Company : Titan Industries
Agency : Lowe Lintas
Brand Analysis Count : 382
Tanishq is a very interesting brand. Interesting because it is a brand that is trying to change the rules of an industry which is very fragmented. Tanishq is one of the first brands to create a national brand in the Rs 40,000 crore Indian Jewelery market.
The Indian jewelery market is huge and India is the second largest consumer of gold trailing behind USA. But the jewelery market is highly fragmented. The branded jewelery segment is hardly 5% of the total market.
Tanishq was launched in 1995. Since then , the brand has grown to a Rs 1200 crore brand even overtaking Titan watches interms of the turnover.
Tanishq is a retail brand. It is the chain of jewelery shops set up by Titan across the country. According to the company website, Tanishq has more than 104 stores across 71 cities. The chain is operating through a franchise system.
Titan has also another brand of retail outlets which is known as Gold Plus which is targeting the urban/semiurban consumers and small towns. Gold Plus has presence in more than 20 towns and Titan is planning a major expansion of these stores.
Titan planned to venture into gold business way back in late 1980's. During that period of foreign exchange crisis, a good way to earn the valuable foreign exchange was through gold business. But by the time the company figured out the business, the foreign exchange problem was over.
Although the jewelery market is large, doing business in this segment is not a cake walk. The market is complex and highly unorganized. The consumer behavior is also different compared to what we see in other products and categories.
Consumers tend to see gold as an investment and indulgence. Most of the individual consumers are loyal to their local jeweler /goldsmith. And for a brand like Tanishq, it had to break this traditional consumer buying process and also make them switch their loyalty from the goldsmith to the retailer.
In the state of Kerala where I live, the market is more organized. There are large chain of jewelers who have their presence across the state. Consumers tend to buy from these retail chains rather than make the gold jewelery from a gold smith.
Tanishq started off selling 18 carat gold jewelers. The brand at that time was positioned as a jewelery for daily wear . But the brand ran into difficulties since the consumers were too sticky about 22 carat ornaments. The light weight jewelery was still alien to the consumers.
Tanishq was depending heavily on the pull factor. The brand relied on the design ranges, the trust that the Tata brand carries and also the reliability factor.
One of the major hurdles that the brand faced was the brand recognition during its initial stages. People did not know about the Tanishq brand . Since gold is a high value- high involvement purchase, consumers were risk averse in trying out a new retail format like Tanishq. The consumers were also less responsive to the premium that Tanishq jewelery commanded.
It takes lot of time to change the consumer perception. It is harder if this behavior is rooted in tradition. Gold retailing is heavily rooted in tradition. If we look at the genesis of local jewelers, most of them have a long tradition and their business and clientele has been built over generations.
Since the pricing of gold jewelery is tricky and complex, consumers also tended to rely on their traditional store rather than experimenting with new stores.
But these have changed in recent times. The stores has been exploiting the consumers by complex pricing policies like " making charges", value addition etc which an ordinary consumer seldom understand.Tanishq has been trying to tap on this need for a honest gold retailer.
Along the way , the brand also had to fight the perception of being a premium brand. In a classic case of over positioning, the brand had to convince the consumer that Tanishq had jewelery which was affordable. Over positioning is where the brand narrowly positions itself and consumer tend to have a narrow image of the brand.
To tide over this issue, Tanishq came out with small priced collections which to an extend corrected the perception problem.
According to the company website, Tanishq had a turnover of over Rs 1200 crores.
The brand is very active across the media. Tanishq have a two prong branding strategy. The company have the main brand Tanishq and lot of sub brands for its different collections. Some of these brands are Solo, Aria, Diva , Collection G etc.
Tanishq recently roped in the new Bollywood diva Asin to endorse a collection.To tide over the issue of low margins, Tanishq has recently launched the diamond collection which is considered to be a high margin product line.
Tanishq has been trying to differentiate on the designs. It had built lot of product lines and has branded these lines. The brand feels that consumers will chose Tanishq for its designs.
Regarding the promotional strategies, Tanishq have the major issue is fighting the regional players. Consider the Kerala example, the brand Tanishq have zero visibility compared to the local jewelery chains. The local jewelers of kerala are advertising freaks and one of the largest spenders in print and visual media in the state.
Jewelers in Kerala have roped in most of the famous models and divas for their campaigns. Even ex-bollywood divas like Sridevi Jayaprada and Hemamalini are endorsing some of the Kerala Jewelers.
The jewelery business works in a different way. The business works like this. Most of the jewelers does not make these jewelleries. They are mere traders. They buy the designs from the jewelery makers and then display them and sell them on a mark-up. Most of the makers supply to all retailers hence retailers stock similar designs thus making this a commodity trading business with little scope of differentiation.
These jewelery chains then spend heavily on building their brands and luring the consumers . Now the stores are so desperate that they have sales executives who are canvasing the bride's parents. Marriage is the event where maximum gold purchases are done by the consumers. You cannot built volume in gold business by ignoring the marriage segment. And this segment is witnessing a dog-eat-dog competition . Gifts, referrels, discounts rule this segment. I am not sure whether Tanishq is geared up for such a volume business.
Among this noise, Tanishq is virtually non-existent. I think, this is the case in most of the states. Hence if Tanishq have to capture the market, it will have to take the brand promotion to the local market. Since the brand is operating on a franchise model, it will have difficulty in localizing its brand promotional activities. I do not remember any campaign which is highly memorable for this brand. In this business, one has to have a higher share of mind and share of voice in order to be successful.
The brand also faces the issue of flucutating gold prices. The concept of a fixed MRP in gold jewellery will not work and usually the mark-up and other charges vary with seasons and demand. When you are operating on a national scale, these issues makes the operations very complex. Jewelery business has not become a commodity business and margins also have come down drastically.
When Tanishq launched the everyday -wear, it was a concept that was ahead of its time. But I feel that the younger generation is now opening up to the concept of such a collection. The ballooning gold prices are also an opportunity for Tanishq to rejuvenate such a line of jewelery.
Tanishq has reached a position from where it can scale up the business to the next level . The brand has to localise its promotional campaigns which will inturn make the brand more visible among the local consumers.
In the state of Kerala where I live, the market is more organized. There are large chain of jewelers who have their presence across the state. Consumers tend to buy from these retail chains rather than make the gold jewelery from a gold smith.
Tanishq started off selling 18 carat gold jewelers. The brand at that time was positioned as a jewelery for daily wear . But the brand ran into difficulties since the consumers were too sticky about 22 carat ornaments. The light weight jewelery was still alien to the consumers.
Tanishq was depending heavily on the pull factor. The brand relied on the design ranges, the trust that the Tata brand carries and also the reliability factor.
One of the major hurdles that the brand faced was the brand recognition during its initial stages. People did not know about the Tanishq brand . Since gold is a high value- high involvement purchase, consumers were risk averse in trying out a new retail format like Tanishq. The consumers were also less responsive to the premium that Tanishq jewelery commanded.
It takes lot of time to change the consumer perception. It is harder if this behavior is rooted in tradition. Gold retailing is heavily rooted in tradition. If we look at the genesis of local jewelers, most of them have a long tradition and their business and clientele has been built over generations.
Since the pricing of gold jewelery is tricky and complex, consumers also tended to rely on their traditional store rather than experimenting with new stores.
But these have changed in recent times. The stores has been exploiting the consumers by complex pricing policies like " making charges", value addition etc which an ordinary consumer seldom understand.Tanishq has been trying to tap on this need for a honest gold retailer.
Along the way , the brand also had to fight the perception of being a premium brand. In a classic case of over positioning, the brand had to convince the consumer that Tanishq had jewelery which was affordable. Over positioning is where the brand narrowly positions itself and consumer tend to have a narrow image of the brand.
To tide over this issue, Tanishq came out with small priced collections which to an extend corrected the perception problem.
According to the company website, Tanishq had a turnover of over Rs 1200 crores.
The brand is very active across the media. Tanishq have a two prong branding strategy. The company have the main brand Tanishq and lot of sub brands for its different collections. Some of these brands are Solo, Aria, Diva , Collection G etc.
Tanishq recently roped in the new Bollywood diva Asin to endorse a collection.To tide over the issue of low margins, Tanishq has recently launched the diamond collection which is considered to be a high margin product line.
Tanishq has been trying to differentiate on the designs. It had built lot of product lines and has branded these lines. The brand feels that consumers will chose Tanishq for its designs.
Regarding the promotional strategies, Tanishq have the major issue is fighting the regional players. Consider the Kerala example, the brand Tanishq have zero visibility compared to the local jewelery chains. The local jewelers of kerala are advertising freaks and one of the largest spenders in print and visual media in the state.
Jewelers in Kerala have roped in most of the famous models and divas for their campaigns. Even ex-bollywood divas like Sridevi Jayaprada and Hemamalini are endorsing some of the Kerala Jewelers.
The jewelery business works in a different way. The business works like this. Most of the jewelers does not make these jewelleries. They are mere traders. They buy the designs from the jewelery makers and then display them and sell them on a mark-up. Most of the makers supply to all retailers hence retailers stock similar designs thus making this a commodity trading business with little scope of differentiation.
These jewelery chains then spend heavily on building their brands and luring the consumers . Now the stores are so desperate that they have sales executives who are canvasing the bride's parents. Marriage is the event where maximum gold purchases are done by the consumers. You cannot built volume in gold business by ignoring the marriage segment. And this segment is witnessing a dog-eat-dog competition . Gifts, referrels, discounts rule this segment. I am not sure whether Tanishq is geared up for such a volume business.
Among this noise, Tanishq is virtually non-existent. I think, this is the case in most of the states. Hence if Tanishq have to capture the market, it will have to take the brand promotion to the local market. Since the brand is operating on a franchise model, it will have difficulty in localizing its brand promotional activities. I do not remember any campaign which is highly memorable for this brand. In this business, one has to have a higher share of mind and share of voice in order to be successful.
The brand also faces the issue of flucutating gold prices. The concept of a fixed MRP in gold jewellery will not work and usually the mark-up and other charges vary with seasons and demand. When you are operating on a national scale, these issues makes the operations very complex. Jewelery business has not become a commodity business and margins also have come down drastically.
When Tanishq launched the everyday -wear, it was a concept that was ahead of its time. But I feel that the younger generation is now opening up to the concept of such a collection. The ballooning gold prices are also an opportunity for Tanishq to rejuvenate such a line of jewelery.
Tanishq has reached a position from where it can scale up the business to the next level . The brand has to localise its promotional campaigns which will inturn make the brand more visible among the local consumers.
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