Tanishq - jewelry division of Titan (India's leading watchmaker)

Titan - subsidiary of Tata Group

Date - March 2006

Tanishq - only truly "national" jeweler
sold gold and gem-studded jewelry
Initially targeted a more western consumer; evoked a "Nice but not for me"
reaction from Indian women
had undergone several strategic retoolings - finally targeted the traditional
but modern Indian woman segment

GoldPlus - a subproject inside Tanishq

to serve the plain gold wedding jewelry market in smaller cities

Issues between main Tanishq team and GoldPlus team

Main Tanishq team wanted to get into the wedding jewelry market themselves
They felt that GoldPlus launch would confuse the marketplace and
distract the organization
GoldPlus argued that their product was superior when it came to serving the
wedding jewelry market
They wanted main Tanishq team to stay focused on the up-market "jewelry
for adornment"
while GoldPlus pursued the "gold jewelry as investment" market in
smaller towns

Total firm target - A billion dollar in sales by 2010

Jewelry market in India

No truly national competitor to Tanishq
However, local competitors were bigger than Tanishq in their local markets.
Also, 25000 family-owned independent jewelers
Women - Target; Men - Buyers
Indian Jewelers were essential stockist - did not own jewelry
Vendors owned the inventory - supplied to jewelers through consigment
arrangements
Back end of supply chain - 3 million craftsmen or karigars
Vendor controlled 3-4 head karigars. A head karigar controlled 10-20
karigars
Jewelers had long-standing relationships with vendors, and remained loyal to
their vendors

Intial entry of Tanishq in India (1995)

Tanishq watches as jewelry that tells time
Target market - urban households with a monthly income of over 1 lakh
Product to be perceived as a premium watch with "high snob value".
Sales were low because of design issues
watches were heavy and appeared clunky; perceived as too costly
High advertising led consumers to incorrectly think Tanishq was only about
watches

Move from watches to jewelry (1996)

Decision to manufacture and market precious studded jewelry
Hypothesis behind decision
Plain gold jewelry has little opportunity for differentiation
Everyone knows gold prices - so jeweler has no pricing power
But customers dont know how to value gems. So, one could be innovative
here
However, studded jewelry required 18 karat gold (as 22 karat was too soft to
hold gemstones)
 anything lower than 22 karat was considered junk by Indian consumers
So, two challenges
1. Establish Tanishq as a differentiated jeweler
2. Educate consumers, to create a paradigm shift in their usage and
attitude
Advertising campaigns focused on creating desirability and communicating that
Tanishq buotiques were precious
Tried to create mystery and intrigue around the brand
However, Indians still considered Tanishq to be "western, and not for me"
Boutiques were too intimidating, like 5-star lobbies;

Reposition Tanishq (1997)

Piloted 400 designs of 22-karat plain gold jewelry (along with 1000 designs
in 18-karat jewelry)
Still focused on "jewelry for adornment", not "investment" - so did not offer
the full range of bridal suite jewelry
Brand was about "looking good, feeling good all the time", unlike
wedding jewelry that you wore once
Average ticket prices remained lower; but walk-ins increased
Sales rose to 24 crores, but the mainstream buyer still eluded the firm
18 karat jewelry was considered to be "costume jewelry" - not precious
Offering more 22 karat products in 1999 elicited curiousity
People came in looking for 22-karat products but left with 18-karat
products
18 karat was higher margin; so increase in walk-ins helped increase
profits
Ongoing concern that Tanishq could not tap the wedding market
To the mainststream market, Tanishq's differentiation was based on primarily
purity and quality
Tanishq needed to substantiate this claim

Karatmeter
Machine that measured the karatage of gold in 3 minutes
Pioneered by Tanishq - they thought it would plant a seed of doubt in
family's minds over their trusted jewelers
Tanishq allowed folks to test their jewelry free of cost, to ascertain if
their previous jewelers were trustworthy
By 2000, this allowed Tanishq to breach the 22 karat market

Challenges after entering plain gold market

Moved away from marketing a brand to selling a commodity
Tanishq's markup was 15% to 25%; other jewelers were 5% to 15%
Explained the higher markup by stating that local jewelers were in fact
overcharging by providing under-karatage jewelry
New research confirmed that Tanishq was still considered "out of reach"
The social embarrassment of having lower-quality jewelry meant people swept
it under the rug
Most people accepted jewelers would "cheat on purity", and accepted it

Changing of the guard (2001)

Tanishq set up a karigar park to remove middlemen
Supplied karigars with raw material
Karigars had to follows its systems and procedures to reduce gold inventories
and improve quality
Indian consumer habits changed - women wanted different styles for different
occasions.
Only Tanishq could offer the range, and had to get the message out
Tanishq - premium Indian brand targeting "the modern Indian woman"
Their decision would impact how the firm would reach the ambitious goal set by
Bhaskar—a billion dollars (Rs.5,000 crores) in sales by 2010 (in March 2006, US$1 =
Rs.44.5).

Moving towards mainstream jewelry market (2003-2005)

Some still thought Tanishq was at least twice as expensive as the local
jeweler
Research showed that while Tanishq had been moving towards the regional
jewelers, those competitors had also moved up the spectrum towards Tanishq
Several new collections were launched
Daytimes - diamond-based; repositions diamonds as affordable, casual,
young and contemporary
Colors - riding on a trend for colored jewelry
Aarka - a high-fashion, 22 karat gold collection to position Tanishq's
image and design leadership (JV with Sabyasachi Mukherjee)
Aamra - a collection of studded jewelry, to tackle Tanishq's
unapproachable image (inspired by the mango motif)

2005 - completion of the brand value exercise

Market was segmented into 5 psychographic segments
Confident Matriarch
Sanction Seeker
Balancer
Individualist
Uninvolved Conformist
Tanishq decided to go after the confident matriarch and the balancer (57% of
the market)
"She believes in harmony, and in getting her way without rebelling. She
plays by the rules to a large extent but modifies them in a way that suits her. She
plays multiple roles, mother, daughter, wife, sister but is not defined by any one
of her roles. She seeks acceptance and expression at the same time. She has a
thorough grounding in tradition, and is proud of it."