The second part of the report is discussed about how to converting changes the segmentation, marketing goals, marketing strategies and marketing mix of Titan to improve the future performance. In order to gain more market share Titan should create the new segmentation. Titan should use geographic (cities variable) and demographic (age variable) to segment the market. Titan should target the Mizoram and Manipur (rural market) and target the youth group which is 13 until 30 years old. For the youth group, Titan should position on benefits on its watches. Moreover, goal is very important it able help Titan to focus the specific aim and achieve it. So, Titan should set the SMART goal to gain 15% market share in the Mizoram and Manipur market. In addition, Titan should use the Ansoff Matrix approach to growth the business and target the new consumer. Finally, Titan should change the marketing mix to fulfill different customer needs. Titan should use the specific innovative product strategy, competitive pricing strategy, provide online shopping, establish women outlet and use the product placement strategy to target the new customer and beat the foreign competitors.
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This report is discussed about the Titan watch industry. Titan is the market leader in the India and fifth largest watch manufacture in the world. Titan established in 1984 by Xerxes Desai. In 1987, Titan joint venture with the one of the reputed organization in India, the TATA group. (Titan.com, 2008) Titan can be a market leader one of the reasons is that Titan joint venture with TATA, the watches provides by Titan is guarantee of quality which majority India consumers have faith in. Titan launched variety brand of watches, some of the sub-brand of Titan is show in the table below.
Besides that, the discussion of this report is focus on India market. The reason for consider India market because India is the fourth largest stable nation and fast-growing economy in the world. This report is divided into two parts, which is part one and part two. Part one is discussed about the PESTLE analysis, SWOT analysis and unique selling proposition of Titan. Recently, many foreign brands enter into the market of India and create strong competition. This influences Titan difficult to sustain growth in the market. So, part two is discussed about how to improve the marketing strategy of Titan to upgrade the performance in the future.
2.0 PESTLE Analysis
PESTLE analysis is a tool used for look at the environment of the business. PESTLE analysis provide the information that help Titan to understand the market situation, business position and the direction of Titan operation. In the following PESTLE analysis will be discussed besides the environmental factor as it is not really affect to the Titan industry.
2.1 Political
India is the largest democracy in the world. In the past, India has instability political but nowadays the political of India has become stable. In 2004, Indian National Congress (INC) won a lot of seats in election and formed a new government. The new government has taken some steps to improve the rate of gross domestic product (GDP) and decrease the inflation rate in India. All this steps help Titan maintain in the market and perform well in the watch industry. (Ashutosh & Netai, 2009) The profits of Titan for last few years are summarized in the table below.
Following the economic growth in India, the corruption becomes a big problem. According to the Transparency International (2010), India is a number of 87 of 178 countries on corruption and India gets 3.3 points, which 0 represent the most corrupt country. So, as the Titan operates business in India, it must have a good relationship with political parties because it may help Titan to minimize the risk on business.
2.2 Economic
India has become a populous country and it is one of the fast emerging and powerful economic in the world. Based on the Times of India (2010), in 2008 the India per capital income is Rs.40,141 and in 2009 it raises 10.5% to Rs.44,345. Increasing the income as well as by increasing the purchasing power in India. As show in figure above the purchasing power in India has been increase year by year. This reflects that many people have ability to purchase the luxury products. Since, India is an attractive market many foreign brands enter into market of India and affect the profit margin of Titan. This creates challenge for Titan to keep up its market share.
2.3 Social-cultural
India is the second largest population in the world with 1.2 billion people, which about 16.9% of the world population. (BBC News, 2010) From being a backward country, nowadays India has become a powerful country and the Indian standard of living has improved a lot. Changes in the political and economic, has significant changes the Indian lifestyle. This lead to Indian prefers purchase the good quality and foreign brand product. So, Titan must emphasis on quality and create strong brand image for the product. Besides that, gold and jewellery is very important in Indian life. Example, in India, gold is a symbol of elite status and for woman, gold is the “Stridhan”, mean property of woman. Hence, most of the Indian love to wear gold and jewellery watch. Selling gold and jewellery watch is a potential business for Titan to gain the market share.
2.4 Technology
India has emerged into global research & development hub. Ali Sadhik (2009) stated that India has one million knowledge and skills workers and a pool of workers are able to speak in English which is useful in technology area. TATA is reputed organization in the India which has the advanced technology. As Titan backed up of TATA group, it has better technological practices than other competitors and able to produce the good quality product. In addition, with the improve technology in India and increase the percentage of people using internet, India has entered to Top 10 list of higher internet user in the world. (FIPP New.com, 2006) So, the e-business will become opportunity for Titan. Even this moment e-business not extensive diffused in India but Titan should invest in this area now because in the few years it will become a gold mine.
2.5 Legal
India government has opened the market to encourage foreign investment. The import license for watch is easy to obtain by foreign organization. This created the challenge for Titan because many foreign brands are entering into market of India. Furthermore, by 1992, WTO has removal quantitative restriction and reduces the import duty to 25% which earlier is 50% on import watches. (Dahiya, 2009) This influences Titan difficult to maintain a sustainable growth because increase the competition of foreign brand.
3.0 SWOT Analysis
SWOT analysis is a framework for analysis organization and its environment. SWOT analysis provides the information that help Titan utilized the resources and capability to compete with competitors. The SWOT analysis of Titan is show in table below.
3.1 Strength
Titan is the market leader in the India and this is one of the strength for Titan. Titan gain the larger market share which is 60%, the competitor Timex has owned 18%, HMT owned 12% and other brand companies has owned 10% in the domestic market. (Aatif, et al., 2009) Secondly, Titan has cutting edge technology to offer exclusive products. Titan holds the monopoly and offer the unique product, Titan Edge (slimmest watch in the world) and in the international market which no one watch manufacture can offer it. Thirdly, Titan offer the wide range products, start from general watches to the luxury watches. Titan offer about 14 different models and about 1000 plus different variety watches. (Titan.com, 2008)
3.2 Weaknesses
Titan is a market leader and own 60% shares in the domestic market
Offer exclusive product
Offer wide range products
Failure to keep up the middle income segment market share
Do not tap the rural market
Certain sub-brand of Titan does not create brand equity
One of the weaknesses for Titan is failed to keep up the middle income segment market share. About 75% market share in the middle segment but Titan just owned 20% and 55% owned by other competitor such as Timex and HMT. Titan fails in this segment because the price charge by Titan is higher than other competitors. Example, the price for Titan is Rs.1100 and HMT is Rs.550. (Ashutosh & Netai, 2009) Moreover, Titan do not tap the rural market. Rural India has grew very fast many competitor has plan to tap the market. In order to maintain in the market, Titan should first enter to the rural market and target large scale of customer. Next, Titan has about 1000 plus different watches but some certain sub-brand of Titan does not create brand equity such as Spectra.
3.3 Opportunity
India watches market grow very fast and just 35% of population owned the watch. (Marketing91.com, n.d.) This created the opportunity for Titan to expand the business in the different area in India. Besides that, due to emerge the fashion trends Indian prefers have different variety watch in different occasion. So, nowadays most of the Indian has possess more than one watch. Furthermore, with the improve technology in India, online selling is a great distribution channel for Titan. Through the online selling Titan can gain more market share.
3.4 Threats
Huge opportunities in India watch market, just 35% population own the watch.
Indian prefers own diverse watches for different events.
Online selling
Many foreign brands enter into market of India such as Rolex, Cartier and Swatch.
Mobile phone as substitute product of watch.
Grey market or organization sector
Table 3.0: SWOT analysis of Titan watches industry
As the import license easy to obtain by foreign watch organization, this creates the threat for Titan. Many foreign brands are entering into market of India and the premium segment of Titan get threat by the foreign competitors. Secondly, most people prefer use the mobile phone as their wristwatch because people can make call and see the time on mobile phone. So, this influence declines the demand on wristwatch. Finally, the grey market also is one of the main competitors for Titan. Recent years, grew market grow very fast almost 34 million watch was met by the grey market. (Nilotpal, 2009)
4.0 Unique selling proposition of Titan
Unique selling proposition is marketing concepts that help organization to distinguish itself from other competitor. The unique selling propositions for Titan are quality, distribution channel and technology.
4.1 Quality
The unique selling proposition for Titan is its product quality. Titan offer “international quality” products to customer. When costumer purchases the watch from Titan, they will know that the quality of Titan is better than other competitors. In 1994, Titan received ISO 9001, in 2000, Titan owned the ISO 14000 and in 2005, Titan owned the IS0/TS 16949 certification. (Amar, et al., 2009) Therefore, Titan can successful beat the main competitor, HMT and become a market leader in India.
4.2 Distribution channel
Titan is the first watch manufacture developed the multi channel retailing in India. Titan developed different distribution channel such as World of Titan showroom (WOT), Time Zone, traditional outlets and nontraditional outlets to target different customers. Example, Titan operates 225 World of Titan outlets. These outlet offer entire range of Titan product and customer able enjoy the latest design product in this outlet. Next, Titan has 1142 Time Zone outlets and these outlet offer low price product and mostly are brand of Sonata. (Nishat, 2008)
4.3 Technology
In addition, the unique selling proposition for Titan is its technology. Titan continuous innovation technology offers from steel to gold to diamond. Titan constant innovate in design and style to keep up its market share in different segment. For instance, in 2002, Titan launched the Titan Edge which is the world slimmest watch with thickness: 3.5mm. (Titan.com, 2008) Furthermore, Titan has advanced prototyping facility, it able to offer the sophisticated design of watches. As advanced technology Titan received many international awards in design.
5.0 Segmentation, Targeting and Positioning
In order to gain more market share and sustain growing Titan should create new segmentation. Titan should use geographic and demographic segmentation to segment market. Firstly, Titan use cities variable to segment India market.
Titan should consider targeting the Mizoram and Manipur because based on the information of Titan homepage: World of Titan (2008), Titan still do not tapped to these two markets. (Please refer to Appendix B, for detail information about Mizoram and Manipur) Besides that, the figure above shows that Mizoram and Manipur is the rural market which per capital income is Rs.10000 between Rs.30000. The reason for Titan to target Mizoram and Manipur because 70% of the Indian population resides in rural area and rural market present a potential area for Titan to expand the business. Moreover, due to growth in rural area, many people have increase in income as well as changing their buying behaviour. This influences more people have ability to purchase expensive products. Nanto Banarje (n.d.) stated that “the real market in India is the rural areas. If you crack it, there is a tremendous potential.” Therefore, Titan should faster to target the Mizoram and Manipur because it’s give advantage to early entrants.
According to Kaustavsengupta (2009) mention that 60% of Indian population are below 30 years old. 250 million youth with around age of 24 and 13.9 million youth with average age is 12 until 16. This reflect that, is growing young population in India. Furthermore, 42% of watch purchaser in India are the age group of 12 until 20 which influences their parents spending or spending their own money. Hence, Titan should target the youth group which is age 13 until 30. This youth segment present huge opportunity for Titan to achieve competitive advantage.
After segment and targeting process, Titan should position its product different with other competitors. Titan was target at 13 until 30 years old customers. This group customer can be classified as youth and they prefer purchase wristwatch which can bring many benefit to them. Therefore, Titan should position on benefits and create slogan “Titan can fulfill all your needs!” Titan should let consumer to know that its product is very unique and able offer a wristwatch which has many function, high-tech design, price affordable, good quality and services which competitors are difficult to duplicate it. Example, Titan can offer Sonata and Fastrack enter to this segment because two of this brand suitable sold to the first time user and can fulfill all the needs of youth.
6.0 Marketing objective and Goal (SMART)
Marketing objective is the clear goal on what the Titan has to be achieved. Titan should set SMART goal to gain 15% market share in the Mizoram and Manipur market. Effective marketing goal can provide guidance and direction for Titan to work toward to achieve it. Next, effective goal also can help Titan to evaluate and improve the performance of the organization. The SMART goals for Titan are showed in the below:
Specific, Titan must gain 15% market share in the Mizoram and Manipur market.
Measurable, to measure to achieve the 15% market share, Titan offer wide range product for consumer to choose and build more store in different state to target more consumer.
Attainable, to achieve the goal, Titan provide good quality product and services to customer. Titan has ability and financial budget to do a lot of promotion to attract customer purchase Titan wristwatch.
Realistic, base on the past experience of Titan, this goal is logically achievable and able meets the aspiration of Titan.
Time based, Titan must gain 15% market share in Mizoram and Manipur within 3 years.
7.0 Marketing Strategies of Titan
Titan should use the Ansoff Matrix approach to growth the business. Ansoff Matrix is a tool that helps Titan to consider the way to growth the business in the current performance. (Diana, 2008, p.g.346) Ansoff Matrix consists of four strategies which are market penetration, product development, market development and diversification. Titan should choose the market development strategy to growth the business and target the new market such as Mizoram and Manipur. Market development strategy can help Titan to attract new customer, earn more revenue, increase the market share and remain competitive in the market.
8.0 Marketing Mix of Titan (4P’s)
Many foreign brands enter into India and influence the sales of Titan. In order to improve the future performance, Titan should change the marketing mix to satisfy the different customer needs. Titan should create the right marketing mix because it able to gain more market share and achieve the competitive advantage. The discussion of improve the marketing mix (product, price, place and promotion) of Titan will showed in the following part.
8.1 Product
Titan can launch the handcrafted watches into the market. Titan provides a choice for customer to customize the wristwatch. This special innovative product strategy is somewhat similar to the Converse had use. Converse provides services for customer to make their own custom shoes. Converse through this strategy has increased 16% sales revenue in 2009. (Anon, 2009) So, Titan can give customer to choose the shape, colour, functions (chronograph, alarm etc), and strap (platinum, gold, silver, jewellery etc) to assemble own wristwatch which is suits to his or her style. In children segment, children have opportunity to design own wristwatch or choose the cartoon which they like it. The delivery time for the custom wristwatch is up to one week after customers make the purchase. Titan will give a three days trial period for customer to feel the watch, whether suitable to them or not. This special innovative product strategy can help Titan to attract more new customer and beat the international brand watches.
8.2 Price
Although Titan is the market leader but Titan failed to keep up the market share of middle segment because the price of Titan in lower segment products is very higher than other competitors. Example, the price for HMT is Rs.550 and Titan is Rs.1100, this lead to customer shifts their purchase to other brands. (Ashutosh& Netai, 2009) Hence, Titan should practice the competitive pricing strategy in the low end product which Future shop had used. Future shop used the competitive pricing strategy to beat the competitors and become the largest consumer electronics retailer in the Canada. (Kurtz, et al., 2009, p.g.614) Titan should adjust the price match with the competitors offering because these segment consumers are very price sensitive and they just saw a wristwatch as a time keeping device. Titan practice the competitive pricing strategy able to get it lost market shares from competitors in the middle segment and target the larger scale of consumer especially in the rural market.
8.3 Place
Nowadays, people are busy on working and do not have free time to shopping. Online shopping is a good channel for customer to shop. Nike is one of the successful organizations who provide online sales services and ranked 48 of 500 in the online retailer. In 2010, Nike through online selling earned $260 million and increased 25% sales. (Brohan, 2010) Therefore, Titan should establish website by providing feature of online shopping. In the website, Titan offer whole range of watches which start from general watches to premium watches. After customer makes the purchase, Titan should delivered directly to customer door on next day. This strategy able helps Titan to attract the new customer who prefer purchase products online and also can enhance Titan image by providing great sales and services.
In addition, Nike knows that women are the powerful consumer in the world. Nike established the Nike women outlet to target female market and successful earned $1.4 billion. (Williams, 2002) So, Titan can refer the Nike strategy establish women outlet in the market. This outlet will target the working women, affluent women, housewives and young ladies. Ladies can enjoy customize wristwatch for engagements and marriage in this outlet. Next, Titan will provide the services for help customers to choose the watch to matching their clothes. Titan establish women outlet able to gain more market share in the female market and remain competitive.
8.4 Promotion
Sony is one of the organization who very successful on promotion. Sony had used all the element of promotion mix such as advertising, personal selling, sales promotion, public relation and direct marketing to communicate the consumer. Titan can refer the Sony marketing tactics to promote the product but Titan should focus on advertising because Sulabha Parasuraman (2009) stated that 86% urban and 54% rural consumer prefer through television network to receive product information. Therefore, Titan can placement its watches in movie and TV serial which Titan never tries to do it before. Product placement can avoid consumer bypass the advertising and give Titan more opportunity to promoting the watches compare to the 30-second advertising. Example, Sony appeared in the Da Vinci Code movie, when the movie release, sales of Sony rose by 85%. (Jeffrey, 2009) Furthermore, watches placement in the movie and TV serial can raise the memorable of the brand and increase the sales of Titan.
9.0 Conclusion
India is a potential market for investment. These lead too many foreign brands enter into market of India and affect the sales of India. So, Titan should create the new segmentation and tap into the rural market to target the new customer. Besides that, Titan should set the SMART goal to guidance the organization to work toward achieve it and changes the marketing mix to fulfill different customer needs. In all, it can be concluded that Titan should use the marketing tactics as suggested in this report because it can help Titan to beat the foreign competitors and to get sustain growth in the market.
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