2. Four Major Growth Strategies
Market Penetration
Increase your sales on existing products and services, in already existing market, increase share
Price decrease, Product Repositioning, Promotions, Distribution effectiveness increase
Market Development
Increase your sales on existing products and services, in previously unexplored market, increase share
New customer segments, new geographies, foreign market expansion
3. Four Major Growth Strategies
Product Development
Launch new products or services on existing markets
Diversification
Launching new products or services on previously unexplored markets.
The riskiest strategy.
It involves the marketing, by the company, of completely new products and services on a
completely unknown market.
4. Diversification
Horizontal Diversification
Purchase or development of new products by the company, with the aim of selling them to existing
customer groups
Often technologically or commercially unrelated to current products but that may appeal to
current customers. E.g. Classmate notes to pens
Vertical diversification
The company enters the sector of its suppliers or of its customers
5. Diversification
Concentric diversification
The development of a new line of products or services with technical and/or commercial
similarities to an existing range of products.
Often used by small producers of consumer goods, e.g. a bakery starts producing pastries or
dough products.
Conglomerate diversification
Moving to new products or services that have no technological or commercial relation with
current products, equipment, distribution channels, but which may appeal to new groups of
customers.
6.
7. History
of
Titan
1984: A joint venture between Tamil Nadu Industrial Development
Corporation (TIDCO) and the renowned Indian business group Tatas,
entered the watch market.
Changed the watch market in India completely by making quartz watch
the centerpiece of its strategy
Titan Company is the unquestioned leader
in Indian Watch Industry
One of the most powerful brands in the
Indian market, scoring very high on brand
awareness, brand image and brand
preference.
8. Histor
y of
Titan
• Strategic Decision: Titan decided that it would be the shaper of the
watch industry and not an adapter
• They decided to manufacture only quartz (analog and digital) and not
mechanicals and they projected as fashion accessory
• First in India to introduce the style concept and was successful in
projecting its watches as more than a time keeping machine – Brand
Repositioning
• Pioneered the concept of "Gifting watches".
9. The
Unorganised
Retail
Sector
• Fraction of sales in organised retail is lower than
unorganised sector.
• Unorganised sector includes corner shops, kiosks, street
vendors and other single-proprietor venues -- which
traditionally has been dominated by cheaply made, value-
priced goods.
• Unorganized outlets represent 97% of Indian retail
10. The
Sonata
Story
• The sub-Rs 200 watch market in India is flooded by cheap
Chinese imports and low-quality domestic products
• Unlike the low-quality plastic watches currently available in the
market at this price point, Super Fiber watches of Sonata offer
superior performance and durability
• The Indian watch market: Around 42 million units, of which only
15 million units are from the organized-retail players
• Titan is the leader in organized retail with a lion's share of around
11 million units across portfolio of four brands:
the flagship brand Titan (addressing the mid- and premium
segments),
Sonata (the budget segment)
Fast Track (the youth segment)
Xylys (Titan's top-end, Swiss-manufactured brand).
11. The
Sonata
Story
Targeting Super Fiber sales to come in mainly from the semi-
urban markets
Keeping with its target group, the company has roped in
Mahendra Singh Dhoni, as its brand ambassador.
It has the potential to redefine the low-end, unorganized watch
market in India
12. Titan
Redefining the market in fact is pretty much core to Titan's
success since its inception in 1987
At that time, the watch market comprised primarily mechanical
watches, and the government-owned Hindustan Machine Tools
(HMT)
Titan entered the market with two key differentiators: One, it
brought in quartz watches, which it promoted aggressively, and
two, it introduced the element of style -- which until then was
missing in this segment.
It ushered in a completely new retail experience,
Brought out advertising with aspirational value
Offered after sales service in a showroom environment
The watch got transformed from a humble time-keeping device
to a style statement and a fashion accessory
13. Titan’s
Mistake
Sonata was a huge success because it was a cheap product but at the
cost of the mother brand Titan.
Titan was perceived to be a premium brand but with Sonata (at that
time "Sonata from Titan") endorsed by Titan took away the premium
image from the mother brand
Titan realized that, by entering into the lower segment, it has actually
paid a price of its brand image in the luxury segment
It then decided to separate SONATA from Titan in 2002
It mainly operates in the mid-priced segment and competitors accuse
Titan of keeping the segment underdeveloped on account of its sheer
dominance
14. Titan’s
Revamp
Titan realized that the market wanted something to be
excited about watches
Titan carefully segmented the market and developed
different sub brands for each segment
Sub brands like Edge, Steel, Dash, Nebula, Classique,
Royale, Fast Track, Raga, and the recently launched Wall
street .
By having various models and sub brands, Titan was
able to create freshness about the brand.
15. Fragmented
Categories
“Any brand attempting to be among the first branded
presences in a fragmented category must first justify why
the category needs a brand in the first place”
"There are good reasons why categories don't have
brands:
It could be the artisan aspect of the category, like in
the case of female ethnic garments, or,
Deep personal relationships like with jewelry, or,
it could be the sheer price aspect like in commodities.
One need to redefine the market and create a value
perception of a different kind that gives the consumers an
overriding reason to shift to a brand."
16.
17. Tanishq • Exactly what was done by Tanishq in 1994
• Tanishq brought a wide design expertise and a plush
retail environment to a segment which until then was
limited to local family jewelers and small set ups
• The first to introduce the karat meter to measure the
exact purity of gold, it brought the element of trust to
the forefront
• The reassurance of guarantee and purity in such a
transparent manner was a great new value addition
that Tanishq brought to this category
18. Tanishq
• The Indian jewelry market is estimated to be around
Rs. 70,000 crore to Rs.80, 000 crore and the organized
sector, a small local players account only for 4,000
crore.
• Opportunity for a player like Tanshiq with strong brand
equity and first mover advantage is tremendous
• Tanshiq's makeover over the year as well is indicating
the shift of Titan in life style segment.
• From being a fashion brand for young people with its
light weight jewelry Tanishq added mainstream
wedding jewelry to its portfolio
• The association with Bollywood through movies like
Jodha Akbar has also brought the brand close to the
consumer
19. Tanishq
Major strength that’s has been in Tanishq’s favor is that
their jewelry is now more of a lifestyle product for
urban customers
Tanishq is the only significant national brand.
Titan is reaching out to semi-urban and rural market
through GoldPlus
Titan currently has 30 GoldPlus stores in South India
Tanishq plays on the style platform, whereas in case of
GoldPlus, the primary focus will be on value
20. Eyeing
Other
Territories
With the success of Titan watches and jewelry segment
and their recent entry in eyewear they are more
comfortable with developing lifestyle brands.
Under the brand Fastrack comprising watches and
sunglasses Titan is now looking at the possibility of
adding accessories like bags and belts and so on.
To make this segment more attractive, Titan is planning
to open exclusive Fastrack stores.
21.
22. Titan
Eye+
Titan entered into prescription eyewear with Titan
Eye+.
As per industry statistics, only around 25% of the
people who need prescription eyewear are actually
using them
Despite its size and growth potential, this is another
industry that is largely fragmented. While there are
some strong regional branded players like GKB and
Lawrence & Mayo, there is no large national player in
this space.
It is this opening that Titan is aiming to fill with its
Titan Eye+.
23. Titan
Eye+
Titan's play in eyewear is based on trust, design and
retail
Unlike traditional 'across the counter' optical stores, the
Titan Eye+ stores are styled on a browse, select and
buy format
The customers are offered a wide range of frames and
lenses comprising both in-house as well as global
brands like Gucci, Armani, Essilor, Bausch & Lomb and
so on
Each store also has a style consultant and a state-of-
the-art optometric clinic that promises zero error
prescriptions free of cost.
24. Titan
Eye+
As in the case of watches, in eyewear Titan's focus is on
positioning the product as a style and fashion
statement and driving multiple purchases
“Eyewear is no longer about just seeing well. It is also
very much about looking good and it is fast becoming a
lifestyle product"
25. Strategy Titan will not enter any category where the opportunity to compete
is only on price and product quality alone
Always chose to enter segments where we saw that the consumer
was being significantly underserved.
In watches, it was lack of choice
In jewelry, it was under-caratage
In eyewear, it was lack of information.
In each of its businesses, Titan focused on offering sharp
differentiators, and the greatest consumer opportunity to
differentiate comes in the unorganized sectors
26. Portfolio
Segment Sales (2008) Sales (2007)
Watches 918.69 783.77
Jewelry 2,028.00 1,291.96
Others 96.03 62.71
Total 3042.72 2138.44
For the year 2007-2008:
Titan's turnover :Rs 3041 crore
Jewelry business: Rs. 2027 crore
Watches: Rs. 918 crore.
This is one of the main reasons Titan is leaning on
its jewelry business.
27. Portfolio
• Titan grew at 43% last year and crossed the sales of Rs.
3,000 crore.
• Net profit stood at Rs. 150 crore as compared to 94
crore last year.
• Net sales include watches, jewelry and other segments
S.No. Year Net profit Net Sales
1 2004 10.27 804.53
2 2005 24.95 1136.60
3 2006 73.62 1483.15
4 2007 94.13 2138.44
5 2008 150.27 3042.72
28. Competition
• Watch market comprised primarily mechanical watches, and the
government-owned Hindustan Machine Tools (HMT) was the
only significant branded player.
• HMT's watches stood for accuracy and robustness
• For the consumer, the sturdy watch was just a functional time-
keeping device.
• Even though HMT finally responded to the competition put by
Titan, there were many other factors to HMT’s failure to gain the
overall market share
29. Competition
• HMT had the overall market share of 26% during 1997-98
and it dropped to 14% during 2001-02.
• Out of this, HMT still had 70% market share of Mechanical
watches during 1997-98, which increased to 94% during
2001-02.
• Company performed poor in Quartz market, it had market
share of 8% for five year during 1998-2002.
• Sale of mechanical watches dropped drastically.
• The value curve for Mechanical watches kept falling and
there was no driving force from HMT to oppose this.
30. Mechanical
v/s
Quartz
HMT observed the demand for mechanical watches go
down, largely because it focused more on competition
from Quartz, instead of their own strength i.e. Mechanical
watches.
In the world market, Mechanical watches hold a good
position.
31. Pitfalls
of
HMT
Quartz watches are as reliable as mechanical, but the
battery is a slip. You cannot predict the life of the
battery.
The parts to replace are easily available for mechanical
watches, but for age-old quartz watches, the battery
would have been obsolete.
Mechanical watches last longer (provided serviced on
time), while quartz watches have lesser life because of
the limited life-span of the electronic circuitry.
Mechanical watches have good resale value.
32. Advertising
Ad expenditure by HMT
Year 2006: Ad expenditure: Rs. 0.1 Cr.
Year 2001: Ad expenditure: Rs. 4.5 Cr
Awareness level of the customers about HMT watches?
Ad expenditure by Titan;
Titan tripled its ad expenditure from Rs. 40 Cr. in 2001 to
Rs. 133 Cr. in 2007.
Titan engaged major celebrities like Amir Khan, Kapil Dev
etc. for its advertisement
HMT advertisements went almost missing from print &
electronic media.
34. Pitfalls
of
HMT
Should have never underestimated the power of advertising-
The biggest mistake
Underestimating advertising was one of the key factors for
HMT to lose its market share
HMT could have done some research on various new ways of
advertisement.
35. Retail
Stores
HMT hardly looked into their stores or took any big steps towards
renovation of their stores.
While Titan kept investing into renovation of its stores, similar
efforts were missing from HMT.
Exclusive HMT stores were hardly seen and this was also one of
the major reasons for further decrease in sales.
The company has 487 exclusive showrooms christened ‘World of
Titan’, making it amongst the largest chains in its category backed
by 700 after sales service centres
36. What did
Titan do right?
Diversification
The brand Titan is committed to offering its consumers
watches that represent the compass of their
imagination.
Titan's customers are therefore consistently introduced
to exciting new collections, which connect, with
various facets of their deep rooted yearnings for self-
expression
The Titan brand architecture comprises several
collection and sub-brands, each of which is a leader in
its segment.
Today, the Titan portfolio has over 60% of the domestic
market share in the organised watch market.