Case – Tanishq: Positioning to capture the Indian Women’s Heart

After discussing the case, I would suggest that Titan Jewellery Division should go with the promotion of Tanishq only.

There are following reasons for my Suggestion.

The launch of Gold plus along with Tanishq will create the competition in between them. There is a strong possibility that marketing team of Goldplus will look for capturing the segment of 18 karat gold jewellery. This is not good for a company that its two brands cannibalize the sales of each other.

There will be a conflict of prices in between Tanishq and Goldplus. Since both the brands belong to same parent company, the brand name will lose the trust among customers which is the basic strength of Tanishq and Goldplus.

Tanishq has been successful in overcoming all the challenges since its launch in 1996.Tanishq has changed the perception of Indian customers regarding the brand i.e. “Nice, but not for me” by launching a lot of wedding collections like Bandhan, Zoya, Paheli, Saubhagy, Aarka, Aamra, seven stone theme & floral theme.

The Government has also proposed to increase the excise duty from 2% to 6% in organized jewellery sector. So this leads to shrink further the margin of plain gold jewellery.

After launching the Wedding and Festival collections in between 2001 to 2005, the sale of Tanishq soared from Rs. 166 crores in 2001 to 570 crores in 2005( an increase of 243%).It means they had been quiet successful in capturing the traditional 22-karat gold jewellery customers.

It has been shown that the customers coming to buy 22 karat plain gold jewellery changed their mindset in Tanishq showrooms and bought the 18 karat gold jewellery which was modern, sophisticated, elegant & artistic. Thus the company is getting higher margins. But this is not possible in the case of Goldplus.

Tanishq brand provides 15% higher margin than Goldplus. Plain Gold jewellery offers little opportunity for differentiation. Also, everyone knows the price of gold.

Consumer spending habits began to change as well. Now Indian consumers not only had more money for disposable items, they were willing to spend money on fashion items.

Conclusion:

There are mainly two segment of buyers; ones who buy 22 karat gold plain & traditional jewellery (investment seeker) and others who like 18 karat fashionable & modern jewellery (adornment seeker). I believe that Tanishq alone can serve both segments of buyers by launching specific & different collections of jewellery for each segment and can get huge success.Like Bandhan, Paheli, Saubhagy, Aamra, Aarka for traditional and 22 karat gold jewellery customers and Aria, Diva, Solo, 9 to 5 jewellery, Daytimes for modern, college-educated, socially versatile & smart spender.