How Tanishq HACKED the GOLD Market of India : Titan & Tanishq (A TATA Product) Business Case Study
Summary
TLDRThe video script narrates the remarkable journey of Tanishq, a titan of the Indian jewelry market, from its inception to becoming a leading brand. It delves into the strategic moves that disrupted the traditional gold market, including the innovative Carrot Meter to ensure purity and the 1922 strategy to gain customer trust. The script also highlights the importance of market research, problem awareness, and empathy in product offerings, as Tanishq catered to diverse customer segments with collections like Mia and Zoya. Lessons learned from Tanishq's success emphasize thorough market understanding and the power of trust and customer-centric solutions.
Takeaways
- đ Titan Company's stock price has seen an incredible surge, increasing from 7.11 rupees to 2700 rupees over the past 20 years, largely due to the success of its jewelry division, Tanishq.
- đ Tanishq is the primary revenue driver for Titan, accounting for 75% of its total business, with net sales of 20,600 crores in 2021, making it one of India's largest jewelry sellers.
- đ Titan initially struggled to penetrate the European watch market due to intense competition and eventually pivoted to selling jewelry in Europe to generate forex for importing watch components.
- đ Mr. Desai and his team identified key opportunities in the Indian jewelry market, such as the passion for jewelry as an investment, mediocre designs, questionable gold purity, and high margins due to cheap labor.
- đ Tanishq's entry into the jewelry market was initially challenging due to competition from unorganized local jewelers and the preference for 22-carat gold over the 18-carat jewelry Tanishq initially offered.
- đĄ The introduction of the 'Carrot Meter', a Swiss machine using spectroscopy to measure gold purity, allowed Tanishq to build trust by offering free purity checks and exposing the impurities in local jewelers' products.
- đ The '1922 Strategy' allowed customers to exchange their impure gold jewelry for 22-carat Tanishq jewelry by only paying manufacturing charges, effectively acquiring new customers by addressing the trust barrier.
- đ° Tanishq addressed the cost barrier by launching the 'Gold Harvest Investment Scheme', enabling customers to make monthly deposits towards the purchase of gold jewelry, making it more accessible to the middle class.
- đ©âđŒ The brand showed empathy by launching the 'Miya Collection' for working women who wanted affordable, elegant, and easy-to-wear jewelry, and the 'Zoya Collection' for the ultra-rich seeking unique, high-end designs.
- đ Tanishq capitalized on the digital wave by investing in 'CaratLane', an online jewelry company, demonstrating an understanding of market trends and catering to diverse customer segments.
- đ The case study of Tanishq highlights the importance of market research, creating awareness of problems, and the power of empathy in building a successful brand that resonates with customers.
Q & A
What significant growth has Titan's stock price experienced in the past 20 years?
-In the past 20 years, Titan's stock price has increased by 33,000%, going from 7.11 rupees to 2,700 rupees.
What percentage of Titan's total business does the jewelry division account for?
-The jewelry division alone accounts for 75 percent of Titan's total business.
What was Tanishq's net sales in 2021?
-As of 2021, Tanishq generated a net sales of 20,600 crores.
Why did Titan initially decide to sell jewelry in Europe?
-Titan decided to sell jewelry in Europe to earn forex to import watch components due to the high demand for dollars to buy oil during the 1990s oil shock.
What was the impact of the 1990s oil shock on India's forex resources?
-The 1990s oil shock led to a significant burden on India's forex resources, leaving the country with less than one billion dollars of foreign reserves by June 1991.
What was the initial challenge Tanishq faced in the Indian jewelry market?
-Tanishq initially faced the challenge of competing with unorganized local family jewelers who had strong customer trust and loyalty.
What was the 'Carrot Meter' and how did it help Tanishq?
-The 'Carrot Meter' was a machine from Switzerland that used spectroscopy to measure the purity of gold. It helped Tanishq establish trust by allowing customers to verify the purity of their jewelry for free, revealing the impurities in products from local jewelers.
What was the '1922 Strategy' and its purpose?
-The '1922 Strategy' was a customer acquisition strategy where customers could exchange their impure gold jewelry for Tanishq's 22-carat jewelry by paying only the manufacturing charges, with Tanishq bearing the cost of gold.
How did Tanishq address the barrier of cost for middle-class families?
-Tanishq launched the Gold Harvest Investment Scheme, allowing customers to deposit a fixed amount per month for 11 months, with Tanishq paying the 12th installment, making their products more accessible to the middle class.
What is the significance of the 'Miya' and 'Zoya' collections in Tanishq's strategy?
-The 'Miya' collection addressed the needs of working women who wanted affordable, elegant, and easy-to-wear jewelry, while the 'Zoya' collection catered to the ultra-rich seeking unique, high-end designs.
What lessons can be learned from Tanishq's case study?
-Lessons include the importance of thorough market research, making customers aware of problems before offering solutions, and the power of empathy in understanding and meeting customer needs.
Outlines
đ Titan's Transformation into a Jewelry Giant
The script begins by highlighting the remarkable success of Titan Company, a subsidiary of the TATA Group, which saw its stock price surge from 7.11 rupees to 2700 rupees in 20 years. The company's jewelry division, Tanishq, has become a dominant player in India's jewelry market, accounting for 75% of Titan's total business and generating a net sales of 20,600 crores in 2021. The video aims to dissect the business strategies that led to this success, including the challenges faced and the innovative approaches taken to disrupt the traditional gold market in India.
đ Titan's International Expansion and the Birth of Tanishq
The narrative moves on to Titan's attempt to expand into the European market in the late 1980s, which faced stiff competition from local and Japanese watch brands, as well as Swiss luxury brands. The venture was not successful and had to be shut down. However, during the Gulf War, the oil crisis led to a significant increase in oil prices, impacting India's forex reserves. Titan, needing forex to import watch components, pivoted to selling jewelry in Europe to earn the necessary currency. The liberalization of India's economy in 1991 changed the landscape, allowing Titan to focus on the domestic market, leading to the birth of Tanishq.
đ Disrupting the Indian Gold Market with Tanishq
The script details the strategic observations made by Mr. Xerxes Desai and his team at a jewelry exhibition, which led to the decision to enter the Indian jewelry market. They identified the Indian household's passion for jewelry as an investment, the mediocre designs, and questionable gold purity in the market. Despite Titan's financial backing and technological prowess, Tanishq initially struggled due to the entrenched unorganized players and the preference for 22-carat gold over the 18-carat jewelry Tanishq offered. The company adapted by focusing on transparency in pricing and purity, introducing the 'Carrot Meter' to measure gold purity, and launching the '1922 Strategy' to exchange lower purity gold for Tanishq's 22-carat jewelry, thereby earning the trust of Indian consumers.
đ Scaling Tanishq Through Innovative Strategies and Market Understanding
The final paragraph discusses the strategies that helped Tanishq overcome the barriers of trust and cost in the Indian market. The 'Gold Harvest Investment Scheme' allowed middle-class families to invest in gold over time, making it more accessible. Tanishq also addressed the needs of different customer segments with collections like 'Miya' for working women and 'Zoya' for the ultra-rich. The company's empathy-driven approach to understanding customer needs and its ability to adapt to market changes, such as the rise of digital platforms, contributed to its growth into one of the largest jewelry sellers in India. The video concludes with lessons learned from Tanishq's journey, emphasizing the importance of market research, problem awareness, and empathy in building a successful brand.
Mindmap
Keywords
đĄTanishq
đĄTitan Company Limited
đĄBusiness Strategy
đĄMarket Disruption
đĄInvestment
đĄPurity
đĄCustomer Lifetime Value
đĄLiberalization
đĄGold Harvest Investment Scheme
đĄMarket Research
đĄEmpathy
Highlights
Tanishq is a prominent brand in Indian business history with its parent company Titan's stock price increasing significantly over the past 20 years.
The jewelry division of Titan accounts for 75% of its total business, with Tanishq generating a net sales of 20,600 crores as of 2021.
Tanishq's success is attributed to strategic business moves that disrupted the traditional gold market in India.
Titan's initial attempt to expand into the European market was unsuccessful due to market saturation.
The 1990s oil shock led to a significant burden on India's forex resources, prompting Titan to venture into jewelry sales in Europe to earn forex.
Tanishq was born out of Titan's need to generate forex and later shifted focus to the Indian market following liberalization.
Tanishq's entry into the jewelry market was based on observations of the Indian household's passion for jewelry and the poor quality of existing designs.
Tanishq initially faced challenges due to strong competition from unorganized local jewelers and a focus on gold purity over design.
The introduction of the 'Carrot Meter', a purity-measuring device, helped Tanishq build trust by exposing the impurities in competitors' products.
The '1922 Strategy' allowed customers to exchange their impure gold jewelry for Tanishq's 22-carat jewelry, strengthening customer acquisition.
Tanishq addressed the barrier of cost by launching the Gold Harvest Investment Scheme, making jewelry more accessible to the middle class.
The brand's empathy towards its customers is evident in the creation of the MIA and ZOYA collections, catering to different segments of the audience.
Tanishq's digital expansion included investment in CarrotLane, an online jewelry company, to capitalize on the rising digital wave.
Lessons from Tanishq's success include the importance of thorough market research, making customers aware of problems, and the power of empathy in business.
Wind Wealth, the sponsor of the video, is a platform for investing in bonds of leading NBFCs with a simple investment process.
The video concludes with the significance of continuous market assessment and customer need updates for business sustainability.
Transcripts
hi everybody tanishq is one of the most
incredible brands in the indian business
history and like we saw in the titan
episode in the past 20 years the stock
price of its parent company titan has
shot up by not 10 not 20 but 33 000
going from just 7.11 rupees to 2700
rupees and a mere 10 000 rupees invested
in titan 20 years back would be worth a
minimum of 35 lakh rupees now although
titan has a lot of brands under its
canopy the jewelry division alone
accounts for 75 percent of its total
business and as of 2021 tanishq
generated a net sales of 20
600 crores and today it is one of the
biggest jewelry sellers in the country
so the question is how did titan turn
tanish into such a huge brand what were
the business strategies that enabled
them to disrupt the orthodox gold market
of india and most importantly what are
the lessons that we need to learn from
this case study this video is brought to
you by wind wealth but more on this at
the end of the video
this is a story that dates back to late
1980s by this time it had been four to
five years since the titan brand had
started and like we saw from the titan
episode mr desa and his team had built
an incredible company for the tatas in
the tamil nadu government and now after
cementing titan's position in india in
the 1990s mr xerxes wanted to take titan
to the european markets however this
proposition did not take off at all why
because the european watch market was
crowded at all levels at the lower end
they had local brands in the middle they
had japanese companies like seco and
then at the top they had swiss brands so
while sales of west asia and asia
pacific were good the euro business was
incurring losses and eventually that
division had to be shut down but you
know what guys this is where suddenly
titan decided to sell jewelry in europe
now the question is why would a watch
company suddenly start selling jewelry
and that too in europe
well that is because something crazy
happened in the middle east during that
time saddam had taken his gamble whether
it was part of a plan to capture the
world's oil supplies whether he would go
marching on to saudi arabia america
didn't wait to see iraq will not be
permitted to annex the way
that's not a threat
just the way it's going to be
the coalition took only a hundred hours
to destroy the iraqi forces in kuwait
in the hours before baghdad surrendered
the oil wells of kuwait were set ablaze
by saddam's retreating army kuwait which
produced one and a half million barrels
of oil a day before
march of 1991
the united states had recently invaded
iraq over saddam hussein's invasion of
kuwait and in the build-up of invasion
iraq and kuwait had been producing a
combined 4.3 million barrels of oil a
day but when the war tensions started
rising it led to the 1990s oil shock
wherein the price of oil shot up from
just 21 dollars per barrel at the end of
july to 46 dollars per barrel in mid
october and this put nations all across
the world in deep deep trouble and in
case of india since india imported oil
and paid for it in dollars or forex the
high prices caused a significant burden
on our forex resource by june 1991 india
had less than one billion dollars of
foreign reserves left which was just
enough for three weeks of inputs
this was a situation even after
substantial borrowing from the imf so
during this time any company that wanted
forex had to generate it completely by
themselves in simple words india said if
you're a businessman who wants dollars
don't come to india for exchange because
we need to buy oil if you want to do any
kind of import earn or borrow dollars
from someone else and then spend it
completely by yourself now in case of
titan they needed dollars to import
their watch components so they started
swelling jewelry with the goal that they
would make and sell jewelry in europe
earn forex then use the money to import
watch competence then use those
components to make more watches in india
and then sell them all across the world
but this is when liberalization came
into effect in india in 1991.
as a result india's i.t companies like
infosys and vipro started bringing an
enormous amount of forex eventually the
oil shop faded away and titan started
focusing on the indian market under a
different brand name
this is how ladies and gentlemen through
another jugado method another iconic
indian brand was born which we all know
today as tanishq now the reason why mr
desai and team pursue the jewelry market
in india was because while visiting a
jewelry exhibition at the taj hotel they
made three important observations number
one the indian household was extremely
passionate about jewelry because it was
an investment and not an expense
and even an orthodox family did not mind
spending tens of thousands of rupees
into jewelry
but secondly the jewellery designs in
india were extremely mediocre and the
purity of gold was quite questionable
this was because impurity was a very
good way for the local jewelers to
expand their margins and make a ton of
profits
and lastly in spite of having such an
enormous demand and a customer lifetime
value in lakhs
the margins in gold were extremely high
because of both appreciation in value
and more importantly because of cheap
labor
this is what propelled titan to enter
the jewelry business now by the look of
it considering the fact that titan had
the cash for the tatas and the expertise
to get world class tech it looks as if
it must have been easy to crack the
jewelry market of india right
well not really in fact tanish in the
initial few years was a loss-making unit
and at one point in time the condition
was so bad that they were in talks of
selling it off
and this happened because of two major
reasons firstly the indian jewelry
market was very very strongly
established with the unorganized players
why because the only dweller and indian
family trusted were the local family
dwellers i say local and family because
if you ask your parents they'll tell you
that even your grandparents and their
siblings bought from the same dweller
secondly back then 22 garrett gold was
the de facto standard this is where
you've got a product with ninety one
point six percent gold and eight point
five percent alloys
but titan started out with 18 carat
jewelry this was because the 18 carat
was studio would not get scratches
easily and would give a firmer grip to
the gems and stones this way they could
focus on innovative designs with started
jewelry
but guess what in india back then and
even today design was secondary
proportion of gold was primary why
because gold for indians was an
investment and not just a piece of
jewelry so the weight of gold weight of
diamond making charges appreciation
value all of it mattered to the indian
buyers and they didn't mind a simple
design as long as it had more gold
this is when mr xerxes and his team
decided to introspect tanish very very
closely so immediately the pricing
system was changed the price tags now
display the gold and the gem details
that explain the price of each product
to the customers and overall the focus
shifted from design to purity and value
and this is when tanishq made a game
changing investment into something
called the carrot meter and this
investment completely changed titan's
game forever
to tell you about it like we discussed
before most of the families in india
trusted one family dweller who had been
selling them gold and other jewels for
20 to 30 long years
but at the same time tanishq understood
that these dwellers were adulterating
the products by a large extent and a
common man can not actually
differentiate these intricacies and this
is also something that you cannot just
tackle with marketing campaigns
this is where the carrot meter came in
carrot meter was an important machine
from switzerland that actually used
spectroscopy to measure the purity of
gold this machine was installed in all
tanish outlets and after that titan
launched a special campaign wherein they
invited customers to walk in with any
piece of jewelry and measure its purity
for free now since gold was very very
important to indians people actually
flocked to these stores to check the
purity of their ornaments that they had
actually bought from their family
dweller out of blind trust and guess
what
majority of these people were shocked to
discover that they had been cheated by
their family dwellers for decades and
this was because the gold was not as
pure as the dwellers claimed and when
lakhs of people felt betrayed or
dissatisfied with their jewelry titan
deployed another strategy called the
1922 strategy
and in this scheme women could bring in
their gold jewelry test it in the carrot
meter and if the purity of the jewelry
was lower than 22 karat and higher than
19 karat it could be exchanged for
tanish 22 carat jewelry of their choice
by paying only the manufacturing charges
and tanish could bear the cost of gold
yes you heard that right tanish could
bear the cost of gold
this was titan's customer acquisition
strategy now although it might look like
titan was draining cash by paying for
the gold what we miss out on is the fact
that when it comes to jewelry the
customer lifetime value goes to lakhs of
rupees and if done right just like local
dwellers you could be looking at
customers from three to four generations
of the family
as a result when this 1922 strategy was
executed titan was very cleverly able to
uproot the blind trust of the local
dwellers and acquired lacks of customers
from all across the country this is how
tanishq laid the foundation to build its
brand as a synonym of trust and purity
and the result well by 2023 the jewelry
division's operating income increased
from 267.66 crores to 345 crores with
profit before tax at 5.37 crores and
this is where tanish rise as a
blockbuster brand began because it
tackled one of the most important
batteries of customer acquisition and
that is barrier of trust
this is when they further moved ahead to
tackle the second barrier which was the
barrier of cost after the carried meter
strategy tanish found another gap in the
market for expansion they realized that
because of their branding efforts the
middle class indian family started to
perceive tanishq as a brand that was too
expensive for them and from the cost
standpoint a middle class family that
wanted to purchase gold could not shell
out 6 to 7 lakhs at once but at the same
time the desire to buy the set was there
because after all it was an investment
this is where tanishq launched the
famous gold harvest investment scheme to
buy jewelry in this game if you wanted
to buy a gold chain worth 2.4 lakhs and
you didn't have that kind of money now
you could actually deposit 20 000 rupees
per month for 11 months with tanishq and
then tanish would pay your 12th
installment of 20 000 rupees
at the end of the year you would have
2.4 lakh rupees to buy your gold chain
this is almost like an sip for gold and
if you didn't want to buy gold after a
year you could get the money back with
the discount voucher for the additional
amount this is how the barrier of cost
was brought down as a result danish
became more accessible to the middle
class population of india and eventually
they tackled yet another important
barrier which was the barrier of cost
and lastly what i personally love about
these classic brands is that they often
consider one factor that no other brand
considers in order to identify intricate
gaps in the market and this is the
factor of empathy in this case tanishk
actually observed that working women
didn't want to wear very ornate jewelry
to work because it looked too flashy at
the same time they wanted something
affordable elegant and easy to wear so
tanishq launched the miya collection
that specifically addressed this segment
of the audience and started their
pricing from 3999 onwards then they also
found that the richest people in the
society who had the purchasing power
wanted to buy unique designs which would
distinguish them from the crowd so they
launched the zoya collection that starts
from 70 000 rupees and goes all the way
up to 70 lakh rupees then they also saw
the digital wave rising so titan
invested into carrot lane in 2016 which
is an online jewellery company in fact
even today if you go out in the market
and you try to examine the competitions
of tanishq you will see that there are
very very few brands that actually cater
to so many categories of audience like
executive ultra rich traditional
minimalistic designer etc this is how
tanishq evolved to become one of the
largest valerie sellers in the country
and this brings me to the most important
part of the episode and that are the
lessons on the case study before we move
on i want to thank our partners windwell
for supporting our content windwell is a
platform by which you can invest in
bonds of leading nbfcs and earn 9 to 11
returns this company is backed by zero
does raid matter along with the angel
investors like kunal shah praveen radha
who was the ex-ceo of paytm and others
the process of investment is very simple
all you have to do is go to assets on
the menu click on the asset which is
currently live and when you do that you
will see the asset page which has
detailed information about the asset on
the right hand side you can see a table
by which you can determine how many
units of the bond you want to buy and
then you can proceed ahead with the
payment you can pay via upi net banking
or even the wind wealth fund and that's
it you are done by investing in wind
wealth you can earn returns that are
higher than fds and at the same time not
as volatile as stocks for full
disclosure even think school is an
investor in wind wealth so if this
sounds useful to you go ahead use the
link in the description to start making
safe investments with wind wealth moving
on the first lesson that we need to
learn is that there is a thin line
between what you think your customers
like and what they actually like so
always do your market research
thoroughly before stepping into the
market and the most powerful way to do
that would be to study the data and then
go and talk to people to understand the
story behind the data the point we noted
over here is talking to people is more
important than analyzing data
lesson number two sometimes you have to
make people aware of the problem before
providing the solution in this case
although people are buying impure gold
the blind trust of the local dwellers
needed to be broken in order to
establish the informed trust by tanishq
this is where titan's carrot meter came
in handy and lastly always remember
empathy is that superpower that can turn
a commoner into a king in this case the
constant market assessment done by
tanishq team gave them million dollar
assets in the form of mia and zoya
collections so always remember keep
updating yourself about what your
customers need otherwise they won't need
you tomorrow
that's all from my side today guys if
you learned something available please
make sure to the like button in order to
make youtube bubba happy and for more
such insightful business and political
case studies please subscribe to our
channel thank you so much for watching i
will see you in the next one bye bye
[Music]
Voir Plus de Vidéos Connexes
How Pidilite's STRATEGY made it a GOLDMINE stock giving 14,000% returns? : Business Case Study
How did TATAs build TITAN into a $31 Billion company? : Titan Watches Case Study
How Aman Gupta's MARKETING STRATEGY turned Boat into a 1500CR Company : Business case study
How did Haldiram Build a 5000cr business empire? : Business case study
This SECRET Brand is KILLING Nike and Adidas in India? | Decathlon Business Case Study
Lec 06- Organizing and managing marketing department
5.0 / 5 (0 votes)