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Xylys case study_analysis

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Watches

Watches

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  • 1. XYLYS : Exploring Consumer Perception about Premium Watches in the Indian Context Case Synopsis The whole case talks about Xylys’ foray into the Indian market in the premium segment category.Manoj Chakravarti was a senior advisor was reflecting on Titan industries’s 28 years in the watch industry, both in India and abroad and was comtemplating on Xylus. He was facing tough competition in the premium segment and had formulated several marketing-mix strategies in the past to face these challenges.The challenge was to create and shape a perception unique to the brand.Premium watches in India were usually associated with the Swiss brands Omega and Rolex. The liberalization of markets, the rising of disposable income , exposure to western lifestyles , and the need for the new generation to establish an identity for itself were some of the reasons for the growth of the luxury watch category in India. Timex was the first foreign player to enter the India market followed by Casio, Rolex, Citizen, Omega , Rado and Tag heuer. There was a significant
  • 2. decline in the global production of premium watches due to the financial crisis. This hampered the growth of luxury segment watches in India too but this was compensated by the growth in the economical segment. HMT was the first one to start the watch manufacturing business in India in 1962 and this was followed by Titan industries ltd. which was a Tata and TIDCO joint venture in the year 1984. As years progressed, Titan was the single largest player (20.6%) followed by Swatch(5.9%). Despite the presence of many brands, the market was predominantly controlled by the unorganized sector. There was a transformation in the watch industry as it started as a time keeping instrument but later on became a fashion accessory, owing to lifestyle changes. Watches were classified as : mechanical, quartz analog and quartz digital. The second basis of classification was benefit which is divided as : casual, formal and sports. Sports segment was relatively an untapped segment. The watch market as a whole was classified into : economy, standard, premium and luxury segments. The premium segment consisted of watches ranging from INR 1500 – INR 5000. Another classification was done which was based on consumer behavior and segmentation by value. Lifecycle stages played a major role in the consumers to forge an interest in buying a watch majorly for status and lifestyle issue. Titan was a leader in organized quartz analog segment and wanted to forge into the premium segment since luxury watches had a special appeal and was relatively untapped in the Indian market especially being dominated by the swiss players. The market for luxury watches was estimated to be 3% of watch retail and was growing at a rate of 20%. The competition for Xylys brand was from established brands such as Seiko and Tissot. The main consumer for luxury brands was the new generation executive, number of young and middle- aged professionals and Indians who belonged in the higher socio-economic strata. These consumers were brand conscious. Luxury watches were brought for their symbolic and experiential benefits as opposed to their functional ones. Certain methodology was developed to analyze and link several aspects of consumer behavior, and to compare users and non-users of premium watches. Three sets of questions were prepared ranging from self-concepts of consumers,
  • 3. brand personality aspects of watches to psychographics of individual respondents. Xylys was a premium Swiss made brand from the house of Titan in India priced between INR 10,000 – INR 33,000 and came in three collections – Contemporary , Classic and Sport. Xylys was available in the World of Titan Showrooms and key multi brand outlets. Their target was the lower spectrum of the luxury watch segment. Titan had to battle with the perception of Indians as they were highly influenced by the “country of origin” as consumers loved the “Swiss-tag” and associated it with quality, precision, premium etc. Hence Xylys had to concentrate on the “Indian – made” tag to impress the target segment. Xylys had to change its positioning strategy from “ Symbol of Success” to “ Feeling of love”. The new identity reflected attitude, lifestyle and personality. Tissot and Seiko were the major competitors for Xylys. Tissot was the world’s largest watch producer and distributor and was a member of the Swatch group hence the “Swiss tag”. Tissot had a wide range of watches ranging from Touch, sport to heritage and the price spectrum was wider than that of Xylys. Seiko watch India Private Limited is a 100% subsidiary of SEIKO watch corporation. SEIKO’s technological development is focused on the creation of “emotional technologies”. SEIKO was positioned below Tissot and Xylys. Challenges  Targeting the right customers.  Marketing strategies to tackle the competition from already existing luxury watch brands like Tissot and SEIKO  Acquire the right personalities to showcase the XYLYS brand to the Indian public to advertise the XYLYS brand.  Acquire the non-users of the brand i.e; targeting new customers  Perception in the minds of the customers  Showcasing the XYLYS brand as an Indian product and delivering the right message to the customers.
  • 4. Situational Analysis :  As per Exhibit 1, the highest rating for self concept was for ‘ I would feel embarrassed if I was around people and did not look my best’. This signifies the lifestyle change and the utility of watches.  As per exhibit 2, Brand and user personality ratings was highest for ‘Up-to- date’ factor as the brand and the user wanted to wear and produce the watches as per the latest fashion and trend.  As per Exhibit 3, Potential users choose to dress for fashion rather than for comfort than any other reason. Column1 Premium watches Accessible Luxury Watches Exclusive Luxury Range (INR) 10000--50000 50000--300000 300000 and above Brands Xylys,Tissot,Seiko, Citizen,Emporio Armani and Hugo Boss Rolex,Omega,Longines and Tag Heuer Breguet,Patek Philippe,Audemars Piguet,Breitling and Hubolt Conclusion Xylys faced stiff competition from other Swiss luxury brands such as Tissot and Swatch with the Japanese giant SEIKO. Xylys had to capture the minds of the consumers in India and change the perception of associations related to the Swiss tag which the consumers thought had quality, precision and premium. Hence Titan had to come up with a strategy to change the perception of Indians and target the right customers who will want to afford a luxury watch for various reasons and since Titan is an Indian brand, there will be customers who were very country Loyal who would prefer to wear the Indian brands on them. Hence Titan has to come up with the right marketing campaign to depict their value offering. Titan could also use the right marketing channels along with their view on the distribution system to make sure the product is available to the targeted customer.