STRATEGIC MANAGEMENT

EXECUTIVE SUMMARY

Titan watch is ranked sixth in the world and India number one watch producing company.

For every price segment Titan has got a model but they basically target three segment of the market which include

·         Low income segment

·         Middle income segment and

·         High income segment.

Titan market share in domestic market alone is 70% while it also held 60% in the organised market.

   The objective of Titan watch in the coming year is to increase its market share by 5% and also aim to increase company profitability by 10%. To achieve this aim of increasing its market share, Titan watch has laid down some marketing strategy to follow in order to beats its competitor and this include the marketing mix.

  Price:  Because both Titan competitor like the HMT and Maxima are doing good in the middle income segment where they hold 45% and 30% respectively, Titan watch has decided to reduce its price in this segment. Titan watch has also decided to bring some innovation into their product and at the same time adding creativity to their advertisement by showing importance of time to the mass.

Place: this is another market mix that Titan is using to beats its competitor by opening more show room in the rural area. Titan watch also uses its product affordability and availability as a strong selling point to beats its competitor. The company makes sure that all segment of the society is covered. For instance they launches  SONATA for the watch first time users and low income segment, Fast-Track for the young, Dash for the kids while the high income segment were made Regalia and Nebula

 

 

 

 Market share of the competitor are the following

HMT	19%
MAXIMA	13%
RADO	19%
CASIO	3%

 

The India watch market is estimated to be 25 million watches per year from this the domestic sales is said to be 6 million watches per year (www.thehindu.com). In this present scenario the rural segment is said to be diverse, the capturing of rural market on a large scale is the key success of the Titan watch and in this segment the range of Titan watch cost from Rs.495 to Rs.1200 and this model can be find available exclusively in Titan showroom and also mainly sold in India smaller towns.

  Though there are enormous challenges from competitors the company still remain the best and this is as a result of its good marketing mix so also the company ability to bring in new innovation to improve the product future.

   Titan watch has also done a lot to bring new revolution into the products model, style, features and pricing policies and as a result converting its weakness to strength and its threat to opportunity.

 

 

 

 

 

 

 

 

 

 

 

 

INTRODUCTION

Before Titan came to existence wristwatch market in India was a shabby market, people rely solely on imported watches it was Titan watch that brought revolution to this industry in India

   Tata group which is the parent company of Titan watch brand launched the company in 1987 when it discovered that there is potential consumer market for the product.

   Titan watch is a success story they offer classical design and quality product to the customer with advance technology. They also did a lot of effective marketing, rendered outstanding services and all these help the company to capture the market.

   In today`s wristwatch market in Indian, Titan has a model for every market and price segment, be it regional, rural and urban and also international.

 

• ENVIRONMENTAL ANALYSIS

Ø  Marketing Environment

v  Competitive forces

The following are the main Titan competitor in the wristwatch industry in India. While some are local others are international and they include

1. Domestic Competitors

                      I.        Rado watch

                    II.        Casio

                   III.        HMT

                  IV.        Maxima-quartz

2. International competitors

                      I.        Citizen

                    II.        Swatch

                   III.        Espirt

                  IV.        Seiko

Among all I have mentioned above only two of them are the main Titan competitors and they are

• Maxima-quartz-which its main strength target lies in the mid-price market but its weakness lies in the quality of its watches compared to that of Titan watch.
• HMT- this is state owned organisation and its main strength is its ability to offer its watches at a low price. HMT average price is said to be Rs.550 while that of Titan is Rs.1100.

The main weakness compare to that of Titan is that it has little varieties of wristwatches and also the attractiveness and quality cannot be compared to that of Titan.

 

Expectation from the competitors in relation to 4Ps. 4 Ps can be best be describe as the known way that marketing mix can be define, these are the choices firm have to make in the process of bringing their product and services to the market  

• Price: this all about the price of titan watch product compare to competitors own, so also it is about whether the customer are price sensitive. The expectations of the competitor in relation to Titan price will be as follows

Advantage

The whole market will be captured by competitor of mid-place segment because of the high price

Disadvantages

The market will be enjoyed more by the premium price segment competitor.

• Product- this is all about what does customer wants in this product, the needs it satisfy and the expectation of competitor in relation to their product is that

Advantage

The cost will increase as a result of increased in quality which in turn gives benefit to competitor. For example in the middle income segment of Titan watch that are not doing well if Titan decided to increase the quality of the watch in this segment it will increase the cost of producing the watch and the price will go up.

Disadvantages

Try to decrease the quality will result into competitor capturing the whole market.

• Place- this is all about where customers have to look for the product, accessibility of right distribution channel. The expectation  of competitors in relation to the place to buy Titan product is

Advantage

Having larger number of place of operation will weaken the competitor because for them to have larger showroom to sell their watch will mean incurring more cost.

Disadvantage

Having a lesser numbers of places of operations will lead to wipe out from markets.

• Promotion- this is all about how to get across to Titan target market with their marketing message and how does Titan want to reach its target, is it by above the line promotion like using of TV, billboards or radio or is it by direct marketing mailshot or through internet? The expectation of competitor in relation to the promotion of Titan watch is as follows

Advantage

There will be more market share as a result of increase in sales promotion which in turn will force competitors to do the same and as a result increasing the cost of competitor`s product which transfer into their product price being increased.

Disadvantages

Reducing sales promotion will give competitor benefits of taken over the market most especially the middle income segment which Titan are not doing well.

 

Industry Role

Since there are lot of competitor that exist in this industry and if there is any changes to any company marketing mix other company also implement changes to their own marketing mix for them to sustain competition and as a result of this the industry structure will be changing and in effect affecting the competitive forces in the industry.

 

Political Forces

Because of changing of government in India especially in 2004/2005, the government took some measure to develop the GDP by reducing the rate of cash reserves ratio (CRR) and also reducing inflation and all these steps had positive impact on Indian company so also Titan in order to compete within its industry, some of the advantages of this measure are

• It has brought significant growth for the company in recent years
• So also the cordial relationship between the government and Titan parents group Tata has helped the company so much because some of the government policy had been to the advantages of the company.

Legal and Regulatory forces

This is a global market in which organisation operates and as a result rules and regulation have to be followed and this can affect company positively or negatively. Some of this rules and regulations can be either

• Changing in taxation rate- if this occur this can affect the company in the sense that it have to pay more tax and doing this will mean shifting the burden to the last consumer by increasing the price of the wristwatch.

 

Economic factors

Ø  Economic landscape

Because of last recession in which many countries are still suffering from, India corporate sector are still nervous about their future and going by the report of FICCI which is Federation Of India Chamber Of Commerce and Industry it is said that for the last twelve months that 264 out 413 companies are currently running in worst condition.

Ø  Consumer view

Though inflation is in double digit but still people remain optimistic that economy will improve in a near future.

 

 

 

 

 

Ø  Purchasing power of consumer

 

BRAND	PURCHASING POWER   (PRICE) Rs	CATEGORY
FAST TRACK	550-1430	YOUTH
EXCTA	595-1430	LOWER MIDDLE CLASS
SPECTRA	650-1830	COMMON CLASS
ROYAL	960-2830	UPPER MIDDLE CLASS
RAGA	1420-4000	UPPER CLASS
BANDHAN	1675-8085	CORPLES
REGALIA	1725-7770	UPPER MIDDLE CLASS &UPPER CLASS

 

There had been increasing in the income from Rs.255.35 Crore and this is as a result of Titan sales which grew by 18% (www.hindu.com)  Looking at the table above and the profit figure the consumer buying power can be easily understand.

 

Ø  Spending habit of the consumer

Even in unfavourable economic condition Titan watch is doing well, its sales income has increased during the first quarter of last year from Rs.168.83 crore to Rs. 171 .89 crore in the corresponding period this year(www.economictimes.com).  This show increment in consumer spending and this is as a result of its brand name, quality of the product, new innovations and attractive models.

 

Social Factor

It is the believe of Titan that they should improve the quality of life of their workers and people of the area in which they operates and as a result they have adopted the Tata business excellence model and corporate citizenship index for sustainable development and this reflect Titan commitment to its corporate social responsibility. It is recorded that Titan spend up to 70% of its profit after tax on its corporate social responsibility initiation and this is spread across the area such as environment, workers and the whole community (www.titanworld.com).

 

 

 

Technological Factor

Ø  Impact of technology

The impact of technology is much in wristwatch industry and as a result of changes in technology Titan watch has gone a step further ahead of his competitor. As a result of technological changes, Titan watch had been able to bring some innovations into wristwatch industry, it has allow Titan watch to be producing quartz which is the Analog and the digital watch compared to mechanical one which was so common before Titan came into the market. Another things brought into wristwatch industry in India as a result of technological changes are

• Wristwatch with blood pressure checking system.
• Wristwatch with heart beat checking system
• Wristwatch with the ability to know the mood of the person.

 

 

 

v  Target Market

Titan basically targeted three (3) segment of the market and they are

·         Lower-income segment- this is the segment of people who buy watches based on low price and also just for time keeping only.

·         Middle-income segment – this is the segment of people who likes fashion, they purchased wristwatch based on how fashionable it is and also likes to compare different watches before buying.

·         High-income segment- this is the most fashionable group, they buy watch based on fashion and don`t care how much it cost.

 

v Need Analysis

Consumer Needs – consumer needs and demand are not the same in all the three market segment, either based on price and quality and to satisfied this current needs at different segment of the market the following steps was taken by Titan watch

·         Low-income segment – Timex wristwatch was offered and when the arrangement of Timex was terminated, the range of SONATA was introduced.

·         Middle-income segment – to satisfy the needs of consumer in this group the stainless Exacta range was offered.

·         High-income segment- the stylish gold plated Royale and Aurum was offered to this group to satisfy their needs.

 

v Review Of Marketing Objective

Strengthen India wristwatch industry through the proper utilization of resources is the current marketing objectives of Titan watch and also to reach an excellence height in which it is free from threat and fear.

 

 

 

 

 

v Performance Analysis

During the year ended 2009/2010, Titan watch has achieved a significant growth, every segment of Titan watch sales grew by 17.2% to Rs.918.7 crore (titanworld.com). The newly introduced range of Raga crystal for ladies also did remarkably well.

 

Ø  Swot Analysis

v Strength

Some of the strengths of Titan watch are

·         Style- Titan watch was the first wristwatch company to introduce style into their range of wristwatches and this has made India people to accept them more than the other brand and they still remain style leader in the industry in India.

·         Models- Titan watch is the only wristwatch company that offer varieties of wrist watch, they have got 10 models with more than 12 different varieties.

·         Exclusive- Titan watch offer the slimmest watch in the whole world in the name of EDGE and the product is doing well.

Implication of this to Titan is that India people are offer more choices by Titan than other maker given Titan the opportunity of increasing their market share.

v Weakness

·         Pricing- Titan watch products in the middle-income class segment are too expensive compare to its competitors and as a result the company is not performing very well because consumer prefer competitors product ahead of Titan watch because they are cheap.

·         Market share- In India wristwatch industry the market share is more demonstrated by the middle-income segment and because Titan watch wristwatches are very expensive in this group, not much people were given the opportunity to buy their watch and as a result they go for other maker. In this segment there is 75% market share but Titan watch only control 20%compared to HMT and Maxima who have 35% and 30% respectively (www.thehindu.com).

·         Globalisation- Because of much concentration of Titan watch on domestic market, their focus on international market is very low and in the world market today for any organisation to have a grip on its industry it has to exploit globalisation to the fullest and this is what Titan watch has not done effectively and efficiently.

Implication of this to Titan watch is that though they are controlling largest share of India watch market but this is because they are controlling the lower income and high income segment but India wristwatch market is best demonstrated by the middle income segment meaning averagely the market leader in the middle income segment on average will be more profitable than Titan.

 

v Opportunity

·         Because the highest sales of watch fall into the lower income group of India population and the highest number of India population falls into this group and also this is the group that makes the highest number of sales for Titan, it gives big opportunity for Titan to exploit this group.

Advantages

·         The implication of this is that Titan will remain India number one watch producing company since competitors cannot match Titan in this segment and this will make the firm profitable.

Disadvantages

·         Having this type of advantages can cause distraction from exploiting other market segment and also it shows that Titan watch is the market leader in this segment it will be less costly for the competitor to operate in this group because the will just be copying what Titan does.

 

v Threat

·         Competitor- Because there are lot of competitor in this industry both domestic and international, so also the government policy on removing quantitative restriction on important watches is going to lead to threat to Titan.

·         Mobile phone trend- the need for wristwatch is now decreasing since one can check for time in his/her mobile phone, people tends not to bother about having a wristwatch and this is a big threat for Titan watch.

The implication of this on Titan is that there will be reduction in sales but with good new market development strategy, Titan has turned its threat to opportunity.

Ø  Marketing Objective

Marketing objective of Titan is to increase its market share by 5% which stood currently at 70% in the domestic market and 6o% in the organised sector.

 

Ø  Recommendations

• Though Titan watch are doing well in the low income segment but it will be good if the go for market development in this segment of the market by bringing new product and new innovation into the market, though the product in this segment are doing fine but in this segment Titan are only controlling 60% of the market and since they know the market in this segment very well it will be good for Titan to do some market penetration with the existing product through advertising and promotion by using some of well known India celebrities in their advert and also developed the market by developing new product that will make them winning more market share from their competitors.
• Loss leader strategy- in the middle income group that Titan are not doing well  because of high price of their product, it will be better if they can adopt the loss leader strategy, this is a business strategy in which a business offer a product or services at a price  that is not profitable for the sake of offering another product/services at a greater profit or to attract new customer (investopedia.com) since Titan is the dominant force in watch production in India they (Titan) can use this position to its advantage by reducing the price of its current range of watches in the middle income segment and as a result making it hard for competitor to compete which in turn knocked them(competitor) of the market so Titan can then be controlling this segment. Titan can then develop new product and also dictates what goes on in this segment of the market since they are now the main player.
• Another thing that I will recommend is that Titan watch should try to find a point between being an asset led firm and market led firm. From their middle income segment market it shows that Titan just offer their products to the market according to the amount of resources in their control without thorough research about what markets want. Though the segment want quality wristwatches but what is their attitudes towards price, this is the segment that compare different brand before buying, so if thorough research had been done their will not be any need for Titan to make mistake of over pricing its product in this segment and to avoid this it will be good for Titan watch to find a meeting point from being an asset led organisation and market led organisation.

 

 

• Market development- Titan can go for market development in international market by introducing more variety of watches to international market and also try to exploit other markets that have not been really exploited. Globalisation is the key word for product development in business world now so it will be profitable and less costly if a market like Africa market can be developed which in turn will make them achieve their objective of increasing their market share.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bibliography

1. www.economictimes.com   10/12/2010, 10:33 am
2. www.invetopedia.com    13/12/2010,  14:22 pm
3. www.mindtools.com  13/12/2010, 14:01pm
4. www.tata.com/titan 07/12/2010, 08:47am
5. www.thehindu.com  07/12/2010, 09:20am
6. www.titanworld.com 07/12/2010, 09:00am