The Tata Management should let both Tanishq and Goldplus operate in their respective niche market

segments, with Tanshiq continuing to aim at its established target group, the urban city dweller,and let
Goldplus target the semi urban and rural population.

Reasoning:

Entry barrier In the mind of the semi urban/rural citizen, Tanishq is still perceived as a distinctively
elitist brand, meant only for the super rich households of the major cities. Moreover,this segment of
society puts large emphasis on tradition and the Western air around the brand its
sophisticated,elegant,artistic and designer appeal, may not be in line with his more conventional and
simplistic tastes.

Brand dilution threat In the minds of the purchasers in the major cities, Tanishq has finally succeeded
in establishing itself as a traditional yet modern brand, with sophisticated designer connotations.The
ultra rich love it for the disntinctiveness and elusiveness of Tanishqs high end collections, like Zoya and
Aarma. The growing upper middle class, like to identify themselves with the high-end feel of the
brand,with collections like Daytimes, and other affordable wedding jewelry designed specifically to aim
at them.

However,in the lower-end gold wedding jewelry market segment,there is little scope for differentiation.

Trying to associate the brand with both these market segments can dilute the distinct identity and niche
that Tanishq has created for itself.

Some concerns raised by the Tanishq marketing team and why they are not of much relevance is
discussed below :

Exaggerated Cannibalisation Threat This threat has little rational basis.Tanishq and Goldplus target
two entirely different market segments with uniquely distinct attitudes,preferences and tastes. They are
two separate income groups who react differently to different triggers.

Also, it is unlikely that the semi urban and rural customer would connect the lower end Goldplus range
and the upper scale premium Tanishq brand with the same core trust proposition of the Tata brand.

Once it is decided that the Goldplus brand should be continued and expanded in the lower end
market segment,we suggest the following recommendations.

Controlling costs Goldplus should focus stringently on cutting costs in manufacturing by improving on
engineering and design technology,also supply chain should be optimized. The firm should consider
dealing with the karigars directly, eliminating vendor costs.

Ground level,personalized direct marketing promotion strategies- Efforts to increase local involvement
in Erode were highly successful.Building on this strategy, local store managers and specially trained local
sales force,with their knowledge and connections in the native community,should keep track of
weddings and similar social events and identify potential buyers well in advance.Impulse purchases are
rare in the lower end market segment.People plan on purchasing jewelry for upcoming weddings well
before in time.Then, promotional discount coupons should be sent to them by store managers.

Other cost effective promotional strategies Advertisements in local magazines,newspapers, radio

station channels etc.

Franchisee model In small towns,local knowledge of the customer base and trust in the eyes of
potential buyers is an important consideration.Hence,Goldplus stores should be operated by local store
managers.

Traditional store designing Unlike the Tanishq stores in major cities,which have the air of mystery and
very sophisticated,minimalist elegance around them,local Goldplus chains should resemble the local
tristed family jewelers shop,with a large range of designs packed in a small volume,giving a more
familiar feel to the customer.

Having local,popular faces as brand ambassadors and creating advertisements that have a distinct
Indian theme Adverts should focus on buying gold jewelry as an investment- both in monetary terms
as well as one that strengthens family ties.

Emphasize the purity element of Goldplus jewelry leveraging the trust associated with Tata-
Install Karatmeters in local Goldplus stores and encourage people to test the relative purity of the
jewelry they buy from the local goldsmith.

Exchange offers Giving customers to exchange old gold at Goldplus stores at lower percentage
charges.