Final Tanishq marketing strategy
project on tanishq jewellery...
INTRODUCTION ABOUT TANISHQ In a market that has traditionally been dominated by family jewelers, it took the entry of Tanishq, India’s largest, most desirable and fastest growing jeweler brand from the house of Titan in 1995, to give Indians access to a product whose promise was truly as good as gold. Tanishq’s appeal lies in the wealth of its designs and purity of gold. It has won the trust and admiration of customers and created a unique position for itself in the marketplace.
The association with Bollywood blockbusters likes Paheli and Jodhaa Akbar and the 2003 Miss India beauty pageant have enhanced the brand’s appeal, lending it an aura of elegance and grandeur. Tanishq stands out as a brand that abides by values of Trust worthiness, credibility and respect. The power of Brand was further enhanced with the introduction of karatmeters — a tool that helped customers gauge the quality of their gold — in every Tanishq outlet.
By introducing revolutionary, innovative designs in a market that worships tradition, the brand created its own tradition of retail success. Yet Tanishq is more than just a jewellery retailer. It stands for reassurance of quality and ethics. The fact that it belongs to the Tata family assures the customer that with Tanishq, all that glitters is certainly pure gold.
TAN + ISHQ = BODY + LOVE The essence of this name is derived from the Urdu language, a Persian Arabic form of dialect. The reason d'être behind electing this unique name for this company is the fact that women and men alike had realized the magnificence of the human anatomy since time immemorial. Beautifying the human body was a primary part of the daily routine, which took several hours of intense care. Though today things have changed drastically, and time very precious to one and all, nonetheless beauty remains a primary concern in the day-to-day activities of every man and woman. Consequently the name Tanishq is synonymous to 'love for your body', where Tan signifies the body and ishq, love.
LAUNCHING OF TANISHQ Titan launched Tanishq in 1995, India's largest, most desirable and fastest growing jewelry brand in India. Diligent care and quality processes ensure that the Tanishq finish is unmatched by any other jeweler in the country. Tanishq challenged the age-old jeweler’s word with TATA's guaranteed purity. It exploded the market with facts about rampant impurity across India. It introduced technology-backed challenge in a category completely governed by individual trust. Tanishq introduced innovations like Karat meter, the only non destructive means to check the purity of gold. In its early days, Tanishq was positioned as an international jewellery brand for the Indian elite. This
meant it catered to a niche market. Moreover, its Italian designs in 18-carat, mostly studded jewellery did not go down well with the traditional Indian woman, used as she was to 22-carat jewellery. Abandoning its westernised look, Tanishq’s designers chose to work on a fusion of contemporary and traditional Indian motifs.
PRODUCT The Tanishq portfolio comprises a wide range of jewellery, including 18-carat studded products, 22-carat plain-gold products, silverware and coins. Tanishq is the first brand in the jewellery category to introduce collections designed exclusively for the modern Indian woman, especially working women. Among the Tanishq collections that have caught the imagination of consumers is Aria, which draws inspiration from the traditional seven-stone jewellery that Indian women have worn for over 100 years. Aria added a contemporary element to the traditional setting of the seven-stone cluster by using diamonds of different shapes and sizes. The use of rhodium plating alongside the yellow gold gives this product a unique look, modern as well as traditional. Other winners from the Tanishq stable include Diva, which has pearls encircled by diamonds, Hoopla, which boasts diamond hoops, and Solo, a collection that uses solitaire diamonds. Collection G, with a selection of over 90 designs, addressed the everyday jewellery needs of working women. Positioned as ‘9-to-5 jewellery’, the collection is stylish and modern and is designed to suit all forms of attire, western and Indian, casual and formal. The introduction of lightweight gold – jewellery that looked heavy but was light in weight and on the purse – marked another milestone in Tanishq’s brand history.
RECENT DEVELOPMENTS Tanishq has veered away from the high-end French look that it started out with to jewellery that is designdifferentiated and yet wearable. This shift in its design ethos has helped make the brand’s products more accessible to Indian women. The Tanishq of today has little to do with conspicuous consumption and much to do with meeting the aspirations and emotional needs of consumers. Tanishq’s retail boutiques are temples for the brand and are used as a platform for celebration, be it the launch of a new collection, a new marketing promotion or a festival. This gives Tanishq outlets a unique appeal and consumers an opportunity to heighten their shopping experience. The launch of new collections such as Dancing Diamonds, Ethnic Gold, Paisley, Dewdrops and Avataar has enabled Tanishq to establish itself as a frontrunner in the fashion jewellery scene. One of Tanishq’s more innovative ideas is to offer special schemes during various festivals. Given India’s diversity, this is never a one-size-fits-all initiative; rather, it means having different promotions at different times of the year in different parts of the country. So, whether it is Varalakshmi Puja in Andhra Pradesh, Durga Puja in Bengal, Onam in Kerala or Karva Chauth in the North, the brand celebrates it with its consumers in the right cultural spirit.
PROMOTION Tanishq has deliberately moved away from mass-media advertising and focussed on store promotions to make the brand more accessible to consumers. This has been done to correct the consumer perception that the brand is highly priced and only meant for the rich and the famous. This approach has also ensured that Tanishq’s
promotional approach is product-led. Promotions are organised from time to time to ‘activate the market’. These events reinforce the image of Tanishq as a trusted leader. The ‘Impure to Pure Exchange’ offer is an example of one such activation-based promotional campaign. Under this scheme, jewellery buyers could exchange their impure jewellery of any ‘caratage’ for Tanishq’s 22-carat jewellery. During the promotion it offered to value consumers’ old gold jewellery of 17carat and above on Tanishq’s Karatmeters. Between August 1st and August 15th 2001, Tanishq embarked on a promotion where discounts of up to 20% were offered on all its jewellery. This was to say thank you to a million consumers on the fifth anniversary of the brand’s launch. Over 100,000 people shopped at Tanishq boutiques during this period. Another consumer loyalty programme that has been initiated by Tanishq is called the Golden Harvest Savings Scheme, which offers buyers the benefit of getting more jewellery than what they have paid for. The scheme allows consumers to plan future purchases in advance and pay for them in easy instalments. Consumers can choose from two plans: a 12-month annual plan and an 18-month extended plan (the monthly installment can be for any amount upwards of Rs. 500). Tanishq contributes 60% of the last monthly instalment in the annual plan and 130% of the last monthly instalment in the extended plan, both of which are part of the final price that the consumer pays for the product.
BRAND VALUES In sync with the Tata brand values, Tanishq is synonymous with trust and purity in a category that is fraught with questionable practices. Being a member of the Tata family has meant that it can leverage the group’s well-earned reputation for ethics and values in a business where such attributes are critical to win the trust of
consumers. Tanishq consumers can afford to take issues such as purity for granted, and they know they can depend upon the brand to deliver quality products all the time. The brand’s winning virtues in design and overall quality have shaped a class of discerning buyers who seek the best in jewellery products. Leadership and innovation are two of the other brand features that Tanishq is consistently identified with. These values have helped the brand bond with its consumers like no other Indian jewellery retailer.
TANISHQ IN INDIA TANISHQ is India's largest, most desirable and fastest growing jewelry brand in India. Started in 1995, Tanishq is the jewelry b u s i n e s s g r o u p o f Ti t a n I n d u s t r i e s L t d - p r o mo t e d b y t h e TATA group, India's most respected and widely diversified business conglomerate. This year marks a decade of successful innings for Tanishq. With a retail sales of 1200 crore last year and gunning for2 0 0 0 c r o r e t h i s ye a r , T a n i s h q h a s a r r i v e d i n t h e I n d i a n jewelry market. It is a story of a successful Indian enterprise, which has delivered value to its customers and shareholders in a complex category, marked by its completely localized front end as well as back end.T a n i s h q h a s s e t u p p r o d u c t i o n a n d s o u r c i n g b a s e s w i t h through research of the jewelry crafts of India. Jewelry at T a n i s h q i s crafted in one of the world's most modern f a c t o r i e s . T h e f a c t o r y complies with all the labor and environmental standards. Located at Hosur, Tamil Nadu, the 1,35,000 sq. ft. factory is equipped with the latest and most modern machinery and equipment. Every product at Tanishq i s p a i n s t a k i n g l y c r a f t e d t o
perfection. Diligent care and q u a l i t y processes ensure that the Tanishq f i n i s h i s unmatched by any other jeweler in the country. Tanishq challenged the age-old jeweler’s word with TATA's guaranteed purity. It exploded the market with facts about r a mp a n t i mp u r i t y a c r o s s I n d i a . It introduced technology-backed challenge in a c a t e g o r y c o mp l e t e l y g o v e r n e d b y individual trust. Tanishq introduced i n n o v a t i o n s l i k e K a r a t me t e r , t h e o n l y n o n d e s t r u c t i v e me a n s t o c h e c k t h e purity of gold. Tanishq also introduced professional retailing in the disorganized Indian jewelry b a z a a r , wh e r e wome n c a n s h o p with comfort and peace, without worrying about the purity of the jewelry they are buying, as well as, select from the best jewelry collections available in the Indian market. Tanishq today is India's most aspirational fine jewelry brand with 91 stores in 64 cities, with an exquisite range of gold jewelry studded with diamonds or coloured gems and a wide r a n g e o f equally spectacular jewelry in 22Kt pure g o l d . Exquisite platinum jewelry is also part of the product range. “Jewellery is one of the last great commodity frontiers i n I n d i a ; i t h a s r e ma i n e d s o b e c a u s e t h i s ma r ke t i s very fragmented,very much unorganized. T a n i s h q h a s successfully taken on the challenge of transforming t h i s f r o n t i e r i n t o a r e l i a b l e consumer space by bringing to it all the v i r t u e s a n d b e n e f i t s t h a t branding offers” - Harish Bhatt, CEO, Tanishq
SOME OF TANISHQ’S COMPETITORS Asmi Asmi, one of the leading diamond brands of the country, was launched, In 2002 by The Diamond Trading Company Ltd (DTC). T h e A s m i d i a m o n d Jewellery Collection is crafted to beautifully compliment and complete her. Asmi caters to the w o m e n o f s u b s t a n c e & s a t i s f i e s h e r m i n d f o r r e w a r d s recognition, evolving to suite her style & Personality. The brand has been endorsed by various celebrities such as Kajol, Mandira Bedi & Perizad. All these women epitomize the different strengths. An Asmi woman is closely identifies with free-spirited, goal-oriented &with an inner fire.
Nakshatra Diamonds The world renowned Nakshatra diamonds were launched in2000, with an equally dazzling Aishwarya Rai as its brand ambassador. In the present scenario Nakshatra diamonds o c c u p y a l e a d i n g p o s i t i o n i n t h e f a s h i o n d i a mo n d j e we l r y segment. The traditional diamond is the most wanted design among Nakshatra diamonds. Nakshatra diamonds claim to shine your glamour and love life. They have aptly put their slogan as "brightest circles of l i g h t . " El e g a n t a n d g r a c e f u l N a k s h a t r a d i a mo n d s a r e t h e epitome of passion, attitude and independence
Gili Gili was launched in 1994, targeting mainly the youth who wanted to celebrate Valentine's Day. Since then, the brand has clocked a turnover of Rs. 90 crores.
Nirvana Diamonds Nirvana Diamonds from Fine Jewellery (I) Ltd. was launched in 1987 in India. Nirvana diamonds are targeting at fashion c o n s c i o u s , m o d e r n a n d independent thinking women. Internationally acclaimed N i r v a n a d i a m o n d s a r e ma n u f a c t u r e d b y u s i n g s t a t e - o f - t h e - a r t t e c h n o l o g y. As a proof of their quality Nirvana was among one of the brands to offer lifetime warranty to its consumers.
D'damas Diamonds D'damas Diamonds are part of Gitanjali Digi co Group and one of the earlies t diamond houses established in India in1966. On the present day D'damas Diamonds offer highly modernized diamond cutting and polishing facilities at five locations in India. D'damas Diamonds claim to promote arange of emotions through their collections
Adora Diamonds Adora Diamonds were launched in India in J u l y 2 0 0 3 b y Mumbai based Concept Jewelry (India) Ltd. On the present d a y t h e s t i l l expanding retail network centers of Adora expands to 117 outlets in 47 cities of India. Adora means g l o r y i n S p a n i s h a n d c l a i ms t h a t i t s d i a mo n d c o l l e c t i o n i s themed on love. Adora diamonds are for adornment of every m o m e n t , occasion, and phase of life through its up a n d downs. The Swaranjali signature collection of living legend La t a M a n g e s h k a r is a u n i q u e f e a t u r e o f Ad o r a d i a mo n d s . E a c h p i e c e o f S wa r a n ja l i c o l l e c t i o n i s c o n c e p t u a l i z e d a n d approved by Lata Mangeshkar and bears her laser printed signature
Kiah Diamonds World's largest volume manufacturer of diamonds-Sheetal manufacturing Company (SMC) launched its exquisite Kiah d i a mo n d c o l l e c t i o n i n Oc t o b e r , 2 0 0 4 . Ki a h d i a mo n d s a r e claims to be for celebrating womanhood. The brand name 'Kiah' means beautiful place. On the latest Kiah diamonds have won the Best Showroom in the DTC Diamond season for 20 05 – 2006.
TANISHQ – MARKET RESEARCH MARKET research On TANISHQ Tanishq emerges as the best known brand with the highest awareness and recall. The difference between the leaders and the follower’s is always greater when the former have a h e a d s t a r t . An d when the pace and efforts of the leaders intensify, the possibility that they will continue to be at the t o p i s a f o r e g o n e c o n c l u s i o n. Th e S o l i t a i r e - T N S S u r v e y shows that Tanishq is the best known brand across the three cities of Mumbai, New Delhi and Bangalore, a finding which lends credence to the leadership factors. More than 65 percent of the target audience had no hesitation in coming up with the name, proving that the extensive branding exercise u n d e r t a k e n b y Tanishq (a division of the Tata group company, Titan Industries) has paid off well. Two decades in the business, over 70 retail outlets across the country and p i o n e e r i n g e f f o r t s to make jewellery buying into an unforgettable shopping experience - all t h e s e f a c t o r s combined to make the brand into a household name.
India's Top Ten Best Known Jewellery Brands
THE SURVEY The Indian jewellery industry is seeing u n p r e c e d e n t e d activity on the market front with new entrants coming in all t h e t i m e . Consumer behavior also is u n d e r g o i n g a transformation. The SolitaireTNS Survey to find out India's b e s t k n o w n brands (and other pertinent details) was initiated with a view to assist a nd equips the industry with information that goes beyond the ordinary. "Men buy products while women choose b r a n d s , " s a y s model-turned-designer and CEO of a billion dollar company, Kathy Ireland, a fact which jewellery brand managers in India w i l l n o t r e f u t e . Hence the Solitaire - TNS Survey across Mumbai, New Delhi and Bangalore was targeted solely at women. Wh i l e t h e s a mp l e s i z e w a s s ma l l , 6 0 0 + , t h e f a c t t h a t t h e t a r g e t g r o u p wa s c o v e r e d i n a n d a r o u n d s h o p p i n g ma l l s , banks, corporate areas and commercial zones, made the s a mp l e mo r e r e l e v a n t t o t h e ob je c t i v e s . Th e s u r v e y w a s conducted through personal interviews over a period of 15days.
TURNAROUND STORY When we started out we didn't think that we could achieve this, but now being jewellers to the nation doesn't seem so distant. - Tanishq COO, Vasant Nangia, in March 2000.
The Unsuccessful Launch I n 1 9 9 5 , Ti t a n I n d u s t r i e s , I n d i a ' s l e a d i n g ma n u f a c t u r e r o f watches, launched the Tanishq range of gold watches and jewellery. Till then, the Indian jewellery market was to a large extent unorganized, with a few recognized names such as Tribhovandas Bhimji Jhaveri and Mehrason's. Tanishq, an e n t i r e l y n e w c o n c e p t i n t h e I n d i a n ma r k e t , t h u s h a d t o struggle hard to b e a c c e p t e d b y t h e c u s t o me r s . I n d u s t r y watchers were extremely skeptical of Tanishq and doubts were being cast over its prospects. Tanishq began by offering jewellery in the 18-carat gold range, with designs borrowed heavily from contemporary European brands. The company justified its decision saying that it wanted to be 'different' from the traditional Indian offerings. T a n i s h q p e r f o r me d v e r y b a d l y i n t h e n e x t t h r e e ye a r s , posting a huge loss in 1997-98, proving its detractors right. J a c o b Ku r i a n , T a n i s h q ' s c h i e f o p e r a t i n g o f f i c e r a d mi t t e d , " Tanishq, as a concept, was far too ahead of its times." Even if one agreed with Kurian, it could not be denied that Tanishq did commit mistakes.
Analysts decreed that the company's strategies were wary. A t t h i s p o i n t , T a n i s h q t o o k v a r i o u s s t e p s t o c o r r e c t t h e mistakes it had committed and very soon, posted its first ever operating profit in 1999. In 1999-00, sales doubled to Rs 1532 million against Rs 743.8 million recorded in 199899a n d r e a c h e d R s 2 0 0 0 m i l l i o n i n 2 0 0 0 - 0 1 . T a n i s h q f a r e d equally well on the export front also with heavy exports to UK, US, Australia and West Asia. T a n i s h q wa s t h e l a r g e s t o v e r s e a s c h a i n i n U S wi t h 1 ,2 0 0 outlets. In the year 2000, exports contributed 10% to the company's turnover. The story of Tanishq, once written off as a losing proposition, making a remarkable turnaround was an example of a company single-mindedly working to make its o wn ma r k i n t h e t r a d i t i o n b o u n d I n d i a n j e w e l l e r y ma r k e t . Behind this success was, of course, a wellplanned and well-executed marketing plan.
Background Note Ti t a n Wa t c h e s Li mi t e d wa s p r o mo t e d jo i n t l y b y Qu e s t a r Investments Limited (a Tata group company) and Tamil Nadu Industrial Development Corporation Limited (TIDCO). The company, incorporated in July 1984 in Chennai, was started in technical collaboration with France Ebauches (a French company), one of the world's largest manufacturers of watch mo v e me n t s . I n i t i a l l y i n v o l v e d i n t h e w a t c h e s a n d c l o c k s business, Titan later ventured into the jewellery businesses. The company was India's leading manufacturer of watches, marketed under the Titan and Sonata brand names with a25% share of the total domestic market.
Titan established its first manufacturing facility in Hosur, T a mi l N a d u a n d i t s f i r s t s a t e l l i t e w a t c h a s s e mb l y u n i t a t 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 Andin 1995, Titan changed its name from 'Titan Watches Ltd.' to' Titan Industries Ltd.' in order to change its image from that o f a w a t c h ma n u f a c t u r e r t o t h a t o f a f a s h i o n a c c e s s o r i e s 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 t h e s a m e family jeweller they had trusted implicitly f o r generations. Moreover, these jewellers made the jewellery to order and often bought back their products at the prevailing market rates. T h u s , f r o m t h e v e r y b e g i n n i n g , Ta n i s h q found it hard to o v e r c o me t h e I n d i a n c o n s u m e r ' s p r e f e r e n c e f o r b u y i n g 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 s a i d , " Wh e n we l a u n c h e d t h e T a n i s h q r a n g e , o u r d e s i g n s were not appreciated initially as they were believed to be e x t r e me l y We s t e r n . Al s o , we o f f e r e d o n l y 1 8 c a r a t g o l d ." Ov e r a p e r i o d o f t i me , T a n i s h q ' s r e s e a r c h r e v e a l e d ma n y other loopholes in its strategies.
Setting Things Right Tanishq found out that it had gone wrong mainly in two areas- the product proposition and retailing. Initially with a focus o n t h e e x p o r t m a r k e t , i t s d e s i g n s w e r e p r e d o m i n a n t l y Western, and the same line of jewellery was sold in India as w e l l . However, when it shifted its focus to the d o m e s t i c 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 i n c l u d e 2 2 a n d 2 4 c a r a t o r n a me n t s a s we l l . Ta n i s h q a l s o made attempts to redefine traditional styles in its designs. T a n i s h q r e a l i z e d t h a t , g i v e n t h e d i v e r s e n a t u r e o f I n d i a n ethnicity, it would have to cater to tastes of all regions. Therefore, the emphasis shifted from the erstwhile modern d e s i g n s t o m o r e e t h n i c o n e s a n d t r a d i t i o n a l o r n a m e n t s (based on designs from various states) were launched. The c o mp a n y a l s o b e g a n s e a s o n a l a n d l o c a l i z e d p r o mo t i o n s 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 o n l y g o t i n mo r e I n d i a n mo t i f s b u t a l s o s t a r t e d s t o c k i n g typical designs from Tamil Nadu in Mumbai and those from B e n g a l i n De l h i . Th e s e d e s i g n s , t h o u g h I n d i a n , p r o v i d e t h e 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 , 5 0 0 d e s i g n s b a s e d o n c u r r e n t t r e n d s a n d t h e f e e d b a c k f r o m s t o r e s . At l e a s t 1 0 % o f t h e s e d e s i g n s we r e c h a n g e d every quarter and fresh ones were added to the stock. Tanishq gave complete freedom to the retail outlets to picku p d e s i g n s , wh i c h t h e y t h o u g h t wo u l d s e l l i n t h e i r s t o r e s . Al mo s t a l l t h e o u t l e t s s t o c k e d t h e ' b e s t s e l l i n g ' r a n g e o f designs, which did well across the country. T a n i s h q w a s now pitted directly against the t r a d i t i o n a l jewellers who were offering similar ornaments. In order to add some val ue 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 touchstone to t e s t t h e p u r i t y o f g o l d . A p a r t f r o m t h e f a c t t h a t t h e 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 1 9 9 9 , T a n i s h q introduced the revolutionary concept
o f caratmeters in its retail boutiques. The caratmeter used X-rays to give an accurate reading of the constitution of gold in the ornament within three minutes. Imported from Germany a t a c o s t o f Rs 1 million each, caratmeters t h o u g h expensive, proved to be the biggest USP for Tanishq in the coming years. Fact, its sales increased by 20 -30%. The concept was later o n h e r a ld e d a s a b o l d s t e p t o wa r d s professionalizing the I n d i a n j e w e l l e r y business. In an attempt to elbow out competition, Tanishq conducted tests on 10,000 ornaments selected at random. In some cases the caratage was found to be as low as 10% and almost 65% of the gold tested was below 22 carats. As the caratage offered was on the lower s i d e i n t r a d i t i o n a l je we l s , t h e je we l l e r s k e p t t h e ma k i n g charges very low to entice customers. This had become the norm all over the country. Tanishq had to struggle hard to break this convention. As the concept of caratmeter became more widely known, customers began to realize that the rates they were paying for Tanishq jewellery were indeed justified. A Tanishq official commented, "They have begun to understand the total value proposition that Tanishq offers." An all-India customer satisfaction survey conducted by Tanishq in 2001 revealed t h a t o v e r 5 0 % o f a l l T a n i s h q customers intended to make it their jeweller, replacing many l o n g s t a n d i n g r e l a t i o ns h i p s wi t h t h e t r a d i t i o n a l j e we l l e r . Wh e n Ta n i s h q wa s l a u n c h e d , i t s o l d mo s t o f i t s p r o d u c t s t h r o u g h mu l t i b r a n d s t o r e s . Th i s d i d n o t h e l p t h e T a n is h q b r a n d to make its mark. Having realized this,
T a n i s h q decided to set up its own chain of retail showrooms in 1998. This proved to be a very wise move as sales picked up a l mo st i mme d i a te l y. B y Ju l y 200 1 , it ha d 47 ' Tanis hq boutiques' in 37 cities – 12 were in the metros D e l h i , Mumbai, Kolkata, Chennai and Bangalore, the rest in smaller cities with a population of at least 0.5 million such as Trichy, Nagpur, Amritsar and Patna. T h e f o c u s o n s ma l l e r c i t i e s p a i d o f f we l l wi t h the annual g r o wt h b e i n g a s h i g h a s 1 5 0 % a s c o m p a r e d t o t h e 4 5 % growth in metros. The number of boutiques was expected to reach 50 by the end of 2001 and to 70 by 2002. Tanishq's efforts to standardize the price of its ornaments proved to be another milestone in its success. Gold prices differed across the country as they were based on different parameters concerning the local markets. In a bid to control gold price variations in different parts of the c o u n t r y , Tanishq decided to have a standard gold p r i c e across all its showrooms from March 2000. The standard price was made binding o n a l l T a n i s h q showrooms. Tanishq based its gold prices on international exchange prices, resulting in prices often being lower than the local market prices. Nangia said, "We already have a kind o f standard pricing in place, but this would r e p r e s e n t a formalization of that system to the public." Tanishq even had plans to link directly with the London Metal Exchange (LME) for daily quotes in the future. Tanishq set up an ultra-modern and large-scale manufacturing unit in Hosur, Tamil Nadu at a cost of Rs 600 million. The unit had facilities like
refining, alloying and stone casting and a dustextraction system that kept gold losses down to 2% of the raw material while local jewellers typically lost 810%. This in-house manufacturing facility was the main reason, which enabled Tanishq to charge the same price across the country. One of the company's most important initiatives was customer service enhancement. Tanishq launched a direct consumer contact programme and conducted surveys to monitor store walk -ins and footfalls and percentage of repeat customers. The company also kept the entry-level price as low as Rs 600(for a pendant) and offered a range, which far exceeded that o f f e r e d b y a n y o t h e r j e w e l l e r . Al l Tanishq outlets gave a100% return guarantee o n i t s b r a n d o f j e w e l l e r y a n d a l s o exchanged other jewellery after deductions depending on purity. A customer satisfaction measurement program was started w i t h t h e h e l p o f C u s t o m e r S a t i s f a c t i o n M e a s u r e m e n t Management (CSMM), an associate of IMRB. CSMM tracked customer satisfaction parameters for Tanishq on a quarterly basis. This gave the company the benefit of bench marking a g a i n s t l o c a l a n d i n t e r n a t i o n a l p l a ye r s a n d a l s o a i de d i n improving repeat purchases. As a result, Tanishq was able to directly link the remuneration of franchisees with customer s a t i s f a c t i o n . Th e c o mp a n y ' s c o r p o r a t e g o l d g i f t s c h e me ('When you want to say thank you, say it in gold'), launched in December 1998 proved to be a major success.
Tanishq d e l i v e r e d 5 0 , 0 0 0 c u s t o m i z e d g o l d c o i n s t o 0 . 2 5 m i l l i o n Maruti car owners nationwide as part of the 15th anniversary celebrations of Maruti Udyog. By 2 0 01 , th e s c h eme accounted for almost 5 % o f t h e t u r n o v e r a n d o v e r 3 0 corporate clients like Coca-Cola, the UB Group, Whirlpool, the TVS Group, Ceat and Liberty Shoes. The communication and promotion budget was increased from Rs. 65 million in 19992000 to Rs 100 million in 2000-01. A majority of this was spent towards advertising, while apportion was also earmarked for promotions tailored to match regional preferences. For instance, in New Delhi, which was Tanishq's single largest market, substantial promotions were c a r r i e d o u t . Th e R s 1 0 0 mi l l i o n w a s s p l i t i n t o f o u r p a r t s , comprising nationallevel spends (both electronic and print media), regional budgets, direct mail and research. For the first time, Tanishq initiated a long-term media plan, aiming to g i v e t h e b r a n d a r o u n d - t h e - y e a r presence and enhance awareness. The communication focused on design and quality instead of the price.
HOW DID TANISHQ TURN AROUND? Jacob Kurian, chief operating officer (jewellery), Tanishq isn't tired of saying that the story of his company mirrors a Bollywood movie. There's drama, celebration, then betrayal in the family, followed by action and, of course, a happy ending.Tanishq, the jewellery business group of Titan Industries is the blockbuster action thriller from the Tata group. After five years of consistent losses, the company, on Thursday, announced the completion of a dramatic threeyear turnaround culminating in annual sales growth of 39 per cent and profit growth of 318 per cent.During 200203, Tanishq recorded a sales turnover of Rs 389 crore (Rs 3.89 billion) -- at consumer prices. By 2007, it hopes to take that to Rs 800 crore (Rs 8 billion) Today, Tanishq has already become one of the top five retailers in the country. It contributes 40 per cent to Titan's business and is expected to account for 55 per cent by 2007.By then, Tanishq's profitability will also be good enough to offer 28 per cent return on deployment of 25 per cent of the capital.
Sales (Rs crore)
1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03
32 38 73 141 188 299 389
It's a long way for a company that almost folded up before it could turn in its first ever profit. Since, its launch, Tanishq has not only been grappling the tough market conditions but also internal strife and Doubting Thomases. "Many people believe we should not be here today. They have kept telling us that the business logic is against what we set out to do. But I am glad we have proved them wrong," says Kurian proudly. The estimated Rs 40,000 crore (Rs 400 billion) gold jewellery market in India is a rough one. There are over 300,000 jewellers, each powerful in his neighborhood. Till the last two years, national players were almost non-existent. One of the largest consumers of gold, the Indian household had a marked preference for 22-karat gold, as opposed to the 18-karat designs that jewellery chains worldwide chose to do their designs in. Not surprisingly, the skeptics were asking what was Titan doing in the jewellery business? In the late eighties, when India was facing a massive foreign exchange crisis, Titan, the watches division, was told to look for a way to earn its own foreign exchange. Jewellery seemed like a huge and interesting market to get into and Titan decided to set up Tanishq as a jewellery division that would be focused largely on exports.
However, by the time it acquired the skills and set up the plant, the world had changed. India no longer had a foreign currency problem, imports were easy to come by, demand had come down in the global market, supply had grown in Asia and margins had become very thin. Tanishq then decided to focus on the Indian market. In August 1992 a pilot plant was set up and production started in two years later. In 1996, Tanshiq launched its first store. It was a hitherto untried concept. The jewellery business in India was highly fragmented and ruled over by local players. There was no national jeweler that people could buy from, despite that India is the largest consumer of gold in the world. Clearly, the local satraps had a very tight stranglehold on their markets and it was difficult for a pan-Indian player to break into. Being ethical too was a problem. Titan estimates that up customers and the Government is defrauded of up to Rs 5,000 crore (Rs 50 billion) annually due to unethical business practices like under-karatage of gold, misrepresentation of quality and tax evasion. As a company which was part of the Tata group, known for maintaining high ethical standards, Tanishq prided itself on delivering customer value through a fair and transparent business model. But that wouldn't help. Till 2000, Tanishq could not find its feet in the market and its losses were mounting. In 1998-99 it showed losses of Rs 10.40 crore (Rs 104 million) though sales turnover was increasing. May 2000 turned out to be the defining period in the company's history.The then managing director of the company, Xerxes Desai had a choice between
Bhaskar Bhat and Vasant Nangia when it came to deciding who would succeed him. Bhat won and was anointed as the next managing director by Desai himself and Nangia became the chief operating officer. Nangia was the hands-on man at Tanishq. A twentyyear veteran of the group, he was the one who had charted out the expansion plans, which included increasing the number of exclusive boutiques to 67 from the then 30 and launching a new men's range of accessories. But a day after Bhat was announced at the successor to Desai, Nangia quit. He took along with him six senior executives of Titan. It was a blow that many thought would sink the company. "The entire sales and marketing team resigned on that day. The company was rocked by what happened. Many thought this would be finally the way Titan closed down its jewellery business. After all, we were in our fifth consecutive year of losses then," says Kurian.It seemed an ignominious way for a Tata company to go. And like Kurian says it was too soon for the movie to end. So, a new and admittedly inexperienced team was put together. The team had an onerous task on its shoulders. It had to not only stem the increasing losses shown by Tanishq and but also show some profits if the company was to remain in business. Tanishq had quite a few problems on its hands then. Its high decibel media advertising wasn't working. A stream of adverse media reports had instilled the fear that its shareholders would pull out anytime. And worse, it had very little time on its hands to show a turnaround.
But as Kurian saw it, Tanishq's woes were rather simple: There were just not enough customers in its stores."For a retailing chain, that's the worst thing that can happen: having no traffic in the stores," says Kurian. A customer survey revealed multiple problems. Despite its high-blitz ad campaign, many didn't know what Tanishq was about, others found it too expensive and some felt that the product was not for people like them. Either way, getting customers back into the store became a priority.
PROFITS GENERATED Year 1996-97
Profits generated (Rs crore) - 10.60
1997-98 K 1998-99 u
- 21.96 - 10.40
2000-01 r i 2001-02 a 2002-03
2.07 1.87 7.82
n Kurian and his team then decided to launch the fifth anniversary celebrations of Tanishq that would offer discounts to customers and induce them to come to the store.
The ploy worked. "We had customers waiting for the store to open. Sometimes we had to call the security guards because of the crowds. We just couldn't believe it," smiles Kurian. There were other minor tweaks made too. Ad campaigns now started to list out the products that Tanishq had. So bracelets, rings, chains, pendants were explicitly mentioned in each ad. A range starting at Rs 399 was launched.The aim was to bring down the price barrier significantly. Collections for the working women and a new set of contemporary designs were brought into the stores. Almost all of the efforts paid off. A year later, Tanishq had made its first ever profit in the entire existence of the company. It was a measly sum of around Rs 2 crore (Rs 20 million), yet it was a beginning.The next year, the company decided to write off some of the financial baggage it had been carrying. Profits generated dipped as a result but Tanishq was clearly on a revival. The company changed quite a few of its original strategies along the way. Tanishq had its first showroom in Chennai in 1996. Today it has over 60 showrooms in 47 cities. Only six of these are owned by the company. The rest are run by franchisees. The model has helped take away capital costs from the company and pass them on to franchisees who will invest money to help the company grow. In all, Tanishq managed to limit its fixed asset investment to Rs 27 crore (Rs 270 million).
Contribution to Titan's growth
Tanshiq contribution to Titan (in percent)
1996-97 1997-98 1999-2000
8 14 24
Post September 11 attack on the World Trade Center the volatility in the gold prices led to a steep decline in the demand for gold. In 2002, the gold demand declined by 19 per cent, from 843 tons to 680 tons.
However, Tanishq was on a roll. It grew its retail sales during 2002-03 to Rs 332 crore (Rs 3.32 billion) from Rs 239 crore (Rs 2.39 billion).Almost Rs 57 crore (Rs 570 million) came through corporate sales and exports. Corporate and institutional sales had become an unexpected money-spinner for the jewellers.
Today, Tanishq counts companies like Hindustan Lever Limited, Pfizer National Panasonic, UB Group, Tata Tea and Tata Chemicals among its clients."We saw corporate sales as a new route to customer acquisition. Institutional sales help us beat targets," says Kurian.
Since the last three years, Kurian and his team have brought in quite a few changes to the way Tanishq operates. A steady stream of jewellery collections each with its distinct target audience has been launched. Aria, for seven stone diamond jewellery, Hoopla, focused on diamond studded hoops and Collection-G for lower priced gold jewellery with an interesting twist are just a few lines that have come out of the Tanishq stable in the last three years. Manufacturing has been made more flexible. New Japanese manufacturing machines have been introduced at the Hosur, Tamil Nadu plant of the company. The emphasis is now on customisation according to customer demands. The challenges remain. Profit figures have yet to rise significantly. In 2002-03, on revenues of Rs 389 crore (Rs 3.89 billion), Tanishq made a profit of only Rs 7.82 crore (Rs 78.2 million).
A slew of national brands have sprung up. From Nakshatra to TBZ to Carbon, Tanishq has to battle a lot more at the market place. Yet, Kurian says now it's a great time to be in business. "We believe jewellery business is one of the few 'China-proof, WalMart-proof' kind of businesses," he grins.
CONCLUSION WITH THE QUESTION OF GLOBALISATION An Indian Brand, which can make big in the global market, is Tanishq from Tata Group of Industries. Tanishq is India's largest, most desirable and fastest growing jewellery brand in India. Tanishq today is India's most inspirational fine jewellery brand with an exquisite range of gold jewellery studded with diamonds or colored gems and a wide range of equally spectacular jewellery in 22Kt pure gold. Exquisite platinum jewellery and designer silverware is also part of the product range. Now the question arises why Tanishq will make a great Global Brand.
CONSISTENCY IN DELIVERING ON THEIR PROMISE: Tanishq promises superior quality jewellery with purity in gold. They claim and deliver the exact carats and weight that they promise. Impurity in gold and not delivering what was promised is one of the main problems the consumers face when going for gold purchase. Tanishq eliminated this and has built its brand in trust. Tanishq now stands for quality and purity. They even have gold meters where one can check the purity of gold. It is first and only jeweller who guarantees the purity of its gold jewellery and certifies the quality of its diamonds and colored gems in writing. Thus it has established itself as a highly ethical player in a market that was rated as having the highest incidence of under karatage (Bureau of Indian Standards).
SUPERIOR PRODUCTS AND PROCESSES Widely acknowledged as a design leader, Tanishq is known for its ability to develop specialized design collections. Tanishq is the only jeweller that houses a full-fledged design studio with a team of several international award winning Indian designers. Tanishq was recently adjudged the Most Admired Jewellery brand (for the third consecutive time) in India at the Images Fashion awards 2004. It has also been judged as the Images Retailer of Year in the fashion category. Tanishq jewellery is crafted in one of the world's most modern factories. The factory complies with all labor and environmental standards. Located at Hosur, Tamil Nadu, the 1, 35,000 sq. ft. factory is equipped with the latest and most modern machinery and equipment. Every product at Tanishq is painstakingly crafted to perfection. Diligent care and quality processes ensure that the Tanishq finish is unmatched by any other jeweller in the country. Distinctive positioning and customer experience. Yet another aspect of Tanishq that sets it apart is a whole new jewellery buying experience offered by its exclusive retail showrooms. Tanishq has not only developed a national retail chain with uniform and transparent practices and policies but also maintained consistency of retailing standards across all these showrooms on an ongoing basis.
It has a distinctive positioning in India as it is known for its high quality and jewellery with international standards. Also, since they have many stores across the country they give guarantee on their jewellery and also offer to repair it free of cost anywhere across the country.
AN ABILITY TOP STAY RELEVANT Tanishq was established in 1995 and within ten years it has become the largest and most desirable brand in the jewellery segment in India. They have constantly introduced new offering to their consumers and have come up with new innovative ideas. They have excellent after sales service and they have been committed in providing good and honest service.
A COMPELLING IDEA: The idea of having branded jewellery was a totally unique idea. Coupled with a promise of purity and a unique experience was very compelling. It persuaded a lot of people especially the people in the metros and semi metros to leave their traditional jewelers and go for Tanishq. There was always lack of trust among the consumers for their jewelers. Tanishq removed that with a promise of purity. Hence what it did in India it can replicate across the globe. Offer a totally new perspective to Jewellery buying especially when it comes to exquisite oriental jewellery. Oriental Jewellery across the world is usually found in flea markets or place like China Town or Indian Markets. Going into the main markets in the Western world will give Tanishq the edge.
A RESOLUTE CORE PURPOSE AND SUPPORTING VALUES: Tanishq maintains its quality standards in all its products wherever they are sold. This shows that they have a resolute core purpose. This is what they will have to maintain even when they global. They have the right range of products for the different markets across the globe. Only they have to remember their differentiating factor. The differentiating factor for Tanishq will be the experience and quality they will be giving the consumer when s/he comes to the store.
A CENTRAL ORGANISATIONAL PRINCIPLE: Tanishq has to translate what its brand signifies to the whole of their organizations. They have done that exceptionally well in the Indian context. A visit to any Tanishq outlet shows that. The people behind the counter are polite and courteous. They know that they are there to deliver the promised exceptional services. The people at Tanishq know what is required of them and hence this will prove beneficial when Tanishq goes global to maintain its global standards. Tanishq, as and when it decides to go global will make a great global brand. As we can see they have all the characteristics, which all the global brands have, it can be said that Tanishq has all the potential to become a leading global brand.
BIBLOGRAPHY www.rediff/business.com www.tanishq.co.in www.wikipedia/tanishq.com www.google.com
OTHER SOURCES:Newspaper Business magazines.
INDEX / CONTENTS 1. Introduction about Tanishq 2. Launching of Tanishq 3. Product 4. Recent development 5. Promotion 6. Price value 7. Tanishq in India 8. Tanishq’s competitors in India 9. Tanishq’s market research and survey 10.
How did tanishq turnaround
Conclusion with Globalization