range) and Esprit and Swatch (in the analog range).

Classique

These watches are targeted at the older, male segment of the market, and profess timeless elegance through a combination of fine leather straps, clean classic dials and

sleek cases, thus making it, A perfect fit for formal wear. Classique is the embodiment of everything that is everlasting yet contemporary. These watches tend to be generic in their simplicity, and find no real competitors, save for perhaps HMT. These watches are priced between Rs 550 to Rs 000.

Insignia

This world watch priced between Rs 4000- Rs 7500, is an eloquent fusion of design, craftsmanship, and precision engineering. An Insignia is 10 times more complex than a regular Titan watch, incorporating the best of materials; high-grade anti-allergic steel, scratch resistant sapphire crystal and special hard gold plating. Individually numbered, each Insignia comes with a two-year international guarantee.

Psi 000

A range of contemporary sports watches, aimed and marketed as a tough, outdoor, adventure brand (Psycho graphic segmentation). Made from non-allergic stainless steel, these watches have such authentic sports features as luminous dial markings, rotating timer rings, upto 100m water resistance, and screw in crowns to withstand pressure while swimming. As is evident from their advertising, Psi 000 are positioned in direct competition with similar foreign brands such as the Swatch Irony. These watches are priced between Rs 800 to Rs 7500.

Raga

These are exclusive watches for women, with design elements that are first of their kind. An exciting collection that incorporates traditional Indian motifs, with such innovations

as interchangeable straps and a unique three in one watch. Designed exclusively for use with Indian womens formal wears such as sarees and salwar kameezes, this range is truly one of a kind and has no competitors in its segment. These watches are priced between Rs 1400 to Rs 4000.

Royale

This stunning collection comprises of alluring gold plated cases matched with exquisite gold plated straps, and includes designs to suit everything from simple to dressy evening wear. These watches are priced between Rs 60 to Rs 000.

Regalia

Priced at Rs 5000 upwards, and marketed as Incredibly eye catchingmagic in gold, these finely crafted watches combine sleek cases and patterned dials with special appliqu s flowing into intricately designed bracelets. This is Regalia a special watch for a special occasion. With a unique combination of all gold and bicolor looks, this range represents the essence of dress wear (Geoclustering segmentation). Competitors include foreign dress watch brands such as Tissot, Piaget and Rado.

Spectra

A truly unique collection of watches, which combines the sturdiness of steel with the richness of gold. International in its styling, this range is for those who look beyond the ordinary. These watches are priced between Rs 650 to Rs 100.

Promotional plan

Present promotional strategies;

1. Titan Positions the Generic Device-Watch-As an Ornament

Titan positions the watch, which till then was a commodity-like product, into an ornament one would like to wear. It also incidentally showed time, thats all! Titan positioned its watch as a part of dress and ornamentation, rather than as a product used for telling time. Titans positioning strategy was so aggressive that it promptly resulted in a change in the consumers very perception about watches. They started seeing a watch more as an expression of an individuals taste and style than as a mere timekeeping device. As a result, demand for watches, which were high in style and design, started growing. This was the real success factor of Titans positioning strategy.

. Distribution and Promotion Further Strengthened

Titan now strengthened its distribution and promotion. By 001, the number of Titan outlets was hiked to 6000 from 5,500. Exclusive, World of Titan shops went up to 140 from 115, and multi-brand, Titan Time Zones, went up to 150 from 11. Titan allocated an advertisement budget of Rs.4 crore, for fiscal 001 as compared to Rs.5 crore, the previous year.

. Always remember the USP

A USP (Unique Selling Proposition) is not only what gives the customer a reason to buy the brand, but is also what helps him distinguish the brand from its competitors. Titans USP is two fold, and can perhaps best be described in six words. An Indian company

offering international quality. This works for Titan in two ways. First of all, its emphasis on international quality successfully negates its major Indian competitor, HMT, who is still perceived as a company offering solid and reliable, yet singularly unstylish and staid looking watches. Secondly, with the plethora of foreign brands available in the country today, Titan emphasis on being Indian enables it to effectively meet their threat. Interestingly, while Titan has never actively promoted the fact that its parent company is the Tata Group, at the same time it has never really done much to hide the fact. Thus while capitalizing on the Tata name, it has built its own identity as an Indian brand offering high quality watches at prices significantly below those of comparable foreign brands.

4. Dont neglect Public Relations

Public Relations, or PR, are vital to the success and survival of any brand. Unfortunately, its value as a brand building tool has more often than not, been undervalued. Newsletters, event and entertainment sponsorships, and other forms of PR help to define the personality of a company or brand, positioning it as a good corporate citizen, and someone nice to do business with. In keeping with Indias obsession with cricket, Titan has often sponsored cricket tournaments, including the now legendary 17 Titan Cup. Titan also sponsors a number of popular television programmes, a prime example of which is Star Worlds The Practice.

Proposed promotional plan

Though being voted Indias #1 company is an honor any company would cherish, we

feel that with the surge of foreign entrants into Indias watch market, Titan cannot afford to rest on its laurels. Titan should prepare for a warA MARKETING WAR.

Before elaborating upon the strategies Titan can adopt in the future, it is important to understand that the best strategy for a market leader is to play defense. However, a defensive strategy should by no means be confused for a passive one. In their famous book Marketing Warfare, Al Ries and Jack Trout identify major principles of defensive marketing warfare;

1) The best defensive strategy is the courage to attack yourself The best way to improve your position is by constantly attacking it. In other words, Titan should strengthen its position by introducing new products that make obsolete its existing ones. It is better to take business away from yourself than have someone else do it for you. This puts the competition in a tough spot as a moving target is harder to hit than a stationary one. Titan should continuously innovate and introduce new models. The importance of R & D (Research & Development) has been realized only recently. In recent times it has been R & D that has provided the edge to both products and brands.

However this strategy can be applied mainly to the lower range or digital range of Titans watches, as the concept of class remains constant over a period of time. Attacking yourself may sacrifice short-term profits, but it has one fundamental benefit. It protects market share, the ultimate weapon in any marketing battle. Any company that hesitates to attack itself usually loses market share and ultimately market leadership.

) Strong competitive moves should always be blocked Most companies have only one chance to win, but leaders like Titan have two. If Titan misses an opportunity to attack itself, it can often recover simply by copying the competitive move. However, the leader

ought to move rapidly before the attacker gets established. There is no room for oversized egos or complacency in marketing. Blocking works well for a leader as it takes time for an attacker to make an impression in the mind of the target customer.

For example if Timex comes out with a new technology watch Titan should counter the move by introducing a similar line of watches. In marketing warfare, psychology is always on the side of the larger competitor. It is thus always better to overcome than to undercover.

We therefore feel that it is only through the proper implementation of such defensive techniques that Titan will be able to stave off the threat of the numerous foreign brands in the country today.

In closing, we sincerely hope that we have been successful in our endeavor to not only discuss the various techniques employed by Titan Industries on their road to being Indias favorite brand, but to have also shed some light on our perspective of marketing in general.

CONCLUSION

The well formulated marketing strategy enabled Titan achieve its main objectives; Carving out a sizeable market share within a short span of time; building a powerful brand; developing and efficient retail chain; and making attractive profits from the very first year onwards. During the year 1-000, Titan sales turnover came to Rs.60 crore; watch business accounted for 76 per cent of this turnover, and the balance was met by jewellery. Net profit was Rs.1. crore and the watch business generated 0 per cent return on capital employed.