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HMT

Watches
OBJECTIVES
• To study of a yester year market leader ‘HMT’.

• Discuss
• 4 P’s (Product, Price, Place Promotion)
• SWOT
• PLC (Product Life Cycle)

• To find out the reasons behind failure of HMT


Watch ltd.

• Reposition the product in the best possible way.


HMT : A Snapshot
Incorporated in
1953 by the
Government of
India as a
Machine Tool
manufacturing
company.
 Over the years  Successful technology  Today, HMT
diversified into Watches, absorption in all product comprises six
Tractors, Printing groups through subsidiaries under the
Machinery, Metal collaborations with world ambit of a Holding
Forming Presses, Die renowned manufacturers Company, which also
Casting & Plastic & further strengthened by manages the Tractors
Processing Machinery & continuous in house R&D. Business directly .
Bearings.
In 1953 Incorporated in Bangalore.

In 1961 started it’s wrist watch plant.

H.W. L. (Hindustan Watches Ltd.) was the first to


enter in the market.

In 1979 sales touch to 4 lakh watches.

In 1980 it was 5 lakh watches.

In 1990 got ISO 9001 certified.

On 9th August 1999 fully owned subsidiary.

Plants was located at Bangalore, Tumkur and


Ranibagh.
THE MARKETING MIX
PRODUCT AND PRICE
PRODUCT PRICE
Braille 495.00

Janata 515.00
Pilot 515.00
Kohinoor. 665.00
Dilip 750.00
Sona 780.00
Chinar 1175.00
Sweekar 1050.00
Kailash 1050.00
Rajat 995.00
Kedar 1500.00
ADSL-03 2295.00
ADSL 02 2095.00
PLACE

• Showrooms

• Dealers

• Retailers

• Whole sellers
PROMOTION

• Radio
• Newspaper
• Television
• Magzine
SWOT ANALYSIS
STRENGTH
• Strong govt. support

• Brand image

• Market leadership

• Good liquidity

• Availability of tangible assets

• Established marketing network

• Prior experience
WEAKNESS
• No emphasis on R&D
• Rigidness
• Red tapism- Over reliance on the production
concept of marketing and hence ignoring the
marketing concept.

• Production was not market driven.

• No emphasis on design and


packaging
Opportunity
• Growing domestic and international market.

• Exports

• Market segmentation

• Enlarge network of sale outlets

• Product improvement
Threats

• Competitors
• Misuse of its brand name by spurious operators.
• Unorganized manufacturing
Causes Of Failure
• A large number of staff, including persons of general manager's rank, had
left the organization to join the rivals.
• Our biggest threat was to come from watch manufacturers in the
unorganized sector and fake parts and components.
• We have even detected our dealers' connivance in selling other brands
SK Chaturvedi

HMT Executive Director


What Went Wrong?

Product
 Few Designs as compared to competitors. HMT has only 40 odd variants
of four basic designs compared to competitor line, Titan which has 70
watches in its ranges with better looks & designs
 There is less emphasis on product research and development
 HMT has not been able to be a leader in Quartz watches segment &
underestimation of this segment
 Another flaw in its product strategy was scant attention to aesthetics
and packaging of its watches.
What Went Wrong?

Price
 HMT positioned the quartz watches as the space age generation
watches & charged high prices for this category which means that only
the affluent middle aged consumer could afford it.
In less than a year the company had to reduce the price and followed
lifestyle advertising to justify the still higher price of the quartz, however
even this backfired as consumers were not convinced of the
differentiation between the quartz and other HMT watches.
What Went Wrong?

Place
 Didn’t strategize its established marketing network according
to growing competition and new market trend like downtrend of
mechanical watches & the growing market for the quartz
watches.
 Since retailers have enough foreign brands they were simply
not interested in HMT’s home grown products as a result it had
to sell through its 13 branch offices for Machine tool equipment.
 In addition, the retailer margins provided by HMT were 2%
less than what its most prominent competitor, Titan, was
offering to the retailers.
What Went Wrong?

Promotion
• 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.
PLC of HMT
Product Life Cycle
Watches
REASONS FOR REPOSITIONING

Completed all the stages of PLC

1-Introduction

4-Decline
PLC
2-Growth

3-Maturity
New Marketing Mix
Segment (Demography) Product Price

Low end Rugged, basic time function, Rs. 300-1000


mechanical or quartz, water
resistance steel and gold make.

Mid upper Automatic, steel or gold make, Rs. 1,000-3,000


quartz/analog, water resistance
and rich looks
Urban Youth USB,MP3,trendy, attractive, Rs.1,000-5,000
stylish, water resistance and
colorful.

Executive/Achievers Automatic, multifunctional, Rs.5,000-30,000


quartz, digital, water resistance,
gold and jeweled

Affluent Jeweled, automatic, gold, Rs. =>30,000


platinum, water resistance
,classy and customize
Place

• Company owned outlets

• Retailers

• Authorized dealers

• Jewellary shops

• Other retail outlets and stores

• Online shopping
Promotion
• Electronic Media:
TV Commercials
Sponsorship Prime time TV programs
Sponsoring major events like IPL, Major Fashion shows, associate
sponsorship
On line marketing

• Print Media:
Billboards,
Cut outs at all major traffic locations
Magazines
News paper
Danglers
Cont…
• Radio:
Sponsoring morning / evening slots

• Public relation:
Organizing press conference

• Events:
Promotional activities at Malls, road shows,
participating in live shows and trade fair.

• Special offers during wedding and festive time.

• Organize village fairs and conduct various publics welfare programs.

• Go for innovative and stylish ad campaign that reflects the aspirant,


independent and modern dimensions of the consumer.
REPOSITIONING STRATEGY
• Attractive Company logo and tag line

• Undertake the marketing concept instead of product concept.

• Focus on all the segment instead of one (low end)

• Capitalize on the brand equity of HMT

• Use promotional and advertising strategy zeroing on the emotional


attachment and bond with the customers.
• Make customize watches.

• Open customer help desk.


Cont…
• Make celebrity as a Brand Ambassador.

• Improve the website by providing features like-

• Online Shopping

• Store Locations

• Exhibiting new products

• Showcasing the existing designs

• Suggestion box

• Open an exclusive outlet only for ladies.


The Repositioning Campaign (30 Days)
Campaign No. of Activities decided
days

Top level exercise 7 Discussion & decision making on all ends like-
Budget, Ads, etc.

Training of sales 9 Training on New product features, competitors


teams weakness & new targets.

Selection of 3 Media engagement


activity and places Radio
Web and social media
PR
Events
The Repositioning Campaign
Campaign No. of Activities decided
days
Pre launch 4 Full dress rehearsal and review of it.
activity

The launch 1 The full fledged launch by the chairman and


the brand ambassador in the presence of media
and the dignitaries.

Post launch 7 Special counters whole week in shopping


activity centers, frequent commercial on T.V. and
radio, road shows and village fairs.
Cover entire market with HMT cut outs.
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.
• HMT should focus first on tier 1 and tier 2 cities and then gradually
penetrate towards tier 3 towns and cities.
• Company has to position itself very carefully because other product
variants like mobi-watch (watch with a cell phone) and handheld
devices may try to snatch the market share.
• The whole idea of buying and wearing a watch must be an
experience.
• If HMT can deliver above mentioned offerings with a strong
distribution chain, a controlled retailer policy, with a wide market
research, future is no longer beyond their control. HMT will emerge
as a winner.
Although it is very uphill task
but HMT can once again emerge as the
“Market Leader”

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