Product Management Assignment on TITAN

System and Finance || MBA(TM) 2011-13

Swapnil Thorat Tarun Chaturvedi Arun Koshy Thomas Udit Wadhwa

: 11020541063 : 11020541064 : 11020541065 : 11020541066

ANALYSIS OF TITAN WATCHES

Titans watch segment is the Indias chief producer of watches and ranks fifth in the world in production of watches. Company really understands the psyche of consumer and they offered quality products in classical design with superior technology. Today the company has model for every prices segment and every market. Basically it deals with three target market High income group Middle income group Lower income group

SWOT ANALYSIS AND MARKETING MIX ON TITAN WATCHES STRENGTHS:

1. Style: Titan first introduced the style concept in India and projected the watch as a fashion accessory. Now a days style is a very much evident factor among the youth. And there is a craze for stylish wristwatch. So, Titan makes the peoples life more glorious by making stylish wristwatch.

2. Models: Titan offers the best and the biggest range to customer; to choose the watch of their choice with an affordable price. It offers about 14 different names with about 1000plus different varieties with a watch for literally everyone.

3. Exclusive products: Today Titan holds the pride for say that its products both within the country and internationally running in battle position. Its EDGE the slimmest watch in the world position.

4. Contribution of owned brands and retail. The profit is accounted by being in the retail space which is booming.

5. Watches are available with popular functions like dates, multifunction and chronographic.

6. Guarantee/warranty is available with TITAN watches.

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WEAKNESS:
1. Pricing: The average price of Titan in mid-price segment is very high than the other competitor. Average price for Titan is Rs.1100 while the price for HMT is Rs.550. In the mid-price segment the company is not performing up to the mark due to the lack of choice of consumers.

2. Market share: As the average price of Titan wristwatch is far more than the other competitor, Titan has less market share. The market is more demonstrate by middle class people and for them Titan is quite costly. Among 75% market share in mid-segment; Titan market share is between 18-20% which is far lower than HMT and Maxima.

3. Globalized: As the company is Indian based which leads it to the strength, where as it is the weakness also because the company not sufficiently globalized

OPPORTUNITIES:
1. Seasonality: At the time of festival, like Diwali Titan promotes Nebula, Bandhan because there is demand for the products. - Gold watches and pairs are the like as a wedding occasion. - The fast track brand is promoted in month of June-August when schools and colleges re-open.

2. Gifting concept: Titan started as a brand which was associated with gifting and relation. The fight concept sells well for people have come to associate Titan with love, care and makes emotion run high.

PRN 63-66| Product Management Assignment| Systems & Finance

3. Exchanging offer: The Titan stores offer exchange offer of any old watch, of any make, in any condition functional or otherwise and receive a flat discount of 25% on their purchase of a brand new, stylish and technologically advanced watch from Titan.

THREATS:
1. Competitor: Lots of Foreign brands are entering in the domestic market with their branded watches. Removal of quantitative restrictions on import watches leads to threat to Titan.

2. Premium segment: As in premium segment Titan is getting threats from reputed international brand such as Espirit, Swatch and Citizen.

3. Mobile: Now a days people can get the time and the other feature in mobile phone. So, the need of wristwatch is in decreasing trend. People can talk and see the time in a cell phone and some people think that there is no need of wristwatch.

MARKETING MIX: PRICE:

The main considerations will be in changing price are followings. A. Survival: In case of some of the watches titan prices them according to the features. The Exacta is a simple steel watch priced at Rs.600-1,100. The company also deals with Spectra, Raga through pricing policy. B. Market share: As we know that 70% of sales in watches come from the lower segment, therefore by pricing Sonata at 350 onwards with guarantee. Titan prices its world watches which compared equal

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to an international players like Calvin Klien where a customer pays 4 times as value of the world watch, therefore market with low prices to international players to gain market share.

C. Market Skimming: In Indian watch industry there is no one offering pure gold watches, watches in pair, jewellery watches. Here Titan offers there product with the Indian touch in its design, the product, the love.

PRODUCT:
Quality and leadership are the two main terms for the Titan. To achieve the marketing objectives; this aspects should also be considered.

A. Product line: To increase the sales, the difference in the prices of the watches should be justified by the features.

B. Product pyramid: Portfolio of Titans product is of 3 distinct price-range that can be defined in general, as Popular, Mid, and Premium. At the popular segment, the emphasis is on in volumes but not in margins. At the premium segment, the emphasis is on profits and image but not in volumes. Obviously, company giving more emphasis at the top of the pyramid as profits at the top of the pyramid is very high. This pyramid guided the strategy of Titan.

C. Product strategy: Titan was first focused only on the premium segment of the watch market. As per the product strategy they took, Titan moved in to the mass market for watches. To widen base, Titan

PRN 63-66| Product Management Assignment| Systems & Finance

created new segments and increasingly focusing on segments individually. In the past few years Titan has took a lot of initiatives to focus on specific segments.

D. Product Quality: Quality and leadership are synonymous to Titan. It seeks to achieve both through their value for products compared to their prices.

PROMOTION:

A. Marketing pricing: As by opening new shops such as the world of Titan buy directly from the dealer and hence the element of middleman is not there. Here the retailer in this category buys watches for 1718% lesser than MRP and hence they are able to get the 17% profit margin on sales. It is managing to successfully convince to the customer of the perceived value of WORLDWATCH using hoarding all around the city, increasing buyer image, trust worthiness, innovation, differentiation, value for the product. Price discount and allowances: Every year Titan comes with a price discount sale on the MRP of the watches. The allowances vary from one segment to another.

B. Creative advertising: Titan introduces a contest on cartoon network in india.com which invites children to use creativity and design watch. The prize winning design was launched as a new watch in summer 2002 collection. Type of advertising: Titan believes in making its ads clean, well made, touch on emotional chord. As the company is using celebrities or a superstar that is Amir Khan for the Titan watches. As here we can say that a female actress would be more effective for the promotional purpose.

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C. Promotion on occasion: Titan is one of the companies which formally believe in the policy of promotion the product based on the occasions.

PLACE:
Keeping in mind about the young trendy and fashionable consumers, Titan distributes its product and set up world of titan in different region. The consumers life style in India, especially in urban area (because the turnover in urban area is 210 million, while the turnover in rural area is90 million) plays a significant role in the success of Titan.

A. Time Zone: Titan Industries brings together the countrys leading watch brands under one roof, providing the customer with variety in brands, looks and price ranges and also efficient after-sales service. These 1142 Time Zones located across 89 towns which offer its customer the complete watch shopping experience.

B. Value Mart: These outlets sell surplus stocks of Titan watches at reduced prices. By doing these it is offering fabulous value for money with the same warranty as a regular full-priced watch enjoy. However these shops would not be placed in the main locations and not working as a normal shops. This is to make the customer go to the shop rather than the shop calling the customer and hence the locations are not very suitable for shopping.

C. Sonata Stores: Sonata stores are also an Authorized Service Centre for Sonata & Titan brands. Sonata store meet the large scale demand for the watch and also to attract customers in more. These shops had full stocks of the watch in demand whereas the others could afford to maintain only limited stock

PRN 63-66| Product Management Assignment| Systems & Finance

TARGET MARKET IDENTIFICATION

The Titan industry basically deals in three segments for its watches. They were as follow.

High Income/Elite consumers:

In this segment mainly the consumer who buys a wrist watch as a fashion accessory.

Middle group:
In this segment, mainly consumers like some fashion in their watches. These consumers would not purchase a watch without comparing various offers in the market.

Lower-income people:
This segment mainly consisted of lower- income consumers who want watch mainly as the time keeping device and purchase on the basis of price.

CONSUMER NEED ANALYSIS

The demand and the need vary one market segment to another segment on the basis of prices & quality. The current need can be satisfied by the following ways in the different segment.

High class:
Titan offered Aurum and Royale in gold watch range .They were stylish watches in all gold and precious metals. The price is between Rs.20,000 -1,00,000.

Middle income class:

Titan offered the Exacta range in stainless steel. There were100 different models in the range. The prices ranges are between Rs.500-700.

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Lower-income group:
Titan offered the Timex watches and later, when the arrangement with Timex was terminated, the SONATA range. The prices ranges were Rs.350-500.There was 200 different models in the ranges.

SUB BRANDS FOR DIFFERENT SEGMENTS:

Customers who were fed up with ugly time machines welcomed the brand and Titan had a dream run for many years. Titan entered the watch market as a premium watch. But the unorganized sector and low priced options from HMT gave Titan serious competition. With the import duty reduced to 25% (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 made a big mistake. It wanted to play the volume game. For that Titan launched another brand Sonata. Sonata was a huge success because it was a cheap product but at the cost of the mother brand Titan. Titan was perceived to be a premium brand but with Sonata (at that time "Sonata from Titan") endorsed by Titan took away the premium image from the mother brand. It was a big costly mistake. Another problem with Titan has been that it mainly operates in the mid-priced segment and competitors accuse Titan of keeping the segment underdeveloped on account of its sheer dominance. Titan realizing that the market wanted something to be excited about watches and carefully segmented the market and developed different sub brands for each segment. Sub brands like Edge, Steel, Dash, Nebula, Classique, Royale, Fast Track, Raga, and the recently launched Wall street . By having various products / models and sub brands, Titan was able to create freshness about the brand.

PRN 63-66| Product Management Assignment| Systems & Finance