Tanishq - The Turnaround Story

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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." Tanishq's team of in-house designers came out with about 3,500 designs based on current trends and the feedback from stores. At least 10% of these designs were changed every quarter and fresh ones were added to the stock. Tanishq gave complete freedom to the retail outlets to pick up designs, which they thought would sell in their stores. Almost all the outlets stocked the 'best selling' range of designs, which did well across the country. Tanishq was now pitted directly against the traditional jewellers who were offering similar ornaments. In order to add some value proposition to rise above the competition, Tanishq decided to address the issue of gold purity, which was most important to the customers. Traditionally, conventional jewellers used the touchstone² to test the purity of gold. Apart from the fact that the customers did not trust the method, it was also alleged that a slight amount of gold was always lost while testing. The customers had to accept this for want of an alternative. In 1999, Tanishq introduced the revolutionary concept of Karatmeters in its retail boutiques. The Karatmeter used X-rays to give an accurate reading of the constitution of gold in the ornament within three minutes. Imported from Germany at a cost of Rs 1 million each, Karatmeters though expensive, proved to be the biggest USP for Tanishq in the coming years. In fact, its sales increased by 20-30%. The concept was later on heralded as a bold step towards professionalizing the Indian jewellery business.

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2] The ornament was rubbed against a special stone. By examining the deposits on the stone, the jeweller decided the purity level of the gold.

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