HMT

Watches
 HMT : A Snapshot
Incorporated in 1953 by GOI as a Machine Tool manufacturing company.
 HMT : A Snapshot
Incorporated in 1953 by GOI as a Machine Tool manufacturing company.

 Over the years diversified into Watches, Tractors, Printing

Machinery, Metal Forming Presses, Die Casting & Plastic
Processing Machinery, CNC Systems & Bearings.
 Successful technology absorption in all product groups
through collaborations with world renowned
manufacturers & further strengthened by continuous in
house R&D.
 Today, HMT comprises six subsidiaries under the ambit
of a Holding Company, which also manages the Tractors
Business directly
 HMT Watches : Profile
 The manufacture of wristwatches started as part of diversification
strategy of HMT in the year 1962, under Technical collaboration with
CITIZEN Watch Company of Japan.
 HMT Limited, the first company to start watch manufacturing in
India; has incorporated "HMT WATCHES LIMITED" as its fully owned
subsidiary on 9th August 1999.
 It manufactures Mechanical and Quartz Analog watches.
 HMT WATCHES LIMITED comprises of three manufacturing units
at Bangalore, Tumkur and Ranibagh
All its manufacturing units have obtained the ISO 9001 certification
MARKET ANALYSIS …

 27% of Indians own a watch.

 Total estimated market as of 2008 : volume
– 35 million units & value Rs. 2500 + Crs

 Market has been split into:

Mass Market ( < Rs400)
Low end (Rs 400 –Rs 1000)
Mid- Upper Market ( Rs 1000 – Rs 5000)
Premium (> Rs 5000)
COMPETITION ANALYSIS
 Titan sells around 7 million watches annually
 Timex sells under 1.2 million watches
 Other Brands (all put together sell less than 0.5 million watches)
 The Japanese – Citizen, Casio, have been present, while Seiko has
not made any significant moves in India.
 The Swiss – Rolex, Omega, Rado, Tissot, Tag, Longiness, Cartier,
Ebel ………and a host of others
 The fashion brands – Esprit, Giordano, Tommy Hilfiger, Calvin
Klein, Fossil, Swatch………and many more have recently entered
the Indian market
 COMPETITION ANALYSIS
Mass (< Rs. 400)
Valued at Rs. 300 Crores
11%
Grey market, Chinese, etc.
43%
Low-end (Rs. 400-1000)
Valued at 1200 Crores
Sonata, Maxima
Premium (> Rs. 5k)
Valued at 370 Crores
Swiss brands: Tissot, Omega, Rolex
Fashion brands: Fossil, Calvin Klein,
13%
Giordano, Esprit
33%
Mid-upper (Rs. 1k - 5k)
Valued at 938 Crores
Titan, Citizen, Timex,
Swatch, Espirit
COMPETENCY ANALYSIS
  Strong government support.
 Vision of Pt. Jawahar Lal Nehru in 1960’s.
 Collaboration with CITIZEN, Japan for formal training and
technological support.
S  Entry barriers were imposed on the foreign brands entering
into India through FERA.
T  Supported its expansion in 1976.

R  Good brand image and market leadership due to high quality, low price
and reliability.
E  HMT enjoyed 71 percent of the market share in the sales of
mechanical watches and 55.22 percent market share of the total watch
N production in organized sector (as of year 1991-92).

G Company’s liquidity position has been quite comfortable. Adequate

availability of tangible assets such as land and buildings.
T
Record of good industrial relations.
H
In 1991 HMT set up a product development center for watch design.
S
Contd….
 Has an established marketing network.
S
T
R
E
N
G
T
H
S
Contd…

 Its prime product category (mechanical watches) was in the decline stage
W of PLC.
E
 Weak Organizational culture: It suffers from bad work habits, lack of
A discipline, low commitment of manpower, inadequate motivational
K strategies, lack of team spirit and low utilization of human and machine
capacities. Inadequate cost control system.
N
 Over reliance on the production concept of marketing and hence ignoring
E
the marketing concept.
S
 Insufficient emphasis on R&D and design engineering.
S
Contd…
Bureaucratic and centralized decision making inhibited
HMT’s ability to respond quickly with respect to market
changes.
W
E  Virtually ignored to maintain good trade relations with retail
outlets vis a vis competition (retail margin was lower than what
A was provided by the competitor)
K
 It restricted product development to quality development
N only.

E
 Aesthetics and packaging of watches have not been duly
S attended to.

S
Contd…

T  Worldwide decline in the production and demand of mechanical watches

due to growing acceptance of Quartz watches.
H  Significant competition from Allwyn and Titan.
 Competitors wooing HMT’s top managers.
R
 It has to the threat of misuse of its brand name by spurious operators.
E  Competitors successfully exploited the lifestyle segmentation which HMT
failed to.
A
T
S
Contd…

O
 The demand for Watches is growing rapidly both in domestic and
P
international market.
P  Capitalize on attractive segments.
O  In coming years Fashion brands, luxury watches and watches with

R multiple functions are considered as the product segment with the biggest
growth.
T
 Leveraging brand equity of HMT to products such as sports gear,
U
personal accessories.
N
T
I
E
S
Contd…

T  Titan had started marketing its watches in unconventional outlets like

H boutiques and jewellery shops.
 The authorized service agents (ASAs) for foreign smuggled watches in
R the country are also offering competition to HMT.
E
A
T
S
MACRO SOCIO ECONOMIC POLICIES

POST Liberalization policies hit HMT the

most.
Allowed foreign brands to come in.
New tax free zones being identified by the
govt. to promote development of rural areas.

SEGMENTATION & TARGET GROUP
 It is estimated that by 2012
half of india’s population will
be less than 25 years.

 Segmentation of market on
the basis of age group 18 –
35 years.

 The main target segment will

be the youth.
 Response to Market survey
90%
89%
Its considered luxury by just 11% 80%
70%
Of the people 60%
50% Necessity

40% Luxury
30%
20%
11%
10%
0%
Reason to buy

% response to price

70%
60% 63% Over 60% of the people prefer price
50%
500-1000
1001-5000
between 1000 to 5000
40%
30% 5001-10000
10001-15000
20% 21%
15% 1% 0% 15000 & above
10%
0%
% response to price
 % response

Price
8% 0% 17% Design
8%
Endorsement
Brand, Design, Price, Durability
2%
Durability is the sequence of factors that
21%
Brand
influence choice
22% Income
Trend
4% After sales service
17%
others

60%
54%
50% Ads and electronic media
Ads
40%
Electronic Media
account to over 50% as
30% Friends source of information
20% 23% Others

14% 3% 6% Salesman
10%

0%
% response
 50% 43%

40%

30%
17%
20% % response
12%
8% 8% 5%
10% 4% 4%
0%
Titan Timex Citizen Omega Maxima Espirit Rado HMT

Demand for HMT is as low as 5% in comparison to 43 % for Titan and 17 % for Timex
HMT
MARKETING STRATEGY -PRODUCT
PRACTISED STRATEGY

 Few Designs as compared to competitors. HMT has  Create competitive advantage by

only 40 odd variants of four basic designs compared
to competitor line, Titan which has 70 watches in its differentiation through technological
ranges with better looks & designs
leadership :
 There is less emphasis on product research and
development  Gadget range of watches
 HMT has not been able to be a leader in Quartz  MP3 watch
watches segment & underestimation of this segment
Another flaw in its product strategy was scant
 USB watches

attention to aesthetics and packaging of its watches.
 New range of table watches and Wall

clocks


New range of table and wall clocks
 MARKETING STRATEGY –
PRICE
STRATEGY
PRACTISED
 HMT positioned the quartz  In the lower end HMT should seek to
watches as the space age achieve cost advantage by exploiting
generation watches & charged the differences in cost behavior, in
high prices for this category line with fast track
which means that only the
 Zero outsourcing strategy
affluent middle aged consumer
could afford it.  Offer competitive commission prices
 Offering less commission than to whole sellers and retailers.
competition to retailers. whole
sellers.
MARKETING MIX - PLACE

PRACTISED STRATERGY CHANGE

 HMT had to sell through its 13  Reworking on distribution
branch offices of Machine tool network.
equipment.  Exclusive stores
 Limited service agencies.  Display in jewelry stores
 Selective Policy while choosing
retailers.
MARKETING MIX - PROMOTION
PRACTISED
• Though HMT’s advertising was
distinctive and did cater to the lifestyle
segment, it failed to communicate the
uniqueness of HMT’s quartz design vis-
à-vis other HMT watches.
• Because of centralized decision making
even the decisions on the campaigns for
specific products were delayed leading
to the time lag and responding to
market changes.
PROPOSED CHANGE
 Special focus on sales during festive
time like Diwali, Christmas along with
discount offer & finance schemes.
 Go for innovative and stylish ad
campaign that reflects the aspirational,
independent and modern dimensions of
the watch collection and its target
market along with effective press
campaign.
Long Distance trains
Volve Busses
Advertising
ATL
TV Commercials, Print media and Billboards

BTL
Consumer engagement programs
Media engagement
Web and social media
Radio
PR
Events
Advertising
 ATL:
TV Commercials
Sponsorship Prime time TV programs focusing youth eg: MT rodies,
Style check, Stunt mania, Channel V Exhausted , Khatron Ke Khiladi,
Big boss to name a few

Sponsoring major events like IPL, Major Fashion shows, associate sponsorship

Print Media:
Billboards Display of ads,
cut outs at all major traffic locations
Magazines, News paper, danglers, Cut outs
Advertising
 BTL
Consumer engagement programs:
Festive offers, discounts, Exchange offers
Media engagement:
Sponsoring TV / radio shows, Tie ups
Web and social Media:
Mass mailing, Ads on the social networking sites
Radio:
Sponsoring morning / evening slots
Public relation:
Organizing press conference
Events:
Promotional activities at Malls, road shows, re launching of a product,
participating in live shows and exhibitions
Budget Microsoft Office
Excel Worksheet
Suggestions
 Faster production of new models of watches for catering to the
changing needs of the customer.

 Adoption of innovative and aggressive marketing policies.

 Strengthening infrastructure for R&D.

 Reduce man power by adopting new technologies and processes.

 Institutional sales and sales through canteen stores department

(CSD) and e - commerce.

 Enhancing customer services.

 To seek collaboration with reputed international watch

manufacturer to make
 - Rohan Chacko

THANK YOU