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Submitted to

Prof
Business Strategy
H.W.Mishra
Formulation

Tanishq Jewellery | Rimjhim Varma


10PGHR43
Acknowledgement

I would like to extend a heartfelt appreciation to Prof. Harsh W. Mishra , our project guide, who
explicated various management basics dealing with strategy and its applications and abridged my
theoretical knowledge of basic strategic issues, competencies, roles, and functions and the
application of concepts in real time industrial problems. Doing the project, brought us in touch with
real time formation and implementation of strategies, their failures and successes and the lessons
learnt from them.

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EXECUTIVE SUMMARY

Jewellery is one of the last great commodity frontiers in India; it has remained so because
this market is very fragmented, very unorganized. Tanishq has successfully taken on the
challenge of transforming this frontier into a reliable consumer space by bringing to it all
the virtues and benefits that branding offers".

- Harish Bhat, CEO, Tanishq

Throughout the project, we came across various key findings about Tanishq. While Tanishq and a few
other regulars do occupy women's mind space, the good news for other brands is that women are not
unduly influenced by the aspirational longings of their hearts. A long history of fascination for the
yellow metal as a status symbol and as an instrument of security and its easy convertibility to cash has
most women, both working and non-working, picking up gold jewellery without precious stones as
their most preferred jewellery. With the economy moving upwards and income levels increasing, gold
consumption in India is showing tremendous growth. WGC reports that there has already been a 50
per cent increase in the first half of 2005 over the same period last year! With established jewellery
manufacturers (read brand owners) recognizing the everlasting appeal of gold among Indian women,
jewellery brands in the future might see more visible usage of gold.

But they have to consider the upcoming competition from other major players as well. Companies like
like Asmi, Orra, D'damas, Oyzterbay, Gili and Carbon can have pose a serious threat in future to the
market share enjoyed by Tanishq currently.

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When Titan launched Tanishq in 1995, the jewellery industry in India valued at Rs 40,000 crore, was
mostly unorganized, with around 3.5 lakh players. India was the second largest consumer of gold in
the world after USA. Before 1992, only the Metal and Mineral Trading Corporation and the State
Bank of India were allowed to import gold. In 1992, as part of economic liberalization, the
government abolished the Gold Control Act of 1962, allowing free import of gold. In 1993, private
companies were allowed to enter the hitherto restricted gold and diamond mining industry. Foreign
investors were allowed to hold up to 50% equity in mining ventures.

In the 1990s, a number of brands entered the Indian jewellery market. In 1995, Mumbai based
jewellery exporter, Gitanjali Jewels, started selling 18-carat gold jewellery under the brand name of
Gili. Su-Raj (India) Ltd. launched its 22-carat gold and diamond jewellery in 1997. Other well known
domestic players included Tribhovandas Bhimji Zaveri, Mehrason's and P. C. Chandra. Among the
foreign players who entered the market were Cartiers, Tiffany, De Beers and Ashton Mining.

Titan realized that there was a huge untapped market for branded jewellery in India. The critical
success factors in the business were quality, fashionable design, and good after-sales service. Titan
also observed that the changing lifestyles demanded lighter and trendier jewellery.

After its launch, Tanishq faced several problems. With its original focus on exports, Tanishq's designs
had been conceptualized for the Western markets and were introduced in India without any
alterations. Formal consumer surveys showed that though brand awareness was quite high, it suffered
from several negative perceptions. Many potential customers thought the products were over priced
and associated the brand only with the rich.

Hence, Titan decided to change its strategy on two fronts:

 Value proposition
 Retailing.

Since the European designs in 18-carat gold did not find any takers in 1997, Tanishq introduced 22-
carat ornaments. Customer surveys revealed that gold jewellery was not bought so much for design as
for value. Titan also decided to do away with the shop-in-shop formats and started retailing its
jewellery through exclusive Tanishq outlets from 1998. Titan realized that, given the diverse nature of
Indian ethnicity, it would have to satisfy the tastes of all regions. So, the designs became more ethnic.

Titan also decided to transpose designs by stocking Bengali designs in Delhi, Keralite designs in

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Tamil Nadu and typical designs from Tamil Nadu in Bombay in order to appeal to a variety of people.
The same year, Tanishq entered the studded jewellery segment, which it had ignored for long. Titan

also tapped institutional customers also. In 1998, it launched the corporate gold gift scheme - 'When
you want to say thank you, say it in gold'. In 1999, Tanishq delivered gold coins worth Rs. 20 crores
to Maruti Udyog Ltd., to be given away as gifts to Maruti car owners. In early 2000, it made
miniature gold cars for Hyundai Motors to be given to select dealers.

The Tanishq strategy for the coming couple of years relies on two things —increasing penetration in
the domestic markets and going abroad in order to diversify its revenue portfolio.

SWOT Analysis

Strength

• Strong financial backup from Tata

Since it’s a Tata brand, it has huge capital base and strong financial backup to expand itself into global
market and cater to Indian needs also.

• Over 15 years of expertise in retailing designer jewellery

Tanishq was coined from a combination of Tata/Tamil Nadu and Nishq (meaning a necklace of gold
coins) and was launched in 1994 as a range of jewellery and jewellery watches meant for the European &
American markets. So the 15 years of experience seems quite significant for its brand value.

• Awarded most admired brand and Retailer of the year by Images Fashion

Since its inception, Tanishq has been winning accolades and awards all over. And it is the most admired
brand in India.

• India’s only national jewellery retailer

Currently it operates in 117 stores in 70 towns which are again situated at prime high street locations. Most
of the stores are operated by franchisees

• Innovative and modern style

The objectives which Tanishq caters is ‘superior craftsmanship, design expertise, product innovation, and
guaranteed quality’.

• 70% market share

Tanishq captures 70% of the market shares in branded jewellry market in India.

• Has had a 50% sustained growth

During the past 5 years, it has shown a tremendous growth rate of 50% and has been able to sustain it.

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• Excellent & outstanding advertisement strategy

It has been sponsoring beauty pageants and its brand ambassador is regarded as Amitabh Bachan which has
been successful in creating a mark in the minds of the segmented set of customers.

Weakness

• Loss of talented skilled work force

As there are various foreign players entering Indian market, so there is a shift of talented skilled gold
craftsman and other skilled workforce into these foreign companies.

• Saturation of Indian market

Indian culture and traditions have various rituals and functions where the gold passes form ancestors and
there is a lot of gold ornaments and jewellery. And it is not a perishable commodity so there is no dire need
of jewellery except wedding events.

• Rising Gold price

The Gold price is soaring high. It has reached its all time high equivalent to 19513.00/10g and is expected to
rise higher. So the increasing price has a negative effect in the demands of the consumers.

Opportunities

• Big potential for growth in US, UK, Canada, with high disposable incomes

Now since the Indian market is quite saturated but the there is a huge potential that lies in the US, UK and
other such markets. There is a large segment of customers with high disposable incomes. So there should be
appropriate strategy to target such customers by showcasing Gold as a valuable investment and fashion
statement.

• Gold is an investment class asset

In the global meltdown that has affected the mentalities of gold customers can be tapped with a different
strategy. Gold could be viewed as a investment class asset. It will help attract consumer’s conscience about
current recession.

• Huge NRI population in target markets will help capture significant market share

There is a large NRI population who value traditional Indian jewellery but are not able to avail it outside
India. So they remain as one of the most potential customers for Tanishq. Even this can help in attracting
foreign customers.

• The Wedding Market

The Indian weddings market is the largest in the world. Every year the figures are growing tremendously.
This in turn is increasing the demand for gold in the form of jewellery.

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• Branded jewelry is 10% of the market

There is absence of hallmarking in non-branded jewellery. Increased investment by industry bodies (DTC,
PGI, WGC) is spurring rapid growth of branded jewellery market in India. And Tanishq stands as the first
branded jewellery player, so it has got the maximum opportunity to explore the market of branded jewellery
and increase its expansion.

• Globalization

With the advent of globalization the laws of entering into different countries is quite relaxed. The import
duty is also lessened, so it gives an opportunity for Tanishq to explore such markets.

Threats

• Local Jewelers

Since 90% of the market is still ruled by the local jewelers so it has become very hard of the branded
jewelers to establish them as the local jewelers have developed certain kind of relation and trust amidst their
customers

• Government Regulations

There are still various countries where the government regulation upon gold is quite higher. And in addition
to that as gold ratio decides the currency of the country so the government has certain set of regulations on
the manufacturing capacity etc.

• Language and culture barriers

As Tanishq has entered the US,UK markets, there exists various culture barriers which needs to be
understood. In order to tap the potential customers we need to understand their needs, their culture, their
events etc. Tanishq needs to cater to their needs by customization of their jewellery pattern.

• Strong retail presence of competitors in US, UK and Canada.

There is a large presence of retail stores in countries like US, UK and Canada where Tanishq is currently
focusing on. This pose a serious completion to Tanishq to establish as a global leader in the gold market.

• Reluctance of consumers at large to spend on luxury items in these times of recession

One of the biggest threat that is harming the market is the recession. People do not want to spend money on
Gold ornaments and jewellery. As the circulation of money is already low in the market so people are very
reluctant on spending heavily on items of luxury.

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INDUSTRY ANALYSIS
The Indian branded jewellery market, though nascent, grew at the rate of 20-30% during 1998-2000.
Besides Tanishq, other major players included Intergold, Gili and Carbon.

However, in the Rs 400 billion Indian jewellery market, Tanishq's share was not even 1%.

Not willing to accept this as a 'poor show,' Tanishq saw it as a vast opportunity instead. The company
planned to attain a 2% market share in the next few years. The jewellery market is one of the largest
consumer segments in the country. It has an estimated 2, 50,000 retailers with no national or
international brand and no corporate player.

Titan believes that this market is right for consolidation. A consumer-oriented, highly ethical
corporate player will have great opportunity. Our growth rates in the past three years have fully
substantiated this hypothesis." Tanishq had ambitious plans to invest in information technology and
utilize Intranets and the Internet to link all of its showrooms to one another. There were also plans to
do online monitoring of sales and design popularity as well as using the Internet to place orders. The
Intranet was to contain a photo collection of all the designs in all the stores so that even that not in
stock in a particular store could be ordered by customers. In a highly innovative move, Tanishq tied
up with Countrywide Finance for providing pre-approved credit line to the customers at selective
outlets. This was expected to boost sales significantly in the future. In May 2000, Tanishq unveiled
plans to surpass its parent company's turnover by 2002.

TANISHQ STRATEGY

Tanishq challenged the age-old jeweller'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.

Tanishq also introduced professional retailing in the dis-organised Indian jewellery bazaar, where
women can shop with comfort and peace, without worrying about the purity of the jewellery they are
buying, as well as, select from the best jewellery collections available in the Indian market.

Tanishq today is India's most aspirational fine jewellery brand with 91 stores in 64 cities, with an
exquisite range of gold jewellery studded with diamonds or coloured gems and a wide range of
equally spectacular jewellery in 22Kt pure gold. Exquisite platinum jewellery is also part of the
product range.

Gold market in India

Jewellery play a significant role in Indian customs and traditions, making this sector integral to the
economy and one of the fastest growing industries in the country. Worldwide, the gems and jewellery
industry has been growing at a good pace and is currently estimated at over US$ 130 billion. In India,
it accounts for nearly 20 per cent of total Indian exports. It provides employment to 1.3 million people
directly and indirectly.The Indian market is laden with gold jewellery of varying karat age, which has
seen huge appreciation in value terms in recent times.

Gold Jewellery Becomes Fashion Accessory


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Till the early 1990s, the average Indian bought jewellery for investment rather than for adornment.
Jewellery made of 18- karat gold was not favoured as it was considered a poor investment.
Confidence in the local jeweller was the hallmark of the gold jewellery trade in India. A jeweller or
goldsmith in a local area had a fixed and loyal clientele .The buyer had implicit faith in his jeweller.
Additionally, the local jeweller catered to the local taste for traditional jewellery.

However, since the late 1990s, there was a shift in consumer tastes: women were increasingly opting
for fashionable and lightweight jewellery instead of traditional chunky jewellery. There has been a
constant rise in demand for lightweight jewellery, especially from consumers in the 16 to 25 age
group, who regarded jewellery as an accessory and not an investment. The new millennium witnessed

a definite change in consumer preferences. According to Samrat Zaveri, CEO of Trend smith,
"Research shows that the Indian jewellery sector is in the transition phase with consumers' desire for
possession of jewellery for its aesthetic appeal and not as a form of investment."

Tanishq - Strategies for Wooing Customers

In the late 1990s, players in the branded gold jewellery market formulated strategies for wooing
customers. According to Jacob Kurian (Kurian), Chief Operating Officer of Tanishq, the challenges
were many.

As the jewellery market was highly fragmented, lacked branding, and allowed many unethical
practices to flourish, Tanishq worked hard on a two-pronged brand-building strategy: cultivate trust
by educating customers about the unethical practices in the business and change the perception of
jewellery as a high-priced purchase.

Said Kurian, "We are changing the attitudes of customers from blind trust to informed trust." To
increase its market share, Tanishq formulated a strategy for luring people away from traditional
neighbourhood jewellers. Tanishq's strategy was to create differentiation and build trust.

The first part of the strategy was to provide a point of differentiation in a highly commoditized
category – which is the whole point of branding.The second part of the strategy was to project
Tanishq as an unimpeachable mark of trust. If differentiation plays the role of primary attraction, trust
takes care of lifelong loyalty. One way to create differentiation was through design.

The emphasis had to be on design because local jewellers could offer to design any pattern according
to the customer's specifications. For a national brand a generic design concept with regional variations
had to be evolved. For this, Tanishq set up a seven member in-house design team and also outsourced
designs from freelance designers.

The designers travelled the length and breadth of the country to get feedback on Tanishq's designs and
learn about customer preferences. On the basis of this feedback, each showroom could select the
designs it would carry. To stay ahead of competition from local jewellers, Tanishq decided to focus
on quality control. In 1999, it introduced caratmeters which showed the purity of gold.

In fact, Tanishq's USP was the purity of its gold. Accordingly, the company's ad campaigns
emphasised the purity aspect of all Tanishq ornaments. In November 2002, Tanishq introduced a new
collection of jewellery called 'Lightweights.'
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The collection featured neckwear, earrings, bangles, rings and chains in 22 karat gold with prices
starting at Rs 1,100. It also launched Lightweight Diamonds, with prices starting at Rs 3,000. Tanishq
focused not only on urban markets, but small town markets as well. Real estate was less expensive in
the small towns than in large urban centres.

GOLD HARVESTING

Tanishq’s “Golden harvest Savings Scheme” is one of the most lucrative savings schemes, that
enables to save each month with Tanishq and plan for wedding jewellery purchases. Your monthly
instalments are safe with Tanishq, whereas savings at home could easily get spent. This scheme
provides with much better returns than other saving options like bank deposits or post office savings
schemes. In addition, Tanishq’s special bonus at the end of the scheme period helps you stretch your
jewellery budget.

You need to invest only Rs.500/- per month to enrol. You could also deposit a larger sum, as long as
they are in multiples of Rs.500/- You can choose from two convenient savings scheme options- an
Annual Plan (12 month instalments) and an Extended Plan (18 month instalments).

BONUS:

• 60% of monthly instalment in Annual Plan

• 130% of monthly instalment in “Extended Plan”

At the end of the scheme period, pick up Tanishq jewellery of your choice worth the amount
deposited plus the BONUS

Golden Harvest Scheme is a unique and systematic scheme to help you plan your jewellery
purchases in advance. Under the scheme, a member is required to make a monthly payment of a
minimum of Rs.500 or in multiples thereof for 15 months. At the end of the term, the company will
add a bonus equal to one monthly instalment and the member can buy any piece of jewellery from the
Tanishq for the accumulated savings. For example, if you contribute a monthly instalment of Rs.500
under the scheme, then in 15 months it will add up to 7,500. The company then adds its contribution
equivalent of one monthly instalment i.e. Rs.500. So your accumulated savings becomes Rs.8000 with
which you can buy jewellery.

ANUTTARA

Anuttara is a relationship program that offers you attractive reward points that you can earn with
every purchase you make at a Tanishq store. In addition, you get special care for your old Tanishq
jewelry, exclusive shopping privileges and access to premium social events.
Launched in July 2007, Anuttara has now 8-Lakh Members. Anuttara was launched to build a lasting
relationship with the customers.

EXCHANGE POLICY

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Most retailers have a differential buy back or different rates for selling and buying gold jewellery. At
Tanishq, a single gold rate is maintained for buying or selling gold jewellery. 8% of the value is
deducted for costs involved with testing, refining and taxes for the jewellery given by the customer.

When you exchange any Tanishq gold coin with jewellery, you get the benefit of the current gold rate
and full value exchange without deduction. When you exchange any other bank’s gold coin with
jewellery there is a 4% deduction on value. This deduction is made for handling and transportation
costs and for refining the metal received on exchange

COMPETITORS

Asmi

Asmi, one of the leading diamond brands of the country, was launched, In 2002 by The Diamond
Trading Company Ltd, (DTC).
The Asmi diamond Jewellery Collection is crafted to beautifully compliment and complete her. Asmi
caters to the women of substance & satisfies her mind for rewards recognition, evolving to suite her
style & Personality.

The brand has been endorsed by various celebrities such as Kajol, Mandira Bedi & Perizad.

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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 in 2000, with an equally dazzling Aishwarya
Rai as its brand ambassador. In the present scenario Nakshatra diamonds occupy a leading position in
the fashion diamond jewelry 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 light." Elegant and graceful Nakshatra diamonds are the 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 conscious, modern and independent thinking women. Internationally acclaimed
Nirvana diamonds are manufactured by using state-of-the-art technology. 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 Digico Group and one of the earliest diamond houses
established in India in 1966. 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 a range
of emotions through their collections

RETAILING

Tanishq ventured into jewellery retailing in 1996 through exclusive stores, both company owned and
franchised outlets, a concept unique to branded jewellery segment at that time. In just over a decade
Tanishq has achieved several milestones and today is the largest jewelry brand in the country with a
turnover of Rs. 1250 crores in the last fiscal. This success of Tanishq is a result of an exclusive blend
of exquisite designs, trust and reliability, innovation, highly focused communication strategy and
innovative retail strategy.

innovation have been the hallmark of Tanishq all these years. Tanishq has constantly formulated an
innovative product strategy this journey in line with the evolving consumer tastes. Tanishq Design
Studio has created exquisite and varied collections like Fashion earrings, Everydays, high-end Zoya
collection among others aimed at distinctive consumer segments. Similarly Tanishq has undertaken
several unique retail initiatives keeping in mind the customer demand for a world class shopping

experience. As such Tanishq retail identity has evolved over the years to offer large format and
concept stores that reflect the brand’s philosophy of being “Revitaliser of Tradition”.

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Commenting on Tanishq’s success story, Mr. C K Venkatraman, COO, Tanishq, said "We have been
able to capitalise on the trends of the local jewellery markets by building on our solid financial
strength, market-leading brand position, wide network, local sourcing strategy, a management model
of excellence and, most importantly, a philosophy of customer care. In the future, the key to building
stronger competitiveness will lie in enhancing network coverage, brand equity and logistics. Amid the
keen competition in the Indian jewellery market, only the strong player can emerge victorious."

Tanishq’s retail strength goes beyond its innovative identity and extensive reach. Tanishq has
undertaken several unique retail and marketing initiatives like creating purchase triggers like Doctors
Day / Professional Day etc that were unexplored avenues in the industry. Tanishq has also
endeavoured to be part of every occasion in an Indian woman’s life through festive promotions,
customer contact programmes as well as through Anuttara, Tanishq’s exclusive consumer reward
programme etc.

Following more than 40% percent growth in operations last year, Tanishq will invest extensively
during 2008 in marketing and retail initiatives to further develop the market. In addition, Tanishq will
build new logistics centres and upgrade existing ones, laying a solid foundation to meet future
competition

Tanishq is the first and only jewellery brand to have organized mass jewellery retail chains across the
country. As our company expands, more and more people will be able to share our mindset. Brand
Tanishq is for every Indian woman; it is at all times keyed-in to their ever-changing demands, moods
and tastes. It conveys a feeling of self-confidence and individualism that characterizes the Indian
woman. The offerings are in tune with fashion and yet do not lose touch with tradition.”

CONCLUSION
Tanishq has been able to capture a good chunk of the market with its chic designing and
attractive schemes. Now that the Indian market is getting more eased out towards
diamonds, tanishq should keep a watch over the diamond segment and perk up on its
glamour quotient. The brand ambassadors of its competitive brands have more power in
comparison to Tanishq. It should also ringmore credibility to its Gold Harvesting
Scheme.Our hypothesis was that we expect the demand of Tanishq will increase significantly in
coming years owing to the awareness in the people. We also expect significant impact of
increased purchase from the middle class in the coming time. Based on our findings through the
we conclude that our hypothesis is correct. With the economy moving upwards and income
levels increasing, gold consumption in India is showing tremendous growth. The growth
differential over the last couple of years means that Tanishq are now a mainstream proposition.

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REFERENCES

http://en.wikipedia.org/wiki/Tanishq

http://www.tanishq.co.in/

http://www.tata.com/company/Articles/inside.aspx?artid=t9a/ZefiVik

http://www.inrnews.com/realestateproperty/india/retail/tanishq_achieves_another_miles.html

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