Tanishq – The Turnaround Story
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BACKGROUND NOTE Contd...Titan established its
first manufacturing facility in Hosur, Tamil Nadu and its first satellite
watch assembly unit at Dehradun, Uttar Pradesh was started in 1990. In 1992,
Titan set up a joint venture, Timex Watches Limited, with Timex Corporation
of USA to market Timex watches in India[1]. And in 1995, Titan changed its name
from ‘Titan Watches Ltd.'to ‘Titan Industries Ltd.'in order to change its
image from that of a watch manufacturer to that of a fashion accessories
manufacturer. In the same year, it also started its jewellery division under
the Tanishq brand.
At this point of time, the jewellery business was highly localized and the
concept of branded jewellery did not exist. In the late 1990s, India had
around 0.2 million jewellers scattered across the country. Jewellery had
predominantly been used as an investment rather than adornment. Hence, a
change in the perception of jewellery from an asset to a fashion accessory
was extremely difficult to bring about. People generally bought gold from
the same family jeweller they had trusted implicitly for generations.
Moreover, these jewellers made the jewellery to order and often bought back
their products at the prevailing market rates.
Thus, from the very beginning, Tanishq found it hard
to overcome the Indian consumer's preference for buying traditional
jewellery only from family jewellers. The sleek and contemporary designs
being offered did not go down well with the Indian customer who was used
to heavy, traditional designs.
Vasant Nangia, erstwhile Chief Operating Officer, Tanishq said, “When we
launched the Tanishq range, our designs were not appreciated initially
as they were believed to be extremely Western. Also, we offered only 18
carat gold.” Over a period of time, Tanishq's research revealed many
other loopholes in its strategies. |
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SETTING THINGS RIGHT
Tanishq found out that it had gone wrong mainly in two areas
- the product proposition and retailing. Initially with a focus on the export
market, its designs were predominantly Western, and the same line of jewellery
was sold in India as well. However, when it shifted its focus to the domestic
market, it was unable to sell these designs.
Therefore the first step was to change the brand positioning from that of an
elitist and Westernized offering to a more mainstream, Indian one. The 18-carat
jewellery range was expanded to include 22 and 24 carat ornaments as well.
Tanishq also made attempts to redefine traditional styles in its designs.
Tanishq realized that, given the diverse nature of Indian ethnicity, it would
have to cater to tastes of all regions. Therefore, the emphasis shifted from the
erstwhile modern designs to more ethnic ones and traditional ornaments (based on
designs from various states) were launched. The company also began seasonal and
localized promotions based on Indian festivals, such as during Durga Puja in
West Bengal, Onam in Kerala, Diwali in north India, etc. Johnson Verghese,
divisional head, sales and marketing, said, “We also decided to go in for
transmigration of designs. So we not only got in more Indian motifs but also
started stocking typical designs from Tamil Nadu in Mumbai and those from Bengal
in Delhi. These designs, though Indian, provided variety to what the people in a
particular area were used to seeing.”
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FUTURE PROSPECTS
QUESTIONS FOR DISCUSSION
ADDITIONAL READINGS & REFERENCES
[1] The venture ceased to exist from
1998 following differences between the two partners.
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