Wrist Watch

1. 1 Wrist Watch

2. 2

3. 3 Major Players

4. 4 HMT First major watch manufacturer in India and undisputed market leader till the entry of Titan Offshoot of India’s self-reliance and import substitution concept Main quality offered sturdiness and reliability As a market leader very few aggressive advertisement campaign No new advertisement drive in recent years Still holds a small market share among the old faithful loyal Lack of new and trendy design has led to erosion of value among the new generation

5. 5 Titan A joint venture between the Tata group and the Tamil Nadu Industrial Development Corporation Launched in 1984 Titan is today world’s sixth largest, integrated watch manufacturer and India’s largest 4 factories - main watch and jewellery plants in Hosur near Bangalore ( India’s ‘Silicon valley’), Watch Assembly plants at Dehradun and in Himachal Pradesh, with an ECB plant in Goa Investment of over US$130 million. A 450,000 sq.ft. state-of-the-art facility

6. 6 Titan Leader in the watch and jewellery businesses in India First and largest branded player in the jewellery (Tanishq) >50% share of the organized watch market Over 60 million watches sold across 30 countries Brands offered: Steel, Edge, Raga, Sonata, Fasttrack, Regalia, Bandhan, Sonata, Nebula, Flip Recently Titan has taken a drive to improve its image as a maker of contemporary style and design in wrist watches Titan is trying to offer international quality/style at an affordable price

7. 7

8. 8 Timex The main focus is on reflecting a sporty and fashionable look for the men In the ladies segment it is offering highly stylized bangle bracelet watch that are sleek and sophisticated The advertising campaign aims at focusing on power, precision and timing Used Brett Lee as brand ambassador

9. 9 Other Players Mainly Rado, Tommy Hilfiger and Evidenza from Longines Tommy Hilfiger is positioned in the mid and premium segment while the other two players are in the luxury segment Trying to catch the upmarket, urban, western-minded youth Also offer a sense of exclusivity and style as their products are distributed through some selected outlets Using high society and stylish brand ambassadors such as Shahrukh Khan, Aishwarya Rai, Yana Gupta, Lisa Ray

10. 10 Segmentation

11. 11 The Watch Market in India(by value 06-07)

12. Volumes Growth, Driven by Low End

14. 14 The Emerging Trends

17. Urban Households

18. The Flow of Money

19. 19 Watch Industry in India: Where is it heading?

20. Forces Transforming Indian Watch Industry

21. 21 The Road Ahead Incorporating new functionalities in the wrist watch with the help of new technology Spot watches which offer advanced features such as automatic time adjustment based on location, access to continually updated content such as news, traffic alerts, weather reports, stock quotes, sports scores and instant messaging. The Times Data Link watch utilizes a revolutionary new communications technology that literally zaps information from personal computer (PC) to watch. IBM Linux-based wrist watch.

22. 22 The Road Ahead Tapping the rural market Huge size of the rural market. As tele-density and infrastructure of the rural India improves, it offers scope for sophisticated form of advertising and method of sales. Launch of Sonata range of watches by Titan in the rural market has met with great response from the buyers in rural and semi-urban India. Indian rural bazaar is displaying a market trend towards consumerism and demand for durable products.

23. 23 Agenda The Watch Industry Evolution Global perspective Indian Watch Market Evolution Trends Price segmentation Consumer Behaviour Major Players HMT Watches Ltd. Titan Industries Ltd. Timex Watches Ltd. Industry Analysis Positioning Advertising Distribution Branding Future Trends

24. 24 The Watch Industry – Evolution Conventional watches – standard spring powered watch Conventional watch evolved into electronic watch Varieties: Jewelled lever watches (complex and expensive) Pin lever watches (recent development) New generation watches evolved from electric watch to Tuning Fork watch and ultimately settle at Quartz Crystal electronic watch Major players Switzerland, Japan and United States 60% Quartz, 27% Digital, 13% Mechanical Source : Segmentation of the Indian Watch Market – Y.L.R. Moorthi, IIMB

25. 25 The Watch Industry – Global Perspective Swiss Watch Industry Specialization in component manufacturing and watch assembling Competitive advantage – mechanical watches Undisputed leaders till ’70s (42% volume share and 78% value share) First electronic watch invented by Max Hetzel, a Swiss Engineer in 1954 Japanese Watch Industry Took advantage of the quartz and digital technology Carved out a strong position in the world watch industry Competitive Advantage: Brand image based on quartz technology and accuracy Mass production which led to lower prices

26. 26 The Watch Industry– Global Perspective (Contd.) US Watch Industry Had some presence till 1970 Post 1970, some chip manufacturers entered as suppliers of components By 1980s most of them disappeared due to fierce competition from Japan and Hong Kong Major player is Timex Hong Kong Watch Industry Entered the world watch scene in 1976 Assembly type production Japan biggest supplier of movements Competitive Advantage: Cheap Labour Low Prices

27. 27 Indian Watch Industry – Evolution 1960: Indian Watch Industry came into being. Govt. took the decision to set up the country’s first watch factory 1961: HMT set up India’s first watch factory at Bangalore in collaboration with Citizen of Japan 1981: Hyderabad Allwyn Limited entered the watch industry in collaboration with Seiko of Japan 1984: The beginning of a new era - entry of Titan, the Tata –TIDCO joint sector company 1990: Timex enters the Indian market in partnership with Titan, targeting the lower price segment 1997: Timex breaks away from Titan - increasing the already fierce competition

28. 28 Indian Watch Industry – Evolution(Contd.) Government Policies Reserved the manufacture of straps and dials to the small scale industry Imposed restrictions on import & manufacture of ECBs Results Until the mid 1980s the industry was predominantly producing mechanical watches. Total demand for watches greater than supply – the gap in demand being met by smuggled watches unorganized sector

29. 29 Indian Watch Industry – Trends Rapid increase in target audience Rise of consumerism and purchasing power of the middle class Bulk of the demand exists in lower and middle segments Newer segments – jewellery segment, etc. Rise of demand of trendy watches

30. 30 Indian Watch Industry – Price Segmentation Source : Segmentation of the Indian Watch Market – Y.L.R. Moorthi, IIMB

31. 31 Consumer Behaviour Transition from mere time keeping device with functional benefits like durability, toughness and economy to a personal wear reflecting people’s lifestyle and aspirations Multiple ownership Price sensitive Durability and utility are important aspects Aesthetic appeal and trendy designs are very important Brand Name continues to be an important driver in the customer’s mind Availability in different segments and for different occasions makes the watch a suitable gift item

32. 32 Major Players HMT Watches Ltd. (34%)

33. 33 HMT Ltd. HMT Limited was established in 1953 in technical collaboration with M/s. Oerlikon of Switzerland Product range includes Machine Tools, Watches, Tractors, Printing Machines among others HMT started manufacturing Wrist Watches since 1962 Technical collaboration with Citizen, Japan 4 integrated manufacturing units More than 7 million high quality watches/watch movements per annum Mechanical and Quartz watches HMT Watch manufacturing units ISO-9001 certified Source: http://www.indiainfoline.com

34. 34 Mechanical Watches - Environment friendly Automatic Hand wound: Ladies, Gents Shakti: Ladies, Gents Quartz Analog Watches Roman Alarm Watches EL Night Watches Multi Dial Watches Dater Watches Plain Watches Elegance Gold Line Bracelet Slim Line Tennmax Utsav Utsav Gem Lalit: Ladies, Gents, Pairs Sangam Swarna: Ladies, Gents HMT Ltd. - Brands

35. 35 HMT Ltd. – Strategies Targeted the global market State-of-the-art technologies – IT Infrastructure Collaboration with ISA Quartz, France and Fraporlux, France apart from Citizen, Japan

36. 36 HMT Ltd. – Positioning Positioning based on age, sex, competition Teenagers Pace Older customers Astra The male segment Roman First watch company to launch watches for children Zap Utsav – to compete with Titan Raga Bracelets, Jewellery and Bangles

37. 37 HMT Ltd. – Distribution Manufacturer – Dealer – Retailer – Customer Established a strong distributor network of 10,000 distributors and 50,000 retail outlets 1990: Followed Titan in introducing C&F Agents

38. 38 HMT Ltd. – Advertising Huge early investments Catchy slogan “If you have the inclination, we have the Time” Portrayed nationalistic instincts “Timekeepers to the Nation”

39. 39 Titan Industries Ltd. Titan Industries Ltd. set up in 1987 Joint venture of the Tata Group and TIDCO 1st factory at Hosur Manufactured quartz analog electronic watches Financial and technical collaboration with Ebauches, France 1988: Estd. a component manufacturing facility 1990: Estd. a case manufacturing plant 1992: Integrated backwards to manufacture step motors JV with EDC2 To manufacture electronic circuit blocks Annually markets over 7 million watches 6th largest globally in the category of “manufacturer brands”

40. 40 Titan Industries Ltd. – Brands Insignia Made with high-grade anti-allergenic steel, scratch-resistant sapphire crystal and special hard gold plating Psi2000, Technology Sports & Multi-functional watches Regalia, Royale Magic in gold and unique futuristic material Classique Elegant corporate wear Spectra Combines the sturdiness of steel with the richness of gold Exacta The “Everyday Watch” Raga Exclusive watches for women Fastrack Contemporary styles for the young Dash! For young boys and girls Bandhan Watches for him and her

41. 41 Titan Industries Ltd. – Strategies Early to manufacture watches targeted at US and European markets The “Insignia Collection” Also makes watches for international labels Roping in the crème of designers Pierre Ludwig (Cartier) Francis Humbertdiz (Omega) Diversification into jewellery – Tanishq Very wide range of products in terms of looks, function and price points Noted for their workmanship and reliability Reputation of being excellent value for money The Titan Signet Club Customer loyalty programme

42. 42 Titan Industries Ltd. – Positioning Market Segmentation The young and teenagers, who are looking for their first watch The low ownership segment like women Middle and upper segments of society Price range of Rs 500 – Rs 5000 International watch at Indian prices A watch that builds your image A brand which represents style, status and technology A “Good Looking Watch” First watch company to brand its showrooms Titania Titan watch boutiques in Bangalore TimeZone The World of Titan

43. 43 Titan Industries Ltd. – Distribution Manufacturer – Retailer – Customer First to go for exclusive showrooms Did away with retailers Wholeseller’s importance reduced Set up a chain of service centres, with close proximity to the marketplace Innovative planning of showrooms Watch buying a pleasurable experience Extensive use of C&F agents to reduce distribution costs

44. 44 Titan Industries Ltd. – Advertising Targeted the typically price sensitive yet discerning Indian customer “International watch you can pay for in rupees” “You don’t need to pay in dollars, pounds or dirhams to buy a Titan watch” Targeted the premium segment of “look and fashion conscious” customers “To find watches like these you don’t have to go to Europe, Japan, America or a duty free shop” Promoted the concept of a watch being the ideal gift “Next time your husband wants to buy you a saree, ask for a Titan watch instead” The rationale behind their ads being constant bombardment if the “Titan” brand name Ads are a blend of sophistication and simplicity

45. 45 Timex Watches Ltd. 1854: Started as the Waterbury Company, in Connecticut's Naugatuck's Valley (the Switzerland of America) 1990: Tied up with Titan to launch in India Broke up with the Tata group in '97 Heart of the watches imported from America Assembled in Timex factories in Noida Launched the Indiglo technology First electroluminescent watch face in 1992

46. 46 Timex Watches Ltd. – Brands Aqura Indiglo Basics Datalink Timex Sportz Lextra Vista Mariner Gimmix

47. 47 Timex Watches Ltd. – Strategies Delivering quality products at affordable prices Basic objective: Change the mechanical watch user to a quartz watch user Tap the untapped Transition from plastic to metal To become market leader Launched Vista brand in Rs 475 – Rs 900 range To appeal to small town customers

48. 48 Timex Watches Ltd.– Positioning Initial understanding with Titan Titan keeps out of Plastic – High Price Segment Timex keeps out of Metal – Low Price Segment “You don't have to be rich to afford a Timex” Lower price segments Basics, Lextra, Vista Youthful and trendy Aqura For the discerning Sportsman Timex Sportz For the children Gimmix Premium segment Technologically superior multifunctional brands like Datalink, Indiglo

49. 49 Timex Watches Ltd.–Distribution Initially followed the Titan distribution channel Post ’97, set up their own showrooms

50. 50 Timex Watches Ltd.–Advertising Featured sports and adventurous personalities Rock climbing, Rafting etc. Exclusivity of the watch is presented by celebrity endorsements President Bush declares his loyalty for Ironman

51. 51 Other Players Westar Almost closed down No Brand Equity Upper segment cluttered Lack of distribution strength Shivaki Launched in 1996 Southern and Western markets Fashion accessory In problem Maxima Assembled watch Water proof watch – Rs 350 Failed with the launch of lower priced Titan and HMT products SITCO Analog and digital watches (branded “IQ”) Failed due to lack of sustained promotion and marketing Now planning to cut prices Hyderabad Allwyn Ltd. Launched in 1981 Sourced watch movements from Seiko Lost out due to Organizational problems (PSUs)

52. 52 The Road Ahead … More and more focus on new technology and multi-functional utility Timex are the leaders in this area with watches like Internet Messenger Digital Heart Rate Fitness System Watch consumption in India – 20 units/1000 people as opposed to China – 50/1000 Scope for increasing the demand of watches Top 23 cities: 80% of Watch market The focus should increase on spreading the market to rural areas Greater price segmentation, sp. lower end 2 fold advantage: ­ Demand, ­ Market spread Greater competition from invisible sector and foreign brands

53. 53 Sources and Bibliography Product Management in India, 2nd Ed. Ramanuj Majumdar Segmentation of the Indian Watch Market Y.L.R. Moorthi, IIMB (http://www.fba.nus.edu.sg/qm/journals/acrj/IndiaWatchMarket.pdf) http://www.indiainfoline.com http://www.titanworld.com http://www.timex.com

54. 54 Thank you