Titan marketing plan

The world is a dynamic place, and the rate of change is increasing. It is essential that businesses have heightened environmental sensitivity to look for new opportunities and threats. But, perhaps more importantly, firms need to be genuinely marketing orientated and prepared to adapt to meet the new needs. The watch and jewelery industry has a long and fascinating history. These sectors are likely to see a continuation of the upward sales trend in the medium term. Rates of consumer disposable income will continue to rise and inflationary influences will also play a part. Rising spend per item will continue to be a factor in the real jewelery market, while changing fashions will play an important role in driving volume sales of fashion jewelery and watches. Factors behind the ongoing growth in jewelery and watch spending have included an increase in disposable income and therefore the trading up on the part of consumers to more expensive items and pieces made from higher carat age precious metals.

The market for jewelery and watches is highly fragmented, supporting a large number of suppliers and retailers. However, there are also global brands with matching promotional budgets, as well as strong international trade bodies supporting the trade and its products. The success of the Internet has provided further opportunities to promote brands and ranges, although the approach taken by suppliers is variable. ‘Titan’ the world’s sixth largest manufacturer brand of watches and India’s leader of watches diversified into jeweler under the brand name Tanishq in 1995. Titan industries leveraged its manufacturing competencies and branched into precision engineering products and machine building in 2003.

Today, Titan has over 60 per cent of the domestic market share in the organised watch market. Titan watches are sold through over 9,000 outlets 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. Its after sales service is itself a benchmarked operation with a network of over 616 service centre and has one of the world’s fastest turnaround times. Leveraging its understanding of different segments in the watch market, the company launched a second independent watch brand ‘Sonata’ as a value brand to those seeking to buy functionally styled watches at affordable prices. It also entered the segment of premium fashion watches by acquiring a license for global brands such as Tommy Hilfiger.

SWOT ANALYSIS

STRENGTH:

Leader in watch industry

‘Titan’ is the world’s sixth largest manufacturer brand of watches and India’s leader in watch industry. 60 per cent of the domestic market share in the organised watch market. Titan watches are sold through over 9,000 outlets 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. Titan is the runaway market leader, with domestic sales of 6 million watches a year.

Distribution Power:

Titan will be using its extensive dealerships and retail network across the country. “As of now it is available in seven company and about 100 franchised World of Titan showrooms across 33 cities, besides about 50+ watch retailers and through many other boutiques.

Power of Tata

Titan really enjoys the power of their parental company for their rapid growth as a number 1 watch industry. At Titan the products were developed in such a way so as to enhance quality and features to increase buyer value. Titan has very large range of products to suit various taste and budget of consumers. Titan has own hi-tech plant for both In-house design team and manufactured this was the perfect example of differentiation through technological leadership and product technological change.

Excellent Branding and Quality Image

Titan like Tata is expanding its retail presence through branding image. Branding has encouraged heavy promotion and developed strong product identities; Gaining strength in jewellery market, Widening range in higher end watches, Making a mark in precision products and Scaling up manufacturing facility, Titan is confident in the market because of their well esteemed branding image.

WEAKNESS:

Branding requires significant financial investment

For a well-reputed company like Titan, have to spend a lot to keep up their branding image. Successful branding requires significant financial investment and Need to develop more strategies to gain a strong foothold in overseas markets.

Fluctuations in the supply

Industry can be affected by fluctuations in the supply and price of gold, diamonds and other precious and semi-precious metals. Titan has no its own benchmark for Titan benchmarks itself with other services (Rediff, 2006 )

OPPORTUNITIES:

Domestic Strategy

Titan has established leadership in India by catering to every market segment. They pursue a strategy of cost focus and differentiation focus in the country. Continuing this strategy will enable them to further consolidate their position in the domestic markets.

Overseas Strategy

Titan now plans to enter the European market. It will start off by offering ultra-thin movements market under the brand name `Le Papillion’ with the all important `made-in-Switzerland’ label. India can make watches of a quality comparable to that of the Swiss and the Japanese. Hence, overtures are likely to be made to Indian manufacturers who can supply parts and components to foreign manufacturers. With India being granted most-favored-nation status and European and Japanese brands increasingly turning to various Asian sources to contain production costs, a huge opportunity lies ahead for Titan.”

Support by WGC

The support given by organisations such as the World Gold Council (WGC) and De Beers encourages retailers to market themselves more effectively. Branding is increasingly being used to target new opportunities in the market and has considerable potential. Many countries have been a growing interest in Indian culture, for example, UK and USA

THREATS:

The wide availability of cheaper watches

In the last three-four years, a number of foreign brands have entered the Indian market through large retailers in big cities, because of the number of international watches increased; there has certainly been a greater interest in that category of products. So, many buyers today are forced to buy a foreign brand. Cheap products available through various outlets discourage trading up on the part of consumers. Main threat is from the Chinese products and thus tremendous competition, Titan Industries is now fighting competition both from international and Indian brands that are slowly but steadily creeping into the Indian watch market.

Expanding global segments

Titans fear about the expanding ambit of global watch brands appears real. International labels such as Esprit, Swatch and Citizen, hitherto restricted to the premium end, have entered the mid-priced segment, as they find it a tempting plank to garner volumes in the local market. Dynamic market conditions, cut throat competition, presence of multiple brands, low growth rates, high manufacturing costs and low capacity utilisation – this is how the dial of the Indian watch industry looks today.

PLEST ANALYSIS

POLITICAL & LEGAL:

Due to commitment to the WTO (World Trade Organization), India had cancelled the license for import products such as precious stone, jewelry and wristwatches (Indiainfoline, 2004). This will impact especially in watch industries by increasing competitors in Indian market. Globalisation adversely affects home made watch companies. Political and legal factors allow foreign brands to creep towards Indian retailers, affecting homemade brands like Titan.

ECONOMIC:

Watch and jewellery industries are a highly capital-intensive segment of and also labour intensive. In the last three-four years, a number of foreign brands have entered the Indian market through large retailers in big cities, because of the number of international watches increased; there has certainly been a greater interest in that category of products. So, many buyers today are forced to buy a foreign brand, thus globalization resulted unprecedented losses impacted by foreign arrivals, cheap Chinese products. Thus labour, and maintenance costs, as well as increased security costs being suffered by industries in India.

SOCIAL:

Indian people always concern about the design of the product and how the product is positioned and promoted (Domain, 2004). Consequently, producers have to know and match their products to the needs of Indian customers in term of design and position of the product. Titan’s homemade watches are comparatively cheaper to Swiss watches and are distributed all across the country. Powerful network and franchisee businesses help local people a lot in order to buy home made products. Titan brings about human integration of time with space and aims to celebrate aesthetics, laud creativity and share the joy of design with society. The project is a series of innovative clock installations, drawing on the natural and manmade features of urban outdoor spaces. Integrating public spaces with the personal concept of time, the goal of the initiative is to seamlessly construct an aesthetic and functional contribution to India’s cities without disturbing the environment of the outdoors.

TECHNOLOGICAL:

Indian industry is the fastest growing in Electronics and Information both in terms of production and exports (Mitt, 2004). The high technological environment may increase the opportunities and threats for the company (Jobber, 2004). Titan represents a unique blend of high-end Japanese technology, legendary European design and renowned Indian craftsmanship. It is the product of an extraordinary cooperation between designers, toolmakers and marketers across continents.

PORTERS FIVE FORCES

BARGAINING POWER OF SUPPLIERS:

The government or other agencies usually determine the price of raw materials and other accessories, so the company will not have any bargaining power over them.

BARRIERS TO ENTRY:

Barrier could be the customers’ preference and loyalty towards Swiss brands due to Swiss heritage. Moreover, the technological of products with varieties of competitors lead consumers have more alternative to buy the product. The reputation made to in India, expansion of the European sector opened a corridor for new dimension.

THREAT OF SUBSTITUTES:

In watch and jewellery market, the product is not something to be purchased more often, and there is low level of substitutes when compare with other types of products. For example, mobile phones with timer in it will do the work better. However, if we include the characteristic of Indian people who always look for new imported products, this may lead consumers to move towards them.

BUYER POWER:

There are high competitions between suppliers (watch manufacturers) which buyers (department stores, watch shops) have more alternatives to select which brands they will put into their stores. All these reasons have led the power of buyers in the markets are relatively high.

SUPPLIER POWER:

Titan enjoys regulation to protect the intellectual property rights (Patents, trademarks, and copy rights). Tata, the parental company provides technical services such as repairs, spares and training on the manufacturing side. It is the name of TATA, which shines behind Titan and Tanishq.

DEGREE OF RIVALRY:

All service Providers in industry offer same products, but the price, place and promotion are different. Titan has to face many competitors in Premium watch market. For example: pricing of products when comparing with other premium brands (Rolex, Citizen) and the technological competitors’ products lead Titan to work harder in term of gaining the market share.

‘Vision for Titan Industries Limited’

“A company should not enter the market by setting up its own channels (stores and sales personnel) from the start: the risks may be too high. Instead, it should choose, from among existing channels, those that suit its products and strategies, collaborate with appropriate partners, distribute their products, and then foster a market”

(Euro monitor, 2004)

According to Titan Ltd, the company has to face with the high competition from foreign competitors. In order to gain its market share from this situation, Titan must make its products to be differentiated or unique (design or technology incorporate with the product) for competitive with other foreign brands. Today the Indian market requirement for watches is well over 20 million watches per year. The sub 1000 Indian Rupee segment generates majority of the demand. Liberalization has brought with it a host of brands for the Indian market, viz. Piguet, Cartier, Christian Dior, Omega, Raymond Weil, Rolex, and Tissot.

Indian companies are now among the few set-ups in the world those are capable of manufacturing and integrating all parts of a watch. The industry growth rate is close to 8%. With the penetration level of 20 pieces per 1000, the Indian market presents an ocean of opportunity and potential for watchmakers. Least affected will be the players whose sales exceed manufacturing capacity and who have both strong brands and strong distribution.

The fast growing economy and globalisation makes the watch market of India a best destination for launching Swiss made premium watches. The liberalisation, privatization and globalization made India the fourth largest economy in the world after US, China and Japan with a GDP of $3.363 trillion at Purchasing Power Parity and is the tenth largest in the world, with a GDP of $691.9 billion at 2005 USD exchange rates and has a real GDP growth rate of 7.1% at PPP.

In terms of growth rates, the national income is expected to rise by 7.9 per cent during 2005-06 in comparison to the growth rate of 9.0 per cent in 2003-04. Services have proved to be India’s most dynamic sector in recent years, registering rapid growth in telecommunications and information technology (IT). Services accounted for over 48% of GDP in 2000, including banks, construction and other industries and small-scale private traders, as well as the public sector. India’s GDP was poised to grow 7.9% during the current financial year and projected inflation at 5.5% this fiscal, as against 4.6% at the end of July.

The volume of watch sales in India is estimated to be around 25 million units per annum. With the abolition of import restrictions, many of the famous international brands have entered Indian market. But Titan enjoys 80% of the premium segment, with almost 100% brand recall among consumers intending to purchase a watch.

Accelerating Titan’s mode of expansion strategies, the company should explore options foraying into the prescription spectacles market as part of its expansion plans. The company should currently value this market and should take a decision to go ahead for expected change to be taken place in next five years. Titan’s brand positioned against the Swiss-made watches is an opening, the premium watch market, which is estimated to be growing at a pace of over 20% annually, is expected to witness phenomenal growth in future. Titan Should forecast to expand its sales and services into the booming Indian wristwatch market launching a premium watch segment in India, which is presently dominated by well-known European brands.

MARKET PROFILES

Industry watchers say India will continue to buy at even higher prices as long as they remain stable and consistent. Investors hate volatility. If prices are stable, physical demand will remain. Indian households have always preferred to invest in physical assets like property, watches and gold. Although demand fell, net retail investment in India grew by 32%. This was on account of two factors – increased promotion by banks following the success of earlier WGC-assisted campaigns; and the general belief that prices will continue to rise. Individuals bought gold coins and small bars with the view of turning them into jewellery or premium watches at a future date.

When preparing a marketing plan for a completely new product, it is likely that there will be no historical data at all other than the foreign similar products at home market. There is, of course, the situation where the product is superseding another product and in such cases historical data for the superseded product should be used. Due note should, however, be taken of changes to the specification of the new product which may broaden its application.

The growth of Indian economy and the booming IT and outsourcing industries in India has created a new potential customer segment. The elite audience comprising celebrities, socialites and trade constituents about Titan’s penchant for re-inventing and redefining the market in terms of manufacturing, designing, distribution, marketing and communication. The Premium Swiss watch from Titan will take its place of prestige amongst the other brand such as Sonata, Nebula, Fastrack and Raga amongst others. Titan is always been true to two core philosophies and values – customer – centricity in whatever we do and innovation. This has driven us to this new phase at the premium end of the watch market. This gives an opportunity to reinvent and redefine the way in which premium watches can be launched in Indian Urban markets.

MARKET SEGMENTATION

A market segment can be defined as a customer group within the market that has special characteristics that are significant to marketing strategy. In order to launch a premium Swiss Titan watch, social class segmentation is being done under Psychographical segments.

The watch market in India can be divided on the aspect of consumers’ behaviour towards the product offered by the company. This might relate to the benefits customers require from the product. In this case the purchase behaviour of the customers will help to develop an appropriate marketing mix for the product provided. So introducing premium Swiss style watches for premium customers will be an appropriate choice for Titan in India. The Psychographical segmentation, especially concentration social classes can be used to divide the market for Titan in India.

Market Targeting

The second stage of market planning process includes market targeting. The following factors are to be considered to target the market.

Size and growth potential of the market:

The Indian market is large and virtually untapped. Because of its huge population, India is an attractive target and offers significant opportunities, although not without risk. The Indian market is flooded with new ventures. The fiscal deficit in India’s increasing economic strength was 7.3 percent of GDP in 1993-94. The government’s target for 1994-95 was to lower the fiscal deficit to 6 percent of GDP, largely as a result of increased revenues due to economic growth.

The structural attractiveness

The structural attractiveness is done mainly to find out the profitability of the company. Porter’s five forces are used to find the structural attractiveness of the company. The five principal factors are:

Threat of New Entrants

In watch market, the product is not something to be purchased more often, however if we include the characteristic of Indian people who always look for new imported products, this may lead consumers to move towards them. These threats can be eliminated by introducing good design, over the gray market by providing dependable after-sales service, and over the local players by establishing nationwide distribution network.

Power of Suppliers

There was no concept of having vendors in the watch industry. Since the suppliers’ role in this industry was very limited they did not have strong bargaining power. Power of parental company Tata, the main suppliers of raw materials for Titan and provides technical services such as repairs, spares and training on the manufacturing side.

Power of Buyers

The penetration of watches within India was low; therefore there was a huge untapped market. The buyers wanted watches that offered more than just the functional benefit. The brisk sales of imported watches in the gray market hinted that there were a segment of people who were willing to pay a premium for watches with good design and performance. There are high competitions between suppliers (watch manufacturers) which buyers (department stores, watch shops) have more alternatives to select which brands they will put into their stores. All these reasons have led the power of buyers in the market relatively high.

Availability of Substitutes

There are so many players in the market and therefore it is a highly competitive market. Since it is a highly competitive product the features considering the time, money, personal preference, and convenience and the quality are given prime importance. The brand name should be highlighted since it always plays an important role in the Indian market.

Competitive Rivalry

All service Providers in industry offer same products, but the price, place and promotion are different. Titan has to face many competitors in Premium watch market. For example: pricing of products when comparing with other premium brands (Rolex, Citizen) and the technological competitors’ products lead Titan to work harder in term of gaining the market share.

Psychographic Segmentation (Social Class)

Although demographic segmentation is useful, marketers can use alternative segmentation variables that aim to develop more accurate profiles of their target segments.

Psychographics segmentation can be broken down into lifestyle, social class, and personality characteristics. Income based is a popular basis for segmentation. Many companies target affluent consumers with luxury goods and convenience services. Good examples include Coutts bank, Moet & Chandon champagne and Elegant Resorts – an up-market travel company. Segmentation done in Social class, many Marketers believe that consumers perceived social class influences their preferences for cars, clothes, home furnishings, leisure activities and other products & services. There is a clear link here with income-based segmentation. Marketers are increasingly interested in the effect of consumer lifestyles on demand. Unfortunately, there are many different lifestyle categorisation systems, many of them designed by advertising and marketing agencies as a way of winning new marketing clients and campaigns.

Through social class segmentation society can be divided into 6 distinct groups based solely on occupation like professional staff, middle management, junior management, skilled manual, semi-skilled and unskilled workers those dependent on the state. Social class segmentation works on the assumption that the higher your profession the more you will earn. Thus the more affluent lifestyle you will lead. Marketers use this type of information to sell products and services based on lifestyle behaviour, and your profession does have an impact on the way you behave.

Psychographic segmentation divides the market into groups based on social class, lifestyle and personality characteristics. It is based on the assumption that the types of products and brands an individual purchases will reflect that persons characteristics and patterns of living. Psychographic profiles on a target market segments are obtained by doing a lot of questionnaires and surveys to ask people whether they agree or disagree with certain statements made about particular activities, interests or opinion. Women account for a significant percentage of workforce and and have a greater awareness of fashion than their mother’s generation.

Buying watches and Jewellery is viewed not only as indulgence, but also as an investment in their appearance, if not their finances, and this has boosted the amount spent by women in this market. This opportunity must be utilize by attracting such social class segments by introducing watches exactly the same to Swiss made. Marketers should use personality variables to segment markets. They should endow the products with a brand personality that corresponds to a target consumer personality or social class wise. The company should ustilise product features, services, and image making to transmit the product’s personality.

The growth of Indian economy and the booming IT and outsourcing industries in India has created a new potential customer segment. The Introduction of Premium Swiss watches from Titan will really enjoy the particular segment. The entry should be into a wholly new, but the existing space aiming the social class segments, especially executive and CEOs in and around metropolitan cities in India. The launch marks an irony as well. Titan is credited with having turned the watch from a timekeeping device into a fashion statement in India and can certainly create buffer space – and perhaps develop an equally appealing personality of its own. India should talks of a paradigm shift in the premium watch segment. Our new product is created for the new generation achievers who go beyond the obvious.

Industry watchers say India will continue to buy at even higher prices as long as they remain stable and consistent. According to World Bank reports the Indian economy could be on course to grow at an average 6% over the next 15 years. THE Financial Times (FT) has estimated India’s total gross domestic product (GDP) in 2004 at nearly $650 billion. Industrial growth jumped to 10.8% in May as double-digit growth in the electricity sector supplemented the already booming capital goods and consumer goods sectors. Exports recorded a healthy 19% growth in April-June but were dwarfed by a 38% increase in imports (40% for non-oil imports), which widened the trade deficit to more than $11 billion, up from $6 billion in the same period last year. Corporate earnings are still showing impressive growth momentum and the services companies are beginning to justify their historically high valuations with large absolute numbers in sales and profits, while still maintaining high growth path.