W.H.Bender Quote 61 -Influential restaurant and food service industry network...
Market Dominance Strategies by Titan
1. A Report on Market Dominance Strategy of Titan Company
Submitted To-
Dr. (Prof.) Chandan Goswami
Department of Business Administration
Tezpur University
Submitted By-
Suprakash Kar (BAM16016)
Raktim Saikia (BAM16017)
Niharika Saikia (BAM16022)
Asif Hussain Siddique (BAM16044)
Kritanjali Kashyap (BAM16011)
Kaveri Chetia (BAM 16026)
Ruhismita Borah (BAM16009)
Sam Nekaro (BAM16051)
Avishek Das (BAM16043)
Suparna Neog (BAM16006)
2.
3. PREFACE
This report attempts to bring under one roof the entire work and dedication put by our
group in the completion of the project work on “Market Dominance Strategy of Titan
Company.”
We have expressed our experiences in our own simple way. We hope all the readers
of this report find it useful and informative and it will be worth reading. All constructive
feedback is cordially invited.
4. ACKNOWLEDGEMENT
Every project big or small is successful largely due to the effort of a number of
wonderful people who have always given their valuable advice or lent a helping hand. We
sincerely appreciate and thank for the inspiration, support and guidance of all those people
who have been instrumental in completing and making this report a success.
We the students of Masters of Business Administration, 1st Semester, Department of
Business Administration, Tezpur University are extremely grateful to Dr. (Prof.) Chandan
Goswami Sir for the confidence bestowed in us and providing us the opportunity to learn and
understand the matter well.
Last but not the least; we place a deep sense of gratitude to all our friends who have
been constant source of inspiration during the preparation of this Project Report.
-Regards
Kritanjali Kashyap
Suprakash Kar
Ruhismita Borah
Raktim Saikia
Niharika Saikia
Suparna Neog
Sam Nekaro
Kaveri Chetia
Asif Hussain Siddique
Avishek Das
5. INTRODUCTION
Titan Industries was established in the year 1984 as a joint venture between the Tata
Group and the Tamil Nadu Industrial Development Corporation. The company brought about
a paradigm shift in the Indian watch market, offering Quartz technology with international
styling, manufactured in the state-of-the-art factory, at Hosur, Tamil Nadu. Leveraging its
understanding of different segments in the watch market, the company launched a second
independent watch brand ‘Sonata’, as a value brand to those seeking to buy functionally
styled watches at affordable prices. In addition it focused on the youth with its third brand
‘Fastrack’. It has also premium fashion watches by acquiring a license for global brands such
as Tommy Hilfiger and Hugo Boss, while it has also in its portfolio its first Swiss made
watch brand ‘Xylys’.
In 1995 the company diversified into jewellery under the brand ‘Tanishq’ to capitalise
on a fragmented market operating with no brands in urban cities. In 2005, the company
launched its second jewellery brand ‘Gold Plus’, for capitalizing on the opportunity in small
towns and rural India. The company has now diversified into fashion eye-wear by launching
‘Fastrack Eye-gear’ sunglasses, as well as Prescription Eye-wear. The company leveraged its
manufacturing competencies and branched into ‘Precision Engineering Products’ and
‘Machine Building’ from 2003. Today Titan Industries is India’s leading manufacturer of
watches and jewelleries employing around 3800 people. Titan and Tanishq are among the
most admired brands in their categories.
Objective of the study
The study has been undertaken to identify the market dominance strategy of Titan
Company and to justify with the strategies for the same.
6. MARKET DOMINANCE AND ITS STRATEGIES
Market dominance is a measure of the strength of a brand, product, service, or firm,
relative to competitive offerings. There are several ways of calculating market dominance.
The most direct is market share. This is the percentage of the total market served by a firm or
brand. Typically there are four types of market dominance strategies that a marketer will
consider:
1. Market Leader
A market leader is a company that has the largest market share in an industry,
and which can use its dominance to affect the competitive landscape and direction the
market takes. Normally there are two combinations of strategies used by a firm to
retain its leadership:
(i) Expand the total market share:- Market leader firms can normally gain the
maximum when the total market expands. The focus of expanding the total
market depends on where the product is in its life cycle. This strategy can be
used when a product is in the maturity stage. Market leaders can look for new
users, new uses, and more usage of its products when the product is in the
maturity stage of the product life cycle.
(ii) Defending market share strategy:- When the leader tries to expand the total
market size, it must also continuously defend its current business against
enemy attacks. In this strategy, the leader firm must keep its costs down, and
its price must be consistent with the value that customers see in the product.
There are six ways that a market might use to protect its market position:
(a) Position defence: This strategy involves allocating maximum resources
into the current successful brands. To overcome a position defence an attacker
therefore typically adopts an indirect approach rather than the head-on attack
that the defender expectsThis strategy is normally followed by brands where
the defender is a market leader or enjoys a high position in the minds of its
customers and the contender brand is a rising brand aiming to displace the
defender form its position. In such cases, the defender maintains its position of
market leader by reminding customers about the status of the brand, setting up
entry barriers, coming up with exclusive distribution contracts, getting patents,
or establishing monopoly like situation.This defence mechanism is a weak one
because in the current scenario, and competitive advantage currently held by
the defender will eventually get eroded by the actions of the competitors if the
defender does not change its position by improving the service, product
portfolio, pricing strategy, target market, etc.
7. (b) Flanking defence: This strategy both guards the market position of leading
brands and develops some flank market niches to serve as a defensive corner either to protect
a weak front or to establish an invasion base for counterattack, if necessary. When a firm uses
the flanking defence, it defends its market share by diversifying into new markets and niche
segments. The idea behind the strategy is that if you lose your market share in the existing
market you can make up for it in these new markets. The danger of the flanking defence is
that it can stretch your resources thin and pull attention away from your main focus.
(c) Pre-emptive defence: This defence strategy manoeuvre involves the
launching of an offence against an enemy before it starts an offence.
(d) Withdrawal Defence: Withdrawal Defence involves sacrificing market
position to increase distance from a competitor, but this is not surrendering. An Example
would be withdrawing a product from Tezpur and introducing the product in other parts of
Assam if the completion in Tezpur is tough.
(e) Mobile Defence: Mobile Defence is a kind of defence strategy chosen by a
firm to prevent competition from the competitors. It requires constantly changing position
and business such that it becomes difficult for competitors to compete. Firms get into Market
broadening and market diversification to increase its coverage into new territories. Businesses
are able to do so by introducing new products, making modification in existing products,
entering new markets, changing market segment, changing target market or changing
promotional focus.
(e) Counter Offensive: This is a defending an attack by following up with
attacks, this defence strategy is used after a competitor’s attack. Example, when your
competitor cut their prices, you also have to cut your prices
2. Market Challenger
A market challenger is a firm that tries aggressively to expand its market share by
attacking the market. Firms that are second and third or lower in an industry usually adopt
market challenger strategies. The challengers can attack the market leader - a high risk but
potentially high-gain strategy that makes good sense if the leader is not serving the market
well. To succeed with such an attack, a company must have some sustainable competitive
advantage over the leader- a cost advantage leading to lower prices or the ability to provide
better value at a premium price. Alternatively, the challenger can attack firms of its own size
or smaller, local and regional firms. These smaller firms may be under-financed and not
serving their customers well. The challenger must choose its opponents carefully and have a
clearly defined and attainable objective. Market challengers may launch a full frontal attack,
matching the competitor’s product, advertising, price and distribution efforts. They attack the
competitor’s strengths rather than weaknesses.
3. Market Nichers
Market Nichers are the marketeers or companies who make specific products and/or
services which made for specific demand of customers which are not met by otherwise
8. available products. They produce highly customized and specialist products/ services which
serve a narrow market range. In this type of market strategy, though the volume is less
the profit margin is high. This is one of the alternate strategies to being a market leader or a
market follower. It is generally pursued by small sized firms who do not compete with the
large firms and their market but rather focus on a Niche market. The strategies are:
Word-of-Mouth Campaigns: These campaigns rely more on conversations among
consumers than advertising or marketing materials touting the product or service.
Brand exposure is low key and subtle, such as sponsorship or giveaways at events
or establishments frequented by the niche market. As a result, these campaigns take
longer to develop and yield results, but the returns can be extremely high, given that
word-of-mouth recommendations generally carry a lot of weight with consumers.
Trusted-Messenger/Endorsement Campaigns: This strategy hinges on finding a few
key influencers in the niche market and enlisting them as spokespersons on behalf
of a product or service. An example of this strategy would to hire Wilford Brimley
(a long-time actor who is known and loved by many senior citizens) as
spokesperson for medical products used frequently by the elderly. The success of
these campaigns is highly contingent on the credibility of the spokesperson and the
sincerity with which the endorsement is delivered.
Targeted Collateral Campaigns: This strategy relies on consistent brand exposure to
the targeted Niche Market. Just about any radio station that plays a niche type of
music (alternative, country & western, or classical, for example) that appeals to a
certain audience will employ targeted collateral campaigns. They might distribute
collateral and attend concerts by artists played frequently on their station, or
advertise in local music/entertainment publications.
4. Market Followers
It is a strategy of product imitation. The innovator bears the expense of developing the
new product, bringing in the technology, breaking entry barriers and educating the market.
However, another firm can come along and copy or improve on the new product. Although it
probably will not overtake the leader, the follower can achieve high profits because it did not
bear any of the innovation expense. Many companies prefer to follow rather than challenge
the market leader. The four follower strategies are as given below:
1. Counterfeiter: Copies the leader’s product and packages and sells it on the black market.
E.g. pirated music/ movie CDs
2. Cloner: Copies the leader’s products as it is as well as name, packaging with slight
variations.
3. Imitator: Copies some of the things from leader’s product but maintains difference in
packaging, and other factors.
4. Adaptor: Launches improved products over that of the innovator’s.
9. Marketing Dominance Strategies Adopted by Titan Industries
In the highly competitive field of watch industry, the rivals being the companies like
HMT, Casio, Citizen, Timex, Titan has adopted various strategies over the years to establish
itself as a brand in the market.
1. HMT, in 1992, launched ‘Zap’ – children’s watches. Soon after that Titan
came up with Zoop- children’s watches.
2. Titan launched more brands and sub-brands to corner the market share of
HMT watches in the early 1990s.
3. In the early 1990s, Titan decided to go global. But it soon discovered that it
had a country-of-origin image problem in Europe that led to large losses and
eventual withdrawal of the firm from the European market. In 2006, Titan
exited the European market, except for a small distribution operation.
4. Titan Industries and Timex Watches USA came together in the early 1990s to
focus on the lower end of the market. The gameplan was that Titan would
focus on the price range of Rs 1,000 and above, while Timex would
concentrate on the range below Rs 1,000. Watches manufactured by Timex
were marketed and distributed by Titan. This strategy was adopted as a
measure to confront HMT. This joint venture lasted till 1998,as Timex realised
that Titans reach was not helping it to penetrate the main market for its
watches.
5. Titan initiated Titan Raga for women, Zoop for children, Fastrack for youths.
Apart from that, to secure the core product, i.e., watches, Titan came up with
few additional products, like Jewellery, Eyewear, Bags, Belts etc. Eg. Tanishq,
Titan Eye Plus.
6. To educate the market on the benefits of using the product, Titan emphasizes
on aggressive promotional approach. Some of the promotional punchlines
were-
Is your wrist still living in the past?
You can have the choice of 700 models
And, you will always find a Service Centre near you
7. Titan adopted the idea of couple watches, at a slightly lower price than two
individual watches. This led to selling of more watches.
8. Titan has developed their watches not merely as a time keeping device but as
fashion accessories.
10. FINDINGS
Starting in 1984, Titan has been able to reach a respectable position with the strategies
discussed above. From the strategies we can see that, the launching Zoop watches for
children were a Counter-Offensive Strategy against HMT. Titan undertook pre-emptive
strategy by launching various brands and sub-brands to capture the market share of HMT.
In the early 1990s, in order to overcome the undergoing losses Titan adopted a
Geographical Withdrawal Defence Strategy by exiting the European market.
In order to capture the lower priced market segment, Titan adopted Mobile Defence
Strategy by coming up in a joint venture with Timex.
Titan undertook Flanking Defence Strategies by segmenting the watch market into
various segments like Titan Raga for women, Zoop for children, Fastrack for youths and also
diversifying from the core watch market to other niche markets like jewellery, eyewear, belt,
etc.
Apart from holding the current market share, Titan is also focused on expanding its
existing market share through market education by using promotional approaches. Titan has
taken the initiative of launching couple watches in the market which resulted in more selling
of the product.
In the era of laptop, smart phone, etc. watches are merely required for time keeping.
Titan has well adapted with the changing scenario by designing the watches in such a
manner, so that the customers can use the watches as fashion accessories rather than just a
mere time keeping device.
From the above discussions we can see that the strategies adopted by Titan are similar
to the strategies undertaken by market leader. Hence, we can say that Titan is a Market
Leader in the field of watches.
11. CONCLUSION
Titan is one of the most valuable brands of the Tata Group, stable in the consumer
durable category. What seemed to be a market where people bought watches for the
functional purpose of knowing the time has been totally redefined by Titan. Today, owning
particular style or brand of watch is all about making a statement. Titan, as a brand, has
established itself for its style and choice of design and is the unquestioned leader in the Indian
watch industry today.
The report is hereby concluded assuming that it had tried to touch most of the aspects
for which the report was prepared.
