Research Report

On

Tanishq

By SAISAMEERA.S.EERANKI

Section C

Enrollment No. 19BSP2384

 Jewellery market in India

India is deemed to be the hub of the global jewellery market because of its low costs and availability
of high-skilled labour. India is the world’s largest cutting and polishing centre for diamonds, with
the cutting and polishing industry being well supported by government policies. Moreover, India
exports 75 per cent of the world’s polished diamonds, as per statistics from the Gems and Jewellery
Export promotion Council (GJEPC). India's Gems and Jewellery sector has been contributing in a
big way to the country's foreign exchange earnings (FEEs). The Government of India has viewed
the sector as a thrust area for export promotion. The Indian government presently allows 100 per
cent Foreign Direct Investment (FDI) in the sector through the automatic route. The Gems and
Jewellery sector is witnessing changes in consumer preferences due to adoption of western lifestyle.
Consumers are demanding new designs and varieties in jewellery, and branded jewellers are able to
fulfil their changing demands better than the local unorganised players. Moreover, increase in per
capita income has led to an increase in sales of jewellery, as jewellery is a status symbol in India.

The cumulative Foreign Direct Investment (FDI) inflows in diamond and gold ornaments in the
period April 2000 – March 2019 were US$ 1.16 billion, according to Department for Promotion of
Industry and Internal Trade (DPIIT).
Some of the key investments in this industry are listed below.

 Deals worth Rs 8,000 crore (US$ 1.19 billion) were made at the Indian International
Jewellery Show held in August 2018.
  Companies such as PC Jewellers, PNG Jewellers, Popley and Sons, are planning to introduce
a virtual-reality (VR) experience for their customers. The customer will have to wear a VR
headset, through which they can select any jewellery, see the jewellery from different angles
and zoom on it to view intricate designs.

Market size

 Gold demand in India rose to 760.40 tonnes between January to December 2018. India's
gems and jewellery exports stood at US$ 4.99 billion between Apr 2019 –May 2019. During
the same period, exports of cut and polished diamonds stood at US $ 3.52 billion, thereby
contributing about 76.96 per cent of the total gems and jewellery exports in value terms.
 Exports of gold coins and medallions stood at US$ 686.51 million and silver jewellery
exports stood at US $ 765.98 million between April 2018 - March 2019.
 The gems and jewellery market in India is home to more than 300,000 players, with the
majority being small players. Its market size is about US $ 75 billion as of 2017 and is
expected to reach US $ 100 billion by 2025. It contributes 29 per cent to the global jewellery
consumption.
 India is one of the largest exporters of gems and jewellery and the industry is considered to
play a vital role in the Indian economy as it contributes a major chunk to the total foreign
reserves of the country. The Goods and Services Tax (GST) and monsoon will steer India’s
gold demand going forward.
 In the coming years, growth in Gems and Jewellery sector would be largely contributed by
the development of large retailers/brands. Established brands are guiding the organised
market and are opening opportunities to grow.
 Increasing penetration of organised players provides variety in terms of products and
designs. Online sales are expected to account for 1-2 per cent of the fine jewellery segment
by 2021-22. Also, the relaxation of restrictions of gold import is likely to provide a fillip to
the industry.
 The improvement in availability along with the reintroduction of low cost gold metal loans
and likely stabilisation of gold prices at lower levels is expected to drive volume growth for
jewellers over short to medium term. The demand for jewellery is expected to be
significantly supported by the recent positive developments in the industry.
 TANISHQ

Introduction
Tanishq is India's largest, most desirable and fastest growing jewellery brand in India. Started in
1995, Tanishq is the jewellery business group of Titan Industries Ltd - promoted by the TATA
group, India's most respected and widely diversified business conglomerate. It is located in Hosur
(spicot). This year marks a decade of successful innings for Tanishq.
With retail sales of 1200 crore last years and gunning for 2000 crores this year, Tanishq has arrived
in the Indian jewellery market. It is a story of a successful Indian enterprise, which has delivered
value to its customers and shareholders in a complex category, marked by its completely localized
front end as well as back end. Tanishq has set up production and sourcing bases with through
research of the jewellery crafts of India. Jewellery at Tanishq is crafted in one of the world's most
modern factories. The factory complies with all labour and environmental standards.
Located at Hosur, Tamil Nadu, the 1, 35,000 sq. ft. factory is equipped with the latest and most
modern machinery and equipment. Every product at Tanishq is painstakingly crafted to perfection.
Diligent care and quality processes ensure that the Tanishq finish is unmatched by any other
jeweller in the country. Tanishq challenged the age-old jeweller's word with TATA's guaranteed
purity. It exploded the market with facts about rampant impurity across India. It introduced
technology-backed challenge in a category completely governed by individual trust.
Tanishq introduced innovations like Karatmeter, the only non-destructive means to check the purity
of gold. Tanishq also introduced professional retailing in the dis-organised Indian jewellery bazaar,
where women can shop with comfort and peace, without worrying about the purity of the jewellery
they are buying, as well as, select from the best jewellery collections available in the Indian market.
Tanishq today is India's most aspirational fine jewellery brand with 91 stores in 64 cities, with an
exquisite range of gold jewellery studded with diamonds or coloured gems and a wide range of
equally spectacular jewellery in 22Kt pure gold. Exquisite platinum jewellery is also part of the
product range.
 Value

Tanishq, a jeweller known to offer the best -in-class jewellery has pledged to ensure that
every purchase is ethical, whether it is a sale or exchange of a product. Tanishq, which
bears the hallmark of Titan and the assurance of the TATA Group, to live up t o the
expectations of the Indian woman promises to provide her with superior craftsmanship,
exclusive designs and guaranteed product quality. Tanishq Promise – is a pledge to always
keep 10 precious promises that it has made to its consumers.

From introducing the state-of-the-art karatmeter at every single Tanishq store which
guarantees the most accurate way of measuring purity of gold, to providing 100% exchange
value for diamonds and other precious stones, Tanishq ensures that its customers a re never
disappointed. The brand propagates ethical practices not only by assuring the customer
purity and selling policies, but also fair policies to the karigars who craft the jewellery.

Sandeep Kulhalli, Senior Vice President, Retail and Marketing, Jewellery Divison, Titan
Company Limited, said;“Tanishq Promise is a premise to reiterate our commitment to
jewellery lovers across the country. Through Tanishq Promise, we are underlining 10
distinctive features whether it’s exchanging gold at a right price or checking your gold
jewellery for its purity through the scientific Karatmeter, the new Promise campaign from
the house of Titan and Tata’s reinforces these features for which the brand has stood for all
these years.”

Tanishq charges only for the actual gold weight, after subtracting the stone weight from the
total weight of the piece. In addition to this, Tanishq also promises best exchange value for
old gold. It melts the customer’s old gold in front of their eyes and weighs it in their
presence. There is complete transparency when it comes to buying and selling of jewellery
at Tanishq.

Tanishq’s range of gold and diamond jewellery has been designed to suit all occasions from
wedding to everyday wear. From the traditional harams, mangalsutras and thalisto the more
fashionable earrings, chains, bracelets and rings, there is a lot to choose from at Tanishq.
The collections in gold abound from the grandiose wedding collection to exotic kundan and
polki, from the stunning Aarka collections to the exclusive Na kashi work.

Tanishq also transforms precious stones into breathtaking masterpieces, each unique and
splendid in design. When it comes to diamonds at Tanishq, you will be spoilt for choice
from many collections it has to offer.

With over 160 stores across 100 cities in the country today, the Tanishq promise experience
reaches a growing customer base and the company looks forward to growing the network.

There exists a huge opportunity for Indian players to do value addition to the processed diamonds
and to export diamondstudded jewellery. India is already a leader in processing small-sized
diamonds and it also has inherent capabilities of manufacturing hand-crafted jewellery. Further,
with its dominance in processing small diamonds, India has an advantage of manufacturing
affordable diamond jewellery for the world market.
 Business Environment

Tanishq has emerged as India’s fastest growing jewellery brand and is a name which signifies
superior craftsmanship, exclusive designs and superlative product quality. The term Tanishq was
coined by Mr. Xerxes Desai by marrying the words ‘Tan’ meaning body and ‘Nishk’ meaning a
gold ornament.

The journey of Tanishq started with the launch of 18k gold watches studded with precious stones
in 1994. But, it soon grew into a 22K jeweller who presented an exquisite range of gold and
diamond jewellery while striking a perfect balance between traditional appeal and contemporary
charm. The brand perfectly understands the ethos of the current Indian jewellery market and
keeps evolving along with its changing demands and preferences.

Tanishq has brought to the market a whole new standard of business ethics and product reliability,
in the process bringing about a transformation in which jewellery is bought or sold in India. Not
only does it abide by the stringent standards but also adheres to strict and uniform guidelines
across all 274+ stores in 160+ cities. With innovations like the Karatmeter to check the purity of
gold, the brand has won over the customer’s hearts.

Following the line of ethical practice further, adequate policies are in place for their karigars and
they are well taken care of with benefits like health care and financial aid. It is also the only
jeweller in India with a state-of-art factory in Hosur, Tamil Nadu and takes utmost care to ensure
that it complies with labour laws and environmental standards. There are 3 other units in
Dehradun, Pantnagar and Sikkim as well.

With retail sales of over Rs. 10,000 crores in the last financial year, Tanishq continues to rule the
jewellery segment in India.

Micro Business Environment

The Indian Gems and Jewellery industry is an age old industry and comprises mainly of two types
of markets, viz the organized sector and the unorganized sector. The organized sector with branded
jewelers, Public Sector Units (PSUs), etc forms only 10% of the precious and semi-precious stones
market, whereas, the unorganized sector forms 90% of the gems and jewellery market in India. The
unorganized sector employs around 1.5 million workers serving over 0.1 million gold jewelers and
over 8000 diamond jewelers. Precious and semi-precious stones industry is a significant earner of
foreign exchange. This sector contributes around 17% of India’s exports. The bulk of the Indian
gems and jewellery exports comprise imports of rough diamonds, cutting and polishing in India, and
re-exports. Cut and Polished Diamonds

(CPD) and gold Jewellery account for nearly 95% of India’s gems and jewellery exports. India is
the world’s leading diamond cutting and polishing center, accounting for 53% share of the global
polished diamond market in terms of value. India imports gold from South Africa, Switzerland,
Australia, Hong Kong and UAE.

The domestic consumption of diamonds have been 626.9 crores in 2001-02 to 483.4 crores in 02-03
and reached and all time high of 1771.3 crores in 2003-04 and the trend has continued in 2004-05 as
well. The market size has also witnessed a rise of around 10% in 2003-04 over 2002-03. The value
of domestic sales has been 7200 crores, 7400 crores and 7650 crores in 01-02, 02-03 & 03-04
respectively. Exports of cut and polished diamonds has been 5892, 7385 and 8240 million dollars in
01- 02, 02-03 & 03-04 respectively, whereas, exports of Jewellery studded with diamonds has been
553, 719 and 934 million dollars in 01-02, 02-03 & 03-04 respectively.

Consumer Demographics & Buying Patterns of Indian Consumers

There is a very high consumption in the western and the northern markets of India, viz, Mumbai and
New Delhi, New Delhi being the leader. In India, the purchase of Jewellery is quite seasonal and
occasion driven. There is a higher consumption during festivals like Diwali, Dassera, Ganesh
Chaturthi, etc. and also during the marriage season, which is spread from November to March.

Macro Business Environment

The macro environment includes all relevant focus outside a company’s boundaries relevant in
thesense that they are important enough to have brought on the decision. An industry ultimately
makes aboutits business model and strategy. Why many forces in the micro environment are beyond
a company’s sphere of influence?Company’s strategy may be needed for answer it. Micro
environment includes all general force that do not directly touch on the short run activities of the
organization but that can and often does, in dulgenceits also ran decisions.
Political Factors:-
The Government of India (GoI) has been working to develop the Diamond industry in India through
several initiatives but under the purview of Diamond industry. The main political factors are as
follows.

 Excise duty: In the budget of year 2008-09 government reduce excise duty from 10% to 5%
on cut and polished diamond units.
 Marketing and control orders: Import of rough diamonds controlled by the Jewellry export
Promotion Councils .The Council provides market information to its members regarding
foreign trade inquiries, trade and tariff regulations, rates of import duties, and information
about Diamond fairs and exhibitions.
 FDI approval: India is now the third most favored destination for Foreign Direct Investment
(FDI), Government of India may permits 49% of FDI in the Diamond industry. FDI of $ 2
billion are invested in terms of working capital in the industry.
 Government policies and taxation: From January 1, 2008. It has made the import of polished
diamonds completely duty free. To reduce the transaction cost for the diamond sector,
testing facility at International Diamond Laboratory (IDL), Dubai, has been incorporated in
the list of laboratory/certifying agencies.
 Competition
Among the branded jewellery players in the Indian market, Tanishq is considered to be a trendsetter.
When it was launched in 1995, Tanishq began with 18-carat jewellery. In 1998, Tanishq decided to
set up its own chain of retail showrooms to create a distinctive brand image. By 2009, Tanishq
retailed its jewellery through 112 exclusive stores across 70 cities. Only Indian player with outlets in
North America & Europe.

MAJOR COMPETITORS
• Gili
• Carbon
• Tribhovandas Bhimji Zaveri (TBZ)
• Geetanjali
• Mehrasons (in Delhi only)

IMMEDIATE COMPETITORS OF TANISHQ

GILI: In 1994, Gili Jewellery was established as a distinct brand by Gitanjali Jewels. Gili offered a
wide range of 18-carat plain gold and diamond-studded jewellery, designed for the contemporary
Indian woman.

TRENDSMITH: Mumbai-based Tribhovandas Bhimji Zaveri (TBZ), opened its new concept store
'Trendsmith' in Mumbai in December 2001. Encouraged by the response towards its first store, the
Zaveris planned to take Trendsmith (India) Pvt. Ltd. all over the nation by opening as many as 100
stores by 2010.

CARBON: In early 1991, the Bangalore based Peakok Jewellery Pvt. Ltd., was incorporated. In
1996, a new brand of 18-carat gold-based jewellery called Carbon was launched
 Consumer Behaviour And Retail Store

Consumer Behaviour is the study of when, why, how and where people do or do not buy a product.
It blends elements from psychology, sociology, social, anthropology and economics. It attempts to
understand the buyer decision making process, both individually and in groups such as family,
friends, reference groups amd society general.

Retail consists of the sale of goods or merchandise from a fixed location such as a department store,
boutique, or kiosk or by mail in small or individual lots for direct consumption by the purchaser.

Tanishq falls under the category of speciality retail store which means store gives attention to a
particular category and provides high level of service to the customer.
 SEGMENTATION

 Niche Marketing – After its inception in 1995 focus on exports, Tanishq's designs had been
conceptualized for the Western markets and were introduced in India without any
alterations. Tanishq positioned itself as an international brand for the Indian elite. The brand
was targeted at a niche market (However they later on started targeting the mass marketing
since 1997).
 Psychographic Segmentation – Life Style: Tanishq has found that 40% of the Indian women
are working and they targeted this segment with a specific group of products called
collectionG, a 9-to-5 jewellery for the working women.
 Geographical Segmentation – Titan realized that, given the diverse nature of Indian
ethnicity, it would have to satisfy the tastes of all regions. So, the designs became more
ethnic. Titan also decided to transpose designs by stocking Bengali designs in Delhi,
Keralite designs in Tamil Nadu and typical designs from Tamil Nadu in Bombay in order to
appeal to a variety of people.
 TARGET

Class Consumer Profile Product Preference Company Preference

High Inherited Branded Designer Tanishq and

Income/Professionals/Business/ Jewellery and Diamond Geetanjali
exceptional ability studded jewellery

Upper Professionals/Business/career Branded jewellery Tanishq

Middle oriented/Executives

Middle White Collar, Educated Unbranded jewellery as jewellery Local Shops

well as high quality like PP jewellers Sia
Artificial jewellery Jewellers for Artificial
jewellery

Lower Blue Collar, Skilled Artificial Jewellery No company

Middle preference

Lower Semi Skilled No Need

 POSITIONING

• Colors- colored jewellery corrected the impression of Tanishq having only modern designs

• Aarka positioned Tanishq as high fashion 22-karat gold collection

• Aamra, a collection of studded jewellery was an attempt to move Tanishq from being a traditional
studded collection inspired by mango motif

• Designed jewellery for the movie Paheli and subsequent incorporation of the themes in TV ads
which echoed Paheli theme acted as a springboard for Tanishq

DIFFERENTIATION

 Tanishq offers consumers a unique value proposition, which combines three relevant
and compelling values:
First, absolute trust and reliability. Tanishq is synonymous with purity in gold and
diamond jewellery. Our Tata parentage reinforces this value even further
 Second, discriminating designs and craftsmanship. Tanishq has a team of award-
winning jewellery designers, and our designs speak for themselves. Women who
come into our stores fall in love with our designs, and inevitably come back for
more.
 Third, a differentiated shopping experience, which offers the right ambience, privacy,
the comfort of browsing at leisure and transparent transactions with respect to all
elements of purchase including critical aspects such as pricing and exchange of gold
jewellery.

TANISHQ IDENTITY CRISIS

• Sold to a more westernized audience evoking “Nice but not for me reaction”

• Underwent several strategic retooling to reach “the traditional but modern Indian woman segment

” • Focused primarily on studded jewelry but grappled with the 18 karat vs. 22 karat issue
• The setting of their stores intimidated the Indian consumers

• They had always positioned themselves as “Jewelry for adornment and not for investment”

• Despite several repositioning attempts the brand was perceived as too expensive and un approach

Product Stratergies

 Piloted an offering of 22-karat plain gold jewellery with about 400 designs

 Multimedia campaigns were launched in press and on TV to focus on traditional designs

 Prevailing under-karatage problems industry wide were countered by installing karat-meter

 Seven-stone concept helped Tanishq to overcome the perception of it being a Westernized

brand

Communication strategy
The marketing strategy focuses on making Tanishq the most desirable brand of jewellery in India.
Tanishq is today rated as one of India's most aspirational brand of jewellery. We intend to further
strengthen this appeal in the months and years ahead by evolving many more opportunities for
consumers to interact with our brand.

Therefore work with two key marketing objectives: first, drawing new customers into our sixty
stores located across the country; and, second, building long-term relationships with our existing
and rapidly increasing customer base. Last year, more than 1.2 million Indian women shopped at
Tanishq this year, are targeting a growth of 40% .

They use media advertising, PR, in-store events and a range of direct marketing tools to achieve
these marketing objectives. The Tanishq store is always centre-stage in these marketing efforts; the
sanctum sanctorum, where the consumer experiences our brand.
 Distribution Strategy

‘Concept’ stores, the first of which, costing Rs 10 crore, opened in Kolkata. The idea of such a store
was to harmonize the tradition of the past with the modernity of the present.

• Titan transposed designs by stocking Bengali designs in Delhi, Keralite designs in Tamil Nadu and
typical designs from Tamil Nadu in Bombay in order to appeal to a variety of people.

• It launched the corporate gold gift scheme - 'When you want to say thank you, say it in gold'.

• Tanishq delivered gold coins worth Rs. 20 crores to Maruti Udyog Ltd., to be given away as gifts
to Maruti car owners. By 2001, the scheme accounted for almost 5% of the turnover and over 30
corporate clients like Coca-Cola, the UB Group, Whirlpool, TVS Group, Ceat and Liberty shoes.

• Tanishq has also endeavored to be part of every occasion in an Indian woman’s life through
festive promotions, customer contact programmes as well as through Anuttara, Tanishq’s exclusive
consumer reward programme etc.
 Pricing Stratergy

Tanishq is a luxury brand, and hence all its products are premiumly priced. The target group is
women of age-group 25+, in the upper class and upper middle class section. Tanishq offers
exclusive designs, which are both available in trendy and traditional forms. With this value
proposition, Tanishq charges a price higher than the local jewelers, who are its major competitors.
The uniqueness of products, the experience of Tanishq stores, and varied availability of choices
allow it to follow a price skimming strategy in its marketing mix. High-end, products of highest
quality and ethnicity, makes Tanishq a premium brand. The brand enjoys an association with
prestige and status in the society, hence it follows premium pricing for its products. Also, the target
group are the people who value exceptionality above money and more willing to pay higher price.
Tanishq also offers some value products, for targeting a different segment. This line’s product are
simpler in designs, although promise the same quality and trust.
 Conclusion

Kept the entry-level price as low as Rs 600 (for a pendant) and offered a range, which far exceeded
that offered by any other jeweler. Initiated a loyalty program called the Golden Harvest Savings
Scheme, which offers buyers the benefit of getting more jewellery than what they have paid for.
The scheme allows consumers to plan future purchases in advance and pay for them in easy
installments. Exchange offer - change impure gold for pure 22 karat gold - attracted more people
to the stores.