Case Study 3

Tanishq - The Turnaround Story The market segmentation can give a firm a temporary commercial advantage. There may be theoretically 'ideal' market segments, in reality every organization engaged in a market will develop different ways of imagining market segments. Criteria for segmenting:An ideal market segment meets all of the following criteria:

It is possible to measure. It has to be large enough to earn profit. It has to be stable enough that it does not vanish after some time. It is possible to reach potential customer via organization's promotion and distribution channel. It responds similarly to a market stimulus. It can be cost-efficiently reached by market intervention. Useful in deciding on marketing mix.

Basis for segmenting:-

Geographic segmentation The market is segmented according to geographic criteria- nations, states, regions, countries, cities, neighborhoods, or zip codes. Geo-cluster approach combines demographic data with geographic data to create a more accurate profile of specific [1] With aspect of region, in rainy regions you can sell things like raincoats, umbrellas and gumboots. In hot regions you can sell summer wear. In cold regions you can sell warm clothes Demographic Segmentation Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality. As you might expect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups. This is partly because customer wants are closely linked to variables such as income and age. Also, for practical reasons, there is often much more data available to help with the demographic segmentation process. 8

Psychographic Segmentation Psychographics is the science of using psychology and demographics to better understand consumers. Psychographic segmentation: consumer are divided according to their lifestyle, personality, values. Aliens within the same demographic group can exhibit very different psychographic profiles.

Behavioral Segmentation In behavioral segmentation, consumers are divided into groups according to their knowledge of, attitude towards, use of or response to a product. It is actually based on the behavior of the consumer.

Titan Industries, India's leading manufacturer of watches, launched the Tanishq range of gold watches and jewellery. Industry watchers were extremely skeptical of Tanishq and doubts were being cast over its prospects. Tanishq began by offering jewellery in the 18-carat gold range, with designs borrowed heavily from contemporary European brands.These European designs were not able to enthrall the Indians and the brand suffered huge lossesin 1997-98.

This clearly symbolizes that the approach of customer were not analysed. Lifestyle, personality and values has to be studied before launching the product. Psychologic and Behavioral approaches were to be emphasized.

Tanishq found out that it had gone wrong mainly in two areas - the product proposition and retailing. 1) Switching to traditional designs:The first step was to change the brand positioning from that of an elitist and Westernized offering to a more mainstream, Indian one. More ethnic ones and traditional ornaments (based on designs from various states) were launched over the modern designs. 2)Karatmeters:-

Traditionally, conventional jewellers used the touchstone2 to test the purity of gold. Apart from the fact that the customers did not trust the method, it was also alleged that a slight amount of gold was always lost while testing. The customers had to accept this for want of an alternative. In 1999, Tanishq introduced the revolutionary concept of Karatmeters in its retail boutiques. The Karatmeter used X-rays to give an accurate reading of the constitution of gold in the ornament within three minutes. Imported from Germany at a cost of Rs 1 million each, Karatmeters though expensive, proved to be the biggest USP for Tanishq in the coming years. 3)Providing Customer Service:A customer satisfaction measurement program was started with the help of Customer Satisfaction Measurement Management (CSMM), an associate of IMRB. CSMM tracked customer satisfaction parameters for Tanishq on a quarterly basis. This gave the company the benefit of benchmarking against local and international players and also aided in improving repeat purchases. As a result, Tanishq was able to directly link the remuneration of franchisees with customer satisfaction.

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