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Tanishq Jewellery Market Research - April 14th, 2009

INDEX

SR.NO. CONTENTS
1 Introduction
2 Market Research
3 Market Research For Business Planning & Growth
4 Tanishq – An Introduction
5 Locating Tanishq
6 Product Line & The Collections
7 Tanishq For You
8 Tanishq Retailing
9 Marketing
10 Tanishq Marketing Strategy
11 The Jewellery Market
12 Some of Tanishqs Competitors
13 Tanishq – Market Research
14 Tanishq – The Turnaround Story
15 Promotion, Advertising & Public Relation
16 Tanishq In The News
17 Globalization

INTRODUCTION

As we see it, research in advertising and marketing is very crucial in understanding,

speculating on, and ultimately determining the position of the product in the consumer's
mind.

It is like a homework task that a good advertising/marketing/sales person would always

carry out before (and after) implementing the said product's advertising/marketing
strategy.

By collecting data with the help of research methods, the researcher can manage to
understand the consumer, what he wants, when he wants it, and how he wants it.

Research methodologies, more or less, aim to reveal consumers’ different perceptions of

the product, in large part about the way it is advertised.
The researcher wants to know how effective the advertisement is on his listeners, where
the strategy falls short, and where it can improve.

Ultimately, it can be said that the most important task of advertising/marketing research
is to increase the sales of the product. This requires a well developed marketing plan, a
good know-how of the prospective consumer, and most of all an effective and rational
research methodology.

MARKET RESEARCH

Market research is the process of systematically gathering, recording and analyzing data
and information about customers, competitors and the market. Its uses include to help
create a business plan, launch a new product or service, fine tune existing products and
services, and expand into new markets. Market research can be used to determine which
portion of the population will purchase a product/service, based on variables like age,
gender, location and income level.

Market research is generally either primary or secondary.In secondary research, the

company uses information compiled from other sources that appears applicable to a new
or existing product. The advantages of secondary research are that it is relatively cheap
and easily accessible. Disadvantages of secondary research are that it is often not specific
to your area of research and the data used can be biased and is difficult to validate.
Primary market research involves testing such as focus groups, surveys, field tests,
interviews or observation, conducted or tailored specifically to that product.

A list of questions that can be answered through market research:

• What is happening in the market? What are the trends? Who are the competitors?

• How do consumers talk about the products in the market?

• Which needs are important? Are the needs being met by current products?
.
MARKET RESEARCH FOR BUSINESS PLANNING & GROWTH

Market research is for discovering what people want, need, or believe. It can also involve
discovering how they act. Once that research is complete it can be used to determine how
to market your specific product.

For the growth and plannning of a business there are a few things that are important:

Market information

Market information is making known the prices of the different commodities in the
market, the supply and the demand. Information about the markets can be obtained in
several different varieties and formats.

Examples of market information questions are:

• Who are the customers?

• Where are they located and how can they be contacted?
• What quantity and quality do they want?
• When is the best time to sell?

Market segmentation

Market segmentation is the division of the market or population into subgroups with
similar motivations. Widely used bases for segmenting include geographic differences,
personality differences, demographic differences, use of product differences, and
psychographic differences.

Market trends

The upward or downward movements of a market, during a period of time. The market
size is more difficult to estimate if you are starting with something completely new. In
this case, you will have to derive the figures from the number of potential customers or
customer segments.

But besides information about the target market you also need information about your
competitor, your customers, products etc.

A few techniques are:

• Customer analysis
• Choice Modelling
• Competitor analysis
• Risk analysis
• Product research
• Advertising research

TANISHQ – AN INTRODUCTION

Tanishq is India's largest, most desirable and fastest growing jewelry brand in India.
Started in 1995, Tanishq is the jewelry business group of Titan Industries Ltd - promoted
by the TATA group, India's most respected and widely diversified business
conglomerate.

This year marks a decade of successful innings for Tanishq. With a retail sales of 1200
crore last year and gunning for 2000 crores this year, Tanishq has arrived in the Indian
jewelry market. It is a story of a successful Indian enterprise, which has delivered value
to its customers and shareholders in a complex category, marked by its completely
localized front end as well as back end.

Tanishq has set up production and sourcing bases with through research of the jewelry
crafts of India. jewelry at Tanishq is crafted in one of the world's most modern factories.
The factory complies with all labour and environmental standards. Located at Hosur,
Tamil Nadu, the 1,35,000 sq. ft. factory is equipped with the latest and most modern
machinery and equipment. Every product at Tanishq is painstakingly crafted to
perfection. Diligent care and quality processes ensure that the Tanishq finish is
unmatched by any other jeweller in the country.

Tanishq challenged the age-old jeweller's word with TATA's guaranteed purity. It
exploded the market with facts about rampant impurity across India. It introduced
technology-backed challenge in a category completely governed by individual trust.
Tanishq introduced innovations like Karatmeter, the only non destructive means to check
the purity of gold.

Tanishq also introduced professional retailing in the dis-organised Indian jewelry bazaar,
where women can shop with comfort and peace, without worrying about the purity of the
jewelry they are buying, as well as, select from the best jewelry collections available in
the Indian market.

Tanishq today is India's most aspirational fine jewelry brand with 91 stores in 64 cities,
with an exquisite range of gold jewelry studded with diamonds or coloured gems and a
wide range of equally spectacular jewelry in 22Kt pure gold. Exquisite platinum jewelry
is also part of the product range.

Jewellery is one of the last great commodity frontiers in India; it has remained so because
this market is very fragmented, very unorganized. Tanishq has successfully taken on the
challenge of transforming this frontier into a reliable consumer space by bringing to it all
the virtues and benefits that branding offers".

- Harish Bhat, CEO, Tanishq.

LOCATING TANISHQ

Tanishq had its first showroom in Chennai in 1996. Today it has over 60 showrooms in
47 cities. Only six of these are owned by the company. The rest are run by franchisees.

There are six branches in Mumbai

Tanishq
365/C,Linking Road, Khar,
Mumbai-400 052
Ph: 022-26484846 / 26495959
Fax: 022 - 26487979

E-mail:

Tanishq
No. 7, Brabourne
Stadium, Veer Nariman Rd ,
Churchgate,
Mumbai-400 020
Ph: 022-22821621/ 22826043 / 22838801
Fax: 022 - 22875155

E-mail:

Tanishq
19-21, Kailash Plaza,
Vallabh Baug Road,
Opp. Odeon Cinema,
Ghatkopar East,
Mumbai - 400 077
Ph: 022- 25128020 / 25127734 / 25128020 / 25127684
E-mail:btqgtk@tanishqmail.com

Tanishq
Level 2 R Mall
Lbs Road, Mulund (W)
Mumbai
Ph: 022 67969627 / 67997874 / 39576922
E-mail:btqmln@tanishqmail.com

Tanishq
G-11, Inorbit Malls
Mind Space, Malad Link Road,
Malad,
Mumbai - 400068
Ph: 022 56406945 / 56406938
E-mail:btqorb@tanishqmail.com

Tanishq,
Durga Chambers, Plot # Ctsf-904,
40 Waterfield Road,
Rk Patkar Marg, Turner Road,
Bandra(W), Mumbai:400050
Ph: 022-67100687 / 26424846

PRODUCT LINE & THE COLLECTIONS

PRODUCT LINE:

Tanishq Diamonds
The sparkle of diamonds has always attracted the human eye.

Finding your perfect piece of diamond jewelry is an exhilarating and unique experience.
As with any significant purchase, it is important that you make an educated decision.

Cut and crafted with utmost care, Tanishq diamonds come with a certificate of
authenticity, stating the caratage, colour and clarity of the stone, to enable you to know
exactly what you are paying for.

No gemstone expresses human emotions more powerfully than a diamond and Tanishq
transforms these precious stones into breathtaking masterpieces, each unique and
splendid in design. When it comes to diamonds at Tanishq you will be spoilt for choice
from many collections we have to offer.

Tanishq Gold

From the traditional harams, mangalsutras and thalis to the more fashionable earrings,
chains, bracelets and rings, there is a lot to choose from at Tanishq.

In India Gold has always been associated with security and is the most valuable form of
investment. However, it has been observed that consumer is an easy target to several
malpractices like under karatage, under valuation of the gold sold and unfair buy back
policies due to the lack of awareness about these issues.

Tanishq propagates ethical practices not only by assuring the customer purity and selling
policies, but also fair policies to the karigars who craft the jewelry

Tanishq's designs in Pure 22k gold are not only unique, expressing the wearer's
individuality but each piece is subject to the intricate process of design, crafting and stone
setting with stringent quality standards at every point. At Tanishq, we cater to every
occasion. Our collections in gold abound from the grandiose wedding collection to exotic
kundan and polki, from the stunning Aarka collections to the exclusive Nakashi work.
We ensure that we have something for everyone with our baby range, 9 to 5 for the
working woman and high fashion, men's wear, teen's collection and regional specific
designs.

Tanishq Platinum
Metal at its best.

Pure
Platinum's purity endows it with a brilliant white luster. This helps to reflect the true
radiance of diamonds. Because it is generally 95% pure (18 karat gold is 75% pure),
platinum jewelry does not fade or tarnish and keeps its looks for a lifetime.

Rare
Platinum is rare, the coveted treasure of discerning individuals. There is very little
platinum on this earth and it is found in very few places around the world. This exquisite
metal is 30 times rarer than gold. Platinum's rarity makes it exclusive and distinctive - a
celebration of your individuality.

Eternal
Platinum jewelry is the perfect choice for a lifetime of everyday wear. Platinum does not
wear away and holds precious stones firmly and securely. All precious metals can
scratch, and platinum is no exception. However, the scratch on a platinum piece is merely
a displacement of the metal and none of its volume is lost.

Some of the world's most famous gems are set in platinum, such as the Kohinoor
diamond, part of the British crown jewels.

Platinum and White Gold are distinctly different materials and must not be confused.
Platinum is a metallic element while White Gold is a Gold alloy, which gets its white
colour due to palladium or nickel.

Tanishq's Platinum represents excellent value for money. The price may be higher than a
similar item in gold but platinum is pure, rare, enduring, beautiful, luxurious, classic, and
the perfect host for diamonds; precious qualities that make it worth paying that little bit
extra for.

THE COLLECTIONS:

The Diamond Collection

No gemstone expresses human emotions more powerfully than a diamond After all, a
diamond is timeless and finding your perfect piece of diamond jewelry is an exhilarating
and unique experience. Cut and crafted with utmost care the diamond collection renders
each piece eternal.

The Wedding Collection

The bride blushes; Everyone around smiles; The shenai announces festivity; The priests
chant auspicious promises; She walks demurely; A vision of beauty; Her jewels are
exquisite; Crafted by the best in the land; As pure as the blessings bestowed on her.
The Zoya Collection

Intricacy coupled with the simplicity; The magnificence of history interwoven with linear
contemporary; Secrets of the pharaohs masked with the mystery of the cosmos; oriental
art embellished with occidental architecture; nature's bounty matched with man's
ingenuity.

The Fashion Earring Collection

The Fashion earring collection', has a range of over 300 exclusive designs. Keeping in
tune with the raging popularity that earrings currently enjoy, the Tanishq design team has
created the Fashion earring collection, inspired by the evergreen Jhumkas or Karnaphools
and the trendy Chandelier and delicate Stiletto designs

The Kundan and Polki Collection

Influenced by the mughal era Kundan work requires special craftsmanship and a myriad
of stages, each crafted by a different set of highly skilled karigars.
Tanishq as a revitaliser of tradition brings to life techniques and motifs of the period
through our exquisite collections of Kundan and Polki (uncut diamonds).
It is difficult for jewelers to ensure the purity and correct grammage of the product since
it involves so many stages. However, Tanishq ensures the karatage and net wt of the
product.

The Colours of Royalty Collection

Colors of Royalty a range of exquisite studded jewelry, reminiscent of the magical

Victorian era. The collection is inspired by the classic design essence and sensibilities
found in the architecture, fashion, design, drapes and patterns of the Victorian period.
Tanishq has incorporated the timelessness of these styles into exquisite jewelry designs to
present a collection where fashion and tradition converge.
This line of precious stones and diamond jewelry in 18k from Tanishq comprises more
than 200 pieces and is by far the largest studded collection launched by us.
This exclusive collection was launched at the Ponds Femina Miss India 2006, where the
25 finalists wore it. The Colors of Royalty is a line of exclusive gems and stone studded
jewelry that reflects the grandeur of India's rich past represented through the varied
meanings associated with colors in our lives

The Moham Collection

The collection comprises designs, motifs inspired by nature that have been beautifully
crafted to make them the most desirable possession this season
Moham is a range of exclusive ruby studded jewelry that embodies the auspiciousness the
color red has in our lives. Rubies have been associated with prosperity, passion and have
been the most coveted gemstone for many years.It is a must have for a Indian
women.This range attempts to strike a balance between convention and fashion by
creating designs suitable for the progressive Indian woman, rooted in her tradition.
This line of Ruby studded jewelry from Tanishq is available in both 18k and 22k. This
launch reiterates Tanishq's focus on catering to region specific tastes and preferences.
India offers great potential for the Moham collection where Ruby studded jewelry enjoys
great popularity and acceptance. Consumer survey indicates that women attach great
inspirational value to rubies, second only to diamonds.

The Aria Collection

Aria is a collection of variety of everyday jewellery which depict various moods and
feelings:

Mysteries of love
Mysteries of passion
Mysteries of envy
Bewitching
Fascinating
Enchanting
Hypnotizing
Sensuous
Captivating

Exquisite crowns and jewelry

Tanishq, India's most innovative jewelry brand, unveiled the awe-inspiring set of crowns
and its 'Colors of Royalty' range of jewelry, specially crafted for India's leading beauty
pageant, Femina Miss India 2007.

Tanishq has built itself a reputation of bringing innovative designs that suit the needs of
"the ever-changing never-changing" Indian woman.The crowns have been designed to
convey the essence of India through the use of distinctive motifs such as the traditional
and auspicious 'teeka' - the Indian touch to the contemporary styling. Crafted with
painstaking detail, each of these crowns convey a story; a story of their "ORIGIN".
Inspired by interplanetary movements and colors of flora and fauna, these tiaras are a
stunning combination of trillions, baguettes, round brilliant cuts, princess, pears and
specially cut colored crystals. Each crown weighs about 450 gms and has a special spring
mechanism designed to fit perfectly on any size or shape of head.

The inspiration behind each crown is distinct and personifies the spirit of the title.

Miss Universe: This crown has the perfect cosmic blend of elements, very like the
universe itself. The large red stone, set slightly on the side, is the symbolic and stylised
'teeka'.

Miss Universe: This crown has the perfect cosmic blend of elements, very like the
universe itself. The large red stone, set slightly on the side, is the symbolic and stylised
'teeka'.

Miss World: The natural essence of this piece is enhanced by the wave-like undulating
shape on the base of the crown, sitting snugly on the forehead of the wearer. And of
course the vivid rectangular blue stone that expresses the teeka of victory, and sets off the
varying hues of the sea on the rest of the crown.

Miss Earth: This crown derives its inspiration from the essence of nature- her flora and
fauna. Based on the fabulous colours and movement of the peacock and its feathers, this
stunning piece is an intriguing study in harmony and contrast.

The jewelry crafted beautifully with interspersion of diamonds and colored stones, is an
ode to the ecstatic beauty and supreme power behind every woman. The contemporary
styling has been brought to life with sensuous curves, balance, rhythm and symmetry of
classic Indian motifs in an unconventional synthesis. These beautiful and vibrant
gemstones in different shapes, sizes and colors are sprinkled amongst diamonds to create
a symphony that enhances the look of the stones and adds a dash of color to conventional
designs.

Tanishq has translated the timelessness of these designs to a modern context and brought
to life a collection where fashion, design and tradition blend perfectly.

TANISHQ FOR YOU

At Tanishq its not just the products, it’s the experience that matters. We make sure that
we give you the premium quality of not only product but service as well. Tanishq not
only has an exquisite range of designs to meet all your requirements we also offer the
benefit of any modification or customization on products.

There are host of value added services that you can avail of at Tanishq like the Golden
Harvest Savings Scheme, Gift Voucher purchase, Exchange of gold and diamonds etc.

Golden Harvest Saving Scheme

Tanishq’s “Golden harvest Savings Scheme” is one of the most lucrative savings
schemes, that enables to save each month with Tanishq and plan for wedding jewelry
purchases. Your monthly installments are safe with us, whereas savings at home could
easily get spent. This scheme provides you with much better returns than other saving
options like bank deposits or post office savings schemes. In addition, Tanishq’s special
bonus at the end of the scheme period helps you stretch your jewelry budget.

How much money must one invest to enroll in the Savings Scheme?

You need to invest only Rs.500/- per month to enroll. You could also deposit a larger
sum, as long as they are in multiples of Rs.500/- You can choose from two convenient
savings scheme options- an Annual Plan (12 month installments) and an Extended Plan
(18 month installments).

BONUS:
• 60% of monthly installment in Annual Plan

• 130% of monthly installment in “Extended Plan”

At the end of the scheme period, pick up Tanishq jewelry of your choice worth the
amount deposited plus the BONUS

Installment Amount (Rs) Bonus for 12 months scheme Bonus for 18 months scheme
500 300 650
1000 600 1300
1500 900 1950
2000 1200 2600
2500 1500 3250
3000 1800 3900
4000 2400 5200
5000 3000 6500

Exchange Policy in Tanishq

Exchange your old jewelry for new with Tanishq

Most retailers have a differential buy back or different rates for selling and buying gold
jewelry. At Tanishq, a single gold rate is maintained for buying or selling gold jewelry.
8% of the value is deducted for costs involved with testing, refining and taxes for the
jewelry given by the customer.

When you exchange any Tanishq gold coin with jewelry, you get the benefit of the
current gold rate and full value exchange without deduction. When you exchange any
other bank’s gold coin with jewelry there is a 4% deduction on value. This deduction is
made for handling and transportation costs and for refining the metal received on
exchange

How are Diamonds exchanged in the market? How are diamonds exchanged at Tanishq?

Most jewelers exchange jewelry returned to them at the purchase price hence any
appreciation in the value of gold and diamonds are not accounted for.

At Tanishq, when you exchange diamond jewelry purchased from us it is exchanged for
its current value, thus giving you the benefit of any appreciation that would have taken
place in the price of gold or diamonds

Gift Vouchers

Gift Vouchers make the perfect gift for friends and family. These are available at all
Tanishq showrooms across India and are also redeemable across the country, Gift
vouchers are available in the following denomination Rs. 2501/-, Rs. 5001/- , Rs. 10001/-
and Rs. 25001/- So now you no longer need to worry about gifting your loved one,
something of her choice!

Purity Checks

Purity checks allow lovers of the yellow metal to test the purity of the gold they already
own. Playing a significant role in this is the Karat meter, which is the most scientific
measure of purity in the world. It uses X-rays to give an exact reading of the purity of
gold in just three minutes, giving the consumer an unmatched benefit when buying or
selling gold. It is in fact the most scientifically proven, non-destructive means of testing
the purity of gold. Due to its excellent precision, X-ray analysis has been adopted by
international agencies as well as by BIS in India as part of the certification process used
to Hallmark Gold.

Anuttara

You can also become the member of Tanishqs loyalty programme Anuttara and avail of
various discounts and priveleges.

TANISHQ RETAILING

Tanishq ventured into jewellery retailing in 1996 through exclusive stores, both company
owned and franchisee outlets, a concept unique to branded jewellery segment at that time.
In just over a decade Tanishq has achieved several milestones and today is the largest
jewelry brand in the country with a turnover of Rs. 1250 crores in the last fiscal. This
success of Tanishq is a result of an exclusive blend of exquisite designs, trust and
reliability, innovation, highly focused communication strategy and innovative retail
strategy.
innovation have been the hallmark of Tanishq all these years. Tanishq has constantly
formulated an innovative product strategy this journey in line with the evolving consumer
tastes. Tanishq Design Studio has created exquisite and varied collections like Fashion
earrings, Everydays, high-end Zoya collection among others aimed at distinctive
consumer segments. Similarly Tanishq has undertaken several unique retail initiatives
keeping in mind the customer demand for a world class shopping experience. As such
Tanishq retail identity has evolved over the years to offer large format and concept stores
that reflect the brand’s philosophy of being “Revitaliser of Tradition”.

Commenting on Tanishq’s success story, Mr. C K Venkatraman, COO, Tanishq, said

"We have been able to capitalise on the trends of the local jewellery markets by building
on our solid financial strength, market-leading brand position, wide network, local
sourcing strategy, a management model of excellence and, most importantly, a
philosophy of customer care. In the future, the key to building stronger competitiveness
will lie in enhancing network coverage, brand equity and logistics. Amid the keen
competition in the Indian jewellery market, only the strong player can emerge
victorious."

Tanishq’s retail strength goes beyond its innovative identity and extensive reach. Tanishq
has undertaken several unique retail and marketing initiatives like creating purchase
triggers like Doctors Day / Professional Day etc that were unexplored avenues in the
industry. Tanishq has also endeavored to be part of every occasion in an Indian woman’s
life through festive promotions, customer contact programmes as well as through
Anuttara, Tanishq’s exclusive consumer reward programme etc.
Following more than 40% percent growth in operations last year, Tanishq will invest
extensively during 2008 in marketing and retail initiatives to further develop the market.
In addition, Tanishq will build new logistics centres and upgrade existing ones, laying a
solid foundation to meet future competition

Tanishq is the first and only jewellery brand to have organized mass jewellery retail
chains across the country. As our company expands, more and more people will be able
to share our mindset. Brand Tanishq is for every Indian woman; it is at all times keyed-in
to their ever-changing demands, moods and tastes. It conveys a feeling of self-confidence
and individualism that characterizes the Indian woman. The offerings are in tune with
fashion and yet do not lose touch with tradition.”

Tanishq the "Revitaliser of Tradition"

Tanishq has opened first-of-its-kind concept stores at Fort Knox Kolkata, South
Extension Delhi, Kormangala Bangalore and Bund Garden Pune . These stores reflect the
new retail identity of Tanishq the 'Revitaliser of Tradition' and combine the grandeur of
the past with the reality of the present without losing its inherent character and appeal.

The introduction of the idea of a concept store catapults Tanishq's unique brand identity
in the retail space and takes jewelry retailing in India to a new level. The concept stores
will take Tanishq closer to making it the complete jewelry brand catering to varying
consumer needs and tastes across all consumer segments and also provide customers a
unique and innovative buying experience.

The theme 'Revitalizer of Tradition' has been incorporated in all the design aspects for the
new concept stores. The stores have a contemporary feel while retaining the flavor of the
past. Traditional craftsmen were used to create a period ambience so that the store
replicates the authentic period look with its stunning sand stone arches and special motifs
inspired by the inlay work of the Taj Mahal for the North and East stores and the
Chettinad influences for the South stores.

Tanishq has plans to extend its retail experience to a larger consumer base by launching
more concept stores across the country.
MARKETING

Marketing Equals the Four Ps

Part of marketing is identifying the mix of "Ps" that makes your service unique. This is
also called your marketing mix. The next step is to shape your marketing mix and
position its components to create a unique identity for your business that attracts and
retains customers. Your market position is one or more selected benefits or features that
make your operation unique and different.

The following steps will help you define your marketing mix:
• Identify your target market.
• Determine what the target consumer desires.
• Assess whether you have any advantages over your competition in delivering the
desired service.
• Choose the position that is most valued by the consumer.
PRODUCT PLACE (DISTRIBUTION) PROMOTION PRICE (COST)
Features Location Publicity List Price
Optional Services Frequency of Service Sales Promotion Discounts
Product Quality Transportation Personal Selling Credit Terms
Staff Quality Distributors Advertising Inclusive/Not
Style Inventory Mailing List Remoteness
Brand Name
Packaging
Guarantees

Tanishq has excelled in 4 P’s of marketing and hence it is the top brand in India.
TANISHQ MARKETING STRATEGY
When Titan launched Tanishq in 1995, the jewellery industry in India valued at Rs
40,000 crore, was mostly unorganized, with around 3.5 lakh players. India was the
second largest consumer of gold in the world after USA. Before 1992, only the Metal and
Mineral Trading Corporation and the State Bank of India were allowed to import gold. In
1992, as part of economic liberalization, the government abolished the Gold Control Act
of 1962, allowing free import of gold. In 1993, private companies were allowed to enter
the hitherto restricted gold and diamond mining industry. Foreign investors were allowed
to hold up to 50% equity in mining ventures.

In the 1990s, a number of brands entered the Indian jewellery market. In 1995, Mumbai
based jewellery exporter, Gitanjali Jewels, started selling 18-carat gold jewellery under
the brand name of Gili. Su-Raj (India) Ltd. launched its 22-carat gold and diamond
jewellery in 1997. Other well known domestic players included Tribhovandas Bhimji
Zaveri, Mehrason's and P. C. Chandra. Among the foreign players who entered the
market were Cartiers, Tiffany, De Beers and Ashton Mining.

Titan realized that there was a huge untapped market for branded jewellery in India. The
critical success factors in the business were quality, fashionable design, and good after-
sales service. Titan also observed that the changing lifestyles demanded lighter and
trendier jewellery.

After its launch, Tanishq faced several problems. With its original focus on exports,
Tanishq's designs had been conceptualized for the Western markets and were introduced
in India without any alterations. Formal consumer surveys showed that though brand
awareness was quite high, it suffered from several negative perceptions. Many potential
customers thought the products were over priced and associated the brand only with the
rich.

Hence, Titan decided to change its strategy on two fronts:

¬ Value proposition
¬ Retailing.

Since the European designs in 18-carat gold did not find any takers in 1997, Tanishq
introduced 22-carat ornaments. Customer surveys revealed that gold jewellery was not
bought so much for design as for value. Titan also decided to do away with the shop-in-
shop formats and started retailing its jewellery through exclusive Tanishq outlets from
1998. Titan realized that, given the diverse nature of Indian ethnicity, it would have to
satisfy the tastes of all regions. So, the designs became more ethnic.

Titan also decided to transpose designs by stocking Bengali designs in Delhi, Keralite
designs in Tamil Nadu and typical designs from Tamil Nadu in Bombay in order to
appeal to a variety of people. The same year, Tanishq entered the studded jewellery
segment, which it had ignored for long. Titan also tapped institutional customers also. In
1998, it launched the corporate gold gift scheme - 'When you want to say thank you, say
it in gold'. In 1999, Tanishq delivered gold coins worth Rs. 20 crores to Maruti Udyog
Ltd., to be given away as gifts to Maruti car owners. In early 2000, it made miniature
gold cars for Hyundai Motors to be given to select dealers.

The Tanishq strategy for the coming couple of years relies on two things —increasing
penetration in the domestic markets and going abroad in order to diversify its revenue
portfolio.

THE JEWELLERY MARKET

Jewellery play a significant role in Indian customs and traditions, making this sector
integral to the economy and one of the fastest growing industries in the country.
Worldwide, the gems and jewellery industry has been growing at a good pace and is
currently estimated at over US$ 130 billion. In India, it accounts for nearly 20 per cent of
total Indian exports. It provides employment to 1.3 million people directly and indirectly.

The Indian market is laden with gold jewellery of varying karatage, which has seen huge
appreciation in value terms in recent times.

The Gold Rush

In the late 1990s, the Indian jewellery market witnessed a shift in consumer perceptions
of jewellery. Instead of being regarded as only an investment option, jewellery was being
prized for its aesthetic appeal. In other words, the focus seemed to have shifted from
content to design. Trendy, affordable and lightweight jewellery soon gained familiarity.
Branded jewellery also gained acceptance forcing traditional jewellers to go in for
branding. Given the opportunities the branded jewellery market offered; the number of
gold retailers in the country increased sharply.

Branded players such as Tanishq, Oyzterbay, Gili and Carbon opened outlets in various
parts of the country. Traditional jewellers also began to bring out lightweight jewellery,
and some of them even launched their in-house brands.

However, the share of branded jewellery in the total jewellery market was still small
(about Rs. 10 billion of the Rs. 400 billion per annum jewellery market in 2002), though
growing at a pace of 20 to 30 percent annually.

The branded jewellery segment occupied only a small share of the total jewellery market
because of the mindset of the average Indian buyer who still regarded jewellery as an
investment. Moreover, consumers trusted only their family jewellers when buying
jewellery.

Consequently, the branded jewellery players tried to change the mindset of the people
and woo customers with attractive designs at affordable prices.

Gold Jewellery Market in India

Before the liberalization of the Indian economy in 1991, only the Minerals and Metals
Trading Corporation of India (MMTC) and the State Bank of India (SBI) were allowed to
import gold.

The abolition of the Gold Control Act in 1992, allowed large export houses to import
gold freely. Exporters in export processing zones were allowed to sell 10 percent of their
produce in the domestic market.

In 1993, gold and diamond mining were opened up for private investors and foreign
investors were allowed to own half the equity in mining ventures.

In 1997, overseas banks and bullion suppliers were also allowed to import gold into
India. These measures led to the entry of foreign players like DeBeers, Tiffany and
Cartiers into the Indian market. In the 1990s, the number of retail jewellery outlets in
India increased greatly due to the abolition of the Gold Control Act.'

This led to a highly fragmented and unorganized jewellery market with an estimated
100,000 workshops supplying over 350,000 retailers, mostly family-owned, single shop
operations.

In 2001, India had the highest demand for gold in the world; 855 tons were consumed a
year, 95% of which was used for jewellery.
The bulk of the jewellery purchased in India was designed in the traditional Indian style.
Jewellery was fabricated mainly in 18, 22 and 24-carat gold. As Hallmarking was not
very common in India, under-caratage was prevalent.

According to a survey done by the Bureau of Indian Standards (BIS), most gold jewellery
advertised in India as 22-carat was of a lesser quality.

Over 80% of the jewelers sold gold jewellery ranging from 13.5 carats to 18 carats as 22-
carat gold jewellery. The late 1990s saw a number of branded jewellery players entering
the Indian market.

Titan sold gold jewellery under the brand name Tanishq, while Gitanjali Jewels, a
Mumbai-based jewellery exporter, sold 18-carat gold jewellery under the brand name
Gili.
Gitanjali Jewels also started selling 24-carat gold jewellery in association with a Thai
company, Pranda

Su-Raj (India) Ltd. launched its collection of diamond and 22 -carat gold jewellery in
1997. The Mumbai-based group, Beautiful, which marketed the Tiffany range of products
in India, launched its own range of studded 18-carat jewellery, Dagina.

Cartiers entered India in 1997 in a franchise agreement with Ravissant. Other players
who entered the Indian branded gold jewellery market during the 1990s and 2000-01
included Intergold Gem Ltd., Oyzterbay, Carbon and Tribhovandas Bhimji Zaveri (TBZ).

Gold Jewellery Becomes Fashion Accessory

Till the early 1990s, the average Indian bought jewellery for investment rather than for
adornment. Jewellery made of 18-karat gold was not favored as it was considered a poor
investment. Confidence in the local jeweller was the hallmark of the gold jewellery trade
in India. A jeweller or goldsmith in a local area had a fixed and loyal clientele.

The buyer had implicit faith in his jeweller. Additionally, the local jeweller catered to the
local taste for traditional jewellery. However, since the late 1990s, there was a shift in
consumer tastes: women were increasingly opting for fashionable and lightweight
jewellery instead of traditional chunky jewellery.
There was a rise in demand for lightweight jewellery, especially from consumers in the
16 to 25 age group, who regarded jewellery as an accessory and not an investment. The
new millennium witnessed a definite change in consumer preferences. According to
Samrat Zaveri, CEO of Trendsmith, "Research shows that the Indian jewellery sector is
in the transition phase with consumers' desire for possession of jewellery for its aesthetic
appeal and not as a form of investment."

In October 2002, Trendsmith conducted a survey to understand the shifting needs,

motivations and aspirations of consumers in the jewellery market, and to identify new
trends and opportunities. The research study arrived at the following conclusions:

• The Indian market was witnessing an accelerated shift from viewing jewellery as an
investment to regarding it as aesthetically appealing ornaments. The focus had shifted
from content to design.
• The younger generation was looking at trendy, contemporary jewellery and clearly
avoiding heavy, traditional gold jewellery.

• The consumer wanted a wider selection at a single convenient location and expected an
international shopping experience.
• The Indian consumer was willing to experiment with new designs.

In the late 1990s and early 2000s, with the increase in the number of designers from
design schools such as the National Institute of Fashion Technology (NIFT), a wide range
of new designs became available. In addition, the growing number of manufacturers
needed a retailing platform with global and national reach. All these led to the
proliferation of branded jewellery players.

Tanishq - Strategies for Wooing Customers

In the late 1990s, players in the branded gold jewellery market formulated strategies for
wooing customers. According to Jacob Kurian (Kurian), Chief Operating Officer of
Tanishq, the challenges were many.

As the jewellery market was highly fragmented, lacked branding, and allowed many
unethical practices to flourish, Tanishq worked hard on a two-pronged brand-building
strategy: cultivate trust by educating customers about the unethical practices in the
business and change the perception of jewellery as a high-priced purchase.

Said Kurian, "We are changing the attitudes of customers from blind trust to informed
trust." To increase its marketshare, Tanishq formulated a strategy for luring people away
from traditional neighborhood jewellers. Tanishq's strategy was to create differentiation
and build trust.

According to Kurian, the first part of the strategy was "to provide a point of
differentiation in a highly commoditized category – which is the whole point of
branding."12 The second part of the strategy was to project Tanishq as an unimpeachable
mark of trust. According to Kurian, "If differentiation plays the role of primary attraction,
trust takes care of lifelong loyalty."13 One way to create differentiation was through
design.

The emphasis had to be on design because local jewellers could offer to design any
pattern according to the customer's specifications. For a national brand a generic design
concept with regional variations had to be evolved. For this, Tanishq set up a seven
member in-house design team and also outsourced designs from freelance designers.

The designers travelled the length and breadth of the country to get feedback on
Tanishq's designs and learn about customer preferences. On the basis of this feedback,
each showroom could select the designs it would carry. To stay ahead of competition
from local jewellers, Tanishq decided to focus on quality control. In 1999, it introduced
caratmeters which showed the purity of gold.

In fact, Tanishq's USP was the purity of its gold. Accordingly, the company's ad
campaigns emphasised the purity aspect of all Tanishq ornaments. In November 2002,
Tanishq introduced a new collection of jewellery called 'Lightweights.'

The collection featured neckwear, earrings, bangles, rings and chains in 22 karat gold
with prices starting at Rs 1,100. It also launched Lightweight Diamonds, with prices
starting at Rs 3,000. Tanishq focused not only on urban markets, but small town markets
as well. Real estate was less expensive in the small towns than in large urban centres.
Besides, competition from stores in small towns was less stiff than competition from the
large jewellery stores in the metropolitan cities. According to Kurian, the best returns on
investment came from small towns.

All That Glitters is Not Gold

Branded jewellery players will continue to face lot of competition from local jewellers. In
order to gain marketshare, they will have to come up with designs that customers want
and win the trust and confidence of consumers by hallmarking and demonstrating the
purity of the gold used by them.

To compete with traditional players, branded players must also find some way to
differentiate themselves. While the success of a particular brand will depend on
differentiation, affordability and quality will be a key element in sustaining a brand. In
addition, branded players require focused advertising and astute salesmanship to compete
with traditional jewellers.

Besides the major brands- Tanishq, Carbon, Oyzterbay, Gili and Trendsmith- several
regional players have opened branches to leverage the trust and reputation that they have
built up over the years. This is going to add to the competition in the branded jewellery
market. Most of the branded jewellery players in India focused on yellow gold; only a
few of them experimented with the pink and white forms of gold. Some of the players
also used diamonds and platinum, which appear to have a good future in the Indian
jewellery market
SOME OF TANISHQS COMPETITORS

Asmi

Asmi, one of the leading diamond brands of the country, was launched, In 2002 by The
Diamond Trading Company Ltd, (DTC).
The Asmi diamond Jewellery Collection is crafted to beautifully compliment and
complete her. Asmi caters to the women of substance & satisfies her mind for rewards
recognition, evolving to suite her style & Personality.
The brand has been endorsed by various celebrities such as Kajol, Mandira Bedi &
Perizad.
All these women epitomize the different strengths. An Asmi woman is closely identifies
with free-spirited, goal-oriented & with an inner fire.

Nakshatra Diamonds

The world renowned Nakshatra diamonds were launched in 2000, with an equally
dazzling Aishwarya Rai as its brand ambassador. In the present scenario Nakshatra
diamonds occupy a leading position in the fashion diamond jewelry segment. The
traditional diamond is the most wanted design among Nakshatra diamonds.
Nakshatra diamonds claim to shine your glamour and love life. They have aptly put their
slogan as "brightest circles of light." Elegant and graceful Nakshatra diamonds are the
epitome of passion, attitude and independence.

Gili

Gili was launched in 1994, targeting mainly the youth who wanted to celebrate
Valentine's day. Since then, the brand has clocked a turnover of Rs. 90 crores.
Nirvana Diamonds

Nirvana Diamonds from Fine Jewellery (I) Ltd. was launched in 1987 in India. Nirvana
diamonds are targeting at fashion conscious, modern and independent thinking women.
Internationally acclaimed Nirvana diamonds are manufactured by using state-of-the-art
technology. As a proof of their quality Nirvana was among one of the brands to offer
lifetime warranty to its consumers.

D'damas Diamonds
D'damas Diamonds are part of Gitanjali Digico Group and one of the earliest diamond
houses established in India in 1966. On the present day D'damas Diamonds offer highly
modernized diamond cutting and polishing facilities at five locations in India. D'damas
Diamonds claim to promote a range of emotions through their collections

Adora Diamonds

Adora Diamonds were launched in India in July 2003 by Mumbai based Concept Jewelry
(India) Ltd. On the present day the still expanding retail network centers of Adora
expands to 117 outlets in 47 cities of India. Adora means glory in Spanish and claims that
its diamond collection is themed on love. Adora diamonds are for adornment of every
moment, occasion, and phase of life through its up and downs.The Swaranjali signature
collection of living legend Lata Mangeshkar is a unique feature of Adora diamonds. Each
piece of Swaranjali collection is conceptualized and approved by Lata Mangeshkar and
bears her laser printed signature.

Kiah Diamonds

World's largest volume manufacturer of diamonds-Sheetal manufacturing Company

(SMC) launched its exquisite Kiah diamond collection in October, 2004. Kiah diamonds
are claims to be for celebrating womanhood. The brand name 'Kiah' means beautiful
place. On the latest Kiah diamonds have won the Best Showroom in the DTC Diamond
Season for 2005-2006.
TANISHQ – MARKET RESEARCH

MARKET research On TANISHQ

Tanishq emerges as the best known brand with the highest awareness and recall. The
difference between the leaders and the followers is always greater when the former have
a head start. And when the pace and efforts of the leaders intensify, the possibility that
they will continue to be at the top is a foregone conclusion. The Solitaire - TNS Survey
shows that Tanishq is the best known brand across the three cities of Mumbai, New Delhi
and Bangalore, a finding which lends credence to the leadership factors. More than 65 per
cent of the target audience had no hesitation in coming up with the name, proving that the
extensive branding exercise undertaken by Tanishq (a division of the Tata group
company, Titan Industries) has paid off well. Two decades in the business, over 70 retail
outlets across the country and pioneering efforts to make jewellery buying into an
unforgettable shopping experience - all these factors combined to make the brand into a
household name.

India's Top Ten Best Known Jewellery Brands

The Survey

The Indian jewellery industry is seeing unprecedented activity on the market front with
new entrants coming in all the time. Consumer behavior also is undergoing a
transformation. The Solitaire-TNS Survey to find out India's best known brands (and
other pertinent details) was initiated with a view to assist and equips the industry with
information that goes beyond the ordinary.

"Men buy products while women choose brands," says model-turned-designer and CEO
of a billion dollar company, Kathy Ireland, a fact which jewellery brand managers in
India will not refute. Hence the Solitaire - TNS Survey across Mumbai, New Delhi and
Bangalore was targeted solely at women.

While the sample size was small, 600+, the fact that the target group was covered in and
around shopping malls, banks, corporate areas and commercial zones, made the sample
more relevant to the objectives. The survey was conducted through personal interviews
over a period of 15 days.
What Did Women Really Buy?

An interesting question is whether there is a difference in what women consider as India's

best brands and what they finally opt for. Quite naturally, price structure and affordability
are in conflict with aspirations. However, there has been little or no difference observed
in our target group in their choices. This may be because most jewellery brands have a
varied price range that caters to women belonging to different segments of society. Even
in a high-profile brand at least a few lines are made affordable to most people. Thus, the
toppers in the best known category come up trumps even here.

What Woman Want?

While Tanishq and a few other regulars do occupy women's mind space, the good news
for other brands is that women are not unduly influenced by the aspirational longings of
their hearts. A long history of fascination for the yellow metal as a status symbol and as
an instrument of security and its easy convertibility to cash has most women, both
working and non-working, picking up gold jewellery without precious stones as their
most preferred jewellery. With the economy moving upwards and income levels
increasing, gold consumption in India is showing tremendous growth. WGC reports that
there has already been a 50 per cent increase in the first half of 2005 over the same period
last year! With established jewellery manufacturers (read brand owners) recognizing the
everlasting appeal of gold among Indian women, jewellery brands in the future might see
more visible usage of gold.

♣ 22 carat yellow gold jewellery is the most preferred gold jewellery.

♣ Diamond studded jewellery is the next highly preferred.
♣ 40 per cent of the working women are willing to try new jewellery outlets.
♣ 32 per cent of non-working women opt for this too.
Where Do Women Buy From?

As constant as their liking for gold, Indian women are totally rooted in the choice of the
place from where they buy their jewellery. In this case, the traditional/independent
jeweller seems to have no competition at all from the new generation brand stores, malls,
etc. But there are changes happening. Working women, the survey points out, are more
open to trying out branded and new retail outlets. With an amalgamation between the old
and the new marketing strategies, independent/family jewellers have also created
indelible brands. Thus, in the final reckoning, most women are brand-conscious and opt
either for the ones that are highly visible or those that have been embedded in their
buying culture through family association.

TANISHQ - THE TURNAROUND STORY

When we started out we didn't think that we could achieve this, but now being jewellers
to the nation doesn't seem so distant."
- Tanishq COO, Vasant Nangia, in March 2000.

The Unsuccessful Launch

In 1995, Titan Industries, India's leading manufacturer of watches, launched the Tanishq
range of gold watches and jewellery. Till then, the Indian jewellery market was to a large
extent unorganized, with a few recognized names such as Tribhovandas Bhimji Jhaveri
and Mehrason's. Tanishq, an entirely new concept in the Indian market, thus had to
struggle hard to be accepted by the customers. 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. The company justified its decision saying that it wanted
to be 'different' from the traditional Indian offerings.

Tanishq performed very badly in the next three years, posting a huge loss in 1997-98,
proving its detractors right. Jacob Kurian, Tanishq's chief operating officer admitted,
"Tanishq, as a concept, was far too ahead of its times." Even if one agreed with Kurian, it
could not be denied that Tanishq did commit mistakes.

Analysts decreed that the company's strategies were wary. At this point, Tanishq took
various steps to correct the mistakes it had committed and very soon, posted its first ever
operating profit in 1999. In 1999-00, sales doubled to Rs 1532 million against Rs 743.8
million recorded in 1998-99 and reached Rs 2000 million in 2000-01. Tanishq fared
equally well on the export front also with heavy exports to UK, US, Australia and West
Asia.

Tanishq was the largest overseas chain in US with 1,200 outlets. In the year 2000, exports
contributed 10% to the company's turnover. The story of Tanishq, once written off as a
losing proposition, making a remarkable turnaround was an example of a company
single-mindedly working to make its own mark in the tradition bound Indian jewellery
market. Behind this success was, of course, a well-planned and well-executed marketing
plan.

Background Note
Titan Watches Limited was promoted jointly by Questar Investments Limited (a Tata
group company) and Tamil Nadu Industrial Development Corporation Limited (TIDCO).
The company, incorporated in July 1984 in Chennai, was started in technical
collaboration with France Ebauches (a French company), one of the world's largest
manufacturers of watch movements. Initially involved in the watches and clocks
business, Titan later ventured into the jewellery businesses. The company was India's
leading manufacturer of watches, marketed under the Titan and Sonata brand names with
a 25% share of the total domestic market.

Titan established its first manufacturing facility in Hosur, Tamil Nadu and its first
satellite watch assembly unit at Dehradun, Uttar Pradesh was started in 1990. In 1992,
Titan set up a joint venture, Timex Watches Limited, with Timex Corporation of USA to
market Timex watches in India.1 And in 1995, Titan changed its name from 'Titan
Watches Ltd.' to 'Titan Industries Ltd.' in order to change its image from that of a watch
manufacturer to that of a fashion accessories manufacturer. In the same year, it also
started its jewellery division under the Tanishq brand. At this point of time, the jewellery
business was highly localized and the concept of branded jewellery did not exist. In the
late 1990s, India had around 0.2 million jewellers scattered across the country.

Jewellery had predominantly been used as an investment rather than adornment. Hence, a
change in the perception of jewellery from an asset to a fashion accessory was extremely
difficult to bring about. People generally bought gold from the same family jeweller they
had trusted implicitly for generations. Moreover, these jewellers made the jewellery to
order and often bought back their products at the prevailing market rates.

Thus, from the very beginning, Tanishq found it hard to overcome the Indian consumer's
preference for buying traditional jewellery only from family jewellers. The sleek and
contemporary designs being offered did not go down well with the Indian customer who
was used to heavy, traditional designs.

Vasant Nangia, erstwhile Chief Operating Officer, Tanishq said, "When we launched the
Tanishq range, our designs were not appreciated initially as they were believed to be
extremely Western. Also, we offered only 18 carat gold." Over a period of time,
Tanishq's research revealed many other loopholes in its strategies.

Setting Things Right

Tanishq found out that it had gone wrong mainly in two areas - the product proposition
and retailing. Initially with a focus on the export market, its designs were predominantly
Western, and the same line of jewellery was sold in India as well. However, when it
shifted its focus to the domestic market, it was unable to sell these designs. Therefore the
first step was to change the brand positioning from that of an elitist and Westernized
offering to a more mainstream, Indian one. The 18-carat jewellery range was expanded to
include 22 and 24 carat ornaments as well. Tanishq also made attempts to redefine
traditional styles in its designs. Tanishq realized that, given the diverse nature of Indian
ethnicity, it would have to cater to tastes of all regions

Therefore, the emphasis shifted from the erstwhile modern designs to more ethnic ones
and traditional ornaments (based on designs from various states) were launched. The
company also began seasonal and localized promotions based on Indian festivals, such as
during Durga Puja in West Bengal, Onam in Kerala, Diwali in north India, etc. Johnson
Verghese, divisional head, sales and marketing, said, "We also decided to go in for
transmigration of designs. So we not only got in more Indian motifs but also started
stocking typical designs from Tamil Nadu in Mumbai and those from Bengal in Delhi.
These designs, though Indian, provided variety to what the people in a particular area
were used to seeing."

Tanishq's team of in-house designers came out with about 3,500 designs based on current
trends and the feedback from stores. At least 10% of these designs were changed every
quarter and fresh ones were added to the stock.

Tanishq gave complete freedom to the retail outlets to pick up designs, which they
thought would sell in their stores. Almost all the outlets stocked the 'best selling' range of
designs, which did well across the country.

Tanishq was now pitted directly against the traditional jewellers who were offering
similar ornaments. In order to add some value proposition to rise above the competition,
Tanishq decided to address the issue of gold purity, which was most important to the
customers.

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.

Fact, its sales increased by 20-30%. The concept was later on heralded as a bold step
towards professionalizing the Indian jewellery business. In an attempt to elbow out
competition, Tanishq conducted tests on 10,000 ornaments selected at random. In some
cases the caratage was found to be as low as 10% and almost 65% of the gold tested was
below 22 carats. As the caratage offered was on the lower side in traditional jewels, the
jewellers kept the making charges very low to entice customers. This had become the
norm all over the country. Tanishq had to struggle hard to break this convention.

As the concept of Karatmeter became more widely known, customers began to realize
that the rates they were paying for Tanishq jewellery were indeed justified. A Tanishq
official commented, "They have begun to understand the total value proposition that
Tanishq offers."
An all-India customer satisfaction survey conducted by Tanishq in 2001 revealed that
over 50% of all Tanishq customers intended to make it their jeweller, replacing many
long-standing relationships with the traditional jeweller. When Tanishq was launched, it
sold most of its products through multibrand stores. This did not help the Tanishq brand
to make its mark. Having realized this, Tanishq decided to set up its own chain of retail
showrooms in 1998.

This proved to be a very wise move as sales picked up almost immediately. By July 2001,
it had 47 'Tanishq boutiques' in 37 cities – 12 were in the metros - Delhi, Mumbai,
Kolkata, Chennai and Bangalore, the rest in smaller cities with a population of at least 0.5
million such as Trichy, Nagpur, Amritsar and Patna.

The focus on smaller cities paid off well with the annual growth being as high as 150% as
compared to the 45% growth in metros. The number of boutiques was expected to reach
50 by the end of 2001 and to 70 by 2002. Tanishq's efforts to standardize the price of its
ornaments proved to be another milestone in its success.

Gold prices differed across the country as they were based on different parameters
concerning the local markets. In a bid to control gold price variations in different parts of
the country, Tanishq decided to have a standard gold price across all its showrooms from
March 2000.
The standard price was made binding on all Tanishq showrooms. Tanishq based its gold
prices on international exchange prices, resulting in prices often being lower than the
local market prices. Nangia said, "We already have a kind of standard pricing in place,
but this would represent a formalization of that system to the public." Tanishq even had
plans to link directly with the London Metal Exchange (LME) for daily quotes in the
future. Tanishq set up an ultra-modern and large-scale manufacturing unit in Hosur,
Tamil Nadu at a cost of Rs 600 million. The unit had facilities like refining, alloying and
stone casting and a dust-extraction system that kept gold losses down to 2% of the raw
material while local jewellers typically lost 8-10%.

This in-house manufacturing facility was the main reason, which enabled Tanishq to
charge the same price across the country. One of the company's most important initiatives
was customer service enhancement.

Tanishq launched a direct consumer contact programme and conducted surveys to

monitor store walk-ins and footfalls and percentage of repeat customers.

The company also kept the entry-level price as low as Rs 600 (for a pendant) and offered
a range, which far exceeded that offered by any other jeweller. All Tanishq outlets gave a
100% return guarantee on its brand of jewellery and also exchanged other jewellery after
deductions depending on purity.

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. The company's corporate gold
gift scheme ('When you want to say thank you, say it in gold'), launched in December
1998 proved to be a major success. Tanishq delivered 50,000 customized gold coins to
0.25 million Maruti car owners nationwide as part of the 15th anniversary celebrations of
Maruti Udyog. By 2001, the scheme accounted for almost 5% of the turnover and over 30
corporate clients like Coca-Cola, the UB Group, Whirlpool, the TVS Group, Ceat and
Liberty Shoes

The communication and promotion budget was increased from Rs. 65 million in 1999-
2000 to Rs 100 million in 2000-01. A majority of this was spent towards advertising,
while a portion was also earmarked for promotions tailored to match regional
preferences. For instance, in New Delhi, which was Tanishq's single largest market,
substantial promotions were carried out. The Rs 100 million was split into four parts,
comprising national-level spends (both electronic and print media), regional budgets,
direct mail and research. For the first time, Tanishq initiated a long-term media plan,
aiming to give the brand a round-the-year presence and enhance awareness. The
communication focused on design and quality instead of the price.

Future Prospects

The Indian branded jewellery market, though nascent, grew at the rate of 20-30% during
1998-2000. Besides Tanishq, other major players included Intergold, Gili and Carbon.
However, in the Rs 400 billion Indian jewellery market, Tanishq's share was not even
1%.

Not willing to accept this as a 'poor show,' Tanishq saw it as a vast opportunity instead.
The company planned to attain a 2% market share in the next few years. Kurian said,
"The jewellery market is one of the largest consumer segments in the country. It has an
estimated 2,50,000 retailers with no national or international brand and no corporate
player.

Titan believes that this market is right for consolidation. A consumer-oriented, highly
ethical corporate player will have great opportunity. Our growth rates in the past three
years have fully substantiated this hypothesis." Tanishq had ambitious plans to invest in
information technology and utilize Intranets and the Internet to link all of its showrooms
to one another. There were also plans to do online monitoring of sales and design
popularity as well as using the Internet to place orders. The Intranet was to contain a
photo collection of all the designs in all the stores so that even those not in stock in a
particular store could be ordered by customers. In a highly innovative move, Tanishq tied
up with Countrywide Finance for providing pre-approved credit line to the customers at
selective outlets. This was expected to boost sales significantly in the future. In May
2000, Tanishq unveiled plans to surpass its parent company's turnover by 2002. Jacob
Kurian who had taken over as the CEO the same month, said, "We have finally figured
out the jewellery business and should be solidly profitable, shorn of any caveat, this
year.”

PROMOTION, ADVERTISING & PUBLIC RELATION

Promotion

Tanishq launches ‘Free gold coin offer’ campaign

July 19, 2008 (India)

Tanishq launched its "Get Gold free with Diamonds" promoti

onal offer were customer be entitled to win at least one 22-kt one-gram gold coin on
every purchase of diamond jewellery worth Rs 5,000 and above.
"Get Gold free with Diamonds' caters to the aspirations of Indian woman by providing an
opportunity to own diamond jewellery and win gold, which is a huge investment
opportunity.

Akshaya Tritiya is one of the four most auspicious days of the Vedic calendar. The
Akshaya Tritiya pre-booking scheme along with the 10 per cent deduction on making
charge offer is available across all Tanishq boutiques

Advertising

Ms Karishma Kapoor the bollywood actress is the brand ambassador of the Product
Tanishq.

T V Advertisement: Tanishq focus on the emotional attachment in the advertisement like

engagement, marriage and such other occasions.

Print advertisement: In Leading news paper and famine magazines are targeted to do the
advertisement.
In short they know their target market and hence do advertising as required.

Bollywood tie-up: Has done tie up with Paheli where in the movie Ms Rani Mukherji
Was seen wearing Tanishq jewellery through out and in Jodha Akbar Movie were they
launched a product line named Jodha Akbar.

TANISHQ IN THE NEWS

Priya Ganapati in Bangalore | July 04, 2003

Jacob Kurian, chief operating officer (jewellery), Tanishq isn't tired of saying that the
story of his company mirrors a Bollywood movie. There's drama, celebration, then
betrayal in the family, followed by action and, of course, a happy ending. Tanishq, the
jewellery business group of Titan Industries, is the blockbuster action thriller from the
Tata group.

After five years of consistent losses, the company, on Thursday, announced the
completion of a dramatic three-year turnaround culminating in annual sales growth of 39
per cent and profit growth of 318 per cent. During 2002-03, Tanishq recorded a sales
turnover of Rs 389 crore (Rs 3.89 billion) -- at consumer prices. By 2007, it hopes to take
that to Rs 800 crore (Rs 8 billion).

Today, Tanishq has already become one of the top five retailers in the country. It
contributes 40 per cent to Titan's business and is expected to account for 55 per cent by
2007. By then, Tanishq's profitability will also be good enough to offer 28 per cent return
on deployment of 25 per cent of the capital.

Sales
Year Sales (Rs crore)
1996-97 32
1997-98 38
1998-99 73
1999-2000 141
2000-01 188
2001-02 299
2002-03 389

It's a long way for a company that almost folded up before it could turn in its first ever
profit. Since, its launch, Tanishq has not only been grappling the tough market conditions
but also internal strife and Doubting Thomases.

"Many people believe we should not be here today. They have kept telling us that the
business logic is against what we set out to do. But I am glad we have proved them
wrong," says Kurian proudly.
The estimated Rs 40,000 crore (Rs 400 billion) gold jewellery market in India is a rough
one. There are over 300,000 jewellers, each powerful in his neighborhood.

Till the last two years, national players were almost non-existent.
One of the largest consumers of gold, the Indian household had a marked preference for
22-karat gold, as opposed to the 18-karat designs that jewellery chains worldwide chose
to do their designs in. Not surprisingly, the skeptics were asking what was Titan doing in
the jewellery business?

In the late eighties, when India was facing a massive foreign exchange crisis, Titan, the
watches division, was told to look for a way to earn its own foreign exchange. Jewellery
seemed like a huge and interesting market to get into and Titan decided to set up Tanishq
as a jewellery division that would be focused largely on exports.

However, by the time it acquired the skills and set up the plant, the world had changed.
India no longer had a foreign currency problem, imports were easy to come by, demand
had come down in the global market, supply had grown in Asia and margins had become
very thin.

Tanishq then decided to focus on the Indian market. In August 1992 a pilot plant was set
up and production started in two years later. In 1996, Tanshiq launched its first store. It
was a hitherto untried concept. The jewellery business in India was highly fragmented
and ruled over by local players. There was no national jeweler that people could buy
from, despite that India is the largest consumer of gold in the world.

Clearly, the local satraps had a very tight stranglehold on their markets and it was
difficult for a pan-Indian player to break into.
Being ethical too was a problem. Titan estimates that up customers and the Government
is defrauded of up to Rs 5,000 crore (Rs 50 billion) annually due to unethical business
practices like under-karatage of gold, misrepresentation of quality and tax evasion. As a
company which was part of the Tata group, known for maintaining high ethical
standards, Tanishq prided itself on delivering customer value through a fair and
transparent business model. But that wouldn't help.

Till 2000, Tanishq could not find its feet in the market and its losses were mounting. In
1998-99 it showed losses of Rs 10.40 crore (Rs 104 million) though sales turnover was
increasing.
May 2000 turned out to be the defining period in the company's history. The then
managing director of the company, Xerxes Desai had a choice between Bhaskar Bhat and
Vasant Nangia when it came to deciding who would succeed him. Bhat won and was
anointed as the next managing director by Desai himself and Nangia became the chief
operating officer. Nangia was the hands-on man at Tanishq. A twenty-year veteran of the
group, he was the one who had charted out the expansion plans, which included
increasing the number of exclusive boutiques to 67 from the then 30 and launching a new
men's range of accessories.

But a day after Bhat was announced at the successor to Desai, Nangia quit. He took along
with him six senior executives of Titan. It was a blow that many thought would sink the
company.
"The entire sales and marketing team resigned on that day. The company was rocked by
what happened. Many thought this would be finally the way Titan closed down its
jewellery business. After all, we were in our fifth consecutive year of losses then," says
Kurian. It seemed an ignominious way for a Tata company to go. And like Kurian says it
was too soon for the movie to end.
So, a new and admittedly inexperienced team was put together. The team had an onerous
task on its shoulders. It had to not only stem the increasing losses shown by Tanishq and
but also show some profits if the company was to remain in business. Tanishq had quite a
few problems on its hands then. Its high decibel media advertising wasn't working. A
stream of adverse media reports had instilled the fear that its shareholders would pull out
anytime. And worse, it had very little time on its hands to show a turnaround.

But as Kurian saw it, Tanishq's woes were rather simple: There were just not enough
customers in its stores. "For a retailing chain, that's the worst thing that can happen:
having no traffic in the stores," says Kurian. A customer survey revealed multiple
problems. Despite its high-blitz ad campaign, many didn't know what Tanishq was about,
others found it too expensive and some felt that the product was not for people like them.
Either way, getting customers back into the store became a priority.

Profits generated
Year Profits generated (Rs crore)
1996-97 - 10.60
1997-98 - 21.96
1998-99 - 10.40
2000-01 2.07
2001-02 1.87
2002-03 7.82

Kurian and his team then decided to launch the fifth anniversary celebrations of Tanishq
that would offer discounts to customers and induce them to come to the store.
The ploy worked. "We had customers waiting for the store to open. Sometimes we had to
call the security guards because of the crowds. We just couldn't believe it," smiles
Kurian. There were other minor tweaks made too. Ad campaigns now started to list out
the products that Tanishq had. So bracelets, rings, chains, pendants were explicitly
mentioned in each ad. A range starting at Rs 399 was launched.

The aim was to bring down the price barrier significantly. Collections for the working
women and a new set of contemporary designs were brought into the stores. Almost all of
the efforts paid off. A year later, Tanishq had made its first ever profit in the entire
existence of the company. It was a measly sum of around Rs 2 crore (Rs 20 million), yet
it was a beginning.

The next year, the company decided to write off some of the financial baggage it had
been carrying. Profits generated dipped as a result but Tanishq was clearly on a revival.
The company changed quite a few of its original strategies along the way. Tanishq had its
first showroom in Chennai in 1996. Today it has over 60 showrooms in 47 cities. Only
six of these are owned by the company. The rest are run by franchisees. The model has
helped take away capital costs from the company and pass them on to franchisees who
will invest money to help the company grow. In all, Tanishq managed to limit its fixed
asset investment to Rs 27 crore (Rs 270 million).

Contribution to Titan's growth

Year Tanshiq contribution to Titan

(in percent)
1996-97 8
1997-98 14
1999-2000 24
2002-03 43

Post September 11 attack on the World Trade Center, the volatility in the gold prices led
to a steep decline in the demand for gold. In 2002, the gold demand declined by 19 per
cent, from 843 tonnes to 680 tonnes. However, Tanishq was on a roll. It grew its retail
sales during 2002-03 to Rs 332 crore (Rs 3.32 billion) from Rs 239 crore (Rs 2.39
billion). Almost Rs 57 crore (Rs 570 million) came through corporate sales and exports.
Corporate and institutional sales had become an unexpected money-spinner for the
jewellers.

Today, Tanishq counts companies like Hindustan Lever Limited, Pfizer, National
Panasonic, UB Group, Tata Tea and Tata Chemicals among its clients. "We saw
corporate sales as a new route to customer acquisition. Institutional sales help us beat
targets," says Kurian.

Since the last three years, Kurian and his team have brought in quite a few changes to the
way Tanishq operates. A steady stream of jewellery collections each with its distinct
target audience has been launched. Aria, for seven stone diamond jewellery, Hoopla,
focused on diamond studded hoops and Collection-G for lower priced gold jewellery with
an interesting twist are just a few lines that have come out of the Tanishq stable in the last
three years. Manufacturing has been made more flexible. New Japanese manufacturing
machines have been introduced at the Hosur, Tamil Nadu plant of the company. The
emphasis is now on customisation according to customer demands.

The challenges remain. Profit figures have yet to rise significantly. In 2002-03, on
revenues of Rs 389 crore (Rs 3.89 billion), Tanishq made a profit of only Rs 7.82 crore
(Rs 78.2 million).
A slew of national brands have sprung up. From Nakshatra to TBZ to Carbon, Tanishq
has to battle a lot more at the market place.
Yet, Kurian says now it's a great time to be in business. "We believe jewellery business is
one of the few 'China-proof, WalMart-proof' kind of businesses," he grins

Tanishq News Headlines

Tanishq launches ‘Free gold coin offer’ campaign

July 19, 2008 (India)

Tanishq to spread its radiance with new stores

May 15, 2008 (India)

Celebrate Akshaya Trithiya with Tanishq jewellery

May 02, 2008 (India)

Tanishq Jodhaa Akbar collection - prêt

January 28, 2008 (India)

Royal Mughal appearance in Tanishq jewelry

January 28, 2008 (India)

Tanishq opens 3rd exclusive showroom in Chandigarh

November 20, 2007 (India)

100th store in Patna & still counting…Tanishq

October 26, 2007 (India)

Tanishq is a perfect gift for your sister!

August 18, 2007 (India)

Tanishq targets US jewelry market

April 09, 2007 (India)

Tanishq unveils coveted Miss India 2007 crown

March 23, 2007 (India)

Tanishq launches elegant fashion earring collection

November 16, 2006 (India)

US to shine with Indian jewellary

November 03, 2006 (India)

Celebrate DHANTERAS with exquisite jewellery from Tanishq

October 10, 2006 (India)

Tanishq Jewellery adds glamour to women's ensemble

October 04, 2006 (India)

Tanishq expects 15-20% sales gain this year

August 03, 2006 (India)

Tanishq to strengthen its presence

July 31, 2006 (India)

Tanishq launches Colors of Royalty range jewelry

April 17, 2006 (India)

Tanishq's 'up to 25 per cent off’ scheme

January 31, 2006 (India)

Tanishq introduces exquisite 'Paheli Collection'

July 02, 2005 (India)

Tanishq introduces exclusive 'Paheli' collection

June 24, 2005 (India)

Tata’s Tanishq registers sales worth Rs 570 cr in FY-05

May 06, 2005 (India)

Tanishq launches exquisite collection for women’s day

March 07, 2005 (India)

Tanishq and Titan declared ‘The Most Admired Brands Of The Year’ at LIFA
January 27, 2005 (India)

Tanishq Launches Aria Collection

October 07, 2003 (UAE)

GLOBALIZATION

Titan opened its first Tanishq jewelry brand outlets in Chicago and New Jersey by
January 2008.

Company aims to expand this into a 10-store chain with initial investment of US $6-7
million.

Tanishq has targeted the world’s biggest jewelry market, through either franchisee or
self-owned outlets. Currently, US jewelry market is valued at around $16 billion.
The Indian jewellery manufacturer plans to launch its pilot retail jewellery store in
Chicago, US, in July. The store is proposed as a 2000 sq.ft. Facility, where the jeweller
would retail 18 karat gold and diamond studded jewellery.

The designs at the store have been inspired and themed basis the lifestyle of modern
American women, with concepts like Rain, Yoga, while native American influences –
like a local tree in New York have also inspired the jewellery collections. Price points for
the jewellery have been determined between $400-$12,000.

Tanishq would inch its way to open a second store in the next three to four months, in
New Jersey.