Product: Gold and Diamond Jewelry

Firm: Tanishq

CONTENTS

1.Executive Summary

2.Current Marketing Strategy

3.SWOT Analysis

4.Objective and Issues

5.Marketing Strategy

6.Action Programme

7. Budget Control

Indian Gems And Jewellery Industry

• Gold jewellery demand in India was around 558 tonnes in 2007.• Largest consumer of gold (around 27 percent of global

consumption) and also the largest diamond processor (around 90 percent by pieces and 55 percent by value of the global market).

• Domestic diamond jewellery market is estimated at around 115 billion in retail value during 2007 and is expected to increase at an annual rate of 8.5-9%.

• Highly unorganized and fragmented with 96 percent of the total players being family owned businesses.

• India is also home to around 450,000 goldsmiths, 100,000 gold jewellers along with 6,000 diamond processing players and 8,000 diamond jewellers.

Tanishq

• Started in 1995, Tanishq is the jewellery business group of Titan Industries Ltd - promoted by the TATA group.

• The product portfolio includes jewellery for everyday wear and for occasions, in 22-carat gold, diamonds and precious gemstones.

• The jewellery designs range from traditional to contemporary and are available in several styles such as jadau and kundan.

• Tanishq also produces platinum jewellery• Tanishq collaborated with POND’s FEMINA Miss India

for making beautiful Crown.• Tanishq grew by 57 per cent to Rs. 2,028 crore during

financial year 2008 on the back of retail expansion and improvement in per-store growth.

• There is an immense scope for further growth as Tanishq comprises a small share of the overall Rs 70,000-crore Indian jewellery market i.e. 2.89%.

• Core Competencies• Consistency in delivering on their promise • Superior products and processes • Distinctive customer experience

Core Competencies

• Consistency in delivering on their promise

• Superior products and processes• Distinctive customer experience

SWOT ANALYSIS

Strengths

•Strong brand Image•Perceived as high quality Indian brand •Strong and Focused Brand Portfolio•Established Design Studio•National retail chain of exclusive stores.

:

Weaknesses

•Lower market share.•Higher prices than competitive market price.•No online selling

Opportunities

•Growing economy and demand•Growing disposable income •Growth in women executives•Product & Brand extension to other categories•Emerging modern / organized retail markets

Threats

•Competition from unorganized sector of industry•Entry of other international brands giving rise to competition

Environment Analysis: Porter’s five forces

• Buyers Power: Low to Medium• Bargaining Power in gold jewellery is limited to fabrication charges only. • Supplier Power: Medium• With negligible domestic production of gold and gemstones, India relies

largely on imports. Bargaining power of Indian Ind. is enhanced by the fact that India is largest consumer of gold.

• Degree of Inter-Firm rivalry: High• Bulk of the industry in India is concentrated in the unorganized sector

and employs around 1.5 million workers serving over 0.1 million gold jewellers and over 8,000 diamond jewellers. The majority of India's diamond workforce is employed by small units that process diamonds on a job-lot basis. However, the share of the unorganized sector has declined in recent years.

• Barriers to Entry – Low• Low capital requirements, but skilled manpower is essential.

Ability to invest in more advanced technology is becoming increasingly critical.

• Threat of substitutes – Low• From historic times, gold has played a pivotal role in the

Indian social fabric. Gold is valued in India as a savings and investment vehicle and is the second preferred investment behind bank deposits. Gold is also the preferred metal in jewellery. Domestic diamond jewellery demand is low, but increasing at a high rate because of higher incomes and aggressive marketing strategies.

PRODUCT PORTFOLIO

Tanishq offers a wide product portfolio through its different collection and tries to cater

all the segments according to segmentation followed in the present jewelry industry.Basis of Segmentation Segments Collections

Style Traditional Gold Plus

Contemporary Aria, Accolades, Everydays

Fusion Fashion Earrings, Colors of Royalty, Moham

Occassion Weddings Wedding Collection

Special Occasion/ Festivals Moham, Aleya

Everyday Wear Everydays

Material Plain Gold 22k Wedding Collection, Gold Plus

Diamond Zoya, Diamonds Collection

Gems and Stone Studded Gold Colors of Royalty, Moham

Kundan and Polki Aleya, Kundan and Polki

Solitaire Solitaire

TARGETING

1. Women, progressive and modern, who still values tradition

2. Men at the age group of 25 and above.

POSITIONING

Tanishq’s Comparison with other Market Players

Tanishq Other Branded jewelers

Local Jewelers

Sourcing Of Raw Material

Gold Procurement from the local jewelers.

Direct Access to the Gold Mines in the World Market. (Ex. Rajesh Exports Ltd.)

Procurement from the local market

Gold Wastages in manufacturing process

.3% wastage, lowest in the world

Higher wastage because of lower economy of scale

Higher Wastage.5%-1%

Retail Distribution Network

Wide distribution through Retail stores (with over 100 stores, largest in the country)

Wide distributionthrough Retail stores, Online Portals, Shopping Malls

Single Shop Model

Designs Variety in designs Variety in designs Not very wide range of variety

Purity of Gold High degree of purity High degree of purity Impurity and blending is common

Making Charges Rs. 65-160 Rs. 115-345 Negotiable- Rs 40 - 200

Consumer Analysis: 7 O’s

Occupants(who they are)

Women in the age group of 15-60Men in the age group of 18 – 50College going studentsExecutivesHouse wives

Objects(what they buy)

Necklace, Pendant, ChainsEar ringsRingsBangles, BraceletsNose PinAnklets etc.

Occasions(When they buy)

Regular useMarriages/ functions/FestivalsPartiesInvestment in gold is seen profitable

Organization(Who is involved in the buying)

Consumers-Those who buy for themselves Payer – Those who pay for the use of othersInfluencers like friends, colleagues, family members, sellers

Objectives(Why they buy)

Custom/Tradition AccessoryStatusGiftsInvestment

Consumer Analysis: 7 O’sOperations(How they buy)

Information search-Spread over few days, through word of mouth, past experiences, learning from the experiences of others, television, and point of sales. Evaluation- Based on intended purpose i.e. personal use, gift etc., price, brand image, quality, collection, availability of desired product Purchase decision- Based on the evaluation done, purchase decision is made which is influenced by family, friends and selling agents

Outlets(Where they buy)

Local Jewellery Stores (Unbranded jewellery)Exclusive Stores (For Branded jewellery)Shopping MallsOnline Retailing

Marketing Strategy:

Goals & Objectives

1. Increasing penetration in domestic market

- Aggressive promotion techniques

- Shop in Shop concept.

- Expanding Gold Plus.

 

2. Going abroad in order to diversify its revenue portfolio.

- Through more global expansion.

- Tapping online foreign market.

New Product Collection:Product Need/benefit Price range Target Group

Cufflinks Cufflinks are the widest selling men’s jewellery product.

They can be made to be available in the price range of 10000-35000

Working or office going men in the age of 25 and above.

Brooch Widely selling fashion accessory.

In the range of Rs 5000-10000 Tanishq can make a foray in men in the age group of 19 and above who are fashion conscious.

Rings Tanishq can focus on engagement rings as it is the time in men’s life when he likes to buy an exclusive ring.

In the price range of 25000- 200000.

Men of age group 25-30, typically falling in the marriageable age.

Chains Chains with pendants for men in sleek, executive designs.

The price range of the gold chain along with the pendants can be begin from 50000 onwards

The target customers of this range can be men of age group 25+.

Bracelets Tanishq can bring out a range of casual looking, smart bracelets.

This piece of jewellery can be priced around the price range above 15000.

Generally worn by young fashion conscious men in the age group of 20+.

Pricing Strategy for the year 2009-10

• Tanishq brand will continue to have perceived value pricing, though the premium paid will be a bit less to penetrate into the marriage gold market.

• Offering special discount of 10% (shared equally between the franchise & the company) on jewelry purchased for the marriage. It will be signified as someone buying gold(or diamond converted to gold based on value) in excess of 100gm

• Tanishq can save 7-11% margin earned by the franchisee through selling online and pass a part of the same to the online consumer.

• Gold plus will continue to have value pricing and being a lucrative option for consumers looking for 22 karat gold in sub urban areas.

• Pricing for the new men’s collection that will be launched next year will also be in line with our current perceived value pricing

Promotion Strategy for the year 2009-10

• Personal communication channels • Non –personal communication channels

print media [vouge,femina, cosmopolitian } and business magazines for men’s collection

broad cast media

display media

Event and experiences

Online selling

Competitors Website ReviewParameters\Brands Tanishq Gili D' Damas Eros

Brand Ambassador - Bipasha Basu Neha Dhupia Karishma Kapoor

Selling Online No Yes Yes No

Product Range Very Low High Medium Limited

Attractiveness Very Good Good Average Average

Occasion wise Jewellery No Yes Yes No

Navigational Ease Low High High Medium

Price Range No 5000-50000 1000-70000 No

Store Locator Yes Yes Yes No

Variety Very Low High Medium Limited

Gift Ideas No Yes No No

Requirements for setting up an e-commerce outlet-

Server

Catalogue and

shopping cart

Payment processing systems

Order fulfillme

nt and Customer Service Systems

Saves money (high overhead margins).

Will provide the consumer a wider choice

A wide increase in the market (people in any city, any country could buy the product.)

New distribution network that works 24*7, 365 days a year and helps make sale even in those

areas where retail outlets have not been established

Advantages of Selling Online

Feature to attract customers to buy jewellery online

Talk to our experts /jewelry designer

Design your own jewelry

Auction for limited / special edition of jewelry

Save online / online harvest scheme

Best sellers

Tanishq experience

Gift your loved ones

The way ahead….

• At the present times when gold and related metals offer one of the highest returns and the share of the organized sector is low, the growth potential for a company like tanishq is very high. To attain that growth the company needs to be innovative in its approach towards the designing and promotion of its various range of products.