Tuesday, December 4, 2012

Watch out: Titan targets 400 EBOs by fiscal end

The nation’s time-keeper, Titan Industries, is hoping to add 40 more exclusive brand outlets (EBOs) by the end of this fiscal year, in the country, to add to its current number of 350. It also plans to open 75 smaller format EBOs in Tier-III and -IV towns in the coming year.

According to Rajan Amba, Global Marketing Head, Titan Industries, the company has allocated 20 per cent of its Advertising and Promotion Plan (A&P) budget to strengthen the company’s ‘World of Titan’ chain. “This includes our investments in BTL activities to generate footfalls, advertising for new stores and product launches, new fixtures, and visual merchandising,” he says.

Rajan Amba, Global Marketing Head, Titan Industries

Last year, according to Amba, the watches division grew at nearly 22 per cent. The CAGR for the Titan brand has been in the region of 15 per cent over the last four years. The six-monthly turnover of the watches division stands at nearly Rs. 835 crore, a growth of 14 per cent over last year’s half yearly results.

Meanwhile, the focus on multi-brand outlets is equally important for the company.

Apart from the four core brands, Sonata (low-end), Fastrack (youth), Titan (mid-segment), and Xylys (premium), Titan has also launched several sub-brands such as Nebula, EDGE, Raga (women), Zoop (children), and Heritage.

This year, Titan has had three key new launches, prior to the festive season – Raga Cities, Edge 2012 and Tagged. While the Raga Cities collection is inspired by “two of the world’s most romantic cities” – Paris and Venice, and are priced between Rs. 2,400 and Rs. 12,000, the collection comprises of 31 new contemporary designs studded with Swarovski crystals, mother of pearl dials and unique metal straps. Edge 2012, is claimed to be the lightest watch ever and is priced between Rs. 12,000 and Rs. 15,000.

Tagged, meanwhile is targeted at the working youth segment and is priced between Rs. 1,400 and Rs. 4,000. “Every year, Titan launches many new collections targeted at different segments across our wide consumer audience. This, over the past five to six years, has been our key growth driver for both business and brand image,” says Amba.

He envisions watches above Rs. 5,000, e-tailing, and the proliferation of the EBO channel as the growth drivers for brand Titan next year.

The company recently announced that it will soon launch an integrated e-commerce platform for its different product offerings. The company currently earns Rs. 15-20 crore from online purchases on its diverse product sites.

Old enough to be youthful?

Ramanujam Sridhar, Founder CEO, Brand-Comm

With close to 15 sub-brands under the umbrella and having a closely overlapping target audience and price variations, there exists a possibility of mixed brand messages. Can this lead to a dilution of the brand identity itself? Ramanujam Sridhar, Founder CEO, Brand-Comm is of the opinion that any brand which has been there for a long period of time runs the risk of being seen and tagged as a slightly ‘older’ brand and that is one of the biggest challenges that the brand is facing.

He feels that unlike the times when HMT was a sitting duck and Titan could make the most of it, the market composition has changed. Brands like Citizen which had messed up their India entry, have now sorted out their act and almost every brand that is out there – Omega, Rolex, Fossil, Tag Heuer – is available in the market. “Titan is a great brand. But, a period of 25 years is fairly long, particularly in a category like fashion and lifestyle, since the company has positioned the watch as a fashion accessory. This is a challenging category,” says Sridhar.

According to Sridhar, there are two key challenges before Titan – what with the company expanding the market, increasing its share, and being the only profitable watchmaker around. His hypothesis is that the brand has lost its aspirational quality for younger, sophisticated audiences in the 25-34 years age group. “The brand still has a great following in smaller towns and in the older segments, and in gifting in certain segments. But the brand’s profile is getting slightly dated.”

Sridhar got his first first Titan watch in 1987 when he “was young and upwardly mobile”. Today, he aspires to own an Omega, a Rolex, or a Tag Heuer. “Titan no longer remains an aspirational brand for people of my socio-economic group,” he adds.

The other challenge is the Titan corporate brand is suffering and is being seen as a mere product brand even as brands like Tanishq, Titan Eye+, Fastrack, Sonata are part of the same corporate brand. Whilst Titan is a great brand to consumers, employees, and investors, it is being seen merely as a watch brand.

Kaustav Das, EVP-South, Publicis Ambience

Meanwhile, Kaustav Das, EVP-South, Publicis Ambience, feels that Titan seems to have ignored the Sonata learning, that loyal consumers are almost puritanical in their expectations from the brand. “To the consumer, ‘Sonata from Titan’ is the same as ‘Titan Sonata’, hence, a dilution of the premium value Titan commands,” he says.

He is of the opinion that with launches across the board in pricing and design philosophies, the brand has lost it equity. “I wouldn’t be surprised if an equity study reveals that Titan is now synonymous with ‘Indian watch Brand of International quality’ and nothing beyond. That’s purely functional and hence detrimental to Titan the brand,” he adds. Interestingly, this is exactly what Titan challenged a quarter century back to become the most coveted watch Brand in India.

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