Titan industries ltd. company report


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Titan industries ltd. company report

  1. 1. Study On Product Mix,Marketing Mix And ProductLife Cycle OfTitan Industries Ltd.Group 5, Section – G
  2. 2. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. INDEX EXECUTIVE SUMMERY OBJECTIVE INTRODUCTION PRODUCT MIX MARKETING MIX PRODUCT LIFE CYCLE Page 2 of 19
  3. 3. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd.EXECUTIVE SUMMARY At the heart of every brand there is a great product. Product is the key element in any market offering. This project studies about the different product offering from Titan Industries Ltd. Titan‘s watch segment is the India‘s chief producer of watches and ranks fifth in the world in production of watches. Company really understands the psyche of consumer and they offer quality products in classical design with superior technology. Titan‘s watch segment has turned out as a brand TITAN, which is well recognised in Indian watch industry. Later part will focus on the company‘s strategy for promotion of the brand Titan. At the end study of product life cycle of well-known models of Titan‘s watch segment is shown. Page 3 of 19
  4. 4. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. OBJECTIVE The product mix of a company, which is generally defined as the total composite of products offered by a particular organization, consists of both product lines and individual products. A product line is a group of products within the product mix that are closely related, either because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.It is extremely important for any organization to have a well-managed product mix. After studying product mix it is important to have a balanced marketing mix. The marketing mix principles (also known as the 4 p‘s.) are used by business as tools to assist them in pursuing their objectives. The marketing mix principles are controllable variables, which have to be carefully managed and must meet the needs of the defined target group.Products pass through a series of stages. Successful products progress through four basic stages: (1) Introduction; (2) Growth; (3) Maturity; and (4) Decline. The product life cycle concept provides important insights about developments at the various stages of the products life. Knowledge that profits assume a predictable pattern through the stages and that promotional emphasis should shift from product information in the early stages to product promotion in the later stages should allow the marketing manager to improve planning. Page 4 of 19
  5. 5. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. INTRODUCTION Business Overview The Indian Economy in the year 2010-11 emerged with remarkable speed from the effectsof the global financial meltdown, with an impressive 8.5% growth last year and an expectation same in the coming year. However, within this ambience of progress and optimism, there is the spectre and challenge of containing inflation which has beenvacillating from above 20% to the below 9.5% level. In addition, structural challengesremain in the economy, of corporate governance, ethical efficiency in the delivery ofsubsidies and building up infrastructure. In this context, it is important to note that the economy, over the last three years,has successfully withstood two shocks in rapid succession: a) a collapse in world economicgrowth and trade caused by the financial crisis during 2007-2009 which persisted into2010-11; and b) experiencing a negative growth in the crucial sector in agriculture in2008-09, resulting in a drought in 2009-10. Cautious optimism is reflected as aconsequence of macro-economic measures aimed at moderating inflation to forecast sustainedgrowth ahead.The recovery in economic performance has led to a significant improvement in consumerand business confidence. Consequently, retail sales of all products witnessedconsistent and high growth. Page 5 of 19
  6. 6. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. TIL has fared exceedingly well as a result of this. Income grew by 40% fromRs.4,703crores last year to Rs. 6,571 crores this year while the net profit increased by72% from Rs. 250.32 crores last year to Rs. 434.02 crores this year.Global trends in the Watches Industry During 2010, global production of watches was estimated at around 1.2 billiontimepieces, an increase of more than 20% compared to the previous year. Many globalmarkets displayed a strong uptrend in sales volumes, after a sharp fall in demand duringrecession-hit 2009. Asian countries such as China, India and Singapore displayed rapiddouble-digit growth. The USA and many European countries also resumed a growth trend,albeit at a slow pace. The premium and luxury end of the global watches market saw vigorous recovery, withexport sales of the Swiss watch industry growing by 22% in 2010, compared to the previousyear. Asia has now become the largest market for Swiss watches, absorbing 53% of Swisswatch exports during the year. This is also the reason why many premium and luxury brands are now investing significant amounts in Asian markets. The Swatch group, global market leader in wrist watches, recorded gross sales of 6.44billion Swiss Francs during 2010, a growth of 22% over the previous year. The group alsoreported record operating profits during 2010.The Indian watches market The Indian watches market continued to display good growth during 2010, with thepremium watch market, in particular, recording a growth in excess of 25%. This isexcellent news for the future of the industry, since global brands will continue to investstrongly in this rapidly growing market.Titan Industries Ltd. As a result of joint venture between the Tata Group and Tamil Nadu Industrial Development Corporation, the Titan Industries Limited (TIL) was born in the year 1984 and commenced its business in the year 1986.Titan Industries is the worlds fifth largest wrist watch manufacturer and Indias leading producer of watches.Started as a watch company, Titan Industries main focus has been to increase the breadth and depth of its portfolio of product offerings.The company has four main business units, which are as follows: Page 6 of 19
  7. 7. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. The Time Products division is where the Titan story began. Today, this division has placed Titan Industries among the world‘s largest retail networks and earned the company the place of fifth largest integrated watch manufacturer in the world. With over 5934 employees spread over 3 business units in Bangalore, India, a manufacturing unit at Hosur and 3 assembly plants located in the north of India, the division continues to add world-class brands to the company‘s portfolio. From the initial offering of 150 models in 1987, today the supply chain and manufacturing set-up has the capability to handle over 3000 watch variants every year, the fact that depicts the product mix complexity. Today, Titan Industries watch assembly capacity is about 12 million watches per annum.Titan Industries entered the international watch market with their business endeavour in the Middle East in 1991. UAE, Oman, Qatar, Bahrain, Saudi Arabia and Kuwait, South Africa, Singapore, Dubai, Malaysia, Oman, and Vietnam are some of the major countries where the brand is offered.With over a hundred million satisfied consumers world over, Titan has successfully established its brand value internationally. This project is focused on study of brand TITAN, that is the time product division of Titan Industries Ltd. The division has sold over a million watches through the unique retail format of World of Titan - where both in-house brands & licensed brands are offered - and through a vast network of dealers and lifestyle stores in India and in 27 countries worldwide. The division offers after-sales service network that has been considered a benchmarked operation in the industry.During 2010, TIL increased its market share in multi-brand outlets (asmeasured by M/s. Francis Kanoi Research) by a further 2% to 45%, in the face ofcompetition from over 65 competitor brands.Titan‘s share in the total market including salesat exclusive stores and corporate clients stands at 47% by value. Page 7 of 19
  8. 8. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. The Company‘s market leadership and consistent growth was achieved through a well-crafted portfolio of sharply defined brands, which dominate several consumer segments inthe watches market – Titan for the mid-premium market, Raga for women, Fastrack foryouth, Sonata for value- conscious consumers, Zoop for school children, and Xylys forconnoisseurs of Swiss watches. Supplementing these brands is a wide and robust retail,distribution and service network which extends across the country. Based on these strong foundations, the watches business of the Company achieved arecord profit before interest and taxes of Rs. 186 crores and a robust ROCE of 73% during2010/11. Titan, company‘s flagship brand was ranked amongst the ten most trusted brands in thecountry, among 16,000 brands studied by the Brand Trust Advisory during 2010. In the samestudy, Fastrack was ranked the most trusted fashion accessories brand.Major Competitors There are many competitors in wrist watch segment which directly or indirectly affect the TIL. The major players‘ are- Domestic Level: HMT, Maxima-quartz, Rado, Casio International level: Espirt, Swatch, Citizen, Tag Heuer, Seiko. Cartier, Giordano, Fashion Houses: Dkny, Gucci, Adidas, Nike, Bvlgary Among all these competitors, HMT and Maxima-quartz are major players with approx. 19% and 13% share in domestic market respectively.The strength and weakness of the companies varies from segment to segment.New Business Lines The new business lines have made a tremendous difference to Titan‘s balance sheets. In 2010-11, Jewellery contributed nearly 65 per cent (Rs27.63 billion) of Titan‘s turnover, making a much larger contribution to revenue than the older watch business (Rs9.08 billion). The rest of Titan‘s business lines — eyewear, accessories and precision engineering — brought in another Rs1.36 billion, taking the total to Rs38.47 billion. Page 8 of 19
  9. 9. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. PRODUCT MIX The product mix of TIL consist of four product lines, which are actually its business divisions. PRODUCT MIX TimeProduct Precision Eyewear Jewellery s Engineering Fastrack Frames Tanishq PECSA Raga Lenses Gold Plus Machine Building and Sonata Contact Zoya automation Solution Lenses Zoop Sun Glasses Tooling Bandhan Solutions Purple Electronic Sub- Octane AssembliesTime Product Division: Page 9 of 19
  10. 10. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. There are over 15 brands of Titan‘s watch segment, which has different models. Total watch variants are over 3000. So product width is around 20 and depth is 3000 for this division. Models Variants Sonata 650+ Fastrack 350+ Raga 269 Zoop 112 Purple 65 Bandhan 65 Octane 53 Other brands and their variants: Tycoon - 57 variants, Edge - 54 Models, Ragalia - 50+ variants, Orion - 42 variants, Obaku - 41 variants, Automatic - 26 variants, Nebula -17 variants, HTSE - 10 variants, WWF - 6 variants, Heritage – 6 variants, some well-known international brands such as Tommy Hilfiger, FCUK, etc.Eye Wear Division: The division is known as Titan EYE+. It offers a wide range of products, including frames, lenses, contact lenses, accessories, etc, in both international (Levis, Esprit, Hugo Boss, etc) and house brands (Titan Eye+ and Dash). Its product width is 4 and product depth is over 1000. Frames The stores carry frames bearing the brands Titan, Eye+ and Dash (for children) brands. Titan Eye+ stores also sell a host of international brands of frames. EYE+: Switcher - 15+ variants, Enigma - 50 variants, Cabana - 35 variants, Vybes - 30+ variants Dash(for children):50+ variants Lenses In terms of optical lenses, the company offers its own products as well as three international brands. Lenses are further classified as follows: Material: Titan Crystal, Titan Lites, Titan Pinnacle Page 10 of 19
  11. 11. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. Special lenses: Titan Bifocals, Titan Elan Silver, Titan Elan Gold, Titan Elan Platinum, Titan Elan Short Corridor, Titan Elan IP White Value Added Benefits-Coatings: Titan Clarion, Titan Armour, Titan Clarion Shield Other brands: Essilor, Kodak, Nikon Contact Lenses Titan Eye+ houses contact lenses from Bausch and Lomb, Johnson & Johnson and Cibavision. Sunglasses Titan Eye+ has a variety of international brands of Sunglasses in addition to Fastrack-a well-known brand from Titan Industries Ltd.Jewellery Division: Titan has 3 jewellery brands Tanishq, Zoya and Gold Plus. Each has many designs.Precision Engineering Division: With an investment of over $10 million, the setup has four main business units: Precision Engineering Components & Sub-Assemblies (PECSA) Machine Building & Automation Solutions Tooling Solutions Electronic sub-assemblies Page 11 of 19
  12. 12. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd.MARKETING MIX Titan‘s marketing strategy had five main bases: a product of international quality, Indian designs, competitive prices, intensive advertising and promotion, and specialized retail shops to control the presentation.Titan has segmented the market on the basis of the following variables: Demographic (age and social class), Psycho graphic (lifestyle and personality), Behavioral (benefits and occasions), Geographical (region).PRODUCT Product Quality: Quality and leadership are synonymous to Titan. It seeks to achieve both through their value for products compared to their prices. Product type  convenience  shopping  specialty Segmentation of TITAN Watch  Based on price  Market segmentation  based on user category Product pyramid: Portfolio of Titan‘s product is of 3 distinct price-range defined in general, as Popular, Mid, and Premium. At the popular segment, the emphasis is on in volumes but not in margins. At the premium segment, the emphasis is on profits and image but not in volumes. Company giving more emphasis at the top of the pyramid as profits is very high. This pyramid is guiding the strategy of Titan. Product strategy: Titan was first focused only on the premium segment of the watch market. Gradually Titan moved in to the mass market for watches. To widen base, Titan created new segments and increasingly focusing on segments individually. In the past few years Titan has took a lot of initiatives to focused on specific segments.PRICE Pricing Objectives: Survival (i.e. Titan Exacta) In case of some of the watches titan prices them according to the features. In same brand company charges lower price for simple model. Page 12 of 19
  13. 13. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. Market share (i.e. Titan Sonata) Company has watches for social classes like lower middle class, middle class, upper middle class, upper class and for occupations like professionals, Retired, Students, Homemakers, Sportsmen, etc. Company also offers watches suit with lifestyle: culture-oriented, sports- oriented, outdoor- oriented, animal lover, monument lover. For example, 70% of sales in watches come from the lower segment, therefore by pricing Sonata at 350 onwards with guarantee company can attract lower segment. Market skimming (i.e. Titan Nebula) In Indian watch industry there is no company offering pure gold watches, watches in pair, jewellery watches. Here Titan offers these products with the Indian touch in its unique and attractive design. Product quality (i.e. Xylys) The best quality watches at higher price is also offered by company. For example xylys, a Swiss-made, impeccably designed watch for the connoisseur and new age achiever.Pricing Method 1. Mark-up pricing The markup percentage could be based on other cost-related factors and may vary from 20 to 500%. 2. Product line pricing Price of the product based on their brand category. For example, Titan watches price varies from 350 to 800 rupees. 3. Promotional pricing Every year Titan comes with a price discount sale on the MRP of the watches.Application of pricing strategy  Lower segment (price less than 1000)  Middle segment (price from 1000 to 20000)  Higher segment (price above 20000)PROMOTION: 1. Advertising Titan believes in making its ads clean, well made, touch on emotional chord. The company has been using celebrities or superstars like Brand ambassadors:  Titan Brand: Aamir Khan  Sonata: Mahendra Singh Dhoni Page 13 of 19
  14. 14. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd.  Raga: GulPanag, Rani Mukherjee  Xylys: Rahul Bose Advertising media:  Television  Print  Internet  They have contracts with orkut and facebook for their promotion. Creative advertising:Titan introduced a contest on cartoon network in India which asked children to use creativity and design watch. The prize winning design was launched as a new watch in summer 2002 collection. 2. Sales promotion Marketing pricing: As by opening new shops such as the World of Titan and hence the element of middleman is not there. The retailer in this category buys watches for 17-18% lesser than MRP and hence Titan may able to get the profit margin upto 17% on sales. Titan can manage the perceived value of customer on ‗World of Titan‘ using hoarding all around the city, increasing buyer image, trustworthiness, innovation, differentiation, value for the product. Price discount and allowances: Every year Titan comes with a price discount sale on the MRP of the watches. The allowances varies from one segment to another. 3. Promotion on occasion: Titan is one of the companies, which formally believes in the policy of promotion of the product based on the occasions.PLACE: Consumer life style in India, especially in urban area plays a significant role in the success of Titan. Keeping in mind about the young trendy and fashionable consumers, Titan distribute its product and set up ‗world of titan‘ in different region. Places where company sales the product: A. Time Zone: Titan Industries brings together the country‘s leading watch brands under one roof, providing the customer with variety in brands, looks and price ranges and also efficient after-sales service. These 1142 Time Zones located across 89 towns which offer its customer the complete watch shopping experience. Page 14 of 19
  15. 15. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. B. Value Mart: These outlets sell surplus stocks of Titan watches at reduced prices. By doing these it offering fabulous value for money with the same warranty as a regular full-priced watch enjoy. However these shops would not be placed in the main locations and not working as anormal shops. 12000 All Over India 2300 Dealers Towns 317 TITAN World 113 Showroom Towns s 135 Multi- Time Zones 73 Towns Brand Stores 650 Service Centers 348 Service Towns Centers 6 Helios Premium Stores 4 Towns Stores Page 15 of 19
  16. 16. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. C. Sonata Stores:Sonata stores are also an Authorized Service Centre for Sonata & Titan brands. Sonata storemeet the large scale demand for the watch and also to attract customers in more. Theseshops had full stocks of the watch in demand whereas the others could afford to maintainonly limited stock. D. Helios Stores:Helios the store is another feather in the division’s cap. These stores are specially designedfor the upscale customers. Helios has over 35 premium international watch brand. E.Titan watches are also available at over 12,000 multi-brand retail stores presents in almostall major cities and towns of the country. Page 16 of 19
  17. 17. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd.PRODUCT LIFE CYCLE Risk assessment at both the operational and the strategic level is undertaken by theCompany continuously under the supervision of the Board.Watches, Jewellery and Prescription Eye-wear are consumer led businesses and the retailnetwork expansion is carried out largely through franchisees at the front end, which is anefficient way to expand rather than having Company owned/managed showrooms which is acostlier option. The relationships have to be actively managed to pre-empt shifting ofloyalties of these franchisees to other product category brands/brands within thesecategories. This risk is being addressed by maintaining a high level of engagement with thefranchisees and addressing their reasonable business requirements in an empathetic mannervia both contractual arrangements and day to day interface with these business associates.Risk Associated With Time Division There is a perceived threat to the product category of watches as a time-keepingdevice due to the increased penetration and use of mobile phones which also display time.A survey was commissioned last year to evaluate the seriousness of this threat and addressthis risk by continuing to position watches as personal accessories and consistentlylaunching new collections to stimulate consumer demand based not merely on functionality,but also on fashion and style. The establishment of the Helios retail store will also helprapidly grow the premium market for wrist watches in India, thereby further strengtheningthe watches category against the perceived risk from mobile phones or other products. A large grey market continues to hinder the growth of the organized watchesmarket particularly in the economy segment and in the smaller towns of the country. Tocounteract this, your Company aggressively launched ‗Sonata Superfibre‘ in this sub- Rs.500 segment. Simultaneously, raids were conducted on unscrupulous dealers sellingcounterfeit watches illegally using our trademarks and the Customs authorities have beenrequested to prevent import of watches or components bearing any of our brand names. A plethora of foreign brands continue to pose a risk to our market share butthis risk has been addressed by continuously investing in our brands, and introducing several new products which fill in key gaps where competition has been gaining ground andmarket share. Launching of watches in new segments like Titan Automatics for the watchconnoisseur and Titan Purple for the fashion conscious was a step in this direction. Company also aims to counter this threat by expanding its retail network significantly andfocusing on dealer relationship programs. The relatively high cost of captive manufacturing remains a future risk, andyour Company addresses the same by a multi-pronged approach which includes theestablishment of low-cost assembly units in North India, increasing the use of automationinmanufacturing plants, hybridization of movements to reduce cost and several othermeasures to improve productivity. Increased outsourcing, particularly to China, is now being seen as a risk tosecured supplies and cost as labour costs in China have started increasing significantly.Company seeks to mitigate this risk by expanding its current network of vendors inIndia and Hong Kong / China. The Hong Kong sourcing office has been established toaddress this risk. Page 17 of 19
  18. 18. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. Titan has introduced different models at every stage of its progress in domestic and international market. So a model introduced in early phase of the company has now came into maturity in its life cycle, while few models, introduced just a couple of years back are in introduction or in growth stage. This can be understood from following graph: Introduction: WWF, Orion, Zoop, Raga Diva, Maturity: Sonata, Fastrack, Dash Heritage, etc. Growth: Nebula, Insignia, Raga, Regalia, Edge, etc. Decline:Aqura Titan has done incremental innovation in wrist watches. Titan started by repositioning watch as an accessory, and not just a time keeping device. Thus, Titan transformed watch from a basic functional product to something that can be gifted to near & dear ones. The ad campaign, back then, had two TVCs, each catering to a different segment. One had a ceremonial theme, focusing on emotions, and the voice-over (VO): ―Pyaarkebaadsabsepyaarauphaar (next loveliest gift after love itself)‖. The other one was targeted at the younger English-speaking segment, with the VO: ―Rediscover the joy of giving, with Titan‖. Enjoying success with the ceremonial-gift positioning, Titan explored the same category in further detail. Titan launched occasion specific TVCs, and in some cases, occasion specific product lines also, focusing on the wedding, Diwali, Durga Puja, Onam etc. Thus, Titan was increasing the scope of the watch market by positioning the watch beyond just a time keeping device. After covering the major occasions, it ventured into the daily activities like aerobics, client presentation, alumni reunion etc, and started defining a different watch for each purpose. The TVC clearly flashed, ―A watch for each occasion‖. This campaign, apart from increasing the number occasions for wearing a Page 18 of 19
  19. 19. Group 5 Study On Product Mix, Marketing Mix And Product Life Cycle Of Titan Industries Ltd. watch, increased the market by inviting customers to buy for themselves, as it did not show any gifts being exchanged, which used to be a very regular feature in the earlier campaigns. Once it realized that all the occasions are covered, or in other words, occasion market saturated, Titan switched tracks and the TVCs started asking people to buy/ gift a watch just like that; it need not be a special occasion to gift someone something special. The VO said, ―Kabhimaukepe, kabhiyun hi (sometimes on an occasion, sometimes, just ilke that)‖. After saturating the market based on reasons of occasions and purposes, Titan identified an opportunity in terms of people‘s behaviour and psychography. The last campaign tried to incite consumers to ―Be more‖. In essence, the message was on experimenting based on your mood and thus, to try out different product lines form Titan. Thus, as the market moves along the PLC curve towards the mature stage, competition increases and market starts getting saturated. Consequently, the marketers keep on trying to increase the usage by scope and by consumption per consumer. Page 19 of 19