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Watch Division
Presented by:
Nilamani Das
Pranab Pegu
Prashant Jain
Vineet Shankdher
HMT : A Snapshot
Incorporated in
1953 by the
Government of
India as a
Machine Tool
manufacturing
company.
Over the years Successful technology Today, HMT
diversified into absorption in all product comprises six
Watches, Tractors, groups through subsidiaries under
Printing Machinery, collaborations with world the ambit of a
Metal Forming Presses, renowned Holding Company,
Die Casting & Plastic manufacturers & further which also manages
Processing Machinery, strengthened by the Tractors
CNC Systems & continuous in house Business directly
HMT Watches : Profile
S
Company’s liquidity position has been quite
T comfortable. Adequate availability of tangible
R assets such as land and buildings.
E Record of good industrial relations.
N
In 1991 HMT set up a product development
G
center for watch design.
T
H
S
Contd…
W
Its prime product category (mechanical watches)
was in the decline stage of PLC.
E
Weak Organizational culture: It suffers from bad
A
work habits, lack of discipline, low commitment of
K
manpower, inadequate motivational strategies, lack
N
of team spirit and low utilization of human and
E machine capacities. Inadequate cost control system.
S Over reliance on the production concept of
S marketing and hence ignoring the marketing concept.
Insufficient emphasis on R&D and design
engineering.
Contd…
HMT didn’t embrace new quartz technology to a
great extent & suffered because of their adherence to
W mechanical watches.
E Bureaucratic and centralized decision making
A inhibited HMT’s ability to respond quickly with respect
K to market changes.
N Virtually ignored to maintain good trade relations
E with retail outlets vis a vis competition (retail margin
S was lower than what was provided by the competitor)
It restricted product development to quality
S
development only.
Aesthetics and packaging of watches have not been
duly attended to.
Contd…
T
Titan had started marketing its watches in
H
unconventional outlets like boutiques and jewellery
R shops.
E The authorized service agents (ASAs) for foreign
A smuggled watches in the country are also offering
T competition to HMT.
S
Contd…
O
The demand for Watches is growing rapidly both in
P
P domestic and international market.
O Capitalize on attractive segments.
R In coming years Fashion brands, luxury watches and
T watches with multiple functions are considered as the
U
product segment with the biggest growth.
N
Leveraging brand equity of HMT to products such as
T
I sports gear, personal accessories.
E
S
Question 2: What is wrong with HMT’s watch division’s
marketing strategy? What kind of corrections do you suggest?
M Product
I Few Designs as compared to competitors. HMT has
M Price
I HMT positioned the quartz watches as the space
age generation watches & charged high prices for
S
this category which means that only the affluent
T
middle aged consumer could afford it. In less than a
A
year the company had to reduce the price and
K
followed lifestyle advertising to justify the still higher
E price of the quartz, however even this backfired as
S consumers were not convinced of the differentiation
between the quartz and other HMT watches.
Question 2: What is wrong with HMT’s watch division’s
marketing strategy? What kind of corrections do you suggest?
Place
Didn’t strategize its established marketing network according
M
to growing competition and new market trend like downtrend
I of mechanical watches & the growing market for the quartz
S watches.
Since retailers have enough foreign brands they were simply
T
not interested in HMT’s home grown products as a result it had
A to sell through its 13 branch offices for Machine tool
K equipment.
E Even when FERA was introduced HMT could take the
advantage in a limited way by offering service agencies to
S
about 50 watch key retailers as a way of expanding its selling
reach.
In mid 80’s HMT’s selective retailer policy began going against
Question 2: What is wrong with HMT’s watch division’s
marketing strategy? What kind of corrections do you suggest?
Place
R technological leadership.
E The products should be developed to enhance quality
C and features matching customers tastes and preferences
T
and there by increasing buyers value.
I
Mid & Premium segment: In this segment HMT should
O
seek differentiation by providing better designs
N
S
Question 2: What is wrong with HMT’s watch division’s
marketing strategy? What kind of corrections do you suggest?
C Conduct market survey:
O Involve leading market research organization along with your
R sales force.
R Do it periodic every six month; Involve retail-shops, shopping
C Competition:
O Shift to quality with new added value..
R Provide consumers with a lot of information select their watch
R wisely and professionally according to their own taste..
E
C Distribution:
Prepare retailer to meet the changing consumer’s trend.
T
Watches just displayed in showcases cannot sell. It is
I
absolutely necessary to present them together with the
O
background such as original story of the watch, its functionality
N
and benefits of after sales service.
S
Contd…
C Pricing:
O In the lower end HMT should seek to achieve cost advantage
R by exploiting the differences in cost behaviour.
R The pricing strategy can be to undercut main competitor by
C
T
Promotion:
Special focus on sales during festive time like Diwali,
I
Christmas along with discount offer & finance schemes.
I
Go for innovative and stylish ad campaign that reflects the
O
aspirational, independent and modern dimensions of the watch
N
collection and its target market along with effective press
S campaign.
Contd…
C Strategy:
O Under the present difficult situation HMT will have to find out
R ways to activate the market and try to to create new demands.
R
E
C
T
I
I
O
N
S
Question 3: In the present competitive watch market, how do you
visualize the future of HMT watch division five years from now?
33%
43%
– Volume growth
– Sharply defined
driven by the Dramatic transformation of consumer segments
low end the Indian watch market around distinct
buying factors
– Value growth
driven by luxury
– More awareness of
segment brands and global
trends among
affluent urban
consumers
4. Emergence of new channels
– New retail outlets emerging (Dept.
stores/malls)
– Existing outlets (MBOs) getting smarter
looking
– Unorganized retail at low-end
Contd…