XYLYS: Exploring Consumer Perception about Premium Watches in the Indian Context

Written Analysis of Case

Submitted byBushra Javed ButtHira TanveerMahnoor MalikM. Sharjeel ShahidTehmas ZakiUzair Nasir

Submitted To: Ms. Tania Hasan

27th October, 2014

IntroductionXylys was a premium Swiss made watch brand from the house of titan in India. Manoj Chakravarti, Senior Advisor, Titan Industries reflected on his 28 years in the watch industry, both in India and abroad. Xylys priced range between INR 10000 and INR 33000. However, the Xylys range of watches was available in three collection i-e contemporary, classic and sport. It also offered over 60 distinguishing models. Xylys are available at select world of titan showroom, key multi brands outlets and at exclusive flagship boutiques in selected cities. Xylys was a premium watch brand launched by titan a few years ago. Brand was aimed at creating unique perception among consumer. Xylys targeted the lower spectrum of the luxury watch segment. Exuding style, attitude and power, the watch is all set to storm the premium watch segment in India so far dominated by well-known European brands. Titan aims to bring about a redefinition of varieties in the premium watch segment with Xylys. It is targeted at new generation achievers who go beyond the obvious, who know who they are and set their own standards and live by their own values. It is a style statement for those who stand apart from the crowd. The liberalization of markets, the growth of disposable income, the impact of the Western way of life, and the need for a new generation to identify for themselves some of the reasons for the growth of this category of luxury watches in India. In the market of luxury watches is estimated at 3% of the retail hours, and grew by almost 20% per year, which is more than twice the rate of growth of the market. Universally, luxury brand watches have numerous factors which associated with heritage, glamour and technology. While had several brands of watches are sold in India at different price points, the task of leading Indian company Titan Industries, which has made great strides in the watch market in the last two decades successfully implement brand luxury watches. Xylys formulated certain aspects of the marketing strategy in the past to deal with different types of problems. Xylys a premium brand of watches Titan launched a few years ago, the brand was aimed at creating a unique perception among consumers.Qualitative Facts Xylys was a premium watch brand launched by Titan a few years ago. The brand was aimed at creating a unique perception among consumers. Consumers wanted to buy not only durable categories that were useful to them and satisfied functional aspects, but also categories and brands that reflected their personality. The Indian watch industry had its origins in the 1960s, with HMTs Janata being launched in 1962. Before HMT, watches were sourced exclusively from imports, and were affordable by only a small number of consumers. HMT was the first major watch manufacturer in India, until Titan Industries Limited was formed in 1984 and started retailing watches in 1987. In 1992, liberalization opened up the Indian market to foreign players, and Timex was the first on the scene. It was soon followed by Casio, Rolex, Citizen, Tissot, Omega, Rado, and TAG Heuer. Global brands set up subsidiaries in India with apparel brands such as Esprit, Tommy Hilfiger, Benetton, and Levis. The Tata group introduced the quartz watch in the 1980s under the Titan brand, and differentiated themselves on the basis of accuracy, style, choice, presentation, and vigorous push-marketing. Timex, in collaboration with Titan, launched its range in India in the nineties. Timex was to keep the low-price plastic segment, while Titan would manage the high-price metal segment. Later, Timex became an independent brand and set up its own distribution channels, and emerged as a brand associated with the sports and casual wear segment. In early twentieth century, many multinational players entered the Indian market. Competition arose from the increasing foray of multinational players into the lucrative luxury segment. Another challenge was to tackle the spurious imports sold by the unorganized sector. During the eighties and nineties owing to significant lifestyle changes, watches as fashion accessories were in competition with a variety of other products such as apparel and fashion handbags. Successful brands were able to sell because they positioned themselves based on the benefits they offered to those who possessed them.Quantitative AnalysisTime line of wrist watch Industry and India

Introduction of Quartz watch by Tata group.In 1984 Titan Industries Limited was formed as a joint venture of (Tata and TIDCO).TIL differentiated themselves from HMT on the basis of Accuracy, Style, Choice, and vigorous-Push marketing through this phase.In 1987 Titan started retailing its brand itself.

The New export-Import (EXIM) Policy introduced relaxed imports of luxury brandsMany Multinational brands entered the market because of EXIM policies that raised the bar on imports of Luxury watches in IndiaIndian Watch Industry Originated when HMT (Public sector Enterprise Entered Indian Market)Till 1980 HMT was only brand offering watches at monopoly and was able to rtain goodwill even from limited editions.In 1990s TIMEX (originated in collaboration with TitanTag line: Do not have to be rich to afford itEarly 20th Century1980s19921987199919841960

Liberalization opened Indian market to Foreign Players:Casio, Rolex, Citizen, Tissot, Omega, Rado, TAG Heuer

Facts India had 28 States and seven union territories with a population of 77.42 million urban households. The income levels categorized as follows: 62.7 million households earned up to INR 1,50,000 (Indian Rupees) per annum (1 USD was equivalent to about 45 INR), 11.6 million households earned between INR 1,50,000 to INR 3,00,000 per annum, and 3.1 million Households earned more than INR 3,00,000 per annum. The latest McKinsey report on India's consumer market included watches as the eighth most required item) at 8% share-of-wallet (SOW) in 2005; this was expected to climb up to 9% SOW by 2015, and to 11% SOW by 2020. In India, in terms of category sales, the highest share, as per value, involved watches priced between INR 500 and 3,000. The premium segment of watches retailed between INR 4,000 and 15,000 and had been growing at an exponential rate of 20% annually.IssuesCustomer perception issueThe potential target market was shifting towards the international brands for the premium watches and it would be difficult for an Indian-made tag to impress the target market. This has made it difficult to culturally adjust the product. As XYLYS was a subsidiary brand of the house of Titan and Titan was already operating in India since long as a joint venture with other Indian based companies for example with The TATA Group and with Timex, hence the Indian target market mostly associated XYLYX as being a more or less an Indian brand whereas the potential and current target market of premium watch users was shifting to multinational brands and most did not regarded XYLYX as a multinational brand.

Increased CompetitionThe liberal government EXIM policies increased the level of competition the firms were facing. Before the XYLYSs parent company had the major market share and little market penetration was required but after these liberal government policies several large competitors entered the Indian market which included Seiko, Casio, Rado etc. This decreased the market share of Titan and negatively affected XYLYS.Quartz analog issueXYLYX was the quartz analog kind and the customers had this perception that the quartz is of low cost and lacking in style which is quite a drawback for XYLYX because XYLYX is exclusively targeting the premium watch users.Untapped Sports market segmentSports target market segment was largely untapped and only 5% of the total sports segment was being targeted. XYSLYX should have specifically made an emphasis on this side of the target market in order to capture more of the target market.Major sales by unrecognized Sales The majority of the sales in India were made by the unrecognized sector which mainly included selling of imported brands through an unrecognized platform that is through black market and this market formed the majority of the market share i.e. 65%. Wrong Brand PositioningIn 2010, the brand changed its positioning from Symbol of Success to Feeling of Love. The brand talked about falling in love with XYLYX. The brand was initially launched with the positioning to target those individuals who are motivated by the passion to pursue their dreams and the brand is recognized as bold, unconventional and distinctive. The customers of XYLYX were highly individualistic persons. But this new positioning was a significant deviation from the core positioning of the brand. The entire brand positioning was changed in the current campaign. It reflected irrational desirability of the brand. However, later in 2011, when market research was carried out the results proved to be indicating that this market positioning was a wrong idea as the target market had a very individualistic and self-improvement approach. The target market was high on self-consciousness, success, and professional achievement and capable of leading others. They preferred reliability, honesty, spirit to excel, and success. They wanted to be influential, rich, and informative. Their need for self-actualization and self-fulfillment was high. None of these factors were supporting the idea of romance and feelings of love. Hence there was a need for positioning of XYLYX to be changed on an immediate basis.Core Issues:XYLYS has been facing adverse competition due to liberalization, its become a challenging, though with economy growth there was an improvement in watch industry but there was certain problems which were challenging Mr Manoj Chakravarti, as mentioned in the case which are as follows. Would conventional or traditional approach of positioning is enough? Does it necessary for the marketers to get some idea of the unique aspect of self awareness of their consumers? How the uniqueness of other well-known brands perceived by the consumers? How important was the Swiss label? Does the XYLYS being an Indian Brand, delivering the right message to the customers?The case investigates into behavioral concepts that are important in terms of the perception of the brand luxury brands.Recommendations: XYLYS should add accessible luxury brand watches in their product line with higher prices than premium watches as the potential target market was shifting towards the international brands for the high end watches. People perceive high price brand to be reliable. As watches held a symbolic appeal in the Indian context regardless of the price and most people are brand conscious. So, high end watches should be introduced to change the perception of customers and stopping them to shift from their brand. XYLYS should focus on untapped sports target market. As it is potential target market for their sports collections. They should hire brand ambassadors as famous sports person (example Dhoni) for their support category as people in India are highly influenced by the stars. Competitors have famous brand ambassadors as Deepika Padukone for TISSOT. XYLYS change the perception of people by increasing advertising and brand endorsement programs to be the reliable premium watches Indian brand. Company should change their positioning from Feeling of Love back to Symbol of Success. New positioning has significant deviation from the core positioning of the brand. As most of results of their study showed achievement, success factors, Exciting, personal ability, leader, achieving success, professional success imaginative the important factors for potential users of premium watch brands. So they must focus on positioning their brands as Symbol of Success. In their market mix strategy emphasize on success, achievement, innovators, and imaginative people. This will help to change the perception of people towards their premium brand.