NEW DELHI, December 14
It's the watch that will be worn by the American president, no matter who wins.
It's the watch that is worn by Sharon Stone and Bruce Willis. And yet, in India, Timex has just 18 per cent of the watch market, and has made losses since it broke up with Titan in 1998.
Now, with a new managing director, Kapil Kapoor, who joined in October 2000, the company is planning to get its act together. The idea? "Capture around one-third of the watch market in the next three to five years," says Kapoor.
Though the company would officially like to forget the past, privately, company officials admit that Timex has not been able to gain ground after it broke its alliance with the Tata-promoted Titan brand in March 1998, after a seven-year partnership.
When the two married, the idea was for Timex to concentrate on the lower-end high- volume market. It was a neat division. Titan was protected from unorganised competition by Timex, it's powerful flanker brand. Timex, for its part, banked on Titan's high-visibility retail network and combined it with high-profile advertising. Thus Timex was able to develop a young, energetic brand personality that was distinct from Titan's sophisticated, mature image and tried to develop a consumer franchise in segments where it was not possible to stretch the Titan equity.
Yet the strategy did not succeed, as Timex was buffeted by strong competition from the Indian-made-foreign-quartz (IMFQ) segment or the grey market and could not build the brand. At the same time, the whole marketing strategy depended on Titan's network. This was to prove Timex's undoing when the two parted ways in March 1998.
The American watchmaker's sales dropped in 1998-99 to Rs 66 crore from Rs 73 crore in 1997-98. It sold nearly two lakh watches less than the previous year. On top of that, average realisation on every watch came down by about Rs 15 (on Rs 385 in 1997-98). Not surprisingly, losses multiplied to Rs 17.5 crore. Now they stand at more than Rs 30 crore.
Kapoor has a tough task saving the brand. "I would look at the foreseeable future, say in the next five years or so to turn around the brand." An ambitious target, given the enormity of the task.
Because the problem is not with the brand alone. Says one analyst who closely follows the fortunes of the brand, "It is a watch that is worn by the best, and the number one brand in such markets as the United States and Canada. So why is it not selling here? The problem is that Timex has failed in both distribution and brand building"
It has been trying to sort things out on both fronts for some time now. In mid-1998, it opened swank, exclusive Timex retail shops in close proximity of Titan stores. Simultaneously, it began addressing the high-end watch segment to boost realisations, which it could not earlier, due to JV agreements. At the same time, it chased volumes through institutional selling and attractive schemes for traders.
Yet, the strategy, fashioned by former managing editor, R J Masilamani, did not wash well. For one, visibility remained poor. Titan's rapid-fire launches in 1999 - digital Fastrack, Dash, Nebula, and so on - have paled Timex's presence. Brand communication now is geared to the high-end of the market, but the problem remains. One, the high-end of the market has seen the entry of such upmarket brands like Swatch, which are competing along the same lines. Disagrees Kapoor, "What we are offering is a watch for the techno-savvy Indian, the new Indian that IT has produced. I don't think Swatch is that substansive."
But over the years, the challenges have only become more severe. Now Timex faces the additional challenge of Chinese watches that have already started to flood the market. Marketing strategists at the company plan to counter this by emphasising on the upmarket image of the watch, which they feel will counter the challenge of Chinese-made watches, which do not have a brand-value. The strategy will be matched by a high-profile advertising campaign which will emphasise on the brand's upmarket values. The advertising, thus, will attract both high-end consumers, and the value-for-money segment.
But the Indian consumer will have to really be convinced. All in all, Kapoor, has a tough task ahead. It will take a really bold and audacious effort to rescue the brand.
© 2000 agencyfaqs!