Market Segmentation of Titan - Marketing

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 Titanà 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.

Titanà 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. Titanà 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
http://www.titanworld.com/http://www.images.google.co.in/http://www.marketingteacher.com/http://www.titanworld.com/http://www.images.google.co.in/http://www.marketingteacher.com/

Documents

Market Segmentation of Titan - Marketing