NAME: MAYUR KUMTHEKAR

ROLL NO: 19
CLASS: IB
PRODUCT: WATCHES (TITAN)


PESTEL ANALYSIS


PESTEL ANALYSIS OF TITAN WATCHES

PESTEL analysis:
PESTEL stands for Political, Economical, Socio cultural, Technological Environmental, Legal
analysis of the external environment affecting the business.
PESTEL analysis is done by managers to understand the macro environmental factors affecting
the business. These analyses are strategic tools for understanding market growth, market
share, latest trends etc.

* Political factors: These refer to the relevant government policies that affect the business
environment. For eg. Tax policy, labour law , minimum wages law ,tariff rates etc

* Economic factors: These refer to the macro economic factors that may affect the business.
For eg. Inflation, Gross National Income, Gross domestic product, REPO rate, reverse Repo
rate.

* Socio-cultural factors: These refer to the various social and cultural factors prevalent in the
business environment. For eg. Greater awareness of the people towards environment, changes
in taste of the consumers, average age of the consumers etc.

* Technological factors: These include the technological factors such as R&D activity,
automation and other innovations which has changed the way business is conducted. For eg
MP3 players, IPOD, I phone, Tele conferencing, cloud computing to name a few.

* Environmental factors: These include the environmental and ecological factors that affect the
business for e.g. climate change, global warming, and rapid depletion of our natural resources.

* Legal factors: These refer to the legal environment in which the business is conducted. For eg.
Trade barriers, consumer law, anti dumping duty, corporate acts.


Innovation in Technology



Most of the innovation in the areas of manufacturing and supply chain management. But, Titan has
made serious efforts to innovate in technology as well. A decade ago, Titans watch division took on the
challenge of making the worlds slimmest, water-resistant watch. The result was The Edge, developed
through the efforts of Titans technology innovation team and its manufacturing group. More recently,
Titan developed a new HTSE (High Tech Self Energized) watch a watch that can be powered by solar
energy. The technology for such watches is closely held, and the company lacked experience in critical
areas like development of Application Specific Integrated Circuits (ASICs) required for such products.
Again, the company kept the faith and persisted in spite of several failures and has now broken into the
ranks of companies that possess the capability to create such watches.



..And in Marketing

All the innovations listed above are outside what is often considered Titans distinctive competence, i.e.,
marketing. Over the years, Titan has built multiple brands and sub-brands (Titan, Sonata, Raga, Fastrack,
EyePlus, GoldPlus, to name a few), often with creative advertising campaigns. Fastrack is one of Indias
biggest youth brands, and naturally uses social media and the internet extensively in reaching out to its
marketplace. GoldPlus is a new gold jewellery mass market brand built to reach out to Tier 2 and Tier 3
towns across India, and has a social marketing angle to it as well. Titans marketing innovations deserve
a separate blogpost!
KNOWLEDGE MANAGEMENT IN TITAN INDUSTRY

Titan Company started its journey in knowledge management in the year 2005 by electing to formalize
knowledge management in the company. The company instituted a practice under the aegis of
knowledge and business excellence management to establish processes and mechanisms in order to
follow a systemic approach to knowledge management.
The KM processes have taken root in the companys manufacturing, retail and marketing domains in
equal measure. With over a thousand retail stores across watches, jewellery and eyewear divisions, the
retail staff at the store share improvements done at the store, their initiatives on elevating customer
experience, and collaborate with the marketing and retail teams at the corporate office through the
knowledge portal. The manufacturing teams at the mother plant at Hosur collaborate with other satellite
plants to share improvements and standard operating procedures. Frequent sessions held through virtual
discussion rooms help the management to assess the knowledge levels on products, processes and
promotions in the field. There are multiple community of practice teams formed to ensure formal
knowledge-sharing sessions amongst, watches, jewellery and precision engineering divisions at the
factory that help them resolve technical issues. Video-based collaboration tools help retail stores across
the country to connect with each other and share best practices.
KM has enabled Titan to capture history across geographies for commerce, connecting the minds of the
people, creating opportunities for enhancing human potential and creating synergy across the
organisation for the benefit of each individual, the organisation and the communities that it impacts.
Speaking at the occasion, Bhaskar Bhat, managing director, Titan Company, said, The idea behind the
KM initiative started with the belief that the power of knowledge and experience of a corporate entity is
several times the individual knowledge and experience of employees if shared in a meaningful manner.
Today technology enables that sharing to happen easily and accurately. A secondary but important
benefit is the sense of teamwork that such an initiative inculcates.
The Indian MAKE study was established in 2005 to recognize Indian organisations for their ability to
create shareholder value or increase stakeholder value by transforming new as well as existing enterprise
knowledge into superior products / services / solutions.
Titan Company was awarded the prestigious Most Admired Knowledge Enterprise (MAKE) award for the
year 2013 at the felicitation ceremony of the Inaugural session of the 8th CII Knowledge Summit
convened in the city yesterday. The 2013 Indian MAKE panel recognized Titan Company for developing
knowledge workers through senior management leadership. This is the first time that Titan Company has
been recognized as an Indian MAKE winner.

MARKETING MIX

Titans 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 Titans 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.
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
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 vary 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
distributes its product and set up world of titan in different region.

Innovation culture of Titan
Summary
The power of innovation in Titan, perhaps can be compared to the power of a punch delivered
with a clenched fist, as opposed to the power, the punch can generate with an individual finger.
We believe in involving every employee on our innovation journey and focusing on the
processes created around innovation, rather than results (results of course, follow). The
innovation journey , which started in a small way in 2003 has graduated over years to, most of
the teams ( departments ) & employees having to do two jobs simultaneously a) How do I do my
job better b) How do I find new ways to do my job .
We have reached, certain stage on our journey in democratizing the innovation process, and this
exciting and purposeful journey, which does not have a final destination, is continuing.
Context
Titan Industries limited, a joint venture between TATA group and Tamil Nadu Government
(TIDCO), was formed in 1985, to design, manufacture, brand and retail watches. As per the
understanding reached between the partners, The Managing director of Titan, will be a nominee
from TATA group and the Chairman will be nominated by Tamil Nadu Government. Today
Titan is the dominant watch retailer in India, with sales of 15 Million watches per annum, and
with market share of 55%. 15% of our total sale comes from exports; we also have an
international presence in Middle East, Singapore, Malaysia, Vietnam , Bangladesh and many
other countries.
Titan diversified into precious jewellery manufacturing and retailing in the year 1995.Precious
Jewellery is a big market in India with 40 Billion USD market today (8 Billion USD in 1995 ).
The retailing of precious jewellery in India is dominated by family jewellers. Jewellery retail is
also highly fragmented, with over 300000 individual retailers. We were the first Corporate to
enter in Jewellery retail, and the task was to understand jewellery manufacturing, precious metal
buying, and the biggest task was to compete with family jewellers , who have been in business
for decades with a loyal customer base. The family jewellers source their jewellery from gold
smiths (through middle men) who work from their house (cottage industry) with nil or minimum
overheads.
We had started with a manufacturing plant with all modern refining, alloying, waxing and
casting facilities, imported from Sweden, Japan & Germany, with an investment of 15 Million
USD. We evolved to selling jewellery under two brands, brand Tanishq , for the evolving,
modern design & fashion conscious Indian woman , and brand GOLDPLUS for traditional,
investment conscious Indian women. We have, as of date, 152 retail stores under these two
brands across the geographies of India.
The annual revenue from jewellery business had crossed 1.5 Billion USD in last financial year.
As of today, we are the largest jewellery & watch retailer in India. Also we have recently
expanded our retail foot print in selling optical eye wear (started in 2006), and have achieved
market leadership in this category also with over 250 retail
stores.

In Titan ( Being a part of TATA group ) , we are guided by the TATA group philosophy on
ethics , values, and Governance , and also, processes for Business excellence ( called TBEM ) ,
HR processes , Sustainability , safety, and Innovation Processes ( guidelines by TGIF). There
are appropriate forums, and structured yearly audits by assessors certified by TATA group, to
understand where Titan is good at and the areas of improvement, in our journey of excellence.
Triggers
The family jewelers were getting their margin (huge) by giving under karatage jewellery to
customers. Also the family jewellers had not invested in right manufacturing set up, in getting
the purity of their jewellery products , built in to the process. It is to be noted that , the regulatory
measures from the Government is in its nascent stage and it is impossible for the customers to
know the purity of product they are buying , since even a jewellery made with under karatage
will shine.
Under this backdrop, our jewellery products with right karatage were perceived as expensive by
the customers, and , Titan Jewellery division , with huge manufacturing investment , initially,
could not penetrate market dominated by family jewellers and was making losses year on year
from 1995 to 2003. Introduction of karat meter ( a device to check the karatage of jewellery in a
non destructive way ) in 2002 in all our retail show room , and creation of awareness amongst
customers , started bringing foot falls to our stores. But the challenge was to make our
business model profitable.


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.