Merchandising Policy : World of Titan

Subject: Principles & Techniques of Merchandising

Under Guidance of Ms. Garima Srivastava
FMS Dept., National Institute of Fashion Technology-Mumbai

Research & Compiled by:

Bhavik Gandhi (M/FMS/08/10) Riddhima Ranga (M/FMS/08/14)
Soumya Mishra (M/FMS/08/30) Vijesh Barasker (M/FMS/08/34)
World of Titan

Contents
Introduction ..................................................................................................................................... 3
About Titan Industries Ltd. ....................................................................................................................... 3
Brand Titan................................................................................................................................................ 3
World of Titan ........................................................................................................................................... 3
Assortment @ World of Titan ........................................................................................................ 4
Product Assortment based on Type of Merchandize ............................................................................... 4
Product Assortment based on Category of Merchandize ......................................................................... 4
Product Assortment based on Brands ...................................................................................................... 4
Further Assortment of Fastrack ............................................................................................................ 5
Further Classification of Xylys ............................................................................................................... 5
Price Range @ World of Titan ....................................................................................................... 6
Markup Pricing .......................................................................................................................................... 6
Perceived Value Pricing............................................................................................................................. 6
Promotional Pricing .................................................................................................................................. 6
Price Discount & Allowances .................................................................................................................... 7
Warranties & Service Contracts ................................................................................................................ 7
Product Line Pricing .................................................................................................................................. 7
Captive Product Pricing ............................................................................................................................. 7
Quality Standards ............................................................................................................................ 8
Brand Offerings .............................................................................................................................. 8
Exclusivity ...................................................................................................................................... 8
Fashion Leadership ......................................................................................................................... 8
Maintenance of Basic Assortment .................................................................................................. 9

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World of Titan

Introduction

About Titan Industries Ltd.

Titan Industries is the world's fifth largest and India's leading manufacturer of watches. The
company has manufactured more than a 100 million watches till date; and has a customer base of
over 80 million. The umbrella brand Titan is one of India's leading watch brands that brought
about a paradigm shift in the Indian watch market, offering quartz technology with international
styling.

The company manufactures over 8 million watches per annum and has a customer base of over
80 million. It has manufacturing and assembly operations at Hosur, Dehradun, Roorkee and
Baddi in Himachal Pradesh and an ECB plant in Goa.

Brand Titan

The brand Titan is committed to offering its consumers watches that represent the compass of
their imagination. Titan's customers are therefore consistently introduced to exciting new
collections, which connect, with various facets of their deep−rooted yearnings for self-
expression. The new brand philosophy of Titan, encapsulated in the words "Be More", touches
this as well as all other aspects of the brand.

The Titan brand architecture comprises several collection and sub−brands, each of which is a
leader in its segment. Notable among them are: Titan Edge The world's slimmest watch which
stands for the philosophy of "less is more"; Titan Raga the feminine and sensuous accessory for
today's woman, Nebula − crafted in solid 18k gold and precious stones. Several other popular
collections like Heritage, Aviator, Regalia, Octane & WWF also form a part of the Titan
wardrobe.

World of Titan

The Titan portfolio has over 60% of the domestic market share in the organized watch market.
The company has 247 exclusive showrooms christened World of Titan', making it amongst the
largest chains in its category backed by 700 after−sales−service centers. The company has a
world−class design studio that constantly invents new trends in wrist watches.

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World of Titan

Assortment @ World of Titan

Product Assortment based on Type of Merchandize

Gents Watches
Ladies Watches
Pair
Unisex

Product Assortment based on Category of Merchandize

Eye wear
Wrist Wear
Accessories

Product Assortment based on Brands

Titan
Titan Edge
Titan Steel
Titan Raga
Titan Regalia
Octane
Nebula
Zoop
Fastrack
Xylys
Sonata
Tanishq
Tommy Hilfiger
Hugo Boss
4 Merchandising Policy – Principle & Techniques of Merchandising
World of Titan

Further Assortment of Fastrack

Watches

Water
Summer
Neon Disc
Campus
Adventure
Digital
Rockstar
XY
Tweens
Aluminum

Eye Gear

Summer
Bikes
Plastic
Rimless
Campus

Further Classification of Xylys

Classic
Contemporary
Sports
Craftsmanship

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World of Titan

Price Range @ World of Titan

< Rs. 500 – Sonata, Fastrack Eye Gear

Rs. 500 – Rs. 1500 Sonata, Fastrack Eye & Wrist Gear
Rs. 1500 – Rs.3000 Fastrack Eye & Wrist Gear, Zoop, Steel
Rs. 3000 – Rs. 5000 Fastrack, Zoop, Steel, Edge, Octane
Rs. 5000 – Rs. 10000 Steel, Edge, Raga, Regalia, Nebula, Octane
> Rs 10000 Raga, Regalia, Nebula, Xylys, Tommy Hilfiger, Hugo Boss

Markup Pricing

Titan goes in for the mark up pricing strategy. The Titan product carries a maximum retail price
on it. Now shops such as the world of titan – exclusive showrooms buy directly from the dealer
and hence the element of the middleman is not there. A retailer in this category buys the watch
for 17-18% lesser than the MRP and hence he is able to get the 17% profit margin on sales. It is
up to the discretion of the retailer to offer any discount on the MRP as it would affect what he
gets in return.

Perceived Value Pricing

Titan has also used the PERCEIVED VALUE PRICING to its advantage. It is managing to
successfully convince the customer of the perceived value of the WORLD WATCH using
billboards and hoardings all around the city, increasing buyers image, trust worthiness,
innovation, differentiation, value for the product. The hoardings go about to say the
international presence of an Indian Watch. Titan has also in the past done so for its steel
collection but using Commercial Advertisements.

Promotional Pricing

There is always a positive relationship between high prices, high quality, and a high advertising
budget. Titan too demonstrates this feature. People are willing to pay the price for the quality
and titan spends 25 crores a year on advertising its products. This is the highest spending done
in the watch industry in India. More so ever with high value and lower prices in case of the
sonata, the product is the heart throb in the watch industry.

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World of Titan

Price Discount & Allowances

Titan once a year comes out with a Price discount sale on the MRP of the watches. Now this is
entirely based on the stock carried by the company at the year end. Allowances are more on the
company to the retailer where the retailer gets a special allowance if the store picks up more than
a certain quantity.

Warranties & Service Contracts

Titan promotes sales by adding a free warranty or service contract to its watches and this is
backed up by the name TATA which is especially needed to convince and march ahead in the
lower segment market.

Product Line Pricing

The differences in the prices of the watches are justified by the features, the style, and the
differences which makes up each watch. Titan prices all its watches in such a way that it
maximizes the total profit on the total mix.

Captive Product Pricing

There is a general buzz in the market about titan being more expensive than the rest in terms of
servicing and the parts used by TITAN. Titan watches, the lower end ones are cheap but the
straps and the battery with services is generally expensive.

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World of Titan

Quality Standards

The company brought about a paradigm shift in the Indian watch market, offering quartz
technology with international styling. The Company leveraged its manufacturing competencies
and branched into Precision Engineering Products and Machine Building from 2003. The
company's Precision Engineering Division supplies precision components to the avionics and the
automotive industry. It also manufactures dashboard clocks as OEM to car manufacturers in
Europe and America. The division also provides fully integrated Automation solutions.
'World of Titan' showrooms ensures the availability of spares and accessories is critical to ensure
that every watch sold can be quickly and reliably repaired so that Titan's customers remain loyal
and satisfied. Titan has a network of spares distributors across the country, and stays connected
using a web application. In fact, they are able to place approximate orders before the production
begins, thus helping Titan produce closer to market requirements. If there is excess inventory
after all the orders are met, it gets released into this system for all prospective buyers. As the
consignments are dispatched, the company's logistics service provider ensures that distributors
can track their consignment online without manual intervention.

Brand Offerings

World of Titan has all the Titan products such as Titan, Titan Edge, Raga, Steel, Sonata, Regalia.
Nebula, Zoop, Fastrack, and Octane.
International Brands like Xylys (Swiss watches from Titan), Tommy Hilfiger, & Hugo Boss are
sold at World of Titan.

Exclusivity

World of Titan has in-house brands as well as the international brands. Apart from World of
Titan, the Titan products are available at various Multi brand outlets.

Fashion Leadership

Brand Titan with Raga, Xylys, Fastrack, Octane, Regalia & Nebula can be classified as Middle
of Road Fashion. Fashion Leaders in this wrist watch segment are RADO, CASIO, SEIKO,
ESPRIT, SWATCH (Tissot), LONGINESS, TAG HEUER.

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World of Titan

Maintenance of Basic Assortment

Getting together a system that will control the movement of about ten lakh watches — from raw
material to the velvet cushion — is not easy. Titan used an Advance Planning System to
forecast demand, plan production better and increase lead-time.
APO involves forecasting the right product mix required for different World of Titan showrooms
depending on an optimal mix of brands, gender, color, etc.A function called 'real time
deployment is also used. This function will alert Titan to re-stock an outlet once stock levels fall
below a fixed level.

Securing the future of a Titan product is a scientific and rigorous exercise. To accurately predict
which watch the market needs and in what quantity, Titan uses a time-tested method. First, it
studies the historic sales of different styles. The primary information comes from an account of
its own sales. Retail or secondary information is gathered from showrooms and distributors. The
company also keeps in mind elements such as marketing schemes and advertisement campaigns
to foresee demand. Seasonality is factored in because sales shoot up during festivals like Diwali,
Onam and Pongal.
Considering that there are about 1,300 variants in the domestic market and 700 internationally,
there is a lot of estimating to do. Instead of forecasting for all its varieties, Titan focuses on about
400 variants that contribute to 75 per cent of the company's overall sales.
To hit on the optimal mix of products, the company has come up with an iterative demand-
planning method. It is currently using an 'advanced planning and optimising' (APO) tool. This
monster of an engine takes into account the historic sales pattern for three years and applies a
forecasting model to that data and develops a heuristic. The forecast thrown up by this formula is
then vetted by the sales and marketing group, which may want to modify it based on specific
sales or market inputs they have received. Once the cast and the screenplay are ready, production
begins.

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