TITAN TOP 1st CASE STUDY BY VIKAS
Which is one largest consumer companies of India I will talk about their humble beginnings and about their journey and I will also talk about some of their products and they they became successful Let’s start with the main character of this story , Mr. Xerxes Desai ( first managing director of Titan ) He joined Tata Administrative Services in 1961 but after some years , he was moved to Tata Press. He joined Tata Press as a general manager when the company was not even profitable. but their intention was to make it profitable and then go public. They would use that money to invest in other interesting projects You might be wondering what is the connection between Tata Press and Titan . You will understand in a second Mr. Mahadevan was an IAS officer in Tamil Nadu . He was on a leave studying the Indus script ( earliest form of writing known in the Indian subcontinent ) His intention was to print and publish several findings and this is when he got in touch with Tata Press for some help .
This is when he had a conversation with Xerxes Desai and they agreed. It was in one their conversations when Mr. Xerxes Desai mentioned that Tata Press is looking for new projects to invest in . Mr. Mahadevan suggested them to visit Delhi as he thought he could offer Tata some interesting projects . Some of the ideas were glass , boats and watch business and in that study they mentioned that there are very few Indian players in this segment . There were only 1.5 million watches made for the entire Indian population HMT was the biggest player making 1 million watches and there were several small players. but the study revealed that many people wanted to buy Japanese and Swiss brands. In order to meet this demand , many people used to sell watches illegally Mr. Xerxes Desai was convinced about the opportunity in front of them and this is when Titan was born but this was just the beginning Tata’s past experience in the consumer and technology business wasn’t so good but there was another big problem They weren’t able to get the approvals needed . At that time , the Government only allowed public owned companies and small scale companies to manufacture watches As you know , Tata was a very big company at that time as well, so they weren’t able to get the approval. This is where Mr. Mahadevan comes back into the picture. He was was posted as chairman and managing director of Tamil Nadu Industrial Development Corporation (TIDCO) TIDCO had been in dialogue with a French movement manufacturer,, but was yet to find a joint-venture partner to execute This is when Mr. Mahadevan approached Mr. Xerxes Desai and asked if they would still be interested and of course they were Unfortunately ,
the Secretary of the Ministry of Commerce and Industry didn’t allow Tata to enter this business This is when Tata put a fresh application for a joint venture between TIDCO and a little-known private company ( Questar Investments ) . They didn’t mention Tata anywhere in the document Questar would later be taken over by the Tatas via a rights issue .The new company Titan Watches. Titan was an acronym for Tata Industries and Tamil Nadu: “T” and “I” for Tata Industries and “TAN” for Tamil Nadu. Once they had the approval , they started building a team. The advertisement in the Times of India only said a large business house was looking for sales executives they never mentioned anything about Titan and the reason I share this is because this is how they found Mr. Bhaskar Bhat ( next managing director of Titan ) So now they had the approvals and they also had a team. Now they had to decide the product.
The two main categories of watches are mechanical and Quartz. The licence issued to Titan was for the manufacture of 2 million watches – 1.6 million mechanical and 0.4 million quartz. This was a very big issue Quartz is a battery based watch. They are cheaper as they have less components but they are very accurate Mechanical watches are the opposite. They are very expensive to make and they have several components . This is not battery based At that time , Titan knew that Quartz is the future of watches but they had to make 1.6 million mechanical watches according to the license but they got lucky again. Mr. Rajiv Gandi became the prime minister at that time and the government stopped micro-managing the industry Titan suddenly found itself free to choose and they chose Quartz. This was one of the most important decisions of that time So now let’s understand how did they sell those watches. They weren’t able to do business with distributors as they only wanted to buy HMT’s watches (competitor ) From day one, Titan was projected as a premium brand but shops at that time didn’t spend money in design and layout The thinking was that anyone who wanted to buy a watch would come to the shop regardless of the experience This is when Titan decided to launch their own showroom as they wanted to provide a better experience .
also started a franchise model after some time but there is one important point to note At that time , people didn’t really trust Quartz watches as they were new. That’s when Titan decided to a open service network alongside the showrooms At that time , when you wanted to get your watch repaired , you never really knew who fixed it because it was happening behind the rooms Titan wanted the repair service to be transparent so people can see what’s happening The main goal was not to earn money but build trust. Once people started trusting them , they would buy more watches eventually there is one funny story here. Before opening their first showroom, they sent the initial batch of watches to the chairman He returned the watch saying, ‘It’s a quartz watch, isn’t it? It is not working, take it back! Mr. Xerxes Desai was scared as they were going to launch their showroom the next day but this is how they realized that they were using the wrong battery that batch of batteries had been on the shelf for too long and such batteries tended to make the watches go slow .
It’s a nice story to see how they started. But if you are familiar with Titan , you know that the majority if their revenues come from the jewelry segment . So how did they start this segment ? in 1990 , while visiting a jewelry exhibition , Mr. Xerxes Desai noticed the designs and workmanship were ordinary this is when they decided to enter the jewelry segment . They knew they had two main problems. Firstly , they had to change the name. They didn’t want to name is Titan jewelry.
They wanted a feminine and Indian name This is when they came up with the name is Niska that later became Tanishq and if we breakup that work , it means tan – body and ishq -love . but the second problem was trust. Nobody could be sure about the gold quality they were buying . That’s why they preferred local craftspersons Titan came up with a solution. They went and bought machines that could help you check the quality of gold you have. You were allowed to check that for free in their stores Titan thought this was enough for them to generate sales but this didn’t work. At the peak . this segment posted a loss of 100 Crores. Even though people were using the machine , they weren’t buying jewelry from Titan. One client gave them the answer. She mentioned that Titan was addressing the problem but they weren’t solving it The machine was helping people understand if they go cheated or not but Titan wasn’t helping them in any other way This is when Titan came up with “Impure to Pure scheme ” .
So If the jewelry was lower than 22 carat , it could be exchanged for Tanishq’s 22 carat jewellery of their choice by paying only manufacturing charges This was important for Titan because now they had a solution to that problem They also launched other schemes such as “Golden Harvest scheme “where you can pay in installments some time ahead buying the jewelry and they will give you a discount This is why their Jewelry segment has done so well. Titan is still using this strategy.
Just like they did in the Jewelry segment , they look for segments where people don’t trust the vendors. They realized that something similar was happening in the prescription glasses segment People were not transparent about the pricing on frames and lenses and that’s why Titan entered this segment where they have tags on everything and you can check the price.