HMT Watches
HMT : A SnapshotIncorporated in 1953 by GOI as a Machine Tool manufacturing
company.
HMT : A SnapshotIncorporated in 1953 by GOI as a Machine Tool manufacturing
company. Over the years diversified into Watches, Tractors, Printing
Machinery, Metal Forming Presses, Die Casting & Plastic Processing Machinery, CNC Systems & 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
HMT Watches : Profile The manufacture of wristwatches started as part of diversification strategy of HMT in the year 1962, under Technical collaboration with CITIZEN Watch Company of Japan.
HMT Limited, the first company to start watch manufacturing in India; has incorporated "HMT WATCHES LIMITED" as its fully owned subsidiary on 9th August 1999.
It manufactures Mechanical and Quartz Analog watches.
HMT WATCHES LIMITED comprises of three manufacturing units at Bangalore, Tumkur and Ranibagh
All its manufacturing units have obtained the ISO 9001 certification
MARKET ANALYSIS …
27% of Indians own a watch.
Total estimated market as of 2008 :
volume – 35 million units & value Rs.
2500 + Crs
Market has been split into:
Mass Market ( < Rs400)
Low end (Rs 400 –Rs 1000)
Mid- Upper Market ( Rs 1000 – Rs 5000)
Premium (> Rs 5000)
COMPETITION ANALYSIS
Titan sells around 7 million watches annually
Timex sells under 1.2 million watches
Other Brands (all put together sell less than 0.5 million watches)
The Japanese – Citizen, Casio, have been present, while Seiko
has not made any significant moves in India.
The Swiss – Rolex, Omega, Rado, Tissot, Tag, Longiness,
Cartier, Ebel ………and a host of others
The fashion brands – Esprit, Giordano, Tommy Hilfiger, Calvin
Klein, Fossil, Swatch………and many more have recently entered
the Indian market
COMPETITION ANALYSIS
13%
33%43%
11%
Mass (< Rs. 400)
Valued at Rs. 300 Crores
Grey market, Chinese, etc.
Mid-upper (Rs. 1k - 5k)
Valued at 938 Crores
Titan, Citizen, Timex,
Swatch, Espirit
Low-end (Rs. 400-1000)
Valued at 1200 Crores
Sonata, Maxima
Premium (> Rs. 5k)
Valued at 370 Crores
Swiss brands: Tissot, Omega, Rolex
Fashion brands: Fossil, Calvin Klein,
Giordano, Esprit
COMPETENCY ANALYSIS
Strong government support. Vision of Pt. Jawahar Lal Nehru in 1960’s. Collaboration with CITIZEN, Japan for formal training and technological support. Entry barriers were imposed on the foreign brands entering into India through FERA. Supported its expansion in 1976.
Good brand image and market leadership due to high quality, low price and reliability.
HMT enjoyed 71 percent of the market share in the sales of mechanical watches and 55.22 percent market share of the total watch production in organized sector (as of year 1991-92).
Company’s liquidity position has been quite comfortable. Adequate availability of tangible assets such as land and buildings.
Record of good industrial relations.
In 1991 HMT set up a product development center for watch design.
S
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Contd….
Has an established marketing network.
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Contd…
Its prime product category (mechanical watches) was in the decline stage
of PLC.
Weak Organizational culture: It suffers from bad work habits, lack of
discipline, low commitment of manpower, inadequate motivational
strategies, lack of team spirit and low utilization of human and machine
capacities. Inadequate cost control system.
Over reliance on the production concept of marketing and hence ignoring
the marketing concept.
Insufficient emphasis on R&D and design engineering.
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Contd…Bureaucratic and centralized decision making inhibited
HMT’s ability to respond quickly with respect to market
changes.
Virtually ignored to maintain good trade relations with
retail outlets vis a vis competition (retail margin was
lower than what was provided by the competitor)
It restricted product development to quality
development only.
Aesthetics and packaging of watches have not been duly
attended to.
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Contd…
Worldwide decline in the production and demand of mechanical watches
due to growing acceptance of Quartz watches.
Significant competition from Allwyn and Titan.
Competitors wooing HMT’s top managers.
It has to the threat of misuse of its brand name by spurious operators.
Competitors successfully exploited the lifestyle segmentation which HMT
failed to.
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Contd…
The demand for Watches is growing rapidly both in domestic and
international market.
Capitalize on attractive segments.
In coming years Fashion brands, luxury watches and watches with
multiple functions are considered as the product segment with the biggest
growth.
Leveraging brand equity of HMT to products such as sports gear,
personal accessories.
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Contd…
Titan had started marketing its watches in unconventional outlets like
boutiques and jewellery shops.
The authorized service agents (ASAs) for foreign smuggled watches in
the country are also offering competition to HMT.
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MACRO SOCIO ECONOMIC POLICIES
POST Liberalization policies hit HMT the most.
Allowed foreign brands to come in.New tax free zones being identified by the
govt. to promote development of rural areas.
SEGMENTATION & TARGET GROUP It is estimated that by 2012
half of india’s population will be less than 25 years.
Segmentation of market on the basis of age group 18 – 35 years.
The main target segment will be the youth.
Response to Market survey
21%
63%
15% 1% 0%
0%
10%
20%
30%
40%
50%
60%
70%
% response to price
% response to price
500-1000
1001-5000
5001-10000
10001-15000
15000 & above
89%
11%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Reason to buy
Necessity
Luxury
Its considered luxury by just 11%Of the people
Over 60% of the people prefer price between 1000 to 5000
% response
17%
21%
4%17%
22%
2%
8%
8% 0%Price
Design
Endorsement
Durability
Brand
Income
Trend
After sales service
others
54%
23%
14% 3%6%
0%
10%
20%
30%
40%
50%
60%
% response
Ads
Electronic Media
Friends
Others
Salesman
Brand, Design, Price, Durabilityis the sequence of factors thatinfluence choice
Ads and electronic media account to over 50% assource of information
43%
17%
12%8%
4%8%
4%5%
0%
10%
20%
30%
40%
50%
Titan Timex Citizen Omega Maxima Espirit Rado HMT
% response
Demand for HMT is as low as 5% in comparison to 43 % for Titan and 17 % for Timex
HMT
MARKETING STRATEGY -PRODUCT
PRACTISED
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.
STRATEGY
Create competitive advantage by
differentiation through technological
leadership :
Gadget range of watches
MP3 watch
USB watches
New range of table watches and Wall
clocks
New range of table and wall clocks
MARKETING STRATEGY – PRICE
PRACTISED
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.
Offering less commission than competition to retailers. whole sellers.
STRATEGY
In the lower end HMT should
seek to achieve cost advantage
by exploiting the differences in
cost behavior, in line with fast
track
Zero outsourcing strategy
Offer competitive commission
prices to whole sellers and
retailers.
MARKETING MIX - PLACE
PRACTISED
HMT had to sell through its 13
branch offices of Machine tool
equipment.
Limited service agencies.
Selective Policy while choosing
retailers.
STRATERGY CHANGE
Reworking on distribution
network.
Exclusive stores
Display in jewelry stores
MARKETING MIX - PROMOTION
PRACTISED• 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.
PROPOSED CHANGE
Special focus on sales during festive
time like Diwali, Christmas along with
discount offer & finance schemes.
Go for innovative and stylish ad
campaign that reflects the aspirational,
independent and modern dimensions of
the watch collection and its target
market along with effective press
campaign.
Long Distance trains
Volve Busses
Advertising
ATLTV Commercials, Print media and Billboards
BTLConsumer engagement programsMedia engagementWeb and social mediaRadioPREvents
Advertising
ATL:TV CommercialsSponsorship Prime time TV programs focusing youth eg: MT rodies, Style check, Stunt mania, Channel V Exhausted , Khatron Ke Khiladi, Big boss to name a few
Sponsoring major events like IPL, Major Fashion shows, associate sponsorship
Print Media: Billboards Display of ads, cut outs at all major traffic locationsMagazines, News paper, danglers, Cut outs
Advertising
BTLConsumer engagement programs:Festive offers, discounts, Exchange offers
Media engagement:Sponsoring TV / radio shows, Tie upsWeb and social Media:Mass mailing, Ads on the social networking sites
Radio: Sponsoring morning / evening slotsPublic relation:Organizing press conference
Events:Promotional activities at Malls, road shows, re launching of a product, participating in live shows and exhibitions
Budget Microsoft Office Excel Worksheet
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 to make
Suggestions
THANK YOU
- Rohan Chacko
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