A

Case Study
on

Presented by
•Kajal Suthar
•Shah Bhavin
•Sanjay Patel
•Paresh Jadav
•Dipak Vasvani
 Question 1
Describe the Key characteristics of
watch industry in India.
 Socio-cultural characteristic
 Initial time used as time keeping device
 Trend changed and perceived as life style product.
 Turned as female and male’s daily accessory.

 Ownership
 Different watches for different occasions
 Analog and digital watches
 Formal and office purpose variants

 Political and Legal characteristics

 Heavy import duty restricts free trade of watches
 After WTO interference, it was liberalized
 Opening of gates for MNCs to operate in india.
 Economic
 Globalization
 Increase in the PPP of indian people.

 Increase in the disposable income

 Technological characteristics
 Analog watches
 Quartz technology

 CAD/CAM is being used

 The watch industry in India
 India is an under penetrated market for watches
around 27 % of Indians own a watch

 Total estimated market as of 2005 Volume ~ 35 mn

units & Value: Rs 2328 Crs (USD 530 Mn)

 Vast proportion of the Indian market is below Rs 500.

 Market has been split into: Low end, Mass market,

Mid market, Premium
 Competitors
 Titan sells around 7 million watches annually, Timex
sells under 1.2 million watches, Other Brands (all put
together sell less than 0.5 million watches)

 The Japanese – Citizen, Casio, have been present, while

Seiko has not made any significant moves in India.

 The Swiss – Rolex, Omega, Rado, Tissot, Tag,

Longines, Cartier, Ebel ………and a host of others

 The fashion brands – Esprit, Giordano, Tommy Hilfiger,

Calvin Klien, Fossil, Swatch………and many more have
recently entered the Inidan market
 The watch market in India
(Consumer segmentation on price basis)

Mass (< Rs. 400) Premium (> Rs. 5k)

Valued at Rs. 300 Crores
Grey market, Chinese, etc.
11%
Valued at 370 Crores
Titan’s Insignia, Tanishq, nebula
13% Swiss brands: Tissot, Omega, Rolex
Fashion brands: Fossil, Calvin Klein,
Giordano, Esprit

33%
43%

Low-end (Rs. 400-1000) Mid-upper (Rs. 1k - 5k)

Valued at 938 Crores
Valued at 1200 Crores
Titan, Citizen, Timex,
Sonata, HMT, Maxima
Swatch, Espirit
 Question 2

Apply five force analyses to Indian watch

Industry
 Rivalry among competitors (high)

 So many foreign player are in

competition
eg. Citizen, Casio Rolex, Omega, Rado,
Tissot, Tag, Longines
 Smuggled watches gives the strong
option to the buyers for the lower
segment market for those who are price
sensitive.
 Local players also create obstacles
 Threat from new entrants
(low)

 barriers of entry
 Deep Rooted Brand Appeal,
 Strong Government Regulation,
 Switching Costs,
Threat from substitute product
(high)

 Mobile phones (close substitute)

 Also positioned on the base of
time keeping device (e.g.
Nokia1600, 1110i etc)
 Handset market is growing 45%
while in watch market is growing
at 27%
 Wall clock & computer (far
substitute)
Bargaining power of supplier
(high)

 High import duty backs titan to

get cheaper raw material,
which increases bargaining
power of Ebauches (French
Supplier)
 Price of gold is highly cyclical,
so it increase bargaining power
of supplier
 Bargaining power of buyer
(low)

 Product Uniqueness
 Large Customers
Question 3
Identifying The Strengths,
Weakness, Opportunity, &
Threats For T.I.L.
 Strengths
 Titan retained it ranking as the 'No 1 Brand' in the
Brand Equity Survey, (A&M magazine), Superbrand
2003, Brand Equity Award, Images Fashion Award
 Integrated manufacturing and World class design
(collaborated with NID )skills
 Powerful distribution and customer service network
 Large and hi-quality retail network: WORLD OF
TITAN
 Over the time successful positioning of their brands
with suitable celebrity.
 Successfully identified changing consumer tastes
about watches and positioned it as lifestyle and
fashion product
 Branded chain outlets:- 6000 outlet across the country
 680 service centers
 Weaknesses

 Still waterproof watches are not in the portfolio of

Titan.
 Non availability of cheaper raw material from
domestic source.
 Titan weakness is that titan has not focused on
lower end level in rural area which is contributing
about @ 40 % share in Indian volume
 Spurious watches
 Opportunity
• Branded jewellery is less than 2% of the overall market
• Importance of jewellery to Indian consumers
• Extend their brand name in feminine accessories
• Globalization and revamping of “Brand India” and “Indian Brands”
• Huge market in the exchange business
• Marketing of other brands under its roof with some guidelines.
• Perceptible shift in consumer attitudes
• Increasing penetration will drive growth of low end and mass marke
segments
• Low penetration level (~27% own a watch)
• Higher multiple ownership will drive growth of Mid-upper segment
 Expansion Opportunity for Titan

Asia's Watch Market

1625
1800
1600
1400 1175
Euro million

1200
1000 Series1
800 436 500
600 200
400 230
200
0
japan

taiwan

others
thailand
singapore
Hongkong)
china(inc

countries

Sources: www.asiamarketwatch.net
 Threat

 Luxury watches are highly cyclical.

 Changing trends in fashion
 Liberalized import of watches in the exim
policy allows major international players to
enter in the high end segment
 Raw material costs are said to be high
because of high import duties.
 Unorganized Players
 Out of 28 million pieces ( 80% of these below
Rs 1000 ) that are sold annually, 18 millions are
sold in the unorganized sector
 Question 4

Critical Evaluation of Titan’s Strategy

 The entire evaluation of the Strategies
are being carried out on the basis of the
4P’s of marketing mix
 Product

 Price

 Place

 Promotion
 Entry Level Strategy - India
 Technical collaboration with French
Ebeuches
 Provided the raw material (Quartz) and installed
plant with capacity of 2M watches.
 Introduced 70 models for different classes of
the market against 40 of HMT.
 At initial period to attract the lower end
segment, titan underpriced the replacement
cost for repair and battery to break
penetration of HMT in this segment.
 Product and Price Strategy
 Successfully identified the changing trends in
the lifestyle of the Indian consumer and
launched the relevant brands over the period
of time.
 Through exclusive product quality and
finishing titan used the Gold and stainless
still.
 Strong brands for each segment of the
market which suite their needs and traits.
 For Various Age Group
 For Various Type Of Access / Occasions
 For All Level Of Community People
 TITAN – PRODUCT PROFILE
Price Range (2002
Brand Segment
figures)
Dash!   Kids   Rs 295 – 425
Sonata  Low-end   Rs 350 – 1,000
Titan Synchrony   Clocks   Rs 450 – 7,000
 Corporate (Semi-
Fastrack   Rs 600 – 1,500
formal) 
Exacta   Daily wear   Rs 700 – 1,550
Classique   Corporate (Formal)   Rs 950 – 2,495
 Corporate (Semi-
Spectra   Rs 1,100 – 1,450
formal) 
Royale   Daily wear   Rs 1,250 – 2,400
 Sophisticated multi-
Technology   Rs 1,400 – 6,000
functional watches 
Raga   Ladies   Rs 1,550 – 4,000
 Affluent 
Regalia   Rs 1,800 – 4,300
businessmen 
psi2000   Sports watches   Rs 6,800 – 7,500
Insignia   Super-rich   Rs 5,750 – 8,000 
 Pair watches for 
Bandhan   Rs 2,475 – 8,375
couples 

Source: www.titanworld.com
 Distribution Strategy
 Titan successfully identified consumers’ psyche
about the outlets of watch as “Watch Stores”, titan by
the exclusive outlets for selling the brands of titan
called “The World of Titan”, changed the perception
of consumer.
 Delivery was done on day to day basis.
 MIS used to intensify the distribution system since
1999.
 Titan watches are sold through over 9,000 outlets in
over 2,300 cities and internationally in over 30
countries including the UK, Spain, Greece and
countries in the Middle East and Asia Pacific
 Applied three level Strategy
 Product Visible
 Affordable

 Available at bookstores, boutiques, gifts

hopes.
 Promotional Strategy
 celebrity endorsements.
 Amir Khan – Titan Rising and others
 Rani Mukharji - Titan Raga
 Making The Product Visible (Shifted A Commodity
Product To Fashionable & Impulsive Choice),
Affordable & Available At Unconventional Locations
 Highly emphasized on the brand building activity.
 Changed the buying behavior of consumer for a
watch from consumer durable mentality to impulsive
buying by campaigns.
 Employed pull strategy for promotion rather than
push it to customer as in the case of HMT.
Result of the Strategy
Against the Gray market

 Tied with Timex and introduced

250 variants under the brand
name of Timex with economical
prices.
 Got cheaper raw material to
fight against gray market on
price factor
 Extensive advertising,
marketing and at the same time
provided low-priced products to
the extent practically feasible.
 International Strategy of Titan
 Europe
 Entered in Europe under its own brand name
rather than collaborating with any local player and
introduced 4 modals in UK in 1993.
 Contracted with French Fashion designers to
design the watch architecture.
 Sold 3.5 lakh watches in UK since its entry in
Entire Europe.
 Integrated marketing strategy employed to build
the brand image.
 Middle East
 Started export to Bahrain in 1991 just on demand
basis.
 Extended it to other middle east countries

 Employed the traditional distribution system

 Conducted detailed research on the consumer

behavior
 Used promotional schemes to make agree the
retailers to sell Titan and “Indian brand”
 Advertising carried out considering local taste, and
culture.
 Question 5

What are the Burning issues in the case?

 WTO guidelines
 It opened flood gates of completely finished
watches in india
 As per report of indian commerce ministry, wrist
watches in millions increased from 0.23m in 1999
to 2.1 million in 2003-2004.
 Due to this the average unit price decreased from
Rs 523 to 294 indicating a steep decline in the
international prices.
 Increased proliferation of international brands.
 Most of the brands like sonata and Fastrack
watches are made from outsourced components
 Titan refuses to enter in the rural where a
the market exists for good quality, rugged
and reasonably priced watch. This is
claimed on the basis of increase in the PPP
of rural India.
 threat from foreign labels (Swiss Authorities )
following the removal of quantitative
restrictions on the import of watches.

 Titans market share in the mass market,

through its Sonata brand, is only between
18 to 20 per cent
 Established Distribution channel was one bigger
issue for titan in abroad since many of them didn’t
want to keep Indian brand and demanded six month
credit

 To do international business under it’s own brand

name

 Saudi Arabia & other Golf countries, Middle East

countries market demand are for costlier watch &
presently Titan has gold finished sub-brand Classic &
Royal (golden dial & strap watches) but having limited
range and model collection was one important issue
in international business for fulfilling the mission
objectives at short term.

 Government exim policy for foreign players to set up

the manufacturing plant in India, it will increase the
dumping of finished watches.
 Forex will be preet away by foreign players by not
 Question 6

What Strategies T.I.L. Should Follow To

Grow Further In Future
 Improved feedback systems online / offline
 Identifying the consumer needs / perceptions by well
trained front line executive at the consumer meet
point i.e. trade fair
 Increase the availability of economic rage of sub-
brand watches to selective value chain
 operator i.e. Aarchies, big retail outlets after close
market survey & executed perfect strategy for
acquiring the new middle / law / student segment &
retaining the existing of them.
 Control over working capital i.e. material usage &
store operation cost… because the revenue is going
up but this cost is rising more then 1.5 times of rise of
revenue % over each year.
 High level control on over marketing & advertisement
expanse & go for optimized & innovative advt
programmes because of averagely doubled the
expanse then % rise in revenue over the year ’99 –
’04 on the base to data of ’99.

 Company should control over higher % of dividend

payout to shareholder in spite to reinvesting in
designing of new models, acquiring the new
customer, reducing the financial charge @ PBIT
which will bring the PAT figure attractive & a strong
reason to retain the shareholder for a long term
growth prospect.

 Titan stores should go for lifestyle product portfolio at

their store i.e. lather wallet, perfumes, selective
books & valued collection of various cultural classical
music collection and serving light impulsive hot drink
to experience the customer the leisure etc…
 New Initiative by the Brand Extension

 THE EYE WEAR BUSINESS

 Started in 2004-05 by marketing Sunglasses
under the Fastrack brand

 Targeted the youth segment

 Achieved a sales turnover of over Rs 12 crores in

2005-06

 Pilotproject for Prescription Eyewear planned

during this year with outlets to open in Q4

39