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Case Report Titan-Redefining Time

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					Table of Contents

LITERATURE SURVEY ................................................................................................... 2

INTRODUCTION .............................................................................................................. 4

SCOPE OF MARKET ........................................................................................................ 8

THE TARGET MARKET :-............................................................................................. 11

STRATEGY :- ................................................................................................................ 155

Financial Results: ............................................................................................................ 200

CONCLUSION ............................................................................................................... 255

BIBLIOGRAPHY ............................................................................................................. 29




                                                                                                                                 1
LITERATURE SURVEY
In 4 continents, 40 countries and 1500 cities around the world, there is a new brand to
reckon – “ Titan “, the new world watch.
Established in 1987, titan is a part of the $8 billion Tata group, a diversified business
conglomerate    with    interest   in   automobiles,    steel,   information   technology,
telecommunications, energy, chemicals, hotels, consumer products and tea.
In a short span of 13 years, Titan has clocked global sales of over 38 million watches and
emerged as a world‟s 6th largest manufacturer brand with sales last year touching 6
million watches. Currently Titan enjoys a nearly 40% share of the domestic quartz market
(more tan three times the size of its nearest competitor) and close to a 50% share among
the nationally recognized brands. Titan represents a unique blend of high-end Japanese
technology, legendary European design and renowned Indian craftsmanship. It is a
product of an extraordinary cooperation between designers, toolmakers and marketers
continents.
The Titan watch plant is a US $70 million state of the art integrated facility, set in 40000
square meters of floor space, and employs over 2500 professionals.
A fierce commitment to excellence coupled with some of the most sophisticated
manufacturing technologies in the world helps Titan deliver world class products in an
incredible variety of designs and styles. Every Titan is powered by robust movement,
tried and tested in the hot and humid conditions of Asia and sold with confidence of a
unique one year guarantee and an unmatched two year guarantee on the watch.
Titans renowned design skills have helped create an exclusive range of jewellery
watches…”TANISHQ”. In India, 35 world-class boutiques exclusively sell Tanishq
brand jewellery made by Titan. Product styling, which is truly contemporary matched by
superior finish and assured caratage, have helped tanishq establish a leadership position.
Offices in London, Dubai and Singapore and a significant distribution and service base in
Europe, Africa, the Middle East, Asia and the Australian drives the company‟s business
across four continent and forty countries.




                                                                                             2
It is watches; however that have been Titan‟s mainstay and that are perhaps singularly
responsible for building Titan industries in to a professionally recognized corporate
leader. Titan has been consistently ranked as India‟s leading consumer durables
marketing company for the past seven year‟s (1993-99) by the countries leading
advertising and marketing publication A&M.
Between the years 1994 and 1998, it was also ranked in Asia‟s top 200 companies and
India‟s top 10 by “The Far Eastern Economic Review”. Finally, and perhaps most
importantly, the readers of the Economic Times also recently voted Titan India‟s most
admired brand.
All of this has of course only been possible through the use of extensive (and needless to
say, effective) brand building techniques. In his book „Beyond Branding‟, Joe Marconi
defines a brand simply as “ a name”, and brand equity as the value of that name. He thus
defines brand building as “ the process of creating, managing and marketing brand equity
by building brand identification, recognition and loyalty”.
In order to truly gauge the extent to which Titan has built itself into a nationally
recognized brand, we need only refer to marketing guru “Al Ries” definition of the word,
which is “ a brand is a proper noun that can be used in place of a common word”.
By this he means such as Heineken, Rolex and Mercedes, which can be used in place of
words such as beer, watch and car respectively. Can Titan be used in place of the word
“watch”? we think it can ( in the Indian context ). This is what marks the difference
between a mere name of a product, and a brand.




                                                                                        3
INTRODUCTION


Remember when the only Indian wristwatch brand you could buy came in a clutch of
clunky models, one more ordinary than the other, when the craze for an `imported watch‟
never seemed to wane? That was before the time of Titan, a name which changed forever
the way watches made in this country were seen by Indians and the world.


Launched in 1987, Titan is credited with transforming the face of India‟s watch industry.
By offering consumers quality products the blended classy designs with superior
technology, Titan became byword for success stories. Outstanding service, wide variety
of models, and effective marketing has helped Titan consolidate its early gains, to the
point where the company is a force to be reckoned with beyond Indian shores.


Understanding the Indian consumer‟s psyche has been vital to Titan reaching its current
position of strength. The company today has a model for every price segment and every
market, urban and rural, regional and international. Within the Titan mother brand are
Nebula, which comes draped in 18-carat gold; the exclusive Insignia; PSI, for those
turned on by technology; and Raga, which has been designed exclusively for women.
Titan‟s focus has always been on India. Research reveals some interesting facts and
figures about this heterogeneous market.The Indian market is estimated at 25 million
watches   a   year, with    50 per cent      being sold    by the organized sector.
Titan is the runaway market leader, with domestic sales of 6 million watches a year.
There are 190 million watch-owning Indians; between them they own about 210 million
watches. Urban India accounts for 120 million of these watches and 90 millions are on
rural wrists. More men than women own watches in India, and more working women
than housewives own watches. It is the rural segment within this diverse market that
Titan is now looking to tap. “The key to success is getting into the rural market on a
larger scale. The company‟s Sonata range is targeted at rural customers, and is part of a
strategy where the alignment of price and reliability are crucial. The rage costs between




                                                                                       4
Rs.495 and Rs.1,200 has showrooms exclusively for it, and is sold mainly in small-town
India. Welcome Titan… Welcome Innovation
WATCH INDUSTRY
Electronic Watches were introduced in the world market in the early seventies. They
came to India in 1979 but had to be withdrawn due toproblems with the product. HMT
Ltd (HMT) introduced its electronic watches in 1981 and was followed by Hyderabad
Allwyn Limited (Allwyn). Organisations such as Electronics Corporation of Tamil Nadu
(ELCOT), Semi Conductor Complex Ltd. (SCL), etc. introduced watches but were not
successful. By mid eighties many smaller companies, originally
manufacturing mechanical watches, diversified into electronic watches. In 1987 Titan
Watches Ltd. (Titan) ajoint venture ofTata Sons and Tamil Nadu Industrial Development
Corporation entered the market and shortly established itself as a major manufacturer.


STRUCTURE
The electronic watch industry is dominated by HMT, Allwyn and Titan. They command
about 80% share of the organised sector. Therefore, the study concentrates on these
manufacturers, though issues pertaining to smaller companies are addressed.
The installed capacity of the industry is 10.8 million pieces. A large unit, Indo French
Times, with a capacity of nearly 2.0 million pieces is lying idle due to some internal
problems among the promoters. The production at present from the industry is around 6
million watches. While HMT and Titan operate at 70% - 80% capacity, others work at
very low capacity. In the case of Allwyn, the company is facing various problems. Titan -
Timex has just completed one year and is still in its gestation phase. The other small
companies work at low capacities as their market reach is limited and are not able to
compete with the big companies. In terms of importance in the market, Titan has a share
of about 58%, HMT 29%, Allwyn 5.5% and 7.5% with others. However, including
mechanical watches the market shares are : HMT 63%, Titan 18%,
Allwyn 8% and others 11%.




                                                                                         5
Industry Performance
As mentioned earlier, while HMT and Titan work at high capacity utilisation, other
companies utilise their capacity poorly. Consequently, except for these companies, the
smaller ones are not healthy financially.They are however propped by their mechanical
watch or clock business. The industry is growing at a rate of about 10%. The growth of
individual product types are discussed later in this report.


Major Problems Faced by the Industry


The major problems facing the Industry are the following :
* Non availability of raw material from domestic source.
* Spurious watches
* Restriction on manufacture of straps.
* High duties and taxes.


INTERNATIONAL SCENARIO
The total world production of watches (in 1991-92) is 828 million pieces.Switzerland,
Japan and Hong Kong are the important watch manufacturing countries. While Japan
leads the world in terms of volumes, Switzerland has the largest share in value terms.
The important markets for watches are Hong Kong, Western Europe, USA and middle
east countries.


Salient Features of Contemporary Technology
The salient features of contemporary technology are the following :
Analogue watches
* Superior appearance parts.
* Thin cases.
* Multi-dial, skeleton watches.
* Jewellery watches.
Digital
* Multi function watches.



                                                                                         6
Others
* High level of process automation.
* Increased use of plastics.
* Development of different calibre of ECBs.
* Development of long life battery cells.


Product Development
The following would be the advancement in the product features :
* Multi function watches including message receivers.
* High accuracy watches.
* Contour watches.
* Long life captive power source for watches.


RESEARCH AND DEVELOPMENT
There is hardly any research and development activity in national laboratories or
educational institutions in this area. Individual companies sometimes sponsor
development in specific areas. The big three companies have active R & D departments.
Till recently they were concentrating on indigenisation of components and developing
jigs and fixtures. Now some of them have started process improvement and product
development projects. In the countries manufacturing watches, significant developments
in watches are spin-offs of elaborate and fundamental research. Added to this the scale of
operation is very high. These factors facilitate on going development. In contrast, in India
there is not much research that goes on in areas connected with watches to offer any spin-
off benefit. Therefore, the industry is required to bear the cost of research. This has not
happened due to the relatively small size and infancy of the industry.


The technology gaps are in the following areas :
* Raw materials.
* Electronic components.
* Finishing/electroplating




                                                                                          7
Another area that potentially has immense benefit to the industry is development of
plastics for movement parts. This would not only lead to reduction in costs, in terms of
not having to import metals, but also prevent material wastage. This will be possible as
plastic components are moulded while metal parts undergo machining, stamping, drilling,
etc leading to wastage.




Testing Facility


The testing facilities with large companies are said to be adequate, though more
sophisticated equipment are reportedly available abroad. The smaller companies may not
possess the standard testing equipment that is desirable. A central facility with
Horological Inspection Institute is not used by all the companies, it was co-promoted by
HMT with UNIDO, and has strong links with HMT.


Standards
The Bureau of Indian Standard (BIS) is developing horological standards. Already 37 of
them have been approved. Currently the BIS committee is reported to be working on
standards for raw materials.




SCOPE OF MARKET

At a time when the broad contours of the Indian economy are emanating positive vibes,
more than 50% of the population is in the working age group and personal disposable
income levels are at an all-time high, the inflection point of the consumer durable
industry is certainly well timed. As per the CMIE, the per capita private consumption
expenditure per annum in India has grown to Rs 18,733 in FY06 from Rs 12,650 in FY00
(CAGR of 8%). Of this, sectors like the branded watch industry that have catered to the
premium segment of the population so far, are yet to cater to a much broader customer
profile.



                                                                                      8
With penetration levels of 37%, the Indian watch industry has a lot more to offer. Besides
low penetration, there also exists huge scope for upgrading - given that only 4.5 m (13%)
watches out of the 35 m sold annually are priced at over Rs 1,000. These two indicators
evidently signal the magnitude of untapped market and the scope for established players.




The value proposition


The mix of the branded watch segment in the adjoining chart clearly shows that the 'value
proposition still remains the key USP in this sector. Despite competition from the
unorganised market and Chinese products, the mass segment (lowest in the value chain)
comprises a sizeable 11% of the total industry. However, the lower end segment (43% of
the total share), which is largely catered to by the domestic players is the most




addressable market, having witnessed a CAGR of 11% over the last 5 years.




                                                                                        9
Scope ahead
The sale of watches per 1,000 people per annum in India is as low as 40 as against 120
globally. 37% of the population owns watches (Source: IRS data 2005), while just 3.5%
of the population owns multiple watches. While the penetration level of 71% in A and B
grade cities is healthy, the level is as low as 19% in the rural areas. This data goes beyond
doubt to prove the scalability of the Indian branded watch market. However what players
need to keep in mind is that they are catering to discerning customers and well-defined
customer segments with awareness of designs and brands. Also, presence of foreign
players is set to intensify the competition. Thus, the ability to innovate customer centric
product offerings and market them through multiple channels will enable players to retain
market share and enhance margins.


The Titan View Of A Watch :-


A watch is now looked at as a personal accessory, an extension of a person‟s lifestyle.
The design of the dial and the strap influence a buyer‟s choice rather than just the
function. Also, a whole new range of technologically superior watches has also entered
the market. With the emergences of this trend, TITAN has clearly segmented their
consumer base targeting niche markets with different products. While Titan introduced
`Dash‟ targeted at children, it introduced `Raga‟ exclusively for Ladies Party Wear.
Another niche segment caters to the technology savvy consumers, with brands such as
`Edge‟, `Technology‟, `PSI 2000‟ to cater to this segment. There is also the fashion
segment, where TITAN has a collection for men and women. For instance, Titan has
`Fast track‟, and Raga, Regalia and Royale in the stylisth segment. International styling,
such as the `WORLD WATCH‟ which was launched a few months ago is also to keep up
with trends in the market. While most foreign brands have their products targeted at one
niche segment, either fashion of function or style, TITAN has different products targeted
at different segments.


The stress is one constant innovation in style, design and products that would keep the
interest alive in the various segments. This is a challenge every player is facing to keep



                                                                                          10
up its market share. It again battles to the survival of the best or the Rule of three where
the top three players in the market would survive. Titan figures not only in one among
them but the leader among them. At TITAN innovation and leadership are part and parcel
of the company and this trend is reflected in their products and the synonymous name the
“The Watch” has in the Indian market.


Titan brought in quartz technology, displacing the mechanically driven HMT, till then
number one, into second place and smaller towns. It brought a sense of style and designs,
till then available only in the West, or in Japan, to its range. Even today, with so many
foreign brands gaining visibility, as well as a buoyant grey market, the strongest selling
point of Titan is that it is available and affordable. It provides for all segments, from the
low-end Sonata for a first-time user, Fast-Track for the trendy young, Dash for kids, and
the higher-priced Regalia and Nebula with its latest offerings being steel Collection
(Rs.1,500 to Rs.6,700) and the world watch, and by the year-end it has ambitious plans to
augment its existing ranges. But Titan‟s flurry of expansion and extension, and its four-
year- several-crore R&D, which has resulted in the Edge, shows that there is no room for
complacency. Though the `most profitable watch company‟ in the country (net profit in
the last financial year Rs.23 crore, with six million watches sold), claims that it doesn‟t
fear foreign competitors, there‟s no doubt that the high ad-spends of the Swatch group
have    taken    some     of   the    sheen    off    the    biggest    domestic    players.
“Reparability, and visibility”, is where Titan scores. Even though a Swatch‟s likelihood
of needing repairs is minimal, it would have to be dissembled even for as small a thing as
a change of battery. Titan‟s products have come down from being a rich man‟s watch to
that of everybody‟s watch with TITAN still being something for somebody and not
everything for everybody.




THE TARGET MARKET :-
FAST TRACK
A collection of watches will contemporary styles that are young and distinctive. Designs
that go from the relaxed and informal to the definitely sporty. The woman‟s collection



                                                                                          11
presents the all new international `Frosted‟ look, which is trendy and chic. The Fastrack
collection has elements like cool mesh straps and features that include EL back-light and
dual time. Also presenting a range of fashion digitals in contemporary wrist hugging
cases with oversized displays and features that include countdown timers, chronographs,
lap timers, hourly chime, alarm and Hi-light glow.
Price: Rs.550-1,430 Category Aimed at : Youth
EXACTA
A perfect combination of dateless styling and design simplicity, Exacta is the all-steel
look in Titan. Everyday watches for those who value fundamental principles of
durability, reliability and affordability.
Price: Rs.595-1,140 Category Aimed at : Lower Middle Class (Office Wear)


SPECTRA
A truly unique collection of watches that combines the sturdiness of steel with the
richness of gold. International in styling the `Spectra‟ collection is designed for those
who look beyond the ordinary.
Price: Rs.650-1830 Category Aimed at : Common Class


ROYALE
A stunning collection of alluring gold-plated cases matched with exquisite gold-plated
straps, the `Royale‟ collection has designs that suit everyday wear.
Price : Rs.960-2,830 Category Aimed at : Upper Middle Class


RAGA
Exclusive watches for women. The Raga and Silver Raga collection is elegant, delicate
and feminine with each piece being truly unique. An existing collection that includes
decorative motifs, `kadas‟, studded bracelets and a first of its kind three-in-one watch.
The designs are inspired by traditional Indian as well as contemporary motifs and are
expressed in ropes, `kadas‟ and ornamental bracelets. Crafted exclusively for the
sophisticated woman, who wears silver jewellery with élan, the Silver Raga makes a
perfect accessory that completes a woman‟s wardrobe.



                                                                                      12
Price: Rs.1,420-4,000 Category Aimed at : Upper Class


BANDHAN
Watches for him and her. The pair watches of the `Bandhan‟ range are Titan‟s tribute to
the everlasting quality of a bond between a man and woman The Bandhan Collection is
available in both leather straps and gold bracelets and its presented in uniquely designed
packaging.
Price: Rs.1,675-8,085. Category Aimed at : Couples


REGALIA
Magic in gold and unique futuristic material. Finely crafted sleek cases and patterned
dials with special appliqué flowing into intricately designed bracelets. A unique
combination of an all-gold and bicolor look, the `Regalia‟ range represents the essence of
dress-wear.
Price: Rs.1725-7770 Category Aimed at : Upper Middle Class – Upper Class


EDGE
The Titan EDGE is the Slimmest Watch in the Universe; a mere 3.5 millimeter thick, the
watch is practically invisible. Delicately crafted with precision, it has an incredibly Slim
Movement of 1.15 millimetes. Furthermore, the Titan Edge is Water Resistant to a depth
of 30 meters, an attribute rarely ever seen in slim watches. Titan‟s Edge comes with an
elemental One-Piece case made from Non-Allergic Stainless Steel, and a Sapphire
Crystal that market it Scratch Resistant.
Price: Rs. 4,500-5,200 Category Aimed at : Business Class


NEBULA
Nebula, a range of watches crafted from solid gold embellished with precious stones,
available with both leather straps and intricately designed bracelets. With Nebula, Titan
turns watches into precious jewellery. The finishing touch to this exquisite collection is
the sapphire crystal that crowns each of the watches.
Price: 10,000-45,000 Category Aimed at : Upper Class



                                                                                         13
Titan‟s portfolio comprises of products from Rs.295 – Rs.45000. Many competitors do
not go beyond a certain range or do not come down below a certain range.
For eg:- To start of with the lower segment maxima quartz, HMT, IMFQ (Chinese
watches), Titan offers its Sonata brand which comprises of about 47-50% of the titan
sales (Figures according to showroom owners), backed by the guarantee of TATA-India‟s
biggest business house which people have faith in. The guarantee, the Research and
development, value for money, new innovative designs, wide dealer network, the
committed service team, discounts and offers is some of the things which means a lot a
price sensitive market, the lower segment in which Titan carves itself the path to being
the market leader.


Moving on further up the pricing ranges we come to a market which is not price sensitive
but wants an exclusive product and who do not mind paying the price. Rado which is
known for its expensive diamond watches, have a niche for the top cream of the society.
Titan manages to cater to these segments with the Nebula, the Edge, the Insignia, the
World watch, distinguishing itself for example as the slimmest watch in the world giving
oneself the identity no one can offer, pure gold watches and combined with Tanishq
which apparently has gained a status of its own jewellery with watches. This unique
concept plays well for titan to offer a wide range of products with the Indian touch and
providing the customer a well designed international store, these products offer
satisfaction and a sense of well being (based on research details), couples watches, the
gifting technique, wide dealer network , selling on emotions, the use of festivals and
occasions, combining new products with the old ones which one no one in the watch
market can boast of are some of the techniques none in the upper market can do.


Thus broadly speaking TITAN has 60% of the watch market in India Today because
companies existing have a niche market where as TITAN gives the flexibility to the
customer to choose a watch more or less than his budget giving him the same guarantee,
the name TATA, a wide dealer network, an international store, and more so ever value
for money.



                                                                                     14
STRATEGY :-

After carrying out an in-depth market study, Titan identified three distinct market
segments for its watches. The segments were arrived at using benefit and income level as
the bases.
The first consisted of the high income/ elite consumers who were buying a watch as a
fashion accessory not as a mere instrument showing time. They were also willing to buy a
watch on impulse. The price tag did not matter to this segment. The next segment
consisted of consumers who preferred some fashion in their watches but to them price did
matter. While they had the capacity to pay the price required for a good watch, they
would not purchase a watch without comparing various offers in the market. The third
segment consisted of the lower-income consumers who saw a watch mainly as a time-
keeping device and bought mainly on the basis of price.


For the first segment, Titan offered Aurum and Royale in the gold/ jewellery watch
range. They were stylish dress watches in all gold and precious metals. The prices
between Rs.20,000 & 1 lakh.


For the middle segment, Titan offered the Exacta range in stainless steel, aimed at
withstanding the rigours of daily life. There were 100 different models in the range. The
price range was Rs.500-700. Titan also offered the RAGA range for women in this
segment. And, for the third segment, Titan first offered the TIMEX watches and later,
when the arrangement with Timex was terminated, the SONATA range. The price range
was Rs.350-500. It was offered in 200 different models. Titan also offered the “Dash!”
range for children. In-depth segmentation helped Titan launch segment-specific product.




                                                                                      15
IMPLEMENTATION ISSUES


There is no doubt that the mechanical watch industry is healthy, perhaps healthier than
ever before. Watch brands are producing more mechanical watches each year, from
simple, entry-level watches to the most complicated ever seen. New watch and movement
manufacturers are popping up all the time, brands revived after years of dormancy and
new brands, while the names we all know and respect continue to churn out mechanical
watches. Lost in this rush to fulfil the worldwide demand for more and more mechanical
product is a glaring and potentially disastrous problem looming on the horizon. The lack
of quality watchmakers to make sure these watches are in good running order before they
leave the factories and to repair and service the watches in the future.


As more watchmakers retire every year, the numbers aren't there to make up for the
coming deficit. At the same time, new watchmakers coming out of school are not up to
the most demanding tasks of high watchmaking. Sure, they might be able to regulate and
service simple watches, but the most complicated movements are often beyond their
abilities. It can take up to ten years for a watchmaking school graduate to.develop into a
master watchmaker. Surprisingly, in the watch industry, time isn't a luxury many
companies have when it comes to the critical situation regarding watchmakers.


The Generation „Gap‟


When the quartz watch revolutionized the watch industry in the 1970s, many old school
watchmakers hung up their tools and watch making became a dead occupation. Sure,
there were some companies still operating, but from the height of the industry, the fall off
in numbers of watchmakers was dramatic.
Then, in the 1990s, mechanical watches got hot again and are hotter than ever today.
More watchmakers are being trained, but what kept the Swiss watch industry on the top
of the world was the apprentice system, which suffered by the „gap‟ when watch making
was not in vogue.


                                                                                         16
Another challenge is the impact the computer has had on the watch industry. Today's
sophisticated computer modelling and design programmes make anything seem possible
and quality problems can result from too much dependence on computer simulation.
Problems that would easily have been spotted when a design is put through the rigorous
process of prototyping and testing can be overlooked or ignored when computer
modelling and simulating testing is depended on too heavily. There are many companies
today selling watches that are not fit for sale. The watches are not controlled enough, so it
has already started. The numbers of returns are astronomical. There are people in the
industry who want to do things the right way and there are people who just want to make
money           to           the          degradation         of          watch           making.
In 1970 - 1980, about 5% of all watches sold were returned for service, today, it's 30 -
40%. The backers all want an immediate profit. They work on a profit basis, not on a
long-term quality basis. There is not enough time to test the product properly.
Economically,        it's   ridiculous.   Who     wins   at        the   end   of   the     day?"
Today's market is hungry for the next great complication and some companies, in a hurry
to capitalize on a market that is super hot right now, just might be putting watches into
the supply stream that already have technical issues or will have service problems down
the road.
Add to this the fact that when these hyper complicated watches need service, there aren't
enough qualified watchmakers to perform that service in a timely fashion.
We need young people coming into the watch industry. Finding qualified people is a big
problem and it will be worse in the future. There is a big difference between a
watchmaker and a watch repair person. The problem is the real watchmakers. It's a recipe
for disaster.


After- sales service.


Timely after-sales service is a huge issue. If a customer has to wait four to six months for
his watch to be sent back to Switzerland, he may think twice about buying something else
from a Swiss company.




                                                                                              17
The question of service is a critical one and that's why Zenith has opened service centres
in every country where Zenith sell watches. To have the top watchmakers, they have to
train their own. They export Swiss watchmakers to the US because they can't find enough
qualified watchmakers there. Service is so important - the bottom line is that the watch
has to work."
In reality, after-sales service is an opportunity for a company to stand out, because in
general,    service   is   pretty   poor   when   it   comes   to   mechanical   watches.
If the watches can't be serviced in a timely fashion, it will kill the watch industry. The
companies who provide good service will survive and thrive, those that do not will have a
huge problem.
Since the watch industry is breaking new records every year, servicing is becoming an
imminent problem. "Lots of watchmakers are going to be retiring soon. The dearth of
watch making needs to be paid more attention to by the government - the watch industry
is the second or third biggest industry in Switzerland. The politicians should incentivize
watchmaking, because it's a good job.
There are more and more mechanical watches, more complicated watches, and who is
going to service these watches? Many brands neglect the service part of it. They don't
factor service into the equation when they are designing the watches, because they are
marketing guys.
Service often becomes a stepchild. Mechanical watches need to be serviced and the
service has to be personal. When you have mechanical watches, the character of each
wearer is different. If you are active, your watch needs some special adjustment and if
you are sedentary, it needs to be adjusted in a different way. There is always a problem
to find good watchmakers. It's the responsibility of watch companies to make a system of
apprenticeship, education. We have an apprenticeship program here. It's not classical, we
have many young people, they want to go forward and we give them a chance.


Retailers


Some retailers have their own in-house watchmakers, which is a great asset to have so
that repairs can be turned around quickly. It will get harder and harder to find qualified



                                                                                       18
watchmakers to work in retailers around the world, as well. And in-house watchmakers
probably are not capable of servicing the most complicated watches from the various
brands.


The Future


The future is, like the watches that need to be serviced, complicated. Some brands are
putting on the best face they can and saying that they have everything covered, but the
bottom line is that if this problem isn't addressed and steps taken to vigorously solve it,
conditions could reach a critical stage in the next few years. As more mechanical watches
are sold around the world, and these watches come back to be repaired and serviced, the
watch industry has to be able to do a good job servicing them quickly and competently.
And    to   do    that,   the   industry   needs   watchmakers     and   watch    masters.
This can be a time bomb if the industry doesn't take the necessary action. We need more
top watch-makers. We need watchmakers who can fix the more complicated watches.
These watches have such tight tolerances, so there are not many people who can work on
them. Many watch brands talk a good game about being ready when the huge numbers of
mechanical watches being sold need servicing. They better be ready to back that up by
having the right people in the right places.




                                                                                         19
Financial Results:                              Rs. in crores
                                     2007-2008          2006-2007
Total Income                         3042.87            2139.68
Less: Excise Duty                    47.35              46.22
Net Income                           2995.52            2093.46
Expenditure                          2743.35            1891.80
Gross profit                         252.17             201.66
Interest                             20.14              20.42
Cash operating profit                232.03             181.24
Depreciation / Amortisation          29.73              25.59


Exceptional items:
Profit before taxes                    202.30           131.65
Income taxes - Current                33.04             36.95
- Deferred                            7.27              (2.86)
- Fringe Benefit Tax                  3.70              3.23
Profit after taxes for the year       158.29            94.33
Less: Income tax of earlier years     8.02              0.20
Net profit                           150.27             94.13
Profit brought forward               130.93             77.50
Amount available for appropriation   281.20             171.63


Appropriations:
Debenture redemption reserve           5.28             4.85
Dividend paid on preference shares       -              0.39
Proposed dividend on equity shares      35.51           22.20
Tax on dividends                       6.04             3.83
Transfer to general reserve            15.83            9.43
Balance carried forward                218.54           130.93




                                                                    20
The Company achieved significant growth during the financial year 2007-08 with sales
income at Rs. 3,043 crores growing by 42% from the previous year and Profit before
taxes going up to Rs. 202.30 crores, up by 54% from previous year. Net profit for the
year stood at Rs. 150.27 crores as compared to Rs. 94.13 crores in the previous year.
The Watch segment grew by 17% to a sales income of Rs. 917.58 crores, while
Jewellery sales went up by 57% to Rs. 2,028 crores. Sales of other products,
including Accessories and Precision Engineering business, rose by 53% to Rs. 95.98
crores.




                                                                                  21
The Company achieved a growth of 42% in sales turnover and profit before taxes went
up by 54% over the previous year. Net profit after taxes grew by 60% over the previous
year.


Some of the key financial indicators of the Company are as under:


                                               2007-08   2006-07           2005-06
Sales to Net fixed assets (No. of times)       10.77        8.00           7.56
Sales to Debtors (No. of times)                 31.53      23.21           16.44
Sales to Inventory (No. of times)              2.98        3.15            3.96
Retained Earnings - Rupees in crores           108.72     67.72            55.33
% of Net Profit for the year                   72.4%       71.9%           75.2%
Operating Return on Capital Employed           34.8%      30.7%            24.0%
Return on Capital Employed (EBIT)              34.8%      25.8%            19.5%
Return on Net Worth                            39.4%      36.0%            42.8%


The share price of the company with the relation to the BSE index shows the perception
of the share holders based on the financial achievements the company has got. Using the
regression tool from 2000 – 2007 share price data as dependent variable and BSE index
(annual closing price) the beta value is 1.1093 and Adjusted R Square is 0.937588



                                                                                     22
         year              Close -Unit Curr               BSE_SENSEX
                 2001                      35.91                         3262.33
                 2002                      75.72                         3377.28
                 2003                    125.84                          5838.96
                 2004                    181.84                          6602.69
                 2005                    799.64                          9397.93
                 2006                    859.05                         13786.91
                 2007                  1,562.30                         20286.99
                 2008                  1,181.55                         14243.73




The chart shows the trend of sales turnover and net profit from 1999 to 2008. The sales
and profit as well have stiff upward slopping from 2005 to 2008.




                                                                                          23
24
CONCLUSION
In the Journey from being a watch manufacturing unit to the watch leader in the industry
the journey to the 50 million watch mark has just shown the METAL of which Titan is
Made of.
In this MEMORABLE TRANSFORMATION , Titan has at every step taken FULL`N‟
FULL care of each person that entered its 50 MILLION STRONG FAMILY which has
made it possible to be what it is today.
TITAN COULD BE CALLED BY VARIOUS NAMES.
“The Company that brought Quartz watches in India”.
“Everyone‟s Brand yet different products to different people”
“The company that made watches a fashion statement than a time piece”
And many more…
Titan has proved its true identity taking the Indian name to foreign soil and shining on soil
not its own, the respect the name commands in the watch industry has been achieved in a
very short time.
50,000,000
& STILL GOING STRONG
WELL DONE TITAN.




LESSON LEARNT


 The following points we have learnt from the report.

 Customer–Relationship Management (CRM):
 Customer–Relationship Management (CRM), which has been successfully introduced by
 Titan in the Indian market.
 CRM is an idea that has began to assume growing significance in today‟s corporate
 environment, as it is a vital element in customer satisfaction. As product differentiation
 decreases (and such is definitely the case in the watch industry) companies will have to
 increasingly use CRM as a means of differentiating themselves from the competition. It is



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here that Titan has made headway, perhaps more so than any other Indian company.
Apart from the run of the mill customer databases and direct marketing techniques that
most companies employ, Titan has implemented a number of small, yet significant
measures that go a long way in enhancing customer satisfaction. A prime example of this
would be to observe one of Titan‟s 55 watch care centers. Here, receptionists make it a
point to speak the local language, and standby watches are provided to serve as
replacements till a customer‟s watch is repaired. Additionally, these service centers are as
posh as the showrooms, have 24-hour voice mail facilities, have no lunch hours, are open
till late evenings, and even deliver watches at home, if so required. It is measures such as
these that enhance a company‟s image and build brand and consumer loyalty. It is little
wonder then, that Titan is consistently voted India‟s no.1 brand.

Expand sensibly:
Extensions should always b logical and market driven and not mere “product explosions”
.as the market environment changes with the addition of say, greater competition, or
changing customer wants and perceptions, brand extension should be undertaken. It
should not, however be undertaken arbitrarily. When Titan entered the market in 1987, its
main competitor was HMT, a company offering reliable and economically priced
watches. Titan thus started out being a company offering a wide variety of models, most
of which were priced economically, with the added USP of being a most stylish
alternative to HMT. As times changed however, so did Titan. With the growing entry of
foreign brands in to the market, Titan continued to introduce sub brand after sub brand to
meet every new challenge. With the entry of “high performance” sports watch brands in
the form of “Tag Hauer”, “Omega” and “Breitling”, Titan introduced it‟s own line of
chronographs priced significantly lower then the completion between the range of Rs
5000 to Rs 6000 which were supposed to be priced reasonably cheap compared to the
international brand similarly, to counter the entry of foreign, youth oriented “Style”
brands such as “Espirit” and “Swatch”, Titan introduced “Fastrack”
Sub brand, again priced extremely competitively. This would now be perfect juncture at
which to introduce the second method through which Titan captured India‟s watch
market. This was done through extensive, yet well thought out segmentation, which
involved introducing a wide variety of models, each targeted at a specific segment of the


                                                                                         26
market, and more importantly, each possessing a unique and identifiable sub brand name.
Not only did this enable consumers to effectively differentiate between the various sub
brands but it also enabled each brand to cultivate for itself a specific image and target
itself at a specific type of customer within a specific price range. Titan has tried to
achieve a balance of cross focus and cost focus and differentiation focus. By this we
mean that in the lower end (popular segment) of the market, it seeks to achieve a cost
advantage by exploiting the differences in cost behavior in the mid and higher end
market, it seeks differentiation by providing better designs.

Don‟t neglect Public Relations:
Public Relation, or PR, is vital to the success and survival of any brand. Unfortunately, its
value as a brand building tool has more often than not, been undervalued. Newsletters,
event and entertainment sponsorships, and other forms of PR help to define the
personality of a company or brand, positioning it as a good corporate citizen, and
someone nice to do business with. In keeping with India‟s obsession with cricket, Titan
has often sponsored cricket tournaments including the now legendary 1997 Titan cup.
Titan also sponsors a number to popular television programmes, a prime example of
which is star world‟s “the practice”.

Realize that promotions can be tricky:
Promotions ought to be used to create recognition and build a brand loyalty. Needless and
irrelevant contests tend to shift the customer‟s attention from the product being promoted
to the price being offered (be it a trip to US or a new car). A better (and far less
expensive) way to promote a brand would be to allow it be used by other companies in
their promotional offers Titan is currently being offered by both outlook magazines and
“Welcome Awards” (the privileged customer programme of the welcome group chain of
hotels) in their various promotional offers. The most sensible and effective forms of
promotional are measures such as establishing a privileged customer club offering
customer points redeemable for discounts and rebates. Titan has their own privileged
customer club, “Titan signet”, which has an impressive membership of 1.6 lacs members.




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Always remember the USP:
A USP (Unique Selling Proposition) is not only what gives the customer a reason to buy
the brand, but also what helps him distinguish the brand from its competitors Titan‟s USP
is twofold, and can perhaps best be described in six words.
“An Indian company offering international quality”. This works for Titan in two ways.
First of all, it‟s emphasis on „international quality‟ successfully negates it‟s major Indian
competitor, HMT, who is still perceived as a company offering solid and reliable, yet
singularly unstylish outdated and staid looking watches. Secondly, with the plethora of
foreign brands in the country today, Titan emphasis on being Indian enables it effective
meet their threat interestingly , while Titan has never actively promoted the fact that it‟s
parent company is the Tata Group, at the same time it has never really done much to hide
the fact. Thus by capitalizing on the name “Tata”, it has been it‟s own identity as an
Indian brand offering high quality watches at prices significantly below those of
comparable foreign brands.

If you can‟t be first, be better:
Being the first entrant in any category earns pioneer status for a brand and gives it the
advantage of being probable market leader such was the case with HMT. However with
the emphasis on its USP aggressive advertising, Titan convinced the market that it
produced the better product and thus destroyed HMT‟s near monopoly of the Indian
watch market.




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BIBLIOGRAPHY


WEB SITES:


www.titanwold.com
www.tata.com/titan
www.google.com
www.indiainfoline.com
www.thehindu.com
www.economictimes.com




BOOKS REFERED:


MARKETING MANAGEMENT – PHILIP KOTLER




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