Innovation factory
Starting with watches, Titan Industries has forayed into jewellery, youth-focused accessories and eyewear
 "Innovation factory")
Titan Industries Managing Director Bhaskar Bhat's game has been to experiment furiously with new products till he smells success. Titan has built on successful products by adding a host of incremental changes so that they cater to a wide variety of tastes. At any large Titan store, the customer is offered a choice of 1,200 designs across segments. "Retailers want us to pull in the customer, and once the customer comes in he is spoilt for choice," says Bhat.
Keeping up the innovation and marketing pace is crucial to Titan's survival. So, once every month, the 58-year-old Bhat sits down with predecessor Xerxes Desai, the founder-MD of Titan Industries, to figure out new ways to grow and mutate the brand into other sectors.
The informal chat sessions seem to have worked. Under the stewardship of Desai and Bhat Titan first thrived, then expanded into new segments, in the process building Tanishq, one of India's best known jewellery brands. Bhat has also forayed into the fast-growing, youth-focused accessories segment with Fastrack, which has been a runaway success. Now, Titan is in the process of stabilising its eyewear business.
Things weren't always so comfortable for Bhat, a B.Tech from IIT-Madras and an MBA from IIM-Ahmedabad. When he took over as MD in 2002, the company was debt-ridden, thanks to an ill-advised venture into the European market. Bhat engineered a remarkable turnaround, enough to give him a third five-year term at the helm of a company counted among the most respected retailers in India.
Titan Industries packs many a marketing feat under its innovative watch cases. Starting with the mid-segment of the watch business, the company worked its way upward and downward, offering multiple choices to multiple customer constituencies. Titan's unique selling proposition for watches was built on simplicity and ubiquity - two qualities that have propelled it into the ranks of a mainstay watch brand. This has also meant selling premium brands through Titan's 'Helios' arm, which offers 25 premium watch brands. These include Hugo Boss, Tommy Hilfiger and FCUK, among others. "We are the market leaders in watches and we have to grow the segment. Since we are a trusted retailer of watches, it makes sense for us to tap into the luxury segment as well," Bhat adds.
Even as the company fine-tunes its strategies to sell sturdy watches priced as low as Rs 225 and high-end ones that can set you back by Rs 50,000, Titan is eyeing areas where it can leverage its marketing and brand-building muscle. "Offering leather accessories under the Titan brand is the next move in the works. Fragrances may be brought in as well. The focus of how we pick and choose the segment is that there should be huge volumes where we can bring in an element of trust, and bring about a change in this highly unorganised sector," says Bhat.
Another potential El Dorado for the company is in the child segment, where Bhat sees a lot of momentum ahead. "As we see the evolution, we are closely studying how we can bring a change in the child segment," says Bhat, noting that parents spend enormous amounts on their kids and want their children to grow up in a specific way.
It has also 'premiumised' its offerings to ensure brand stickiness. Last year, the company acquired 300-year-old Swiss heritage brand Favre Leuba; it is being primed for an India launch. "Over a period of time, we see good potential play for high-end Swiss watches in India. Brand building in that segment is a long haul, which we are on course with our brand Xylys. Favre Leuba is another attempt to occupy that luxury space, while at the same time ensuring that we do not lose focus on the mass-volume segment where we excel," Bhat said.
The premiumisation push is also taking place in the gold jewellery business. Highly-specialised designer jewellery and diamond-studded jewellery are being pushed, as they yield better returns. On average, diamond jewellery accounts for around 26 per cent of the Rs 7,000-crore jewellery business. The roadmap is to take this share to 40 per cent. The margins in the jewellery business are less than 10 per cent, while the watches segment does much better at 15-16 per cent.
For all its success, Titan has its weaknesses. Hammered by rising gold prices, the company has been under pressure during most of the current fiscal, with volumes and margins having contracted. Bhat is however managing to steer through the turbulent times and has been able to deliver decent growth.
Realising the vicissitudes of the commodity business, Titan is working feverishly to boost its innovation capabilities and focused marketing strategies. Bhat is aware that creating new businesses and expanding established ones is insanely difficult. "We are in the lifestyle segment. We are pretty much aware that people will keep moving and there is a high degree of demand in building loyalty with good aspirational value," he says. He adds, "That is one big challenge which keeps us on our toes."