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Product Launch Grandeur Watches.

About the Company


Grandeur is a South Korean watch making company with 50 years of watch making experience in South Korea. The company has a capital base of over 300 crores and has 3 manufacturing plants in South Korea with more than 5,000 outlets all over the country. The company makes watches only for the female segment of the market. After being highly successful in the South Korean market, Grandeur has now decided to enter the Indian market.

Christ University Institute of Management, Bangalore.

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Product Launch Grandeur Watches.

Study of Indian watch market:(Macro Environment & Aggregate Market Factors)


Wrist Watches form an integral part of the personality of individuals in the present era. Earlier seen as a luxury item, they are now witnessing a fundamental change in perception, and are now gaining respect as an essential utility item. F or the watch industry, time seems in its favour what with the liberalization of the Indian market coupled with the rising purchasing power of the young and consumerist Indians.

Indian watches market was for long dominated by public sector organisations l ike Hindustan Machine Tools Ltd. (HMT) and Allwyn (also famous for its refrigerators once upon a time!), and has now left the pioneers far behind or nowhere in market by private sector enterprises like Titan, Sonata, Ajanta and Timex along with foreign entities jostling for display space in the smallest of shops selling these products. Before the establishment of HMT as the dominant player in the Indian markets initially, the country was solely dependent on imports to meet the internal demand. However, establishment of HMT as the leading player in the wrist watch segment in the 1960 s, changed the scenario. In post liberalization India, the market stood to witness intensive competition between foreign and Indian manufacturers like Timex, Titan, Movado, Longi nes, Rado, Rolex, Frderique Constant, Mont Blanc, Swatch, and many others. Many watch makers have made significant inroads in the industry and others are in the process of establishing themselves, currently.

Besides this, buyers are extremely choosy about the brand and type of wrist watches they wear. Being extremely brand conscious, their tastes have evolved over the years and have gone beyond the realms of durability to choose in terms of aesthetics and elegance. Thus it is a buyers market with multitude of designs that have entered and flooded the market place. The size of the watch market currently is estimated to be around 40 to 45 million pieces annually. The organized sector alone contributes up to 30 percent of this figure, and the rest of the demand is being met by the unorganised grey sector. This data is significant indeed in view of the socio economic distribution of the Indian populace. More than 58 percent of the population is under twenty five and more than 80 percent of the population is be low 45 years of age. In dollar terms, the estimated annual market size is around USD 195 million, despite the fact that the penetration of watches is the lowest, compared globally. Looking into this fact and the long standing Indian tradition of comparing watches with jewellery and other traditional items,
Christ University Institute of Management, Bangalore.

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many watc c mpanies are intereste in setting up base in India. The average growth in the size of the market is s ated to be around 10 -15 percent per year.
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The lower priced segment consists of watches priced less than INR 500; the medium price range consists of watches in the INR 500-1500 range and the high priced watches come in the INR 1500 upwards range. There are other higher c ategories as well such as the premium and luxury range, but they appeal to only a small category of the watch market in India. According to a recent study, more than 90 percent of the watches were from the lower price ranges with international costs being less than 20 euros. Moreover, around 20 to 25 watches are being sold for every 1000 citizens. Thus there is enormous potential for growth of the industry in this untapped segment. Some customers look out for features like fashion appeal, technology, sophistication and status. Others go for durability, economy and precision.
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Many customers prefer mechanical and automatic watches, while others prefer quartz watches. Newer segments are also on rise such as ladies watches, children s watches and gent s watches. Customers usually base their preferences and buying decisions on a variety of factors like price, durability, utility, aesthetic appeal and brand name. A combination of all these points ultimately forms the customer s buying decision that translat into the purchase of a watch. es

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A casual study of the watch market reveals that it is segmented on basis of multiple proportions such as price benefits and types of watches. The price of the watches is a major motive in the minds of the customer. Accordingly three segments can be identified here namely low priced, medium priced, and high priced watches.
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The retail sector has just begun to boom in India. Since the early 1990 s, Indian customers are relying more on departmental stores and shopping malls to purchase their wants and needs. This has come as a boon for watch manufacturers and dealers, who are now looking forward to utilise these new outlets to reach out to the Indian masses. Watch manufacturers are looking at a suitable mix to market their products ranging from exclusive retail outlets to display sections in malls and large departmental stores. In the end, though India is still considered to be a difficult market to penetrate, due to reasons like price sensitiveness and its largely unorganised sector. However, with the right planning and the right partners and experienced collaborators, it is expected that both international and domestic watch manufacturers will do well in the Indian markets. The current size of the watch market (non-jewellery in India is estimated at Rs 5,300 crore.Forty-six per cent of this market is organised. It is one of the most organised retail categories in the country. Among premium watches, the per capita annual spend ranges between Rs 25,000 and Rs 40,000. Customers are not very price-sensitive as far as quality watches are concerned. Most watch buyers (almost 80 per cent) in India are in the age bracket of 21 years. -30
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The premium segment is expected to grow at a brisk pace in the coming years due to the influx of international premium brands.

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Product Launch Grandeur Watches.

SocioEconomic Class:
Table I Table Estimated households by annual Structure of the Indian consumer market (1995-96) income Annual Annual income (in No. of income Rupees) at 1994- households (in Rupees) at Classification 95 prices (in million) 1994-95 prices <25,000 25,001-50,000 80.7 50.4 <16,000 16,00122,000 22,00145,000 45,001215,000 >215,000 Destitutes Aspirants II

Number of households (in million)

Urban

Rural

Total

5.3 7.1

27.7 36.9

33.0 44.0

50,001-77,000

19.7

Climbers

16.8

37.3

54.1

77,001-106,000 >106,000

8.2 5.8

Consumers The rich

16.6 0.8 46.6

15.9 0.4 118.2

32.5 1.2 164.8

Total no. of households: 164.9 Total no. of households million

Indian watch makers:


y y y y y y y y

Ajbani Jewellers - Manufacturer & designers of customized watches Cambridge Time Spares - Clock & watch parts manufacturer Centura Watch Cases - Watch cases manufacturer Eurogold Premiums - Retail store for wrist watches and travel clocks Gold Time Spares &Tools - Manufacturer of watch spares & jewelry making tools HMT Watches - Manufacturer of wrist watches International Watch Trading Company - Watch and jewelry making tools supplier Kamla Watch Hands - Manufacturer of watch dials & watch hands

Christ University Institute of Management, Bangalore.

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Product Launch Grandeur Watches.

y y y y y y y y

Kamla Dial & Devices - Manufacturer of watch dials & hands Maxima Watches - Watch & watch parts manufacturer Parimal Exports - Wall clocks, brass hardware and glassware exporter Raj Clock Industries - Wall clocks manufacturer Ramesh Watch Gallery - Swiss watches dealer Ridhi Enterprise - Quartz clocks manufacturer Titan - Manufacturer of watches. Titan - Manufacturer of watches

Christ University Institute of Management, Bangalore.

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Product Launch Grandeur Watches.

Market Survey
Sampling method Stratified Sample size 100 in each city in each of the 6 major cities of India Kolkata, Hyderabad and Chennai. Delhi, Mumbai, Bangalore,

QUESTIONAIRE
1.Do u wear a watch? Yes-70% No-30%

2.Do u prefer branded watches? Yes-65% No-35%

3.If the answer for the above question is yes,then which of the following brand would you prefer? Titan 40% Timex 15% Swatch 20% Others 25% 4. Why do you wear a watch? Time 25% Style Statement 45% Gadget 5% Jewel 25%

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Product Launch Grandeur Watches.

5.Do u prefer a watch brand which makes watches exclusively for women? Yes- 80% No- 20%

6.Are you aware of any watch company which only makes watches for women in India? Yes 100% No- 0% 7.Would you like to wear a watch with a sporty look when you wear casual clothing? Yes- 90% No -10% 8.If the answer for the above question is yes, then why would you prefer a watch with a sporty look? A) Goes well with casual clothing B) A style statement of modern changing women C) Bored of the usual watches for women

1)Only A -10% 2) Only B 3)Only C 8% 5% 35% 32%

4) Both A and B 5) All the above

9.Have you ever come across a watch for women with sporty look in India?

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Product Launch Grandeur Watches.

Yes 95% No 5% 10. When you want to buy a watch which outlet would you like to visit? Titan 68% Others-32%

Inference: From the above responses obtained it can be inferred that most of the girls within the age group of 11-24 prefer to wear branded watches and their first choice is Titan. However, they would be highly interested in a watch brand that makes sporty looking wa tches especially for the women. They believe that sporty looking watches go well with casual clothing and they will be a style statement of modern, changing women and that at present there s no watch company that makes these kind of Watches exclusively for the women. Therefore, there s a huge opportunity in this attractive market segment.

Christ University Institute of Management, Bangalore.

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Product Launch Grandeur Watches.

SWOT ANALYSIS
STRENGTHS:
    
Company with a good capital base. 50 years of experience in the watch making field in South Korea. The only brand concentrating specifically on the female segment. Innovative product offering to the female segment. Represents women empowerment.

WEAKNESSES:
 May be perceived as a strategy to divide the society on the basis of gender.  Strong feminine link may limit the growth perspective.  Missing traditional link.

OPPORTUNITIES:
   
Huge demand for sporty looking watches. Opportunity to become a market leader in the female segment. Good growth opportunities in terms of revenues and diversification. To develop as a brand for women freedom and energy.

THREATS:
 Severe competition from already established brands like Titan, Swatch, Timex etc.  Threat from non branded duplicates.
Christ University Institute of Management, Bangalore.

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Segment tion:
Demographic Segmention has been done mainly on the basis of GENDER and on the basis of AGE. On the b sis of Gender:
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As it can be observed from the above graph, out of the total population in the 6 major cities of India such as Delhi, Mumbai, Kolkata, Bangalore, Hyderabad and Chennai, 53 is male population and 47 is female population.

On the b sis of age.

Age %
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0 to 10 11 to 17

1 to 4 24 and above

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As it can be observed from the above graph, in the 6 major cities of India , 15 of the total females are within the age group 0-10, 20 of the females belong to the age group of 11-17, 25 of the females belong to the age group of 18-24 and the rest 40 % belong to above 24 years of age.

Targeting:
After segmenting the market on the basis of gender and age, the targeting has been done as per below. On the basis of Gender

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female

Target Market
As it can be observed in the above graph, we are targeting only the female population segment specifically and all our products would be directed only towards the fe male population.

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On the basis of age:

We are targeting the female population within the age group of 11-17 and 18-24 and all our products would be directed specifically towards the female population of this age group.

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Product Launch Grandeur Watches.

Positioning:
For girls within the age group of 11 -17, we are positioning ourselves on the basis of lifestyle. For girls within the age group of 18-24 we are positioning ourselves on the basis of lifestyle and attitude. A brand for the modern, confident and empowered women with a positive attitude towards achieving their goals in the changing India.

Unique Selling Proposition:

 

Unique combination of design, colour and Texture. Unique Distribution Levi s, Pepe, Adidas etc. Tie ups with branded apparel outlets such as

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Product Launch Grandeur Watches.

4Ps
Product:
Grandeur has decided to make sporty looking watches for the female segment within the age group of 11-17 and 18-24. Initially we will introduce 4 models of watches. The names of the products and their features are mentioned below: For the 11-17 Age group: The watches for this segment will be made attractive with respect to colours, textures, straps and design. The dial will be small, attractive textures on the dial, synthetic straps with attractive colours for the young girls such as pink, red, blue, yellow etc. Below are the 2 models targeted at this segment. Grandeur Dione

Grandeur - G-Sport

For the 18-24 Age group: Watches for this segment will be different with respect to the design, colours and straps. The dials will be bigger, the colours will be more elegant as well as sporty looking, straps will be made of both leather and steel. The two models of watches targeted at this segment are: Grandeur - Enigma Grandeur Athena

Place:
The products will be initially launched in the six major cities of India Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore. Initially, we will open 5 outlets in each city. Along with our outlets, our products will also be available in other places such as Landmark and Archies. We also have tie-ups with Levi s, Pepe, Adidas, United Colours of Benetton and Bossini and our products will be available at their outlets as well.

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Product Launch Grandeur Watches.

Pricing:
We have decided to adopt Competition based pricing strategy. The prices will be at par with the prices of our competitors such as Titan, Swatch etc. The prices of each model are: Dione G-Sport 995/1,695/-

Enigma - 1,495/Athena 3,995/-

Promotion:
Advertising: The brand will be advertised through the below channels of advertising:

 Television.  Hoardings and billboards.


Saina Nehwal will be used as the brand ambassador as she is the female youth icon of India. Modern women aspire to be as successful as S aina in their respective fields and will be able to relate to her easily.

Publicity:

 Sponsoring major sports events for women in India.

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Product Launch Grandeur Watches.

Finance and Break-Even Analysis Statement of Profitability Particulars


Initial Investment 1st year
Estimated Revenue (60,000 units * Rs 2,000) (-) Estimated cost Operating expenses Fixed Expenses - 08 - 01 12

(Rs in crores)
20

Profit

03

2nd Year
Estimated Revenue (90,000 units * Rs 2,0 00) (-) Estimated cost Operating expenses Fixed Expenses - 11.5 - 1.5 18.0

Profit

5.0

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Product Launch Grandeur Watches.

3rd Year
Estimated Revenue (1,20,000 units * Rs 2,000) (-) Estimated cost Operating expenses Fixed Expenses - 14.0 - 2.0 24.0

Profit

08.0

4th year
Estimated Revenue (1,40,000 units * Rs 2,000) (-) Estimated cost Operating expenses Fixed Expenses - 16.0 - 2.0 28.0

Profit

10.0

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Initial Investment (Rs in crores) 20 20 20 20

Year 1 2 3 4 3 5 8 10

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15 10

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Break- Even (in years) = 3 years + 4 10*12 = 3 years + 5 months. Thus, we expect to break-even in 3 years and 5 months.

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Profit (Rs in crores)

Cumulative Profit (Rs in crores) 3 8 16 24

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Initial Investment (Rs in crores)

Cumulative Profit crores)

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Product Launch Grandeur Watches.

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