Marketing Management Project 5q731d

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Marketing Management Project On 4 P’s & STP of FASTRACK Watches

A report submitted in partial fulfillment of the requirement of the PGPM program of- IBS Mumbai

Submitted to: Ajit Patil (Faculty IBS Mumbai) Date : 18th Sept 2011

Compiled by: Rushi Chokshi (11BSP0847) IBS Mumbai, Section F

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Acknowledgement This Project would not have been possible without the guidance and the help of several individuals who in one way or another contributed and extended their valuable assistance in the preparation and completion of this report. First and foremost, my utmost gratitude to Prof. Ajit Patil, faculty of IBS Mumbai whose sincerity and encouragement I will never forget. He has been my inspiration as I hurdle all the obstacles in the completion of this report. Without his constant guidance and supervision as well as for providing necessary information regarding the project, this report could not have been completed. His thorough teaching of the concepts used in the project had made my work much easier. My thanks and appreciations also go to my colleagues in developing the project and people who have willingly helped me out with their abilities.

Rushi Chokshi

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Table of contents Sr.No. 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Topics Executive Summary History of Fastrack Fastrack as a full-fledged brand Product portfolio Pricing Policy Promotion Place People STP in an nutshell STP Analysis of Fastrack Watches  Segmentation(13)  Targeting(15)  Positioning(17) SWOT Analysis Conclusion Fastrack Watches Bibliography Annexure

Pg. No. 01 02 03 04 06 07 09 10 12 13 18 19 21 22

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Executive Summary Titan watches, the major Indian watchmaker embarked on the fashion watches category with the launch of the Titan Fastrack watches in the year 1998. As the ever changing fashion industry influenced the watch industry during this era, Titan watches came up with

the

stylish

and

trendy

Titan

Fastrack

watches

collection.

Extraordinarily innovative technology coupled with a fresh sense of style in the Titan Fastrack watches became an instant rage especially with youths. In the Titan portfolio it is believed to contribute a 4% value. Significant rise in Titan Fastrack watches sales has subsequently compelled Titan to establish it as a separate brand. In this project I have talked about the most important aspect of marketing, the marketing mix strategy and the Segmentation, targeting and positioning of Fastrack Watches. Fastrack is considered as an icon of today’s youth which proves the fact that it has efficiently complied with all the marketing strategies.

1

History of Fastrack Timex had entered the Indian market through a t venture with Titan and which was their offering for the youth market. When that JV broke off in 1997 and Timex went independent, there was a gap in Titan’s portfolio and it only made sense to fill that need through their offering. Fastrack was launched as a range of watch ware under Titan and was called Titan Fastrack. Subsequently, it grew from a range to a sub-brand, where Titan was upfront in the logo and the association was strong. They used the jazzy version of the Mozart tune, which is Titan’s signature tune. So, the link with Titan was very strong. When they launched, they targeted predominantly the early jobber 23-30 year-old male executive. It was only a year or two later that they launched a line for women.

2

Fastrack as a full-fledged brand Fastrack became the full-fledged brand just about eight years back. Before this time, this was just another sub-brand of Titan like Dash and Sonata. In keeping the pace with the changing market scenario, the need was felt to cater to the younger generation who do not see watches merely as time keeping device but important accessory as well. After the thorough market research, the following four trends emerged: 1. It came into the light that with the advancement of mobile telecom industry in India youth diverted their expenditure in purchasing the trendy handsets. This clearly indicated that handsets have become the “

Top-of-the-heart” category for the youth.

2. The trend mentioned in point number 1 impacted the watch industry in another way also. As handsets came with the in-built clock and it also led to the decrease in purchase of watches by Youth. 3. As the disposable income of the youth increased after liberalization, it was also noted that youth started preferring foreign youth oriented brands like Swatch & Tissot over the Indian brands. 4. College goers also had the desire to own trendy watches but their pocket money was limited. Clearly, there was gap in the market. No Indian watch maker was supplying the watches desired by youth. Titan took the initiative and continued with the legacy of Fastrack brand name with a remarkable change that Fastrack was spun-off as an independent brand and was projected as a funky, modern and contemporary youth-centric offering. With this, a new marketing team comprising of young employees of TIL was created. There was a ion and excitement in the air. Everybody wanted to make Fastrack a success. With this ion, the team started working on making Fastrack as a true iconic youth brand in India.

3

Product portfolio Once the team understood that product will become the main differentiator in the market place, the responsibility fell onto the product development team to come up with the exciting variants. Under the cautious leadership of Michel and Neal Foley (The award winning designers), the first wave of watches were created that were trendy, stylish and modern. The watches were modern in nature and had the unconventional shapes and designs.

4

Because of the uniqueness of the shapes and styles, youth immediately liked the watches. Now, they started seeing Fastrack differently. Fastrack was now not only a watch but accessory also. TIL didn’t stop here. To make the brand trendier, they started promoting the new set of watches as “Wrist-Gear”, it had a lot better appeal to the youth as this phrase reaffirmed that Fastrack was not only a time keeping device but a fashionable adornment also.

The success of Fastrack clearly indicates that youth constantly scan the environment to satisfy their needs. It is up to the companies to understand their needs and devise the “bundle of attributes” to service them profitably. TIL understood and worked on it and is reaping the profits today. Another stride from TIL was it emphasized on women watch category. Generally speaking, women watch market was never considered a serious market except by TIL. Continuing this trend, Fastrack team also came up with nice women designs which were fashionable yet feminine. With the clear segmentation strategy at place, this resulted in the lot of young women with good disposable income also purchasing and repurchasing the watches.

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The equal success of the women collection indicates the fact that while targeting the market, it is equally important to give the proper significance to both the genders as the buying power of young women has become as good as young males. The young women also like to flaunt their accessory and would like to become as fashionable as their male counterparts in watch wearing. So, in the nut shell, the Fastrack watches was designed in such a way that apart from fulfilling the beneficial need (time keeping), it also fulfilled the emotional/social need of getting the appreciation from the peer group as well.

Pricing Policy Keeping in mind the fact that college goers as well as the employed youth were the target market, the pricing policy was twofold. At the bottom were the watches which started from Rs. 500 MRP for the college goers (so that they could afford the watch out of their pocket money). The highest price bracket touched the MRP of Rs. 4000 and these watches were targeted towards the employed youths. The pricing was closely associated with the deg. The basic designs (mainly made up of hardened cloth strap) were at the lower end while the designs with leather/steel strap were at the higher end. This also served as the point of differentiation at the retail counter where it was easy for the customer to select the watches as per the designs. The buyers generally selected the watch first and then asked for the price. At the lower end segment, the prices were generally kept at “Cost-plus” prices wherein the company added a certain incremental value to the cost of goods sold. With this plan, the company was able to keep the MRP low so that the watches belonging to this segment could easily come into the buying reach of the customer. This segment typically became “High volume-low margin” segment as the basic purpose of this pricing was to make the watches affordable to the college goers.

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The pricing at the higher end was “Skimming pricing” wherein the company tried to sell the leather strap/steel strap watches to those who were ready to spend the for the unique product. These watches became popular with office goers who had the willingness and ability to pay for such watches. This segment became “Low volume-high margin” segment in which the numbers of watches sold were not as high as lower end segment but the margin was handsomely good. The Fastrack team also came up with chronograph watches in. It was an exercise to provide the affordable chronograph watches to the youth. The chronographs of the various other companies available in the market are placed at a much higher rate, somewhat beyond the reach of the young customers.

Promotion Fastrack is supposed to be one of the finest marketers in India. Fastrack was the first company who believed that promotion was not expenditure but an investment for the long term relationship with the customer. It was not surprising then that Fastrack also came up with some excellent promotional devices. With respect to communicating with the customer, Fastrack used print and T.V. as the basic mediums. The T.V. ads were clutter-breaking as the theme used in the ads were unique and close to the youth.

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The idea has been to constantly reinvent the brand through the amazing advertising. Also, as the brand was targeted towards the youth, Fastrack used the digital and social media very heavily. Fastrack also placed a great emphasis on point of sale visual merchandising material also. Whenever company ran the promotional scheme for the customers, one could see the attractive posters, danglers and mode of communication dotting the retail space. This served as a fantastic repeat communication medium and reinforced the communication of the promotion to the customers.

TIL also

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came up with the attractive goodies for the customers. These goodies also worked as a medium of constant reconnect. The goodies had the logo of the Fastrack prominently featured.

9

Place It is a well known fact that distribution has been one of the biggest strength of Titan. In fact, people in the watch business believe that it is Titan who taught the watch retailer to sell the watches. The following outlets were selected to sell Fastrack: World of Titan (WOT): The exclusive Titan showrooms, some of them are company owned while the others are franchise operated. The WOTs are the face of Titan. Whenever somebody wants to buy Titan, he is most likely to visit WOT first. Every year, WOT witness millions of foot-falls. Time Zone (TZ): TZ is a form of a multi brand outlet wherein 60% of the shelf space is committed to Titan and other Titan products. Multi Brand Outlets (MBO): The MBOs are the outlets who sell different brands of watches and may also sell other electronic items. This kind of outlets was catered by the distributors appointed exclusively for Fastrack. Large Format stores: Like Shoppers’ stop, Central, Pantaloon etc. As these kinds of outlets became the hang out place for the youths, it was imperative to have the availability of Fastrack in such stores. With such a strong distribution channel, it was no big surprise that the availability of the brand was not a major concern. Customers found the Fastrack wherever they went. This resulted in the huge volume growth of the brand which has been seeing the exponential growth of 50% to 100% for the last four years. Today, Fastrack is available in more than 3000 outlets across the country.

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People No marketing success can come about without the active involvement of the people. It is the people who develop the idea and work on it. It is the people who form the product development and marketing team and create the product and brand. It is the people who make sure that the product is available at the right place at the right time. The success of Fastrack was no exception. Under the leadership of Bhaskar Bhat, CEO, TIL, the new team to re-launch the brand was created at the corporate office in Bangalore. The team started extensive market research in finding out the gaps available in the market. Once the team was sure what the market wanted, the team got its act together and successfully re-launched one of the finest youth brands India has ever witnessed. TIL conducted research, where they shared products and communication and realized that their price points were really high for their TG. They were targeting someone who gets pocket money, which is a nebulous term in India. Some get it, some don’t. Some get it as maintenance money, while some don’t get it, but get everything they want. Their average price, which was about Rs 1,700-Rs 1,800 was just too high for that TG. Also, the product they had was not cutting ice with the younger audience because they were now seeing the Esprits and Swatches of the world, which had come at a higher price point but were creating desire for a very different fashion look. Then there were Chinese

models

priced

at

sub-500

and

very

affordable.

They realized that there was a big gap between this sub-500 and Rs 3,000, which is where the fashion brands started. That’s where we decided to peg ourselves, but we consciously kept 75 per cent of our collection at sub-1500 as no one was present there and it was big opportunity. They had to design watches that were funkier and keep it in line what the fashion brands were creating an aspiration for. They undertook a design overhaul and put in place a design exercise and got around 100 new designs. They decided to re-launch with this collection and drop all the old collections.

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Fastrack was aggressive in not only re-launching the brand but on selling as well. As the field force selling the bigger brands like Titan and Sonata were already having their hands full, the need was felt to create the separate sales force to make the brand available at the maximum outlets. With the single focus on placement of the product and generating the sales, the sales force did wonders in achieving the sales targets. Soon, the market was flooded with Fastrack watches and customers got their choice of variant at the location convenient to them. What’s more, even the new distributors were selected to cater to the MBOs wherever the demand for the brand was higher. The success of the re-launch of Fastrack clearly indicates that when people work with ion, welcome the ideas and keep a close tab on consumer behaviour and preferences, nobody can stop the creation of the mega brand. Seen here is Simeran Bhasin, Marketing Head, Fastrack and new brands.

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STP in a nutshell Segmentation, targeting and positioning together comprise a three stage process: •

Determine which kind of customers exist , then

•

Select which ones we are best off trying to serve and, finally

•

Implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.

The three Stage Process

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STP Analysis of Fastrack Watches  Segmentation Wrist watch can be majorly segmented on the basis of demographic factors and price. On the basis of price the market can be segmented into low priced, medium priced and high priced. The low priced watches are priced less than Rs.1000, medium priced watches are priced from Rs1000 to Rs.3000 and highly priced are priced above Rs.3000.On demographic grounds, the market could be segmented on the basis of age. The watches could be targeted at kids, youth and middle aged people. Fastrack watches were launched to cater to the needs of youth at first however it introduced watches for kids also later on.

The levels of Market Segmentation are as follows : •

Segment Marketing

•

Individual Marketing

•

Niche Marketing

•

Local Marketing



Segment Marketing

“Markets target more than one segment when it is not economically feasible to design products and services for individual segments” Fastrack has segmented its business into three main categories: •

Low priced

•

Medium priced

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•

High priced

 Individual Marketing “Individual marketing is the extreme level of segmentation in which marketers focus on Individual customers” Fastrack has not applied this for its marketing.

 Niche Marketing “A niche is more narrowly defined group, typically a small market whose needs are not well served. Markets usually identify niches by dividing a segment into sub segments defining a group seeking a distinctive mix of benefits” Fastrack Perspective: Serving the youth since they form the majority of customer base •

Price offering from 500 (for college going youth)

•

Price till 4000 (for the employed youth)

•

Watches with style statements

 Local Marketing “Marketing programs being tailored to the needs and wants of local customer groups. The prominence of local marketing has also become very dominant.” Fastrack perspective:

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All the products of Fastrack are addressed to all the customers as a whole. Localized products are not available. But some products which are available in UK have some pictures of eminent personalities on their Dial like M.K.Gandhi, Mr. Jawaharlal Nehru, etc. so that the customer can identify the product with those dignitaries.

 Targeting Targeting comprises of four main activities: •

Defining the abilities of the company and resources needed to enter a market

•

Analyzing competitors on their resources and skills

•

Considering the company’s abilities compared to the competitors

•

Deciding on the actual target markets.

Fastrack has products caters to the products in all the segments. The range of Fastrack watches is from Rs. 500 to Rs.4000. Hence it is catering to all the three segments of low, medium and highly priced segments. However more emphasis is laid on medium and high priced segments On demographic grounds, Fastrack watches were launched to cater to the needs of youth at first however it introduced watches for kids also later on. Hence it is targeting both youth and kids segments.

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Fastrack is also targeting: •

Exclusive Fastrack store.

•

Opening 50 such stores by2013 ,India.

•

“Fastrack plans on being a Rs 500-crore brand in 3-4 years. Not to be surprised if it touches Rs 750-1,000 crore in 5-7 years.”

•

In three years, Fastrack projects to contribute 25-30 per cent of the Titan’s watch business.

•

Fastrack contributes to 4 per cent in value to Titan and the company has decided to establish it as an independent brand because of its high penetration potential.

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 Positioning “Positioning is a statement that shows how you are different, better or more special than your competitors.” Fastrack perspective: Earlier Fastrack was targeted at 20-25 year olds and positioned along the line “Cool watches from Titan”. The company re launched the brand lowering the yargey segment to 18-30 year olds with the baseline. “How many you have.” Presently it is positioning itself with the baseline “Move on”. Fastrack positions itself as both trendy and affordable range. These two attributes were usually considered as two poles wide apart. Fastrack has taken the challenge of combining both the features to offer a greater value proportion to its customers.

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SWOT ANALYSIS Strengths: 

Goodwill in the market



Strong financial position



Fast changing designs

Weakness: 

Short cycle products which are expensive to make



Weak channel of communication



Lack of exclusive stores

Opportunities: 

Rapid market growth



Changing customer needs



To create relation between society on social marketing

Threats: 

Tough competition in watches



Low profit margins



New competition in market

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Conclusion Fastrack Watches Isn’t the story of Fastrack like the story of Phoenix raised from the ashes? It is the story about the self belief, ion, great marketing insight and the ability to deliver under any circumstances. To sum up this excellent success story, the following can be treated as the enablers who created the win: 

The faith of TIL’s upper management to allow a relatively younger team to revive and handle the brand.



The constant market research/scan to understand the ever-changing needs of the youth.



The phenomenal coordination among marketing, product development and sales team to realise the same goal of serving the customer profitably.



Constant renovation in product portfolio to keep the portfolio contemporary. This is where the seamless integration comes into play between marketing and product development team. Based on the research, product development team keeps on coming up with the collections that keep the portfolio refreshing.



To keep the communication fresh and in line with the lingo of the youth. The use of youth’s language was an innovative idea. Similarly, the use of Social and digital media was also important as youth make use of these media vehicles in a big way. The out of the box thinking of renaming watches as wrist gear also paid the rich dividends.

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

The aggressive placement of the product, separate sales force and new distributors made sure that the brand was available across 3000 outlets in India.

All this culminated to the fact that today Fastrack is a proven and trusted brand with a huge fan following. The main challenge that lay ahead in front of TIL is to keep the brand refreshing all the time. With the strong association with the brand, the customers will keep on coming back to Fastrack to fulfill their desires of owning the watch which is equally good as an accessory.

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Bibliography Books:  Marketing Management by Philip Kotler  A framework for marketing management by Philip Kotler Online references: 

www.businessindia.com



www.indiatoday.com

 www.hindustanstudies.com

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Annexure

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