titan strategies
TRANSCRIPT
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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.
Write a research paper on titan-marketing strategies
HMT, the undisputed leader of the wristwatch market before Titans entry completely
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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 haslaunched 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 wasfirst 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.
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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
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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. Thesesmall 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.
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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 hassegmented 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
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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
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G eographical
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 belaunched) , 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.
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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 G ents Rs. 750 to Rs. 7750 8
Insignia Ladies Rs. 1600 to Rs. 7500 8
PSI000 G ents Rs. 1780 to Rs. 7500 61
PSI000 Ladies Rs. 800 to Rs. 450 6
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Regalia G ents Rs. 180 to Rs. 770 157
Regalia Ladies Rs. 175 to Rs. 7770 168
Royale G ents Rs. 60 to Rs. 810 1
Royale Ladies Rs. 110 to Rs. 80 1
Classique G ents Rs. 850 to Rs. 450 68
Classique Ladies Rs. 565 to Rs. 0 161
Spectra G ents Rs. 1140 to Rs. 180 57
Spectra Ladies Rs. 650 to Rs. 1410
Exacta G ents Rs. 600 to Rs. 1170 48
Exacta Ladies Rs. 55 to Rs. 800 5
FasTrack G ents 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
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Nebula G ents Rs. 850 to Rs.1500 8
Nebula Ladies Rs. 550 to Rs. 650 4
Bandhan Rs. 1675 to Rs. 8085 4
Sonata G ents 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 G irls 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 G old series has been introduced to target the premium segment.
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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 G eoclustering 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.
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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 ( G eoclustering
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
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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
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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 ( G eoclustering 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 therichness 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
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Present promotional strategies;
1. Titan Positions the G eneric 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 awatch 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 out-
lets 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
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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 G roup, 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
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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 MARKETIN G 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 toimprove 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
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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 defensivetechniques 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 veryfirst 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.
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