Titan Industries Ltd: Providing Real-Value to Customers

Titan Industries Ltd, India’s leading watch manufacturer was established in 1984, as a joint
venture between the Tata Group and the Tamil Nadu Industrial Development Corporation
(TIDCO). The company brought about a paradigm shift in the Indian watch market, offering
quartz technology with international styling. Leveraging its understanding of different
segments in the watch market, it launched a second brand, Sonata, as a value brand to those
seeking to buy functionally styled watches at affordable prices.

Diversification

In India, gold is used as an ornament as well as an investment. The inherent demand for gold
from Indian households has made it a huge industry today. Titan diversified into jewellery in
1995 under the brand name Tanishq after taking stock of the huge opportunities and the large
size of the jewellery business in India. In 2005, to capture the market in small towns and rural
India, the company launched its second jewellery brand, Gold Plus. Tanishq has established
some new rules in the jewellery market over the last ten years. It has set a benchmark for
quality in a market rampant with unethical practices, and also introduced the concept of
professional retailing through a national network in a disorganized bazaar. The company also
focuses on fashion and style in a tradition bound category. Over the last 10 years, the brand
has consistently delivered real value to its customers in product quality, retail experience, and
consumer aspiration. After its success in the gold business, the company has diversified into
the optics business by launching a chain of optical stores. The “World of Titan” exclusive
showrooms have also been hugely successful.

Success Through Rebranding

Titan Industries set a milestone during 2006–2007, by crossing the Rs 20,000 million mark
by obtaining a sales income of Rs 21,360 million. This is a growth of 44% from the previous
year with profit after taxes growing to Rs 943.3 million as compared to Rs 745.5 million in
the previous year. To maintain this growth, Titan has decided to go in for a rebranding
exercise for its watch brands. The company has already decided to invest Rs 150 million for
the next two years. Ogilvy & Mather, the advertising agency in charge of the campaign has
roped in Aamir Khan to launch the new campaign. Mr Piyush Pandey, Chairman, Ogilvy
India stated, “Titan has been a restless brand, be it in design or its advertising. The
challenging part for us was to capture everything that the brand represents and show it in a
way that is easily understood, engaging and entertaining.”

1. Question 1: Suppose Titan Sonata has launched a new watch. The retail price of this
product varies from Rs 920 to Rs 950 in various showrooms of the country. If a price
is randomly selected, what is the probability that it will fall between Rs 930 and Rs
940. What is the average price, standard deviation, and variance of the distributio

Solution: Given,

P (price falls between 930 and 940)

 Uniform probability density function = 1/{B-A}, => 1/ {950-920}

 1/30
 P(930<X<940) = 1/30 * {940-930} = 10/30 = 0.333

Average price = {950+920}/2 = 935

Variance for uniform distribution

 {B-A} ^2 / 12 = {950 – 920} ^2 / 12

 900/12 = 75

2. Question 2: Suppose Titan has launched new jewellery designs under the Tanishq
brand for working Indian women. Past record indicates that the mean sales of this
brand from various show rooms located across various towns is Rs 20 million. If the
distribution of sales is normal with standard deviation of Rs 50,000*, what is the
probability of obtaining sales greater than Rs 35 million this year? What is the
probability of generating sales between Rs 15 to Rs 25 million? What is the
probability of generating sales between Rs 15 million and Rs 18 million?
Solution: Correction in the question, instead of S.D. of Rs 50000 we take S.D. of 6
million.

Given, Mean = 20M, SD = 6M

 What is the probability of obtaining sales greater than Rs 35 million this year?
P(X>35M)
 (Z > (35-20)/6) = (Z > 2.5)
Now, we know P(X>35) = 1 – P(X<=35)
As a result, 1 – (Z<=2.5) => 1 – 0.9938 = 0.006
 What is the probability of generating sales between Rs 15 to Rs 25 million?
P(15<=X<=25)
 {(15-20)/6 <= Z <= (25-20)/6} = {-5/6 <= Z <= 5/6} = P (-0.8333 <= Z <=
0.8333)
P (Z <= 0.8333) – P (Z <= -0.8333)
As a result, 0.7967 – 0.2033 = 0.5934
 What is the probability of generating sales between Rs 15 million and Rs 18 million?
P (15 <= X <= 18)

 P {(15-20)/6 <= Z <= (18-20)/6) = P ( -5/6 <= Z <= -2/6)

= P ( -0.833 <= Z <= -0.333)

P (Z <= -0.333) – P (Z <= -0.833)
As a result, 0.3707 – 0.2033 = 0.167