Q.1 Discuss the various bases or criteria for segmenting consumer markets. Explain Tanishq’s segmentation and positioning strategy. Tanishq from the house of Tata entered the jewellery market as a national retail chain that provided made the audience with jewellery of high design value and reliable worth. it it’s consumers believe in the purity of their jewellery by introduction of ºKarat metersª. These instruments helped the consumer measure the purity in a non- destructive manner. Another positioning strategy used by Tanishq were promotions by fashion shows to increase the shopping experience. It also catered to the mass by their differentiated designs for everyone be it contemporary, tradition, Indian or International audience. It also created exclusive Tanishq outlets and also launched its new collection at a quicker rate than its competitor.
Tanishq also came up with new marketing promotions with every new collect to attract consumer. Tanishq overall segmented its consumers in different promotional manners and focused more on in-store promotions than advertising to make the brand more accessible. Q.2 What are Tanishq’s key brand values or brand strengths? Explain. * Tanishq has a range of differentiated designs like contemporary, tradition, Indian or International to suit everyone’s needs and demands. * Tanishq established itself as reliable in terms of purity by introducing ºKarat metersª in the Indian market for the first time. * The Tanishq portfolio comprises of a wide range of jewellery, including 18- carat studded products, 22- carat plain-gold products, silverware and coins. * The Tanshiq collections called Aria and Diva, Collection G positioned º9-5 jewelleryª worked wonders with the working women.
Tanishq: Positioning to Capture the Indian Woman’s Heart
I. Case Summary:
The case study here provides us with the insight of how Tanishq has adopted different strategies to position itself as a mainstream jewelry brand and differentiate itself from the competitors, in the Indian jewelry market. GoldPlus, on the other hand which was launched nine years after Tanishq had entered the jewelry market, is also a subsidiary of the same holding company, which is targeted towards serving the customers which Tanishq was not serving, plain wedding jewelry in rural and semi -urban market. Tanishq, first started as a brand name for jewelry watch of Titan, was targeted towards the Indian high end customers. By then it was positioned as an ego satisfier. The reason for failure of Tanishq in the initial phase was that the company followed a selling concept. They made the product first and then tried to sell it. The consumer preference was not considered while designing the 18 karat jewelry. Over time Tanishq has undergone through a lot of changes in its marketing policies and strategies to position itself as a mainstream jewelry firm rather than targeting a small customers of the whole jewelry market.
Tanishq, established in 1995, challenged the established family jeweler and introduced new rules in precious jewelry. Tanishq spread awareness to the public about alleged impurity in Gold jewelry across India. Tanishq introduced innovations like Karat meter, the only non-destructive means to check the purity of gold and machine made jewelry. Tanishq was introduced as jewelry for adornment and bore a western appeal; it was targeted towards modern women. But as a largest part of the Indian jewelry market is dominated by traditional jewelries, Tanishq had to move from being modern to being traditional. In its errand, Tanishq adopted different strategies at different points in time to capture customer value, to survive competition from local market, to reduce cost and to modernize the tradition in an innovative way. Today Tanishq has over 80 stores all over India. GoldPlus, which was solely introduced to reach out the jewelry market in the rural areas, was targeted towards selling traditional plain jewelry, which were perceived by the customers as investment and worn during festivals and weddings.
It also adopted different marketing strategies to position itself as a traditional jewel brand. However it has only been serving two localities through franchisees where Tanishq has no presence. Now having two brands of its own dealing in the jewelry market of India the firm faces a problem; which one should go after the plain jewelry market in the rural areas. As noted earlier 80% of the jewelry market of India is dominated by traditional jewelries which were mostly prevalent in the semi-urban and rural areas where Tanishq has not yet set its border. And on the other hand GoldPlus which has just been launched in two localities through franchisees though has shown positive results, the margin is too low due to the fact that it has to be marketed heavily to create brand awareness and prevalence of government duties and taxes; and is vulnerable to local competition. Both the brands Tanishq and Gold Plus focus on differentiated market segments.
While Tanishq focuses on the modern Indian women living in urban areas, Gold Plus focuses on people with more traditional outlook living in rural and semi urban areas. So, there is no overlapping in the target market for these 2 brands. If the firm does not make any decision now it will lose the opportunity to serve the huge market, which will gradually vanish with the new competitors entering to compete with Titan at a national level. With both the brands providing positive results, which one should the firm accept for serving the traditional customers. The goal of the firm is to reach the sale volume of a billion dollars in 4 years. For this, should Tanishq or GoldPlus pursue the plain gold wedding jewelry market in the smaller cities? II. Alternatives:
Given the situation as outlined above and with reference to the current value proposition of the two different brands, the company can follow one of the three alternatives to retain and expand their market. 1. Allow Tanishq to go after the plain jewelry market in semi-urban and rural area Tanishq, after its long struggle and hard work has gained good brand recognition and brand equity in the jewelry market. After so many years of working in the jewelry market it has pursued a great knowledge of the market. It has now positioned itself as a progressive Indian brand that combined tradition and heritage. Moreover, after the success of the tradition wedding jewelers in major cities, it argued that it can also do better in the smaller towns and cities. This makes it clear that it has a potentiality to serve both the rural and urban market as well.
Allowing Tanishq to go after the plain jewelry market in semi-urban and rural areas and let GoldPlus to remain a franchise may be one of the alternative decisions for the firm. However, though the brand did well in the major cities, where the customers were well educated and earned better than ones in rural and semi-urban areas, but the brand is still perceived as an expensive and traditional yet modern jewelry. It has a high margin and bargaining power due to its elegant design, purity in gold and quality ranging from 18k to 22k. This is its distinctive positioning and differentiation factor of Tanishq. If it goes after the traditional jewelries in the rural areas it would have no bargaining power. It will lose its perception as fashion jewelry and will be competing with the local jewelers. This may result in low margin, lost market share and increased competition.
2. Allow GoldPlus to extend its market and Tanishq only serve the high end customers Another alternative might be allowing GoldPlus to extend its market and Tanishq to serve only the high end customers, which it has proved to be good in. The recent outcome of GoldPlus shows, though the margins are lower, it has been able to make remarkable sales in the selected localities. As it is mainly concerned with the traditional plain jewelries and targets the semi-urban and rural areas, which forms one of the largest parts in the Indian jewelry industry, it has a larger scope in this field. Moreover, this option allows Tanishq to maintain its brand equity and continue to serve its customer with higher margin. Given the ground of opportunities, there are also some great challenges for GoldPlus. It does not have enough market experience and the brand awareness is low. It has only experimented in few areas and concentrated marketing only in these sectors. If it is to expand then the cost will be huge. And also there is a threat of goal biasness that would arise between Tanishq and GoldPlus as both are the brands of same holding company.
3. Combine GoldPlus to Tanishq as a subsidiary brand of traditional jewelry The third alternative might be to combine both the brand names and use GoldPlus as a subsidiary brand of traditional jewelry. Tanishq is a well established brand and adding GoldPlus as one of its design which would serve the traditional customers. The market for exquisite modern jewelry will grow with the changing consumer tastes. Tanishq can take this opportunity to make profits. Since it is already an established player in this market it can leverage on this and take advantage of its experience. Though it sounds simple, the campaign would not be practical. If the consumer taste remains unchanged, the market will be very limited for Tanishq. Tanishq which is still perceived as expensive apparel will be continuing on its previous journey of brand awareness rather than increasing market share.
It will again have to put in a lot of effort to change itself from modern to traditional outfit. Moreover, with large part of jewelry market dominated by plain jewelries, launching GoldPlus only as a subsidiary brand of Tanishq, would fail to capture the value of customers. And when GoldPlus has already been marketed as a traditional jeweler and then reclassifying it as a part of Tanishq would create chaos among the people and market, which may adversely affect the image of Tanishq as well. Now the three alternatives suggested above have their own pros and cons. However in choosing the right alternative, the firm has to decide as which one would help it attain the unreached market of Titan in effective and efficient manner. III. Conclusion:
First and the last alternatives seem to be against what Tanishq is today. It has come a long way to position itself from a "jewelry that tells time" to "modern but traditional" position. Also as it has already been able to position itself in the terms design, quality and purity, going towards the traditional sector would cause it to compete with the local jeweler for price and loose its differentiating capability. And if it tries to remain on both the ends from elegant and appealing design to traditional and cultural ornaments, it would be impossible to retain a distinct brand image. Therefore as Tanishq has been able to create its image as an elegant and stylish design along with traditional values in the urban areas and bigger cities, it is profitable if it remains the same. It has now educated the customers about the new trend in jewelries and also has a well defined target market, it is better if it strives to serve its own target.
And as for GoldPlus, instead of competing each other, combining its traditional look and cultural uses with the market knowledge of Tanishq, it would be able to expand in the other rural part of India. Within each sub-brand the company can focus on the 5 psychographic variables as already identified by it. In case of semi urban areas the company can conduct proper market research and then decide which model would work best. GoldPlus can concentrate more on traditional pieces in tune with the local demand while Tanishq can concentrate on the niche market in urban areas as per the psychographic variables it identified. Though the cost would be initially high and would take some more marketing effort, its entry in the largest sector of jewelry consumption would justify the costs involved. Therefore, the best alternative would be to go with the second option.