UNIVERSITY OF MUMBAI

A PROJECT REPORT ON
INDIAN WATCH INDUSTRY WITH A SPECIAL
REFERNCE TO HMT AND TITAN

SUBMITTED BY
SOMJIT DAS
TYBMS (SEM V), 2006-2007

PROJECT GUIDE
PROF. MONA THAKKAR PANDYA

BACHELOR OF MANAGEMENT STUDIES

VIVEK COLLEGE OF COMMERCE,
GOREGAON (WEST), MUMBAI 400062

DECLARATION
I, Somjit Das, of VIVEK COLLEGE OF COMMERCE AND
MANAGEMENT STUDIES of TYBMS (semester V) hereby declare that I
have completed project on Indian Watch Industry with special reference
to HMT and TITAN during the academic year 2006-2007.
This information is true and original to the best of my knowledge.

Date:
Signature of student
Place:

Certificate
I, PROF. MONA THAKKAR PANDYA, hereby certify that

Somjit Das of VIVEK COLLEGE OF COMMERCE AND

MANAGEMENT STUDIES, TYBMS semester V has completed this
project on Indian Watch Industry with special reference to HMT and
TITAN in the academic year 2006-2007.
This information is true and original to the best of my knowledge.

Signature of project guide

signature of principal

ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so
numerous and the depth is so enormous.
I would like to acknowledge the following as being an idealistic
channel and fresh dimension in the completion of this project.
I take this opportunity to thank the UNIVERSITY OF MUMBAI
for giving me chance to do this project.
I would like to thank my Principal PROF. SUNIL B. MANTRI for
his encouragement.
I would like to thank & would heartily like to take this opportunity to
express my sincere gratitude towards my project guide PROF. MONA
THAKKAR PANDYA for his support and guidance through out the
project.
I am also thankful for PROF. MONA THAKKAR-PANDYA, our
coordinator of BMS for the tremendous help in the project.
I would like to thank my college Library, for having provided
various reference books and magazines related to my project. I would also
like to thank my librarian MRS BINDU VERMA and the entire library
staff for helping me in finding the books related to my project.
I would like to also like to acknowledge the different websites which
helped me immensely in completing the project.
I am ending this acknowledgement to all my friends and my parents
who have helped me directly or indirectly in the completion of my project.

SOMJIT DAS
4

CHAPTER

TOPIC

NO.
CHAPTER
1

PAGE
NO.

Indian Watch Industry

Watch industry
Industry structure vital statistics and market

11

share
CHAPTER
2.1

HMT
Summary, background
15

Business
CHAPTER
2.2

TITAN
Introduction
Vision, mission & background

17

Areas of Business
Distribution
Franchising
CHAPTER

Strategies Of HMT
20

3.1
CHAPTER

Strategies Of TITAN
23

3.2

CHAPTER

ANALYSIS
5

Porters Diamond
Sot analysis
30

PEST analysis
CHAPTER
5.1

RECOMMENDATION FOR HMT

High lights
Product, Price & no. Of model

39

5 Ms
Media
Print ads
CHAPTER
5.2

RECOMMENDATION FOR TITAN

High lights
54

Brand building
Conclusion

FOREWORD
6

THOSE WHO SEEK, WILL FIND

It is a well know fact that knowledge can be obtained only those who want to obtain it.
Knowledge is everywhere but it always eludes those who dont seek it. With this point
in mind author proceeded with the report.

INDIAN WATCH INDUSTRY

The story of the watch in India goes back a long way to 1957. Pandit Jawaharlal Nehru,
during his visit to Japan, received a watch as a gift inspiring him to bring watches closer
home in his country. This dream became a reality in 1961 when Pandit Jawaharlal
Nehru commissioned the first watch factory in India in1961. This was the watch
division of HMT Ltd.
1987 saw the establishment of Titan watches, which was formed by the Tatas and
TIDCO (Tamil Nadu Industrial Development Corporation). The Tatas took decisions
that they will manufacture only Quartz (analog and digital) and not mechanicals, and
they would set up a state of art plant to manufacture watches in a wide variety of
designs and prices.
Today the Indian market requirement for watches is well over 20 million watches per
year. Majority of the demand is generated by the sub Rs. 1000 segment.

EXECUTIVE SUMMARY

PROJECT TITLE
INDIAN WATCH INDUSTRY WITH SPECIAL
REFERENCE TO HMT AND TITAN
REASONS FOR SELECTING THE TOPIC
Indian watch industry is growing day by day. Once Hmt was synonymy with a watch
and now Titan had gained a sort of monopoly in the market and due to the entrant of
smuggled goods and foreign players Indian watch industry is shaking. So,
If any company wants to achieve the top position in the market what should
the company do ?
Are mechanicals watches are extinct ?
What are the new segments available to the companies, which are not yet
tapped ?
What is the future of this Industry ?
In these ever-growing markets, what should the Indian watch companies do to grab new
markets and increase their market share? Keeping this motive in mind author selected
this topic.

STRUCTURE OF THE REPORT

Chapter 1

This chapter deals with the overall Indian watch industry and its evolution. The various
players present in the market. The company wise trends in market shares.

Chapter 2
2.1 - Introduction to Hmt
2.2 Introduction to Titan
These chapters talk about the introduction to above mention companies. It talks about
the different products and models manufactures by these companies.

Chapter 3
3.1 Promotion activities of Hmt
3.2 Promotion activities of Titan
This chapter talks about the promotion activities carried out by the respective
companies and its evolution over the years.

Chapter 4
In this chapter author has done an industry using Porters diamond. Author has
conducted a Swot analysis of the industry also. The author has also conducted a Pest
analysis through which he tried to see how much political, economical, social and
technological factors affect the industry.

Chapter 5
5.1 Recommendations to Hmt
In this chapter the author suggested some strategies to Hmt so that it can come back and
achieve its position. Author have suggested new brand to introduced in the market and
have prepared few prints ads for it.

5.2 Recommendations to Titan

In this chapter the author has given a model by which the company should carry out its
branding for its product.
5.2 Conclusion
For HMT to acquire the position back, should always keep in mind, Manufacture what
the consumer wants and not the Company, Because, Customer Is The King and king
cannot be disappointed.

LIST OF TABLES AND CHARTS

TOPIC
TABLE 1
TABLE 2
TABLE 3

PAGE NO

Vital statistics on watch market

Trend in market share
Distribution of household with%
Share of population and national Income

TABLE 4

Distribution of household by Income group

CHART-1

Porters diamond

CHART-2

PEST Analysis

CHART-3

Brand Building model

CHAPTER 1
10

INDIAN WATCH INDUSTRY

THE WATCH INDUSTRY

The story of the watch in India goes back a long way to 1957. Pandit Jawaharlal Nehru,
during his visit to Japan, received a watch as a gift inspiring him to bring watches closer
home in his country. This dream became a reality in 1961 when Pandit Jawaharlal
Nehru commissioned the first watch factory in India in 1961. This was the watch
division of HMT Ltd.
Citizen, the popular Japanese manufacturer, evinced interest to train select Indian
people at their watch manufacturing plant in Japan. The year 1962 saw the manufacture
of the first component and then began the slow but steady growth of watch manufacture
in the country. The first watch model manufactured by HMT was the Janata model,
which exists even today, was gifted by Pandit Nehru to the senior most employee of the
company. The next 10 years saw the Indian-made watches carve a niche for themselves
in the market. 15000 to 20000 mechanical watches were made every month.
Smuggling was on a rise during the 1970s and the 80s period. To counter this the watch
manufacturing activities were beefed up. An assembly plant was set up and the concept
of a mother plant with other units in various states was pioneered.
The early 80s was a period of technological revolution with drastic changes in tastes
and preferences. The integrated chip was invented in the US and digitals were in
demand and LED watches flooded the market.

11

Japanese companies took over the manufacturing of LCD for digital watches. Quartz
technology had picked up and there was a shift in focus from mechanical to quartz
watches.1987 saw the establishment of Titan watches, which was formed by the Tatas
and TIDCO (Tamil Nadu Industrial Development Corporation). The Tatas took two
decisions- that they will manufacture only quartz (analog and digital) and not
mechanicals, and they would set up a state of the art plant to manufacture watches in a
wide variety of designs and prices.
Today the Indian market requirement for watches is well over 20 million watches per
year. Majority of the demand is generated by the sub-Rs. 1000 segment. Liberalization
has brought with it a host of brands for the Indian market, viz. Piget, 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. The new exim policy announced on 31st march 1999 removed all
quantitative restrictions on import of fully assembled watches a full three years ahead of
commitment made to the WTO. This will lead to significant upheavals in watch industry
and the trade. Most affected will be the watch makes with significant idle capacity,
small or weak brands and host of components suppliers to them. Least affected will be
the players whose sales exceed manufacturing capacity and who have both strong
brands and strong distribution.

THE INDUSTRY STRUCTURE

12

Vitial statistics of the watch market:

Head

Units

92-93

93-94

94-95

95-96

96-97

03-04

Productioun

000

29401.6

30648.4

20918.6

24726.0 36480.7 36717.5

Nos.
Export Value Rs.

24.7

52.7

77.2

100.9

116.9

100.8

45.0

49.2

51.0

88.7

112.6

88.8

471.3

416.2

536.5

677.3

648.6

657.5

587.4

766.0

797.3

746.3

Crore
Import Value

Rs
Crore

Sales Value

Rs
Crore

Market Size
(value)

Domestic

Rs

516.3

465.5

491.6

412.8

Crore

Rs

510.2

665.1

consumption crore

Trends in market shares:(in per cent)

13

680.3

645.6

Company

92-93

93-94

94-95

95-96

96-97

97-98

Titan

37.03

48.6

44.62

41.05

44.69

48.03

Industries
HMT

46.65

21.96

22.38

Timex

3.07

9.57

11.65

23.42
12.63

21.15
10.48

22.42
9.79

Watches
Sakura

1.26

2.58

5.23

4.89

3.13

3.34

1.84

2.35

2.40

2.81

3.12

Seimitsu
India
Kamla

1.37

Dials&
Devices
Growel Times -

1.14

1.48

1.14

1.20

0.49

IST

0.97

0.67

0.63

0.39

0.27

0.39

CHAPTER 2.1
14

HMT
(Hindustan Machine Tools Limited)
Summary
HMT Ltd. Is a PSU engaged in the manufacture and sale of machine tools, tractors,
watches and industrial machinery? While the machine tools and industrial machinery
divisions have been victims of industrial slow down, HMT watches are facing stiff
competition from imported brands. The tractor division is the only profitable division
in this loss making company.
The company has identified machine tools, tractors and watches as core areas and
plans to exit from the others. It is spinning off the 3 core business into separate
subsidiaries with a view to impart greater focus. A comprehensive financial and man
power restructing plan is being undertaken simultaneously. This move is extremely
significant, for it will enable the company to seek technological collaborations in each
area, which is critical for sustained growth.

BACKGROUND
HMT was incorporated in 1953 by the government of India to produce machine tools in
collaboration with Oerlikons of Switzerland. It is set up Indias first watch making
unit in 1961 in collaboration with citizen watch Co of Japan. Later, it diversified into
printing machines and started assembling tractors in 1981, followed by an injection
moulding unit. In 1980, HMT took over the sick Indo Nippon Precision Bearings and
renamed it HMT Bearings Ltd.
HMT International, a subsidiary company, explores export opportunities for
companys products.

BUSINESS
15

HMT operates in the following areas

Tractors
HMT manufactures tractors in the lower and medium HP range . It has an
installed capacity of 18000 tractors. It produced 18700 tractors in FY99.The division
accounted for 53% of the companys sales in FY99. It is the only profitable division,
contributing Rs 344mn to the bottom line. The new unit Hyderabad went on stream in
FY99.

Machine Tools
The unit contributed 24% to the top line. It has started making losses to the tune
of Rs 136mn in FY99 due to slowdown in the industrial production. The index of
Industrial Production is a reliable indicator of the demand for machine tools.

Watches
Watches accounted for 18% of the turnover in FY99. Although the HMT brand
is very popular, it is facing stiff competition from imported brands and Titan,
especially in the lower price ranges.

Industrial Machinery
It accounts for 5% of the companys sales. Order books have been affected by
slowdown in auto industry and general engineering industry, particularly for die
casting machines and presses.

CHAPTER 2.2
16

TITAN

Vision
To earn the respect, regard and trust of customers, investors, business
associates, peers, related communities and society at large for titan, our brands,
products, services and professional skills.

Mission
Titan seeks to achieve these values goals through a focused pursuit of
outstanding quality in both the ends that we target and the means that we adopt. Titan
encourages and enables individuals and groups to realize their fullest potential through
rationality and creativity, cerebration and passion, transparency and informality, pride in
the past and excitement
about the future.

BACKGROUND
Titan Industries Ltd was promoted way back in 1984 by Questar Investments,
Tata Sons and TIDCO. In 1987 the company set up its facilities at hosur to manufacture
quartz analog electronic watches with financial and technical collaboration from France
Ebauches. Later in 1988 the company established a component manufacturing facility
and a case manufacturing plant in 1990. Both these units were set within close
proximity to its main plant at hosur. In 1992 the company integrated backwards to
manufacture step motors. During the same period it entered in a joint venture with
EDC2, to manufacture electronic circuit blocks, used in its watch movements. In due
course the company started manufacturing watches for the Europeans and American
markets. And later diversified into jewellery- Tanishq.

17

AREA OF BUSSINESS
Titan industries are leading manufacture of watches, which it markets
under the titan and sonata brand names. It enjoys a 25% share of the total domestic
market more than three times the size of its nearest competitor and close to a 50%
share among nationally recognized brands.
It has very wide range of products in terms of looks, function and
price, all noted for their workmanship and reliability. A significant portion is sold
through two titan controlled retail chains. The companys watches are presently sold in
about 40 countries of the world through marketing subsidiaries based in London, Dubai
and Singapore. They enjoy a reputation for being excellent value for money. Titan
industries also make watches for international labels.
After entering the watch segment in 1987, titan industries entered the
precious jewellery segment in 1995 under the brand name of Tanishq. It is Indias only
fine jewellery brand with national presence and is an acknowledged business leader in
the countrys US $ 10 billon jewellery market.
Tanishq jewellery is sold exclusively through a company controlled
retain chain, which now has 40 outlets and is still expanding. Tanishq jewellery is also
exported to Europe, the USA, the Middle East and Australia.
Titan industries also make and market a very attractive range of
decorative table clocks incorporating both classical and contemporary designs,
including some ethnic styles.
The company employs around 3700 personnel. Its manufacturing
facilities occupy a built-up area of square meters. The main manufacturing plants are
located at Hosur in southern state of Tamil Nadu.
In addition there is an assembly unit at Dehra Dun in the northern state
of utter Pradesh and a unit that produces electronic circuitry for quartz watches in the
state of Goa. Headquarter offices are in Bangalore, the Information Technology capital
of India.

18

Distribution
Distribution in India
A key partner of titan in the market place is the redistribution stockist.
The distribution channel handles well over 50% of the watch business of the company.
The main focus of this channel is market penetration and coverage. Currently titan has
distributors handling well over 6000 dealers across the country.
Titans growth rate in the market place requires us to appoint new
distributors every year. The combined stockholding and credit to the market is
controlled to stay within stipulated limits. The distributor channel operated independent
of all other channels and reaches out to its own set of distinct dealers.
Distribution worldwide
Titan distribute through an exclusive distributor in each country, who is
responsible for indenting, distributing, servicing, assisting and providing marketing
support for the brand

Franchising
The world of Titan The exclusive titan showrooms
Titan has revolutionized watch retailing in India, by setting up a chain
of high profile stores. The world of titan is our face in the market, a store providing an
international ambience showing our entire range. This provides the customer with the
complete brand experience making it the most preferred place to buy the most
preferred watch from.

Current network
Over a period of 14 years, the chain has grown to 120 showrooms at prime locations
across 74 towns in India. These showrooms have grown along with the company, both
in business and profitability, which is testimony to the success of the chain.

19

CHAPTER 3.1
STRATEGIES of HMT
HIGH - LIGHTS

If you have the inclination. We have the time

Market research

if you have the inclination. We have the exact time

If u has the inclination, we have the time. Plenty of time

First to launch watches for children

Launch of Utsav and roman range of watches

1. If you have the inclination. We have the time

To encourage watch ownership and to built equity for its brand, HMT advertised
heavily, the company advertising with its memorable base line If you have the
inclination, We have the time' - firmly established the HMT brand. Even three
decades later, the HMT brand was among the few Indian brands in the country
which annoyed considerable equity with the consumer.

20

2. Market research

The company kept in close touch with its consumers. It regularly carried out
market research studies with a view to track buyer behavior, ownership
patterns and even psychographics to understand demand patterns. The company
used the knowledge to alter or modify its communication. For instance,
observation the increase in the sales of watches during the wedding season, the
company promoted Watches to be given as gifts to newly weds.

Similarly, when one of the studies conducted by the company revealed the average
age of the first time buyer of watch to be 23, the company directed its
efforts to reducing this age and bringing teenagers into its fold. It modified the
communication package to show teenagers wearing watches in its advertisements.
3. If you have the inclination. We have the exact time

The company launched its quartz range in 1981. The company targeted the 'modern
young man' and positioned its quartz watch as the 'space age' generation watch. It
again re-launch its brand and this time the ads talked about how different the
watch looked at the back through its looked the same on the wrist.

The communication focused on the benefit of accuracy and convenience. In

order to drive home the point the company also modified its signature tune to ''If
you have the inclination, We have the exact time'.
4. If you have the inclination. We have the time. Plenty of time
In 1991, the company launched its Astra and Pace range of watches. Both were
mid prized plastic watches. While Pace was targeted at teenagers, the Astra was
aimed at slightly older buyers and was positioned as a multifunctional watch.

21

5. First to launch watches for children

In 1992 the company pre-empted Titan once gain, by being the first to launch
watches for children- branded zap! All the new brands, whose launch was wellsupported high advertising spends, net with great success. The company could not
keep pace with the demand for these watches and consumers often went back
without being able to buy these watches.

6. Launch of Utsav and roman range of watches

In 1993, HMT launched its Utsav and Roman range of watches. The Utsav range was
launched as an answer to titan's Raga and came in the form of bracelets, bangles and
costume jewellery watches. The Roman, on the other hand, was targeted at the male
segment. Targeting the male segment was fallout of the findings of market
research study, which revealed that the consumer perceived Titan as being slightly
feminine. Further, the Roman watch was the first HMT watch, which did not say that
the watch as 'from HMT' on its face- a significant departure from the company's
over three-decade-old practice. The roman received an excellent response from the
consumer who was attracted by the macho, male image of the watch.

22

CHAPTER 3.2
STRATEGIES of Titan
HIGH LIGHTS

Concentrate on the higher end of the market

Typical sources of differentiation in the value chain

Restructuring clock businesses

Developed a range of brands

The TATA Business Excellence Model

1. Concentrate on the higher end of the market

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 Mozart's Fifth Symphony has become one of the
most recognised in Indian consumer durable goods segment.

23

2. Typical sources of differentiation in the value chain

Earlier Titan had created an advantage through its design and styling. Now it created
an advantage through the last two elements of the value chain, i.e. marketing and
service. The Titan brand was well established. This was coupled with a chain of
retail stores, which showcased the range of Titan watches and also provided with
support and service. TIL and Timex Watches BV entered into a joint venture on
November 6, 1990.
Titan tied up with Timex to create a presence in the lower end segment of the
watch market. Timex provided the know-how in the plastic watch manufacture and
Titan provided its retail and distribution strength. Timex was positioned as a
separate youthful brand. This served two purposes; Titan protected its image as the
premium watch manufacturer and at the same time created a presence in the lower
end of the market via the Timex venture. Also Titan had always strived to keep its
costs in control.

Right since its inception Titan had implemented World Class Manufacturing, which
helped to keep costs under control. The major thrust areas under WCM were: Just-InTime Manufacturing, Total Productive Maintenance, Total Quality Control, Total
Employee Involvement, and Housekeeping.
Though WCM meant lower costs, Titan always differentiated itself through other
elements of the value chain viz. design, marketing, and support. This meant more buyer
value and at the same time more profitability for Titan due to cost controls.

24

Restructuring clock businesses:

Titan has evolved a whole new strategy for its low-end clock business by going in for
"virtual manufacturing. Titan has stopped making clocks at its own facility and is now
sourcing them from vendors, local and international. Titan's inputs come in the form of
design, styling, marketing and quality control.
Titan plans to focus on the segment of the clock market where it enjoys a
competitive advantage and where it can leverage its three core competencies, viz.
design, brand name, and market reach. The company plans to focus on beautifully
crafted clocks. Under the "Kaal" banner it has recently introduced clocks that
symbolize the fusion of time with Indian craftsmanship. Titan plans to use the
investment made in the clock manufacturing to make plastic watches and its new
offerings.

4. Developed a range of brands

The FasTrack range has grown by almost 100 per cent in volume terms and is easily the
largest youth brand in the country. Titan has now made a foray into the digital watch
market with FasTrack Digital. The decision to enter this segment was inspired by the
resurgence of digital watches internationally and the need to revitalize a dormant segment
of the Indian watch market.
It also extends the width of Titan's offer to the fashion conscious youth of India.
Breaking away from the traditional, functional platform, Titan has positioned the FasTrack
Digital collection on a fashion platform

Dash! The children's watch brand, Dash! launched

by Titan a year and a half back, has garnered volumes of 2.5 lakh units since then. The
company has said that the brand is well on its way to achieving the one million targets in
three years. Dash! targeted at the age group of 6 and 14 years, is priced in the range of Rs
250 and Rs 395. Dash! Competes with Gimmix from Timex in this category.
The company says that Dash! has done "exceptionally" well since its launch, growing in
volumes every month, both in like-to-like stores as well as a consequence of the
extension of distribution from the 8-city launch to full national distribution.
6. THE TATA BUSINESS EXCELLENCE MODEL
Titan Industries has signed up to implement the compliance plan laid out by the
TBEM. Beginning July 2000, it will be evaluated on 7 parameters that constitute
the TBEM: leadership, strategic planning, customer and market focus,
information and analysis, process management, human resources focus, and
business results. The goal is to reach a score of 600 in next five years. Titan
currently stands second in the Tata group, with a score of 450, after Tata Steel. The
objectives of TBEM are:
> To provide a framework for the group to become
competitive.
> To work as a competition to ensure participation.
> To acquire competitiveness using quality as the route.
> To monitor the progress through ratings.
> To become a transformational tool for every company.
The TBEM has no prescriptions, and is extensively adaptable. The choices of tools
and the method of deployment lie entirely with the company. It also shies away
from making any suggestions about how the organisation should be structured and
whether they should have quality-planning department or not, and any
suggestions about starting points, systems, tools, and techniques.

The TBEM drives excellence across functions in the following manner: The
Leadership criterion checks how senior leaders create leadership system based on
Group values. With the able leader in form of Mr.Xerxes Desai at the helm of
affairs, Titan has become a dynamic, vibrant and pro-active organization.
The Customer and Market Focus checks how the company determines customer groups,
key customer needs, and complaint-management issues. Titan has always been a
customer centric organisation and always has focused on satisfying the customer
demands.
The Strategic Planning criterion examines how the company develops strategic
objectives, action plans, and resource-allocation. Since its inception, Titan has been
the shaper of the watch industry. It has identified the future trends well in advance
and taken appropriate steps in the right direction to emerge as the leader in the
industry. The Information and Analysis criteria check whether the organisation has
key metrics in place to measure and analyse performance. Being market-driven, Titan
has its information systems in place and has its hand on the pulse of the watch market.
The Human Resources Focus checks the appraisal system, the work environment,
and the training and development of the employees. Process management examines
the product design, production and delivery process, and supply chain management.
Titan has pioneered the 'style' concept in the watch industry and is the undoubted
leader in design. Also WCM ensures high quality of products at all times. The
Business

Results

criterion

measures

the organisation's performance in areas

like customer satisfaction and product- and service- performance.

Implementation of the TBEM will ensure that processes and practices are customercentric, company pursues agility, uniform performance are employed, knowledge and
best practices are shared, and a unified management strategy for the Tata Group is
employed.

THE PRODUCT PYRAMID

Titan's business model resembles the one created by the Swiss watchmaker, SMH. Its
essence is the product pyramid: a portfolio of products spanning 3 distinct pricebands that can be defined, in general, as Popular, Mid, and Premium. At the bottom,
the emphasis is on volumes-not margins. At the top, the emphasis is on profits and
image-not volumes. Obviously, profits are concentrated at the top of the pyramid,
but the base acts as both an entry-barrier and a caretaker of the company's fixed
costs.
This pyramid guides the present strategy of TIL. TIL was first focussed only on the
premium segment of the watch market. As per the above-mentioned strategy TIL is
moving in to the mass market for watches. To broaden the mass base, TIL is
creating new segments and increasingly focusing on segments individually. In the
past few years TIL has launched at a number of initiatives focussed on specific
segments.

7. FUTURE STRATEGY:
It is prudent for Titan to follow a two-pronged strategy in the future one strategy for
the domestic markets and a different strategy for the overseas markets.
> 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 Papillon1 with the all important * made-in-Switzerland1 label. Titan is
going to offer he ultra slim movements, which are as thin as any Swiss
ovements, but at a price, which is a fraction of what the Swiss, charge. * Le
Papillon' will retail for Swiss Francs 33, whereas the competing Swiss movements
cost Swiss Francs 150. Titan's Le Papillon movements will qualify for the
made-in-Switzerland label, as components, which constitute 50 per cent of the cost
of
the movement, will be of Swiss origin. Parts like step motor, quartz crystal,
chip and battery will be sourced from Switzerland while the plate, the moving
parts, the electronic circuitry will be made by Titan at its Hosur plant. Titan also
plans to provide a stiff competition to the Swiss companies by introducing
their range of watches in Europe. Titan's marketing strategy will be to offer
watches that match the Swiss watches in looks and quality, but which come at a
much lower price. Thus, Titan will be adopting the strategy of being the cost
leader in the overseas markets.

CHAPTER 4

ANALYSIS of the industry

PORTERS DIAMOND

Potential
Entrants
(Threat of Mobility)

Suppliers
(Supplier Power)

INDUSTRY
COMPETITORS

Substitutes
(Threat of replacement)

Buyer
(Bargaining Power)

Industry Structure:
The industry consisted of the organized segment which was dominated by HMT, and the
unorganized segment consisting of small time local players and the gray market. HMT, the
timekeepers to the nation, manufactured only mechanical watches. The HMT watches
fulfilled only the functional needs of a watch. Small time players lacked the nation wide
reach that HMT had. They also did not have reliable support network. The gray market
was flooded with quartz and digital watches from Japan. Though the gray market did not
have the support network their sturdy performance and their looks made the Japanese
watches very attractive purchases.

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.
There was also a latent demand for quartz analog and digital watches that HMT was
unable to fulfill as it manufactured only mechanical watches. The brisk sales of imported
watches in the gray market hinted that there was a segment of people who were willing to
pay a premium for watches with good design and performance.

Suppliers:
HMT had fully integrated operation for mechanical watches. 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.

Substitutes:
The quartz technology had become popular all over the world. Quartz watches from
Japan had already beaten the Swiss in their own game in the sixties and the seventies.
The Swiss had refused to embrace the new quartz technology and they had suffered
because of their adherence to mechanical watches. HMT was making the same mistake
in India. Since the imports were not freely permitted, there was no immediate
possibility of some company entering into the watch market by assembling imported
parts (assembly of completely knocked down kits).

New entrants:
The demand for watches in the gray market indicated that there was space in the
market for a new entrant who would provide watches with good design and reliable
performance. The new entrant could score over HMT with good design, over the
gray market by providing dependable after-sales service, and over the local
players by establishing nationwide distribution network.

SWOT ANALYSIS

STRENGTH

WEAKNESS

Strong brand equity.

Wide dealership

Uneducated customers.

network.

Lack of specialization.

No government support.

After sales service.

Wide range of
products available.

OPPORTUNITIE

THREAT

Untapped lower price

segment.

Growing consumerism.

Porous international border.

10 million marriages per

Lack of will to curb

year.

smuggling.

Shift towards branded

products.

Reduction in import duties

Good demand in luxury

range.

Poor legal framework.

PEST
(Political, Economical, Social, Technological)

Political
Political stability also affects the watch industry. In India every year elections takes place,
which affect the economy very much. Political stability is very much required for the
growth of any industry.

Economical
1990s 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 2 months for repairs. About 7%
of the watches were rejected at the dealers' level because of the manufacturing defects.
Being 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
1990s, its share in the high margin high growth quartz segment was a mere 18%. This
led to a sudden and drastic decrease in HMT's total market share in mid-90s.

Social
Growing Middle Class
Distribution of Household with % Share of Population and National
Income (2003-04)

Income Group

No of

% Of

% Share of National

(Rs, *000)

Households

Population

Income

('000)
< 20

81485

51,80

11.0

20-62

51569

32.80

26.7

62-100

9260

5.90

10.0

100-500

13864

8.80

33.3

500-1000

698

0.44

6.5

1000-2000

272

0.17

5.2

2000-5000

124

0.08

5.2

> 5000

50

0.03

3.4

Total

157320

100.02

101.3

Distribution of Household by Income Groups (2003-04)

Income Class

Low
Lower Middle

income (Rs)

Urban

Rural

All India

Upto 20,000

14.2 (33.1)

67.3 (58.9)

81.5 (51.9)

10.3 (24.0)

21.2 (18.6)

31.5 (20.0)

7.9 (18.4)

11.9 (10.4)

19.8(12.6)

1.5(3.5)

4.7 (4.1)

6.2 (3.9)

9.2 (8.0)

18.2 (11.6)

20,000140,000

62,000

Upper Middle

Total

No of Households

40,001-

Middle

High

Annual

62,00186,000

Above 86,000 9.0 (21.0)

42.9 (100.0)

114.3 (100.0) 157.2 (100.0)

Source: National Council of applied Economic research

Note : (i) Figures in the brackets are % of the total
(ii) Average size of households =5.61 members

As is evident from the Table 4 and 5, India has about 157.2 million households of
which about 52 percent fall in the low income (upto Rs 20,000) category; a further
20 percent in the lower middle category ( Rs 20,001-40,000). Of the remaining
population, the households in Rs 40,001 to Rs 62,000 income group with per capita
mean purchasing power of about Rs. 9,000 p.a constitute another 12% of total.
The overall conclusion that can be drawn from the NCAER data is of great significance from
the point of view of the consumer durables manufacturers
> When compared with the data from the previous estimates it
appears that the upper middle and high income segment of
the population has been growing faster. Since a major chunk
of demand for watches comes from this segment therefore
the market for this sector is expected to get larger in the
near future.
> Within the upper middle and high income segment, the rural
households are growing at a far more impressive rate than
their urban counterparts
> Roughly about 137 million people belong to upper middle and
high income categories i.e. incomes over Rs. 62,000 per
household and with per capita income of Rs 34,500 p.a. This
is a fairly large size indicating that the marketing of 'niche'
products can be the promising area.

Technological
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 2 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 was first
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.

CHAPTER 5.1

RECOMMENDATIONS for HMT

HIGH - LIGHTS
From its inception, HMT should decide that it would be the shaper of the watch industry
and not an adapter. They should create a competitive advantage through differentiation.
They should concentrate on niche market, by launching MINTAGE.
They should concentrate on technological leadership, by launching SENSATION.
They should concentrate on Middle-income group, by launching PRESENT.

The price and models of various brands are shown.

The Media mix for various brand is given.

The final count down is given regarding how the brand PRESENT would be launched
in the market.

PRODUCT
TARGET MARKET
Mechanical

BRAND NAME

Niche market

WINTAGE

watch
Photo kinetic

Middle income group &

technology

Youths

Quartz

Middle & lower income

SENSATION
PRESENT

group

PRICE
BRAND NAME

PRICE

WINTAGE

Rs. 1195 - Rs.7000

SENSATION

Rs. 999 onwards

PRESENT

Male

Female

Gift

Rs. 395 Rs. 1495

Rs. 395 Rs. 895

Rs. 1395 Rs. 2495

BRAND NAME

NO. OF MODELS

WINTAGE

1500

SENSATION

1000

PRESENT

Males
600

Females
400

5M's OF MARKETING

5W'S OF MARKETING

WINTAGE

SENSATION

PRESENT

1. MISSION
Informative ads

Informative ads

Emotional
bonding

To sell 1135

To sell 3150 units

To sell

units in first 3

in first 3 months

4500 units

Objective
Sales goals

months

after the
launch in
the first 3
months

2. MONEY
Stage in PLC Introduction
Market share

Introduction

introduction

24% to 30%in

the next 12
months

Youth

middle and
upper

Consumers
base
3. MESSAGE
4. MEDIA
5. MEASUREMENT
Sales impact

Niche market

Timex -Fast

middle

track, indigo

Titan

MEDIA
Media
BROADCAST
MEDIA

WINTAGE

SENSATION

Star Plus

yes

yes

Zee TV

yes

yes

Sony

yes

Star movies

yes

yes

Zee English

yes

Star sports

yes

ESPN

yes

Discovery

yes

MTV

yes

yes

V channel

yes

yes

BROADCAST
MEDIA
Cinema
Print media
News Paper
daily newspaper
Sections of daily
Newspaper
Weekly news
Paper
Magazines
general interest
Magazines
Special interest
Magazines
Institutional
Publications

Outdoor Media
Hoardings
Neon signs
Transit media
Suburban trains
Buses
Taxi and auto rickshaws

POP AND IN-SHOP Media

Banners
Hangings
Stickers
Painted signs
Specialty media
SMS

 FM

THE FINAL COUNT DOWN

Market research
Consumers needs

These factors will help to

Perception of the brand

know the consumers well

Brand loyalty

so that a proper product can

Be made to target the right
Market

Segmentation targeting and positioning

Segmentations would be done on the basis of the market research

The target for this product is middle and lower income group

The product would be positioned as a gift/present to any one

Designing the product and the concept

Shape of the watch

Color combination

Material of the strap

Media

Deciding on media selection

Television
Print
Outdoor advertising

Media buying
Contacting media buyers like carat media India ltd. , mind share etc. for channels like

SONY
ZEE and
STAR PLUS

Distribution centers
Company outlets
Franchising

The company should embarked on setting up exclusive show rooms called

Time Art both companies own outlets and Franchising. The company should_ increase the
retailers margins and wooed them with the schemes like the sell and win scheme where
winners will be given free trips to Bangkok, Singapore and Hong Kong.

HEAVY PROMOTION

OUTDOOR ADVERTISING

Railways

Trains

Trains can be used for promotion since there is a lot of exposure and cheap also.
Indicators
On very indicator of HMT it should be written the 'The HMT time'so
that the people would remember it as the HMT time and not as Railway time.

Hoardings
Hoardings have high repeat exposure and comparatively less costly.
Posters
Posters can be used in their retail outlets and franchise outlets for promotion.
'
Window display
Posters can be used in their retail outlets and franchise outlets for promotion.
SMS
Catchy Slogans Like 'What's The Time In Your HMT' Would Be Displayed On.

Solar Glow System

HMT can use the new technology of "SOLAR GLOW SYSTEM" for
glow sign, which work on solar energy. The unique features of this are that the product can
be advertised from all the four sides while lightening the surface from underneath. It has
automatic "on" and "off " system with duration of lighting 6-8 hours each day.

EVENTS
Cultural events like Gudhi Padwa, Independence Day, and Dasera could be used for
promotion in the years.

PRINT ADS

Of HMT Brands

Chapter 5.2
RECOMMENDATIONS of Titan

HIGH LIGHTS
The Law of Contraction
The Law of Advertising
The Law of the Word
The Law of Quality
The Law of the Company
The law of the name
The law of sibilings
The law of shape
The law of colour

The law of borders

 Law of contraction

All of this has of course only been possible through the use of extensive (and
needless to say, effective) brand building techniques. In his book 'Beyond Branding',
Joe Marconi defines a brand simply as "a name", and brand equity as the value of that
name. He thus defines brand building as "the process of creating, managing and
marketing brand equity by building brand identification, recognition and loyalty". In
order to truly gauge the extent to which Titan has built itself into a nationally
recognized brand, we need only refer to marketing guru Al Ries' definition of the
word, which is "a brand is a proper noun that can be used in place of a common word".
By this he means words such as Heineken, Rolex and Mercedes, which can be used in
place of words such as beer, watch and car respectively, Can Titan be used in place of
the word "watch"? We think it can (in the Indian context). This is what marks the
difference between a mere name of a product, and a brand. Perhaps one of the most
highly regarded works on brand building is the now classic '22 Immutable Laws of
Branding' by the father and daughter team of Al and Laura Ries, This can be used a
reliable base while measuring the efficiency of a company's brand building
techniques.

Law of
Contraction

Law of Law of
Advertisinq
Company

In order to facilitate proper comprehension, we have chosen to

illustrate this point as follows:
The Law of Contraction:
A brand becomes stronger when its focus is narrowed. This does not
imply carrying a limited product line, but rather limiting and focusing a
brand on only one type of core product, which-in Titan's case happens to be
watches. Titan, though possessed of a wide product line, has
stuck to its focus. It hasn't launched other types of products and stuck
them with the Titan name, which would have only gone on to cannibalize
the value of the core brand. As a result of this, Titan has developed for itself
an image of being "time keeping experts" in the minds of the consumers.
The Law of Advertising:
Once born, a brand needs to actively advertise in order to stay
healthy and maintain market share. Ir' done right, advertising is more
of an investment than an expense. Titan has implemented this by always
maintaining a high degree of visibility when it comes to it's advertising. In
addition, it possesses one of the most
recognizable ad-jingles in the history of Indian advertising.
The Law of the Word:
Any brand worth it's salt should strive to "own" a word or words in the
mind of the consumer. Examples of such brands are Volvo, who own the
word "safety", Mercedes, who own the word "prestige" and Coca-Cola, who
own the word "cola". Titan, at least when viewed in the context of the Indian
watch market, seems to own the word "quality".

Though unsubstantiated by any formal market research, in an informal survey we

conducted among a sample of 30 people we know (including friends, family,
neighbors and acquaintances), 19 of them, when asked what one word came to mind
when they heard 'Titan Watches' answered "quality". A further 8 answered "Indian",
another word that would do Titan absolutely no harm to own in the minds of their
prospects.

The Law of Quality:

Though quality is essential to the survival and growth of any brand, the fact
remains that brands are not built by quality alone. The perception of the brand is
as, if not more significant than mere quality. It is here that Titan "scores". As
mentioned previously Titan more or less owns the word "quality" in the
minds of the consumers, thereby implying that it is perceived as a quality
product. Thus, it's actual quality, as well as it's perception of being a quality
product combine to work towards building the strength of the Titan brand.

The Law of the Company:

Brands are brands, and companies are companies. There is a difference. Titan
is owned by the Tata Group, who though highly regarded in Indian industry are
associated more with heavy industries such as steel and truck building, than with
watch making. Chances are that no one would buy a Tata watch (it's name invoking
the same, if not greater reaction than an HMT). People would, however buy a
Titan.

The Law of the Name:

In the long run, a brand is nothing more than a name. The difference between
products is thus not so much between the products, as it is between their names,
or perceptions of the names. Seeing as how its name is perhaps the most
important element of a brand, we feel that this point warrants a slightly more indepth discussion.
There are 4 major factors to be kept in mind while naming a brand:
1) It should suggest stability and integrity.
2) It should avoid negative imagery.
3) It should avoid acronyms, the use of which Ries and Trout call "the
no-name trap". (Perhaps the sole exceptions to this are BMW & IBM).
4) It should avoid anything-generic sounding (General, National,
Standard, etc), as this would not help in defining a brand's personality.
Let us see to what extent Titan satisfies these conditions. First of all, the name Titan'
itself comes from Greek mythology, and symbolizes greatness, grandeur and power.
Remember the Titanic? It is easy to pronounce, as well as to remember. One only has to
compare its name to that of it's biggest competitor, HMT to see how well thought out
the name Titan is.
HMT, while being an acronym, expands out to 'Hindustan Machine Tools', a generic
name if we ever heard one. Asides from all these differences, the question of
perception arises. A watch is a product, the purchase of which is perhaps driven
more by perception than anything else. What sounds more classy and sophisticated?
Titan or Hindustan Machine Tools?

 The Law of Siblings:

There is always a time and a place to launch a second brand, but when this
is done it should be ensured that both brands have separate and
distinct identities. Each brand should be kept unique and special. When
Titan decided to diversify into the jewellery segment, they did not call
their new brand Titan Jewellery', inspite of
the high standing of the Titan name in the minds of the Indian
consumers. To do so would be to undermine the power of the Titan brand,
which is that of being "watch experts". Hence, the jewellery was called
Tanishq.
The Law of Shape:
A brand's logotype should be well designed, in order to fit the eyes.
Visual symbols (again with the possible exceptions of Nike's "swoosh" or
Mercedes1 3- pointed star) are highly overrated. The meaning lies in the
words,

not the

symbol.

The Titan

logo,

though

well recognizable

(please refer to the cover page in the rare event that you do, in fact actually
NOT recognize it) is always accompanied by the words "TITAN" in a
clear, crisp typeface- denoting power (through the use of capital letters) and
class at the same time.

 The Law of Colour:

A brand should use a colour and typeface that is the opposite of it's
major competitor. For example, while Coca-Cola stands for red and
appears in running handwriting, Pepsi stands for blue and appears in
capital, modern looking letters. Similarly, while HMT appears in small silver
lettering, Titan appears in capital letters, and is
usually in black.

The Law of Borders:

Finally, a brand should know no borders or boundaries. With a name that stands
for Hindustan Machine Tools, HMT would be hard-pressed to sell a single watch
outside Indian Territory. Such is not the case with the more globally oriented name,
Titan. As mentioned previously, Titan is sold in over 40 countries through
marketing subsidiaries in London, Singapore and Dubai.
Thus far, we have restricted ourselves to issues exclusively concerned with the role of
the brand in building brand equity. The fact however remains that brand building is
an exercise that requires effort in a number of ways, many of them unrelated to
the actual "brand" as such. These could be related to the product's image, the
company's image, public perception of the parent company, and efficiency of
promotional measures, to name but a few. The Far Eastern Economic Review Award
for being 'One of India's Top Ten' and 'One of Asia's Top Two Hundred'
companies for the years 1994, 1995, 1996, 1997 and 1998.

The Road ahead...

Though being voted India's #1 company is an honour any company would cherish,
we feel that with the surge of foreign entrants into India's watch market, Titan
cannot afford to rest on it's laurels. Titan should prepare for a war...A MARKETING
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 2 major
principles of defensive marketing warfare;
"The best defensive strategy is the courage to attack yourself"
The best way to improve 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
realised 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
Titan's 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 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 over cover than to
undercover.
We therefore feel that it is only through the proper implementation of such defensive
techniques that Titan will be able to stave off the threat of the numerous foreign brands in
the country today.

CONCLUSION

Indian watch industry is growing day by day. Once upon a time the time keepers of the
nation was HMT was synonymy with a Watch and now Titan had gained a sort of
monopoly in the market and
acquired that position.
For HMT to acquire the position back, should always keep in mind, Manufacture what
the Consumer wants and not the Company
Because, Customer Is The King and king cannot be disappointed.

Due to the entrant of smuggled goods and foreign players Indian watch industry is
shaking. Hence this is the right time to introduce right models, which the consumer
wants, and grab he market.

BIBLIOGRAPHY:
WEBSITES:
WWW.TATA.COM
WWW.TITAN.COM
WWW.HMT.COM
WWW.GOOGLE.COM

NEWSPAPER REFERRED TO:

THE TIMES OF INDIA
THE HINDU BUSINESS LINE

MAGAZINES REFERRED TO:

BUSINESS WORLD.
BUSINESS TODAY.