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7/27/2019 Market Segmentation of Titan - Marketing
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TO
UNIVERSITY OF MUMBAI
PROJECT REPORT ON
MARKET SEGMENTATION
-TITAN WATCHES.
SUBMITTED BY
SHEFALI PRADEEP MALSHE
ROLL NO. 79
MASTERS OF COMMERCE PART 1(SEMESTER-I)
UNDER THE GUIDANCE OF:
PROF. NEETA NERURKAR
PTVAs
M.L DAHANUKAR COLLEGE OF COMMERCE
Vile Parle (East), Mumbai
2012-2013
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CERTIFICATE
I, Prof. Neeta Nerurkar here by certify that Shefali P. Malshe of M. L. Dahanukar
College of Commerce of Master of Commerce (Part1) has completed project on
Performance appraisal MARKET SEGMENTATION during academic year 2012-
2013. The information submitted is true and original to the best of my knowledge.
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DECLARATION
I, SHEFALI P. MALSHE of M. L. Dahanukar College of
Commerce of Masters of Commerce Part 1 , hereby declare
that I have completed project on MARKET SEGMENTATION
TITAN WATCHES, in the academic year 2012-13, as per the
requirement of the University of Mumbai as a part of Masters of
Commerce Part 1 (Semester I ) . The information submitted is
true and original to the best of my knowledge.
DATE: SIGNATURE OF
STUDENT
PLACE:
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ACKNOWLEDGEMENT
I would like to convey my heartiest gratitude to several people for help and support
during this project.
First and foremost I seek the blessings of my beloved TEACHERS who keep lot of
expectations on me and showering their infinite love for ever.
I would like to thank University of Mumbai for giving me this opportunity of taking
such a challenging project, which has enhanced my knowledge about the topic
MARKET SEGMENTATION TITAN WATCHES.
I show my gratitude to the Principal, Vice Principal and co-ordinator of
M.L.DAHANUKAR COLLEGE OF COMMERCE who gave me a lot of moral
support and under their guidance I was successfully able to complete my project.
And with deep sense of gratitude I would like to thank Prof. NEETA NERURKAR
for her immense help and co-operation.
Last but not the least, my endless appreciation goes to my family who has
stood by my side and given me moral support whenever I was low and boosted my
will power.
Thank You.
SHEFALI PRADEEP MALSHE.
M. L. DAHANUKAR COLLEGE OF COMMERCE.
VILE PARLE ( EAST )MUMBAI.
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SR
NO.
CONTENTS
PAG
E NO.
1. INTRODUCTION. 6.
2. NEED FOR SEGMENTING THE MARKET. 8.
3. LEVES OF MARKET SEGMENTATION. 9.
4. TYPES OF SEGMENTATION. 11.
5. MARKET SEGMENTATION VARIABLES FOR BUSINESS
MARKETS.
16.
6. EFFECTIVE SEGMENTATION. 24.
7. MARKET TARGET. 36.
8. MARKETING STRATEGY TITAN WATCHES. 39.
9.. ADVANTAGES & DISADVANTAGES OF MARKETSEGMENTATION.
43.
10. CONCLUSION 44.
11. BIBLIOGRAPHY. 45.
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INTRODUCTION
Market Segmentation and Market Targeting
Market segmentation is the process of identifying key groups or segments within the
general market that share specific characteristics and consumer habits. Once the
market is broken into segments, companies can develop advertising programs for
each segment, focus advertising on one or two segments or niches, or develop new
products to appeal to one or more of the segments. Companies often favor this
method of marketing to the one-size-fits-all mass marketing approach, because it
allows them to target specific groups that might not be reached by mass marketing
programs
The market for any product is normally made up of several segments. A market all
is the aggregate of consumers of a given product. And, consumers, who make a
market, are seldom one homogeneous lot; they vary in their characteristics and
buying behavior. It is thus natural that many differing segments occur within a
market.
Marketers usually divide the heterogeneous market for any product into
segments, with relatively more homogeneous characteristics, since this helps in
tapping it. And, this process of disaggregating a market into a number of sub-
markets/segments is known as market segmentation.
Recognition:
(a) Any market is made up of several sub-markets, or sub-groups of consumers,
distinguished from one another by their varying needs and buying behavior, and
(b) It is feasible to disaggregate the consumers into segments in such a manner that
in needs, characteristics and buying behavior, the members would vary significantly
among/across segments, but would be homogeneous within each segment.
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Need for segmenting the Market
1. Facilitates Proper Choice of Target Market: The segmentation helps the
marketer to distinguish one customer group from another within a given
market and thereby enables him to decide which segment should form his
target market.
2. Facilitates Tapping of the Market, Adapting the Offer to the Target:
Segmentation also enables the marketer to crystallize the needs of the target
buyers. It also helps him to generate an accurate prediction of the likely
responses from each segment of the target buyers. Moreover, when buyers
are handled after careful segmentation, the responses from each segment will
be homogeneous. He can achieve the specialization that is required in
product, distribution, promotion and pricing for matching the particular
customer group, and develop marketing offers and appeals that match the
requirements of that particular group.
3. Makes the Marketing Effort more Efficient and Economic: Segmentation
also makes the marketing effort more efficient and economic. It ensures that
the marketing effort is concentrated on well defined and carefully chosen
segments. After all, the resources of any firm are limited and no firm can
normally afford to attack and tap the entire market without any delimitation
whatsoever. It would benefit the firm if the efforts were concentrated on
segments that are the most productive and profitable ones.
4. Benefits the Customer as well: Segmentation brings benefits not only to the
marketer, but to the customer as well. When segmentation attains higher
levels of sophistication and perfection, customers and companies can
conveniently settle down with each other, as at such a stage, they can safely
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rely on each others discrimination. The firm can anticipate the wants of the
customers and the customers can anticipate the capabilities of the firm.
Levels of Market Segmentation
Segment Marketing: A market segment consists of a group of customers who share a
similar set of needs and wants. The marketer does not create the segments; the
marketers task is to identify the segments and decide which one(s) to target.
Segment marketing offers key benefits over mass marketing. The company can
presumably better design, price, disclose and deliver than the mass marketing.
Market segment can be defined in many different ways. One way is to identify the
preference segments.
(1) Homogeneous Preferences: Where the consumers have roughly have
the same preferences. The market shows no natural segments. Example:
Salt
(2) Diffused Preferences: Where the consumers preferences may be scattered
throughout the space. Examples: Branded Clothes
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(3) Clustered Preferences: Where the consumers preferences are similar
or restricted to some of the products only. Example: Coke and Pepsi.
Niche Marketing:
A niche is a more narrowly defined customer group seeking a distinctive mix of
benefits. Marketers usually identify niches by dividing a segment into sub segments.
An attractive niche is characterized as follows: The customers in the niche
have a distinct set of needs; they will pay a premium to the firm that best satisfies
their needs; the niche is not likely to attract other competitors; the niche gains certain
economies through specialization and the niche has size, profit, and growth potential.
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Whereas segments are fairly large and normally attract several competitors, niches
are fairly mal and normally attract only one or two. Example: Ezee the liquid
detergent from Godrej is a fabric-washing product for woolen clothes, Crack Cream
by Paras Pharmaceuticals, local language TV channels.
Local Marketing:
Target marketing is leading to marketing programs tailored to the needs and wants oflocal customers groups. Example: Local courier companies in many cities that
specialize in delivering mail and packets on the same day within a specified
geographical area, usually within the same city.
Customerization:
The ultimate level of segmentation leads to segment of one, customized marketing
or one-to-one marketing. Example: Maentel which produces Barbie dolls go for this
type of marketing.
TYPES OF SEGMENTATION
There are many ways in which a market can be segmented. A marketer will need to
decide which strategy is best for a given product or service. The major segmented
variables are:
i) Geographic segmentation.
ii) Demographic segmentation.
iii) Psychographic segmentation.
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iv) Behavioral segmentation.
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Geographic Segmentation:
It is the division of market according to the different geographical units. That is,
segmentation of consumers based on geographical factors, such as, country, climatic
zone, region, district, state, city, town, population density etc.
Geographic segmentation can be a useful strategy to segment markets because it
provides a quick overview of differences and similarities between consumers
according to geographical unit;
Can identify cultural differences between geographical unit takes into consideration
climatic differences between geographical units;
Recognizes language differences between geographical units. Different geographic
segments have different consumption patterns. Introducing different products for
different geographic segments can bring more sales.
Demographic Segmentation:
In demographic segmentation, the market is divided into groups on the basis of
variables such as age, gender, income, occupation, education, religion and social
class. Demographic variables are most popular bases for distinguishing customer
groups.
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Figure 7.3 Demographic segmentation
AgeLife-cycle
StageIncome
Social
Class
E.g.
under6,
6-11,
12-19,
29-34,
35-49,
50-64,
65+
E.g.
Bachelor State,
Newly Wed: No
kids
Full Nest 1:
w/child
under 6
Full nest 2:
Youngest
child over 6
Full nest 3: Older
married couples
withdependent
children
Empty nest 1:
Older
couples no
children at
home
E.g.
Under 5,000;
5,000-20,000;
20,000-50,000;
50,000-100,00,
100,000-250,000
etc
E.g.
A = Upper, upper
B = Upper lower
C1= middle class
C2= Working
class (skilled
workers)
D= upper lowers
E= Lower, lower
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Age:
Consumer needs and wants change with age. So the marketers design and promotetheir products differently to meet the wants of the different age groups.
Gender:
Gender segmentation is widely used in consumer marketing. The best examples
include clothing, hairdressing, magazines, cosmetics etc.
Income:
The market is also segmented on the basis of the consumers income level.
Social class:
Many companies design products and services for special social classes.
Psychographic Segmentation.
In psychographic segmentation, buyers are divided into different groups on the basis
of customers life style or personality or attitude or values. People with the same
demographic group can exhibit very different psychographic profiles.
The company makes their product with a brand personality that corresponds to a
target consumer personality.
For Example:
A significant number of consumers in India are strictly vegetarians. Even among
those, who consume non-vegetarian food, many avoid beef. Mc. Donalds changed
their menu in India to adapt to consumer preference. Beef was stuck off the menu
and the company introduced vegetarian burgers and other products based on the
preference for vegetarian food.
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Behavioural Segmentation:
Some marketers regularly attempt to segment their markets on the basis of product-
related behavior, they utilize behavioral segmentation. Behavioral segmentation
divides buyers into groups based on their knowledge, attitudes, uses or responses
to a product.
Behavioral segments can group consumers in terms of:
a. Occasions:
Buyers can be distinguished, according to the occasions. Occasion
segmentation helps firm to expand the product to sales. For example,
Greeting cards brand such as Archies and Hallmark make cards for different
occasions, such as birthdays, weddings, marriage anniversary, friendship
days, etc.
b. Usage:
Some markets can be segmented into light, medium and heavy user groups.
For example, in the mobile phone service provider market, heavy users are
targeted by giving those special packages or offers and also for low tariff
targeted at the entry level and light users of mobile phones.
c. Loyalty:
Loyal consumers - those who buy one brand all or most of the time-are
valuable customers. Many companies try to segment their market into those
where loyal customers can be found.
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Market segmentation variable for buisness markets
The major question that the company asks is which customer should I choose? At
the heart of any sales and marketing program is market segmentation. Who are weselling to and how can we effectively and efficiently target them? Which companies
will be "good" customers that can benefit most from what we have to offer, whose
needs and buying practices fit with our abilities? Which companies will be "bad"
customers that ask us to do things we cannot, or do not value our relationship and
therefore are not willing to pay for the resources we commit to solving their
problems?
Segmentation characteristics must relate to important differences in the customer and
in how they will respond to your marketing efforts. As discussed by Frederick
Webster, Jr., in "Industrial Marketing Strategy," segmentation variables must be
measurable, such as age, size of company, or preferred method of buying.
Segmentation variables must also be relevant to a sizeable group. The group must be
large enough to warrant your attention and each group must be different enough to
warrant distinctive marketing strategies. Finally, the segmentation variable must have
operational relevance to your marketing strategy. In other words, each will require
something different, whether it's a unique product, special messaging, different
pricing, alternative distribution channels, or varied selling approaches. One way to
view the segmentation challenge is to break out the key issues at both a macro and a
micro level.
Itis also called as Nested Approach to Segmentation. It was given by Bonoma and
Shapiro. Bonomaand Shapiro suggested that the nested approach for segmentation
should be applied in multi-process manner to allow flexibility to marketers in
selecting or avoiding the criteria best suited to their businesses. They proposed the
use of the following five general segmentation criteria:
i) Demographics: industry, company size, customer location
ii) Operating variables: company technology, product/brand use status, customer
capabilities
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iii) Purchasing approaches: purchasing function, power structure, buyer-seller
relationships, purchasing policies, purchasing criteria
iv) Situational factors: urgency of order, product application, size of order
v) Buyers personal characteristics: character, approach
Demographics are the usual variables we think of at the most macro level: SIC code,
company size, and geographic location.
Operating variables are a look at how the company works. What technology do
they employ, are they currently a user or non-user of your type of product, do they
have the financial resources to make this purchase? Often, your sales force is the best
resource for this level of information.
Purchasing approach focuses in on the purchasing department. How are they
organized, is there a power structure within the group, what kind of relationships do
they have with other vendors, how do they interact with your competitors, what are
their purchasing policies?
Situational factors help you define particular segments within a given organization.
What is the urgency of the purchase? This can vary dramatically among buying
influencers within the company. How will the product be used? One person in the
company may use a database package to create a small contact manager for their own
personal use; another may develop an inventory management system for the entirecompany. Just be careful as situational factors can lead to an infinite number of
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market segments. Make sure you define segments that are big enough to warrant the
distinction in marketing strategies.
Personal characteristics include individual buyer motivation, personal strategies for
reducing risk, and individual perceptions. Within one company, the purchasing
manager may prefer to handle all account matters face-to-face, whereas the
engineering manager may prefer e-mail and the web.
EFFECTIVE SEGMENTATION
Not all segmentation is useful. For examples, salt buyers could be divided into blond
and brunette customers, but hair color is not is not relevant to purchase of salt.
Furthermore, if all salt buyers buy the same amount of salt each month, believe all
salt is the same, and would ay only one price for salt, this market would be minimally
segmentable from a marketing point of view. To be useful, segment must be:
Measurable:
The size, purchasing power, and characteristics of the segments can be measured.
Substantial:
The segments are large and profitable enough to serve. A segment should be the
largest possible homogenous group worth going after with a tailored marketing
program. It would not pay, for examples, for an automobile manufacturer to develop
cars for people who are less than four feet tall.
Accessible:
The segments can be effectively reached and served.
Differentiable:
The segments are conceptually distinguished and respond differently to different
marketing-mix elements and programs. If married and unmarried women respond
similarly to a sale on perfume, they do not constitute separate segments.
Actionable:effective programs can be formulated for attracting and segment.
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MARKET TARGET
Once the firm has identified its market segment opportunities, it has to decide how
many and which ones to target. Marketers are increasingly combining several
variables in an effort to identify smaller, better-defined target groups. Thus, a bank
may not identify a group of wealthy retire adult, but within that group distinguished
several segments depending on current income, assets, savings, and risk preferences.
This has led some market researches to advocate a need-based market segmentation
approach.
Evaluating and selecting the market segments
In evaluating different market segment, the firm must look at factors: the segments
overall attractiveness and the companys objectives and resources. Does a potential
segment have characteristics that make it generally attractive, such as size, growth,
profitability scale economy & low risk? Does investing in the segment sense given a
firm objective, competencies, and resources? Some attractive segment may mesh
with company long run objective, or the company may lack one or more necessary
competencies to offer superior value.
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Product specialization: The firm makes a certain product that it sells to several
segments. An example would be a microscope manufacturer who sells to university,
government, and commercial laborites. The firm makes different microscope for the
different customers groups and built a strong reputation in specific product area. The
downside risk is that the product may be supplanted by an entirely new technology.
Market specialization: The firm concentrates on serving many needs of a
particular customer group. An example would be a firm that sells en assortment of
products only to university laboratories. The firm gains a strong reputation in
serving this customer groups can use. The download risk is that customer group may
suffer budget cuts.
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Full market coverage: The firm attempts to serve all customers groups with all
the products they might need. Only very large firm like IBM (computer market),
General motors (vehicle market), and Coca cola (drink market) can undertake a full
market coverage strategy .Large firms can cover a whole market in two broad ways:
through undiffertiated marketing or differtianted marketing.
In differtiated marketing, the firm operates in several market segment and designs
different product for each segment .General motors does this when it says that it
produces a car for every purse, purpose, and, personality. IBM offers many
hardware and software packages for different segment in the computer market.
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MARKETING STRATEGY OF TITAN WATCHES
TITAN-AN INTRODUCTION
Titan Industries Limited, Formerly Titan Watches, is a joint venture of
the Tata Group and the Tamilnadu Industrial Development Corporation [TIDCO]. It
was promoted in 1984. And, in 1987 the company set up its production facilities for
the manufacture of quartz analogue electronic watches at Hosur, near Bangalore.
Within three years of launch, Titan emerges as the leader in the Indian quartz watch
market- the fastest growing segment of the industry. Titan sold 7, 50,000 watch in the
very first year and crossed the 3-million mark by the fourth year, securing 60 per cent
share of the quartz watch market.
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Expansion and Growth
The 1990s were decade of expansion and growth for Titan set in motion expansion
plans in quick succession for achieving a capacity of 4 million pieces. In addition.
Titan sold over a million pieces of Timex watches during this period as per its
marketing arrangement with Timex Watches Limited. By 2001, Titan was making
and marketing over 6 million watches, thus becoming the six largest global players in
the manufacturer brands category, i.e. watch companies which, by themselves
manufacture in the components that go into the branded product they market. The
companys watches are currently sold in about 40 countries of the world, through
marketing subsidiaries based in London, Dubai and Singapore. Titan also makes
watches for other international labels.
Excellence in Marketing and Brand Building
Titan`s expertise in marketing, especially in brand building, has elevated Titan to the
fore-front of Indian brands. The Economic Times survey for the year 2001 on India`s
most admired brands, ranked Titan as the country`s most admired brand. In fact,
winning awards for excellence has become a way of life with Titan. Titan has been
ranked as India`s leading consumer durables marketing company for the past eight
years {1993-2000} in succession in polls conducted by the advertising and marketing
publication A & M. And, in each of the years between 1994 and 1998, in surveys
conducted by The Far Eastern Economic Review, it was rated as one of Asia`s top
200 companies and India`s top 10.
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TITAN`- A MARKETING STRATEGY
When Titan entered the market, HMT was the unquestioned leader in the industry in
fact; the name HMT had almost become synonymous with wristwatches. Titan has to
reckon this reality while formulating its marketing strategy. Titan consciously voted
for a confrontation strategy. It confronted the leader, HMT, head on and soon
acquired the leadership position in the quartz segment of the watch industry.
Titan`s marketing strategy has four main components:
A.) An aggressive approach in product
A high-quality product, supported by state-of-the art technology
A long product line, with a wide range of models.
B.) An effective positioning strategy
C.) High profile distribution, dominated by the showroom concept
D.) Effective promotion.
AGGRESSIVE PRODUCT STRATEGY
Product, the No. 1 Weapon in Titan`s Marketing Strategy
In its effort at developing a marketing strategy capable of confronting the leader,
Titan chose product as the No.1 weapon. Titan put on the market a wide and
attractive range of quality watches. The watches were also contemporary in style.
Titan added new models and dials at regular intervals.
In its effort at product augmentation, the company`s product engineering group
developed a number of new watch movements including dual time, world time, alarm
and long-battery-life watches. In short, Titan offered a product that combined quality
and fashion; it provided an abu8ndant choice in terms of styles and models. Titan
Currently offers a choice of over 1,000 designs.
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Right Product Choice Titan Opts for Quartz
Titan made its product choice very sensibly. When Titan entered the watch business,
mechanical watches dominated the market. Those days, HMT, the market leader, was
producing mechanical watches in the order of five million pieces per year. Titan had
to make a conscious choice- Shou8ld it goes in for mechanical watches? Or should it
follow the global trend and go for the Quartz? Or should it go in for a combination of
mechanical and quartz watches?
Initially, Titan considered the option of making both mechanical and quartz watches.
But, on a closer examination, it decided to stick exclusively to quartz. It proved a
sensible move. The world over, the trend has since been towards quartz. Moreover,
setting up a mechanical watch plant required more investment. By choosing the
quartz route. Titan was able to enter the industry with lesser investment: a quartz
watch normally has less than half the parts of a mechanical watch. Titan was aware
that the decision to go for quartz would deny Titan the market of mechanical
watches, the high volume and lower end segment. Titan consciously opted for quartz.
Aggressive Launching
Having made the decision to favour of quartz. Titan launched its product with a real
bang. In fact, the Titan launch was so grand that the market got the impression that
Titan was the first company in India to introduce quartz watches. Actually, HMT had
already done in 1981, followed by Allwyn in 1984. Titan went the whole hog
towards spreading the quartz culture.
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Titan Opts for the Best Technology
Titan went in for the most modern technology and the best international
collaboration.
The Titan range Addressed to Different Segments
Classique:
Distinctive watches combining the elegance of Gold and leather, in 135 different
designs.
Royale:
Stylish dress watches in all gold and precious metals, in 40 different designs.
Exacta:
Contemporary watches in stainless steel to withstand the rigors of daily life, in 100
different designs.
Fast Track:
Casual watches with an accent on youth and the outdoors, in 25 different designs.
Sonata:
For the low-end market.
Raga:
Exclusively for women.
Aurum:
Jewellery watches in 18 carat gold, studded with precious gems and colored stones.
Titan`s collaborator in watch movement, France Ebauches, is one of Europe`s
leading manufacturers of watch movement. And the Citizen Watch Company, Japan,
Titan`a collaborators for the watch case, is equally well known in its field. Titan also
secured the best equipment from Switzerland, Japan and France.
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Long Product Line and Wide Range of Models
A wide product range--- over 1000 models, incorporating world trendswas the
other major element of Titan`a product strategy. And, Titan cleverly exploited HMTs
weakness in terms of its narrow range. In fact, Titan`s marketing strategy revolved
around offering the consumer an unprecedented choice of models. Even in the early
phase of its entry, there were as many as 70 models in the Titan range targeting
different segments. Titan also kept expanding its range all the time. For example,
when Titan saw that plasticoffered scope for bold, contemporary styling, something
not possible with steel or brass, it went in for plastic dials in a big way.
Customers tempted to own more than one watch: By offering a wide range of
models, Titan benefited in yet another way. Customers were tempted to own more
than one watch. Titan designed different watches that matches one`s dress and
occasions. Titan calculated that creating a desire in the minds of the customer by
showing him a wide range of models could in the long rung help Titan increase its
market share.
Different range for different segments: Titan also segmented the market and made
distinct offers for each segment. Chart 16.1 shows how the Titan offers addressed
different segments.
Jewellery watches: titan spotted a market in India for expensive, jewellery watches.
Titan`a market research revealed that a number of Indians buy expensive watches
from abroad. It introduced the Aurum line in the price range of Rs.20,000 to
Rs.100,000. Titan`a assessment ran like this: `To start with, we can sell 20,000
watches of this type a year. There are a lot of people in India who would like to own
a gold watch. The Indian appetite for gold is insatiable. What we are offering is a
actually a gold bracelet along with a watch. One offer initially in this range was 30
models.
The additions to models continued and Titan brought in designer watches, the Euro
Collection, designed by European designers.
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Product Quality
Titan flew down technicians from Europe to train its Indian staff. Watch movements
in the jewellery range had to be finer and more carefully assembled Gold and
precious stones were sourced from Surat and Jaipur.
To Ensure Quality, Titan Resorts to Vertical Integration
In the early stages, Titan had to obtain a gold portion of the components through
outsourcing from vendors developed within the country. Some imports were also
involved. But, Titan was clear that over the long-term, bulk of the requirements
should be made in-house. Titan believed that in-house manufacturing was essential to
maintain high product quality. Titan soon launched a programme of vertical
integration. The first phase of this programmed involved watch case manufacture;
and from there, it moved on to other product components.
AN EFFECTIVE POSITIONING STRATEGY
TITAN is known for offering variety in its product till now people gave attention to
dress, ornaments, and even footwear but nobody was much bothered about the wrist
watch HMT positioned the product as just the time keeping device. They wee termed
as the time keepers of the nation. But TITAN tried out something different and
innovative which also led them as a successful player in the market. Following are
some of their effective strategy.
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TITAN POSITIONS THE GENERIC DEVICE WATCH AS AN ORNAMENT
TITAN positioned the watch, which till then was a commodity like product, into anornament one would like to wear; it was an ornament showing time. This strategy of
TITAN was to changethe individuals perception towards watch, it tried to position
the watch as an ornament or rather a dress. This strategy promptly drew peoples
attention and was a quiet a lot successful in changing their perception. They started
seeing a watch more as an expression of an individual taste and style than as a mere
timekeeping device. As a result of this demand of designed and stylish watch started
growing. This was the real success of titans positioning strategy
TITAN MAKES ITS WATCH A GIFT ITEM
Another element of titans positioning strategy was that they popularized their
watches as gifts. TITAN presented their watch as an ideal gift. So they addressed
particularly two segments
The person to person gift on wedding or other festival occasions
The corporate gift.
In the personal gift segment, it was campaigned as the best gift for friend, the parent,
the child, or the partner in our life. For these purpose TITAN made the product
available at locations like bookstores, gift shops, and boutiques. Titan paid priorityattention to gift shops titan recognized the fact that it was competing not only with
other watch companies but also with the entire category of high value gift items. It
was even competing with shirts and saris. So Titan opened its counters in restaurants,
in photography shops and in fashion wears shops. Titan was going by the principle
that once you have targeted your customer, you better follow him wherever he goes.
With this strategy, titan succeeded in deflecting a part of the discretionary spending
from other products to watches.
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The other market which was segmented by the titan was the corporate world. the
corporate campaign said that it was something that your customer will be happy to
receive it .for this it also decided to get a corporate watch designed specially for
corporation .once titan established itself among the leading corporate, it used the factfor its promotion .for example, it highlighted that companies like HLL, Brooke Bond,
Eureka Forbes, Lipton, Diners club and Nestle were already using titan watches as
gifts.
INNOVATIVE DISTRUIBITION
Matching with this product positioning, titan adopted an innovative distribution
strategy. Titan had made a quick study of the 8000 odd retail watch outlets in the
country. The majority of the existing outlets were perceived by the consumers as just
stores, not as showrooms of watches titan voted for the showroom idea and started
franchising a network of trendy titan showrooms. To quote titan, we felt the need
for such excusive showrooms, where we have control on the dcor, the ambience, the
selection of staff and the level of inventories, as we wanted to upgrade the quality of
display of our wares and also to expand the market for watches. It was Titansconviction that if the watch is positioned as a fashion wear, the store image was very
important and had to be in tune with the overall product positioning.
SELECTION OF FRANCHISEES/SHOWROOMS
Titan went about the task of selecting the franchisees/showrooms in a systematic
manner. It released an elaborate advertisement in the national and regional press,
inviting applications from prospective dialers and giving a resumes of Titans
activities, its marketing strategy and the plans of the company for appointing
franchises/showrooms all over the country. Titan also briefly outlined the benefits
the franchisees would get and the inputs required of them. The high standards of
merchandising, display, sale and service expected of the franchisees were also
specifically mentioned.
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The applicant should possess a showroom of approximately 50 sq. m; in a
high consumer traffic area; should have excellent salesmanship; should be willing to
invest in interiors as per the companys advice; and should be able to maintain high
standards in merchandising, displaying, selling and servicing watches.Titan also took care to communicate the point that the watches are proof the
House of Tata. The ads communicated, Tata presents a promising business
opportunity through the Titan franchise.
Since the Titan watch was positioned as a symbol of fashion, status and
contemporariness, rather than a utility. Titan insisted on attractive showroom in the
best location as a major criterion in dealer selection. The ads carried a picture of the
Titan showroom that was already functioning in Bangalore, attractively displaying
more than 150 international designs of watches. Titan wanted the franchisees to
perceive the Titan business as one of dealing in ornaments, rather than watches. As a
result of this focus, Titan was able to recruit excellent franchisees within a short
period. Three years later, when Titan went in for another round of selection of
franchisees, it organized an equally systematic selection. This time, it employed the
pithy slogan in its ads:
Titan
Is
Shopping
For
Showrooms.
Titans Dealer Network Today:
Titan watches are now sold for more than 6,000 retail shops, spread throughout the
country, covering 1,200 towns. They are backed by a wide service network. Titans
140 exclusive showrooms (World of Titan) and 150 multi-brand showrooms (Titan
Time Zones) have set a new trend for watch retailing in India. The showroom has
indeed been the key to Titans distribution strength and it forms an important part of
the companys marketing strategy.
Well-Focused Promotion:
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In promotion too: Titan chosen aggressive approach, matching with its overall
strategy of confronting the leader. Titan spent over Rs 20 crore per year for
advertising in the initial years. The Titan message was truly persuasive
Sales Promotion:Titan paid good attention to sales promotion too. One of its sales promotion schemes
Gold Bonanza offered a first prize of jewellery worth Rs. 1.5 lakh in cash. The
budget for this campaign was Rs. 50 lakh.
CUSTOMER SERVICE
Customer service was also the one of the strong point in the titans marketing mix.
Titan understood that in most businesses, service is neglected and poor service is
often cause hurt to the feelings of a customer. Titan therefore laid down its service
objectives very carefully .to quote titan it is our belief that, when a customer walks
into a shop to get a titan watch serviced, there are in fact three types of repairs which
need to be effected: repairing the watch, repairing the feelings of the customer and
the repairing damage done to the companys image. Attention, therefore, has to be
given to the physical environment inwhich the customer is received, the manner inwhich he or she is dealt with by the service personnel. The speed and the quality of
the actual repair job and the charges collected for the repair. Such a corporate
concern for the customer and for the quality of service rendered to him was not a
common feature in the then prevailing Indian business scene.
Titan, in fact, made its service a much-talked about affair. Titan under priced repair
and service charges, battery and other replacement spares.
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TITAN ENTERS THE LOW PRICE SEGMENT, BY
TEAMING UP WITH TIMEX
Titan saw that if it could provide watches priced between Rs 350 to 500, it would
complement the Titan range and confer a dominant position on Titan as a player in
all segments of the watch industry.
Titan worked out a tie-up with Timex Corporation of the US, the worlds fourth
largest watch-making company, and promoted Timex watches Ltd.
It dominates the US market with 25% market share.
To start with, Timex offered around 200 models in four distinct ranges. The plan was
release 800 models over a period of five years.
The Timex alliance was in operation only for few years. Subsequently Titan
terminated the tie-up.
TITAN ATTACKS HMT IN THE LOW PRICE
SEGMENT
The tie-up with Timex served Titans overall strategy of confrontation with HMT, in
early growth stage. Titans idea was to knock out HMT even in the lower end of the
watch market without getting into the mechanical segment.
Titan achieved a market share of 75% of total quartz watches in India.
While mechanical watches still accounted for 5 million of the 10 million units
domestic watch output, its share in the total has been steadily falling.
By offering a lower priced quartz model the switchover from mechanical could be
accelerated and HMT could be confronted even in the lower end of the market. Titan
did succeed in making inroads into HMTs stronghold through Timex.
Together with Timex Titan achieved a market share of 75% of total quartz watches
in India.
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From a leadership position in the business, HMT started decline. Throughout the first
half of the 1990s, HMTs Losses went up. It touched Rs 53 crore in 1994-1995,
when it sales revenue was Rs 138 crore, and sales volume was 2.9 million units.
HMTS Defense
It had to sharpen its marketing, widen its product range, and add teeth to distribution,
advertising and sales promotion.
HMT launched its elegance series of watches in the high price range of Rs 1600 to
Rs 3500. With, HMT too moved in to the world of high fashion in the watch
business.
To strengthen its position at the lower end, HMT launched its low-price digital
watches and the plastic quartz range-Pace and Astra. HMTS new strategy had to
naturally cover the distribution aspect, especially the showrooms.
Investment for expansion and modernization
HMT also came up with a plan to invest Rs 100 core for expansion and technological
up gradation of its watch factories around the country.
HMT introduced some attractive sales promotion schemes, too. And, one such
scheme called the Festival of Time, with a bumper prize of one kilo of gold
medallions did create ripples in the market.
HMT which was first Indian company to launch quartz watches lost ground in the
segment following the aggressive entry of Titan. It is not as though HMT did not
have any strength at all. On the contrary it had a number of unique strength, its
infrastructure, its vest, technical manpower and the capability to make almost all the
components of quartz in-house. Unlike Titan, who had to import components like
dials, hands and batteries.
But HMT failed to work out winning marketing strategy using its strengths. It had
very limited no. of design. And companys assessment that quartz would remain a
restricted market also proved wrong. Based on this assumption, it had pegged itsquartz manufacturing capacity at a very low level.
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Titan Modifies Its Marketing Strategy
Global Competition Poses a New Challenge to Titan.
While Titan had conquered HMT and other domestic players, with the opening up of
imports, it had to face global competition-competition from Swiss and Japanese
brands in particular. In 1998, the government had removed most of the restrictions
on the import of fully assembled watches into the Indian market. It resulted in a
virtual upheaval in the domestic watch industry.
Titan modifies its Target Market
Now, Titan wanted to target semi- urban and rural consumers as well. By now, the
company had developed several market segments with large potential-women, youth,
children, sportsman, etc.
Decides to Tap Rural Markets in a Big Way
Now, a more conscious and direct opening to the vast rural markets of the country
were being made. New market had to been formed, and taped. Towards achieving
this objective, Titan launched a detailed study of the rural markets.
Titan Modifies its Positioning
Titan now decided to modify its positioning as well. Titan was originally positioned
as an elite product, a brand of classic elegance for the sophisticated urbanite. It now
broadened the focus.
The new marketing objective is to cover a larger number of small towns and
villages to increase brand presence in the semi-urban and rural areas.
Distribution and Promotion Further Strengthened
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Books: Marketing Management-Philip Kotler
Marketing Management-NamanKumari & Ramaswamy
Website: www.titanworld.com
www.images.google.co.in
www.marketingteacher.com
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