HMT Complete

HMTHMT WatchesWatches

OBJECTIVES• To study of a yester year market leader ‘HMT’.

• Discuss • 4 P’s (Product, Price, Place Promotion)

• SWOT

• PLC (Product Life Cycle)

• To find out the reasons behind failure of HMT Watch ltd.

• Reposition the product in the best possible way.

HMT : A SnapshotIncorporated in 1953 by the Government of India as a Machine Tool manufacturing company.

Over the years diversified into Watches, Tractors, Printing Machinery, Metal Forming Presses, Die Casting & Plastic Processing Machinery & Bearings.

Successful technology absorption in all product groups through collaborations with world renowned manufacturers & further strengthened by continuous in house R&D.

Today, HMT comprises six subsidiaries under the ambit of a Holding Company, which also manages the Tractors Business directly .

In 1953 Incorporated in Bangalore.

In 1961 started it’s wrist watch plant.

H.W. L. (Hindustan Watches Ltd.) was the first to

enter in the market.

In 1979 sales touch to 4 lakh watches.

In 1980 it was 5 lakh watches.

In 1990 got ISO 9001 certified.

On 9th August 1999 fully owned subsidiary.

Plants was located at Bangalore, Tumkur and

Ranibagh.

THE MARKETING MIX

PRODUCT AND PRICEPRODUCT PRICE

Braille 495.00

Janata 515.00

Pilot 515.00

Kohinoor. 665.00

Dilip 750.00

Sona 780.00

Chinar 1175.00

Sweekar 1050.00

Kailash 1050.00

Rajat 995.00

Kedar 1500.00

ADSL-03 2295.00

ADSL 02 2095.00

PLACE

• Showrooms

• Dealers

• Retailers

• Whole sellers

PROMOTION

• Radio• Newspaper• Television• Magzine

SWOT ANALYSIS

• Strong govt. support

• Brand image

• Market leadership

• Good liquidity

• Availability of tangible assets

• Established marketing network

• Prior experience

STRENGTH

WEAKNESS

• No emphasis on R&D

• Rigidness

• Red tapism- Over reliance on the

production concept of marketing and hence

ignoring the marketing concept.

• Production was not market driven.

• No emphasis on design and

packaging

Opportunity

• Growing domestic and international market.

• Exports

• Market segmentation

• Enlarge network of sale outlets

• Product improvement

Threats

• Competitors

• Misuse of its brand name by spurious operators.

• Unorganized manufacturing

Causes Of Failure• A large number of staff, including persons of general manager's rank, had

left the organization to join the rivals.

• Our biggest threat was to come from watch manufacturers in the

unorganized sector and fake parts and components.

• We have even detected our dealers' connivance in selling other brands

SK

Chaturvedi

HMT Executive

Director

What Went Wrong?

Product

Few Designs as compared to competitors. HMT has only 40 odd

variants of four basic designs compared to competitor line, Titan

which has 70 watches in its ranges with better looks & designs There is less emphasis on product research and development HMT has not been able to be a leader in Quartz watches

segment & underestimation of this segment Another flaw in its product strategy was scant attention to

aesthetics and packaging of its watches.

Price HMT positioned the quartz watches as the space age

generation watches & charged high prices for this category

which means that only the affluent middle aged consumer

could afford it. In less than a year the company had to reduce the price and

followed lifestyle advertising to justify the still higher price of

the quartz, however even this backfired as consumers were not

convinced of the differentiation between the quartz and other

HMT watches.

What Went Wrong?

Place Didn’t strategize its established marketing network

according to growing competition and new market trend

like downtrend of mechanical watches & the growing

market for the quartz watches. Since retailers have enough foreign brands they were

simply not interested in HMT’s home grown products as a

result it had to sell through its 13 branch offices for

Machine tool equipment. In addition, the retailer margins provided by HMT were

2% less than what its most prominent competitor, Titan,

was offering to the retailers.

What Went Wrong?

Promotion• Though HMT’s advertising was distinctive and did cater to the

lifestyle segment, it failed to communicate the uniqueness of

HMT’s quartz design vis-à-vis other HMT watches.

• Because of centralized decision making even the decisions on

the campaigns for specific products were delayed leading to

the time lag and responding to market changes.

What Went Wrong?

PLC of HMT WatchesProduct Life Cycle

REASONS FOR REPOSITIONING

Completed all the stages of PLC

1-Introduction

2-Growth

3-Maturity

4-Decline

PLC

New Marketing Mix Segment (Demography) Product Price

Low end Rugged, basic time function, mechanical or quartz, water resistance steel and gold make.

Rs. 300-1000

Mid upper Automatic, steel or gold make, quartz/analog, water resistance and rich looks

Rs. 1,000-3,000

Urban Youth USB,MP3,trendy, attractive, stylish, water resistance and colorful.

Rs.1,000-5,000

Executive/Achievers Automatic, multifunctional, quartz, digital, water resistance, gold and jeweled

Rs.5,000-30,000

Affluent Jeweled, automatic, gold, platinum, water resistance ,classy and customize

Rs. =>30,000

Place

• Company owned outlets

• Retailers

• Authorized dealers

• Jewellary shops

• Other retail outlets and stores

• Online shopping

Promotion• Electronic Media:TV CommercialsSponsorship Prime time TV programs Sponsoring major events like IPL, Major Fashion shows, associate

sponsorship On line marketing

• Print Media: Billboards, Cut outs at all major traffic locationsMagazinesNews paperDanglers

Cont…• Radio:

Sponsoring morning / evening slots

• Public relation:Organizing press conference

• Events:Promotional activities at Malls, road shows,participating in live shows and trade fair.

• Special offers during wedding and festive time.

• Organize village fairs and conduct various publics welfare programs.

• Go for innovative and stylish ad campaign that reflects the aspirant,

independent and modern dimensions of the consumer.

REPOSITIONING STRATEGY

• Attractive Company logo and tag line

• Undertake the marketing concept instead of product concept.

• Focus on all the segment instead of one (low end)

• Capitalize on the brand equity of HMT

• Use promotional and advertising strategy zeroing on the emotional

attachment and bond with the customers.

• Make customize watches.

• Open customer help desk.

Cont…• Make celebrity as a Brand Ambassador.

• Improve the website by providing features like-

• Online Shopping

• Store Locations

• Exhibiting new products

• Showcasing the existing designs

• Suggestion box

• Open an exclusive outlet only for ladies.

The Repositioning Campaign (30 Days)

Campaign No. of days

Activities decided

Top level exercise 7 Discussion & decision making on all ends like-

Budget, Ads, etc.

Training of sales teams

9 Training on New product features, competitors weakness & new targets.

Selection of activity and places

3 Media engagement

Radio

Web and social media

PR

Events

The Repositioning Campaign

Campaign No. of days

Activities decided

Pre launch activity

4 Full dress rehearsal and review of it.

The launch 1 The full fledged launch by the chairman and the brand ambassador in the presence of media and the dignitaries.

Post launch activity

7 Special counters whole week in shopping centers, frequent commercial on T.V. and radio, road shows and village fairs.

Cover entire market with HMT cut outs.

Faster production of new models of watches for catering to the

changing needs of the customer. Adoption of innovative and aggressive marketing policies. Strengthening infrastructure for R&D. Reduce man power by adopting new technologies and processes. Institutional sales and sales through canteen stores department

(CSD) and e - commerce. Enhancing customer services. To seek collaboration with reputed international watch manufacturer.

Suggestions

• HMT should focus first on tier 1 and tier 2 cities and then gradually

penetrate towards tier 3 towns and cities.

• Company has to position itself very carefully because other product

variants like mobi-watch (watch with a cell phone) and handheld

devices may try to snatch the market share.

• The whole idea of buying and wearing a watch must be an

experience.

• If HMT can deliver above mentioned offerings with a strong

distribution chain, a controlled retailer policy, with a wide market

research, future is no longer beyond their control. HMT will emerge

as a winner.

Although it is very uphill task

but HMT can once again emerge as the

“Market Leader”