marketing strategy of titan watches1

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MARKETING STRATEGY OF TITAN WATCHES

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TITAN WATCHES

• Started in 1987

• Joint-venture between TATA and TIDCO

• Quartz watches

• Market leader

• Most admired brand for many years

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Marketing environment

• In 1987

• HMT, the undisputed leader

• Synonymous with watches

• Established player

• PSU

• Leader in mechanical watches

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PEST factors

• Political

• Economical

• Social

• Technological

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Political

• Stable government

• Tinges of liberalization

• Government had started allowing foreign brands to enter Indian market

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Economic

• GDP growth rate was close to 3%

• Inflation rates stable but higher

• Protected economy

• Still highly regulated

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Social• Changes in lifestyle• Select exposure to MNC brands• Entry of Honda, Kawasaki• Indians highly patronizing foreign brands• Grey market• Burma Bazaar’s• Increasing aspirations• Good quality/foreign brands bought

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Technological

• Better technological practices

• Quartz watches was the future

• Traditional mechanical watches

• Increasing preference for better technological products

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COMPETITIVE ENVIRONMENT• HMT undisputed leader• Complacent• Changing worldwide trends• Preference for quartz• Declining market for mechanical watches• Indian consumers increasingly exposed to

foreign brands through grey markets

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TITAN’s assessment• Absence of any other major competitor• Presence of HMT• Complacent• Higher market growth rates• Quartz-the future of watch market• Increasing share of grey market• Lack of innovation amongst domestic players

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CONSUMER ANALYSIS

• 50% of the watches bought by consumers are used as gifts

• Consumers looking for trendy watches

• Look at watches as a statement of their personality

• Market did not have trendy, designer oriented watches

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PILLARS-TITAN’s MARKETING STRATEGY

• Wants to be a leader

• Resources of Tata’s

• Positioning strategy

• Marketing mix

• Segmentation

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Wants to be a leader

• To become leader

• ‘confront’ with the leader

• Take HMT head-on

• Why

• Had the resources to fight the leader

• Backing/resources of Tata’s

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Positioning strategy

• Limited range of HMT

• Titan positioned watch as an ‘ornament’

• Statement of fashion

• Change the consumer’s perception of watches

• It could be gifted

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Marketing Mix

• Product

• Price

• Place

• Promotion

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Product• Quartz technology• Better product• Contemporary styles• Started with 750 designs• Faced dilemma• Mechanical versus quartz• Finally quartz• Avoid price competition with HMT• Do not want to confront a low-cost producer on

price.

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Product

• Objective was to• Consumers buy more than one watch• Market size increases• Augment demand for watches

• Different range for different segments

• Introduce jewellery watches

• Indians buying designer jewellery abroad

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Pricing• Unique benefits• Higher prices• Higher cost of manufacture• Latest plant, high investment• Avoid price confrontation with HMT• Avoid price war• Sell on differentiation

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Place• Comes from positioning• How customers buy fashion items• Creating a showroom idea• Dedicated exclusive distribution• Investment in a showroom• Inline with product positioning• Prime locations

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Promotion• Exploring relationships• Why• Gift items• Promotion themes explored• New relationships• Market research feedback• Focus on after sales network• Why• Poor feedback of consumers about service

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Strategic Alliances• Timex tie-up• Titan’s strong presence in middle income

segment• How to increase presence in lower segments• Not presence• Dominated by mechanical watches• Presence of grey market• Sale of trendy watches

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Strategic alliance with Timex

• Timex leader in mechanical watches

• Attack HMT through Timex

• Decimate HMT

• Make the competitor as weak as possible

• Attack from many flanks

• HMT loses heavily

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RESULT

• Market leader in next five years

• Most envied brand

• Dominant market share


HMT ‘s defence

• Market leader

• How to defend

• Revamps its product line

• Launches Elegant series

• Launches quartz range


HMT’s strength • Low end• Launches digital watches• Rs 300-500• Showroom concept• 30 showrooms• Expand dealer network• Motivation of dealer


HMT

• Leads mechanical watches segment

• Lags quartz segment

Strengths

• Its infrastructure

• Technical manpower

• Inhouse manufacture of most parts

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Modifications in Titan’s marketing strategy

• Why

• Changing environment

• Global competition

• New challenges

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Global competition

• Swiss and Japanese brands

• Removal of restrictions on imports

• By 1998, restrictions were removed on imports

• Upheavel in domestic market

• Made imports favorable for high end watches

• Unfavorable to domestic player

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Focus on semi-urban/rural markets• Over 66% of the population• Had developed variety of brands for various

segments in urban markets• Various price points• Mostly urban centered• Semi-urban and Rural markets• Distribution challenges• Increase number of outlets in semi-urban markets

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Market Leader

Expansion of markets• Product innovation• Launch of Nebula, another range of all Gold

Watches• End of 1998• Aimed at well –to-do, 25 years plus segment• Rs 6000 to 32000

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Titan launches Digital watches

• Digital Fastrack

• Young and sporty

• Cover flanks

• Break up with Timex

Timex

• High-priced and lack of distribution

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• Globally youth was being targeted through digital watches

• Fastrack Digital collection on a fashion platform

• Multiple time zones

• Objective was to prevent competitors to enter from flanks

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Launch of Dash

Expansion of markets• Exciting brand for children• 6 to 14 years• Attractive colors and designs• Positioning• Targeted at the child who has style and class, is

discerning and more importantly, wants to wear a new face.

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• Children market nexplored

• 250 to 395 range for boys and girls

• Objective was to make consumers brand loyal at young age

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Competitive advantage

• Early 2000s

• Low-price segments

• Semi-urban areas

• So far differentiation

• Low-price segments mean cost advantages

• How to cut costs35


Competitive advantage

• Cost advantages had to be developed

• Focus on cost

• Shifted on production

• Control labor and other production costs

• Better realizations by controlling costs

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Learning • Understanding of environment• Successful positioning• Fighting a leader • Identifying competitive advantage• Changed its strategy with changing environment• Strategic alliances with a competitor-Timex (of

HMT)

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Innovative marketing strategy was the main reason for successful strategy of Titan Watches

marketing strategy of titan watches1

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