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June 19, 2000
The Rediff Business Special/Nikhil Faleiro
Jewellers to the nation
Titan Industries, which seemed to have acquired the Midas touch in reverse till the last year, has turned the tables on misfortune. Apparently, there's nothing it can do wrong with its exclusive jewellery line Tanishq.
Four years ago, everything was going wrong for the company. Its designs were not finding any takers, the 'boutique concept' while selling jewellery was not catching on and the company bore the brunt in terms of huge losses year after year.
But times have changed for Titan. The company has pulled itself back on track: both, in terms of sales in the domestic market and the turnover on the exports front. After a breakeven turnover of Rs 1.50 billion this year, Titan is hoping to grab 2 per cent of the Rs 400-billion Indian jewellery market over the next five years. The company is riding high with a six-fold increase in sales since 1997-98 the company. And if things go the way Tanishq plans them to, then its dream of becoming the jewellers to the nation would soon be realised.
Apart from the domestic market, Tanishq today is the largest overseas chain in America with 1,200 outlets. Exports to other countries like Australia and Britain have also picked up and today exports contribute 10 per cent to the company's turnover. With its large and loyal brand following, Tanishq is looking at neighbouring countries where both the Titan and Tanishq names are known.
As Vasant Nangia, vice-president jewellery, says, "Nothing was going right from the very beginning. So we had to change our strategy from the very start. The problem was that while everyone appreciated our designs, they just said that the jewellery was not for them."
With its focus on exports, Tanishq's designs that were being introduced in India were conceptualised for the Western markets. Hence, the designs were very European and did not go down very well with the traditional Indian consumer. Moreover, the company aimed to promote gold watches more than jewellery. This proved to be a major setback for Tanishq as the domestic consumer refused to purchase a westernised concept.
Thus, to survive in its country of origin, despite having made some impact abroad, the company decided to change its strategy for the Indian consumer.
The first step was adding a range of plain gold 22-karat jewellery in 1997 to the existing 18-karat range: surveys revealed that gold jewellery was not bought for design as much as for value.
Tanishq also gave up the shop-in-shop concept and began retailing its products. In 1998, it came up with its range of studded jewellery. Admits John Verghese, divisional head sales and marketing, Tanishq, "This was the most important component of the market which we had till then ignored."
And it was in late 1998 that Tanishq woke up to the fact that the Indian consumer wanted value for money and designs which he could relate too. As Verghese says, "We decided to transpose designs."
So the company decided to stock Bengali designs in Delhi, and typical designs from Tamale Nada in Bombay. These designs provided a variety to the people in that area." The Indian consumer looked for a typically Indian design, but with an 'international finish': once Tanishq was able to deliver this, half the battle for it was one.
Today, Titan has over 3,500 designs. As Nangia says, "It's a matter of honor, a status symbol today to wear Tanishq jewellery."
By following an 'open policy', its 30 showrooms in 25 cities across India have the freedom to pick and choose what they feel will sell in their particular region. It plans to spread to 75 cities soon.
The company does not mind changing the designs as often as the customer demands. After all, it has a state-of-the-art jewellery-manufacturing unit at Hosur in Tamil Nadu. Set up at a cost of Rs 600 million, the unit has facilities like refining, alloying and stone-casting. This in-house manufacturing also accords Tanishq the facility of maintaining uniform pricing across the country.
Yet, the biggest factor that has worked in Tanishq's favour has been the Tata name "which spells reliability".
This is the one aspect that Tanishq decided to focus on during its aggressive advertisement campaigns. Apart from allowing customers to test the purity of the products, Tanishq went a step ahead by giving 100 per cent guarantee on all its jewellery: if it is found impure, it will be exchanged.
Tanishq, which was once considered an elitist and foreign brand, can now be seen on many domestic hands. But Tanishq in its bid to relentlessly pursue excellence is not satisfied with this alone. It even introduced a scheme whereby a customer could exchange any other jewellery for a Tanishq item, after deducting the cost of the original piece.
As Verghese says, "We are Indian, so we should not forget the masses." Tanishq then adopted a flexible pricing policy, which has worked wonders for the company. With prices ranging from Rs 600 for a pendant to Rs 250,000 for a bracelet, Tanishq became accessible to a wide variety of people from the ordinary working women to traditional families who shop for jewellery during the wedding and festive seasons.
In a bid to expand this base, Tanishq also decided to concentrate on smaller towns to build up volume sales. Hence, it has focussed on Ahmedabad, Varanasi and Indore.
Nangia admits, "There is huge demand during festive occasions. We are still learning the intricacies of the local markets: once we are more established in these marts, our sales will skyrocket."
By targeting weddings and festivals, and aiming to rope in big companies for corporate gifts, Tanishq has gradually moved away from its 'elitist-snob' image to a well-designed, quality product. With designs for all and by catering to all segments of the society, Tanishq's dream of becoming jewellers to the nation may soon become a reality.
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