Project on Brand Impact and Customer Loyalty towards Titan

Watches

CHAPTER I

1.Introduction

History of the watch market

The Indian watch industry began in the year 1961 with the commissioning of the watch
division of HMT. The first watch model manufactured by HMT was the Janata model
in the year 1962. HMT was the leader in the watch market till the Tatas formed Titan
Watches in association with Tamil Nadu Industrial Development Corporation in the
year 1987. They took a major strategy decision, which later changed the face of the
Indian watch market- to manufacture only quartz watches. Liberalization in 1992 and
the removal of quantitative restrictions due to WTO has opened the doors for many
foreign brands in the Indian market viz. Tissot, Swatch, Omega, Rado, TAG Heuer,
Rolex and many others. The import duties on watches are falling which makes the
Indian market look attractive for the global majors like Casio, Swatch and Citizen.

Titan Industries Limited is engaged in manufacturing of watches, jewelry, precision

engineering and Eyewear. The Company has four divisions: watches, jewellery,
precision engineering and eyewear. As of March 31, 2012, the Company had 311 World
of Titan stores. The Company sold its products through departmental stores, such as
Shoppers’ Stop, Central, Lifestyle, Westside, Pantaloons and Reliance Retail. During
the fiscal year ended March 31, 2012, the Company launched collection of watches, such
as Purple by Titan, an offering of fashion watches; Raga Aqua, a new collection whose
evocative designs were inspired by the oceans and seas; Tycoon by Titan, a new
collection of gold look watches; and new products in the automatic watches range,
which cater to premium consumers. As of March 31, 2012, the Company had 120
Tanishq stores, 29 Gold Plus stores and two Zoya stores in jewelry division. As of
March 31, 2012, the Company had approximately150 exclusive eyewear stores.

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Titan Industries is the organization that brought about a paradigm shift in the Indian
watch market when it introduced its futuristic quartz technology, complemented by
international styling. With India's two most recognized and loved brands Titan and
Tanishq to its credit, Titan Industries is the fifth largest integrated watch manufacturer
in the world.

The success story began in 1984 with a joint venture between the Tata Group and the
Tamil Nadu Industrial Development Corporation. Presenting Titan quartz watches that
sported an international look, Titan Industries transformed the Indian watch market.
After Sonata, a value brand of functionally styled watches at affordable prices, Titan
Industries reached out to the youth segment with Fastrack, its third brand, trendy and
chic. The company has sold 135million watches world over and manufactures 13 million
watches every year.

With a license for premium fashion watches of global brands, Titan Industries repeated
its pioneering act and brought international brands into Indian market. Tommy
Hilfiger and FCUK as well as the Swiss made watch – Xylys owe their presence in
Indian market to Titan Industries.

Entering the largely fragmented Indian jewellery market with no known brands in
1995, Titan Industries launched Tanishq, India’s most trusted and fastest growing
jewellery brand. Gold Plus, the later addition, focuses on the preferences of semi-urban
and rural India. Completing the jewellery portfolio is Zoya, the latest retail chain in the
luxury segment.

Titan Industries has also made its foray into eyewear, launching Fastrack eyewear and
sunglasses, as well as prescription eyewear. The organization has leveraged its
manufacturing competencies and branched into precision engineering products and
machine building.

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With over 826 retail stores across a carpet area of over 10,08,083 sq. ft. Titan Industries
has India’s largest retail network. The company has over 331exclusive ‘World of Titan'
showrooms and over 83 Fastrack stores. It also has a large network of over 700 after-
sales-service centers. Titan Industries is also the largest jewellery retailer in India with
over 130 Tanishq boutiques and Zoya stores, over 31 Gold Plus stores. It also sports
over 204 Titan Eye+ stores. The company has two exclusive design studios for watches
and jewellery

Backed by over 6,000 employees, two exclusive design studios for watches and jewellery,
9 manufacturing units, and innumerable admirers world over, Titan Industries
continues to grow and sets new standards for innovation and quality. The organization
is all geared to repeat the Titan and Tanishq success story with each new offering.

Present Situation of the Indian Watch Market

The Indian watch market is today of 40 million units, out which 60% is in the
unorganized sector in which the maximum number of watches are sold are below
Rs.300. Quartz watches form two thirds of the organized sector and the rest is split
between mechanical and digital watches. Even in the organized sector, three fourth of
the sales by volume comes from watches that are priced below Rs.1000.

Watch is one of the consumer durables whose replacement rate is very high. The
replacement rate of watch is 33.8% (Source: India market demographics report, 1998).
This is also due to the fact that the estimated scrap rate of wrist watches is 7.8%, which
is applicable after 6 years (Source: India market demographics report, 1998). So due to
high scrap rate, outdated models, and the shift from the mechanical watches to the
quartz watches is causing a very high replacement demand for watches. This along with
the low penetration levels represent the untapped market potential for watches in India.

Major brands in the Indian watch market:

The major players in the Indian watch market include HMT, Titan and Timex. The
other players include Westar, Shivaki, Maxima, SITCO. Foreign brands such as
Cartier, Piaget, Omega, Tiffany’s and Corrum, Gucci, Longines, Casio, Citizen, Tag
Heuer and Espirit are also making an inroad into the Indian market.

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Titan has been consolidating its market share over the past decade. Timex watches,
which entered in India with collaboration with Titan, now independently has also
gained substantial market share.

1.2. COMPANY PROFILE

Titan Industries is the organization that brought about a paradigm shift in the Indian
watch market when it introduced its futuristic quartz technology, complemented by
international styling. With India's two most recognized and loved brands Titan and
Tanishq to its credit, Titan Industries is the fifth largest integrated watch manufacturer
in the world.
1.3 ABOUT PROCESS COSTING
Process costing is a method of costing used mainly in manufacturing where units are
continuously mass-produced through one or more processes. Examples of this include the
manufacture of erasers, chemicals or processed food.

In process costing it is the process that is costed (unlike job costing where each job is costed
separately). The method used is to take the total cost of the process and average it over the
units of production.Process costing is a method used in a situation where production follows
a series of sequential processes. The method is used to ascertain the cost of a product or
service at each stage of production, manufacture or process. It is generally applied in
particular industries where continuous mass production is possible. In view of the continuous
nature of the process and the uniformity of the output, it is not possible or necessary to
identify a particular unit of output with a time of manufacture. The cost of any particular unit
must be taken as the average cost of manufacture over a period. This can be complicated
because of the need to apportion costs between completed output and unfinished production
at the end of the period. Wastage must also be accounted for. In process costing, it is the
average cost incurred that concerns management. Process costing is used in a variety of
industries, including food processing, paper milling, chemical and drug manufacturing, oil
refining, soap making, textiles, box-making, paint and ink manufacturing, brewery, flour
milling, bottling and canning, biscuits products, meat products, sugar making, etc. It is
probably the most widely used cost accounting system in the world.Process costing is a form

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of operations costing which is used where standardized homogeneous goods are produced.
This costing method is used in industries like chemicals, textiles, steel, rubber, sugar, shoes,
petrol etc. Process costing is also used in the assembly type of industries also. It is assumed in
process costing that the average cost presents the cost per unit. Cost of production during a
particular period is divided by the number of units produced during that period to arrive at the
cost per unit.

1.4 MEANING

Process Costing is a method of costing. It is employed where each similar units of production
involved in different series of process from conversion of raw materials into finished output.
Thus, .unit cost is determined on the basis of accumulated costs of each operation or at each
stage of manufacturing A product. Charles T. Horngren defines process costing as "a method
of costing deals with the mass production of the like units that usually pass the continuous
fashion through a number of operations called process costing." The application of process
costing where industries adopting costing procedure for continuous or mass production.
Textiles, chemical works, cement industries, food processing industries etc. are the few
examples of industries where process costing is applied.

Process costing is a method of costing under which all costs are accumulated for each stage
of production or process, and the cost per unit of product is ascertained at each stage of
production by dividing the cost of each process by the normal output of that process.

1.5 DEFINITION:

CIMA London defines process costing as “that form of operation costing which applies
where standardize goods are produced”

1.6 CHARACTERISTICS OF PROCESS COSTING

Although, details will vary from one business concern to another, there are common features
in most process costing systems that should be taken note of.

These are:

I. Clearly defined process cost centers will normally be set up for each operational stage,
which can be identified. Expenditure for each cost centre is collected and, at the end of
the accounting period, the cost of the completed units are then transferred into a stock

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account or to a further process cost centre. Accurate records are, therefore, required of
units produced and part produced units and the total cost incurred by the cost centers.
II. The cost unit chosen should be relevant to the organisation.
III. The cost of the output of one process is the raw material input cost of the following
process. The cost incurred in a process cost centre could include, therefore, costs
transferred from a previous process plus the raw materials, Labour and overhead costs
relevant to the cost centre.
IV. Wastage due to scrap, chemical reaction or evaporation is unavoidable. The operation
or manufacturing should, however, be in such a way that wastage can be reduced to the
barest minimum.
V. Either the main product or by-product of the production process may require further
processing before reaching a marketable state.
VI. Continuous or mass production where products which passes through distinct process or
operations.
VII. Each process is deemed as a separate operations or production centres.
VIII. Products produced are completely homogenous and standardized.
IX. Output and cost of one process are transferred to the next process till the finished
product completed.
X. Cost of raw materials, labour and overheads are collected for each process.
XI. The cost of a finished unit is determined by accumulated of all costs incurred in all the
process divided by the number of units produced.
XII. The cost of normal and abnormal losses usually incurred at different stages of
production is added to finished goods.
XIII. The interconnected processes make the final output of by-product or joint products
possible.

1.7 ADVANTAGES OF PROCESS COSTING

The main advantages of process costing are :

I. Determination of the cost of process and unit cost is possible at short intervals.
II. Effective cost control is possible.
III. Computation of average cost is easier because the products produced are homogenous.

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IV. It ensures correct valuation of opening and closing stock of work in progres~ in each
process.
V. It is simple to operate and involve less expenditure.
VI. Costs are be computed periodically at the end of a particular period
VII. It is simple and involves less clerical work that job costing
VIII. It is easy to allocate the expenses to processes in order to have accurate costs.
IX. Use of standard costing systems in very effective in process costing situations.
X. Process costing helps in preparation of tender, quotations
XI. Since cost data is available for each process, operation and department, good
managerial control is possible.
1.8 IMPORTANT TERMS TO UNDERSTAND
In a manufacturing process the number of units of output may not necessarily be the same as
the number of units of inputs. There may be a loss.

1) Normal loss :-
This is the term used to describe normal expected wastage under usual operating conditions.
This may be due to reasons such as evaporation, testing or rejects.

2) Abnormal loss:-
This is when a loss occurs over and above the normal expected loss. This may be due to
reasons such as faulty machinery or errors by labourers.

3) Abnormal gain:-
This occurs when the actual loss is lower than the normal loss. This could, for example, be
due to greater efficiency from newly-purchased machinery.

4) Work in progress (WIP):-

This is the term used to describe units that are not yet complete at the end of the period.
Opening WIP is the number of incomplete units at the start of a process and closing WIP is
the number at the end of the process.

5) Scrap value:-
Sometimes the outcome of a loss can be sold for a small value. For example, in the
production of screws there may be a loss such as metal wastage. This may be sold to a scrap
merchant for a fee.

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6) Equivalent units:-
This refers to a conversion of part-completed units into an equivalent number of wholly-
completed units. For example, if 1,000 cars are 40% complete then the equivalent number of
completed cars would be 1,000 x 40% = 400 cars. Note: If 1,000 cars are 60% complete on
the painting, but 40% complete on the testing, then equivalent units will need to be
established for each type of cost. (See numerical example later.)

1.9 FORMAT APPROACH PROCESS ACCOUNTING QUESTIONS AND ITS STEPS

For each process an individual process account is prepared. Each process of production is
treated as a distinct cost centre.

Items on the Debit side of Process A/c.

Each process account is debited with –

a) Cost of materials used in that process.

b) Cost of labour incurred in that process.

c) Direct expenses incurred in that process.

d) Overheads charged to that process on some pre determined.

e) Cost of ratification of normal defectives.

f) Cost of abnormal gain (if any arises in that process).

Items on the Credit side:

Each process account is credited with -

a) Scrap value of Normal Loss (if any) occurs in that process.

b) Cost of Abnormal Loss (if any occurs in that process).

Cost of Process:

The cost of the output of the process (Total Cost less Sales value of scrap) is transferred to
the next process. The cost of each process is thus made up to cost brought forward from the
previous process and net cost of material, Labour and overhead added in that process after

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reducing the sales value of scrap. The net cost of the finished process is transferred to the
finished goods account. The net cost is divided by the number of units produced to determine
the average cost per unit in that process. Specimen of Process Account when there are normal
loss and abnormal losses.

STEP 1:- Draw up a T account for the process account. (There may be more than one
process, but start with the first one initially.) Fill in the information given in the question.

Impact of Brand Loyalty on Consumer Behaviour

Consumers experience different phases when buying from certain brands. They
constructively check product information, packaging, quality, company details and also
evaluate multiple brands before making a final purchase decision. However, what drives a
person to consistently buy from a brand rather than a competing brand is the trust earned over
time.

Brand loyalty is simply regarded as the consumer’s perception of a brand. It is the ability of
consumers to make decisions to buy a particular type of product repeatedly instead of
choosing a competitor. Over time, as the consumer gets familiar with the brand, their
behaviour is bound to be influenced because of their love for the brand.

Let’s take a look at how the consumer’s behaviour can be influenced when a brand maintains
its loyalty;

Consumer Engagement 
Brand Loyalty drives large consumer engagement. The majority of consumers will always
give the audience and also, want to be identified with a brand that has maintained its loyalty
to them over time. They tend to give full support to a brand they love. They engage more
frequently on social media platforms and are always willing to participate in events,
competitions, surveys and loyalty programs organized by the brand.

Brand Recommendation
This is also known as word of mouth referral. According to a statistic by Gensler, 94% of
individuals said they will highly recommend a brand they were emotionally engaged with.
Their love for a brand usually has a great influence on their friends and family’s behaviour.

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Consumers always tend to recommend and act as an ambassador for a brand that has
maintained its loyalty. Manufacturers won’t be spending too much on marketing because they
will act as brand marketers to people within their circle of influence. They will not only
recommend a loyal brand but also ensure that everyone gets associated with it.

Repeat Purchases
 Individuals who are familiar with a specific brand will tend to come back and buy more
products. Majority of consumers will likely come back to buy from a brand that has remained
loyal over time. Even when there is an increase in price, they will always come back and buy
that same product instead of choosing a competitor own.

Try out new products: 

Statistics show that 59% of shoppers prefer to buy new products from the brands they are
familiar with. Consumers will always anticipate the release of a new product and are more
likely to try out a new product from a brand they love.

Spend More: 
Have you ever wondered why you keep paying more money to buy indomie noodles rather
than other types of noodles regardless of the increment in price! It is simply because you
know that you will get value for your money. Price doesn’t act as a constraint for a brand
loyal consumer because they know they will always get value for their money.

So How Can You Improve Your Brand Loyalty Amongst Your Consumers?
Building brand loyalty can seem like a difficult task for many brands as they don’t often
know what will trigger a consumer to switch to a competitor. However, we have highlighted
a few ways brands can improve their loyalty among their consumers;

Deliver Value Consistently

 It is not just enough to deliver value, but if you really want to keep consumers coming back,
you must be consistent. Individuals don’t want quantity over quality, they want a brand that
does not compromise just because they have gained market share. Majority don’t like to be
identified with brands that can’t maintain their standard. Therefore, if you want consumers to
stick with your brand or switch from a competitor’s product to yours, all you need do is to be

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consistent in creating value. When your product surpasses its value, consumers behaviour
will greatly be influenced.

Introduce Loyalty Programs

Make a positive impression by creating loyalty programs to appreciate consumers for their
commitment to your brand. Everyone likes freebies and will only associate with brands that
compensate for their loyalty. A loyalty program is a marketing strategy that helps reward
consumers for engaging with a brand/product frequently. You don’t just get to reward
consumers but also loyalty programs help strengthen your relationship with consumers, build
trust, influence their purchase behaviour as well as acquire new consumers who haven’t
pledged loyalty to any particular brand/product.

Create Innovative products

Consumers always like to buy products that serve a purpose and solve their problems. Once
they discover a new product in the market, they are quick to upgrade and switch brands if
they need to. Don’t give them a reason to choose a competitor’s product over yours.
Therefore, you need to find unique ways to impress consumers through innovation. Create
new products that will satisfy their desires. Even if it is an improvement from the current
product, make it appealing and different. As long as your products serve a purpose and add
value, be sure that you can influence consumers behaviour.

Be a Proactive Brand
 To improve brand loyalty amongst consumers, aim at being a proactive brand that supports
and ensures consumer derives optimum satisfaction from goods and services purchased.
Don’t focus too much on sales but pay attention to their complaint and create solutions to
their problems before they occur, communicate/engage effectively on social media platforms
they hang out on, provide instant feedback on a personalized level. Being proactive helps you
earn consumers trust and also you will have a better understanding of how your
brand/product is perceived.

Key Takeaway
Brand loyalty has a great impact on consumers behaviour. Once a brand maintains strong
loyalty, marketing efforts will be reduced because loyal consumers will help promote the
brand positively.

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One of the greatest advantages of being a loyal brand is that consumers will always stick with
your products during economic downturns and if you don’t meet up to their expectations,
they will likely give you an opportunity to make things right.

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MULTI LEVEL MARKETING

Multi-level marketing is a system for selling goods or services through a network of

distributors. MLM is an acronym for Multi-Level Marketing, sometimes called Network
Marketing. As the name suggests, multiple levels of people are marketing products to
consumers. A sales representative also referred to as a distributor, member, affiliate,
partner or associate gets customers and recruits and trains another sales representative to
get customers. Multi-level marketing is a marketing strategy in which the sales force is
compensated not only for sales they personally generate, but also for the sales of the other
salespeople that they recruit. This recruited sales force is referred to as the participant's
"down line", and can provide multiple levels of compensation. Other terms for Multi-level
marketing include pyramid selling, network marketing, and referral marketing. In contrast
to Multi-level marketing is, single-level marketing, wherein the salesperson is rewarded for
selling the product directly to the consumer. In Multi-level marketing, the salespeople are
expected to sell products directly to consumers by means of relationship referrals and
word of mouth marketing. Some people use direct selling as a synonym for Multi- level
marketing, although MLM is only one type of direct selling, which started centuries ago
with peddling. Amway, Tupperware, Herbalife, Avon, Oriflame are some of the examples
of such companies operating as MLM around the globe.The concept of MLM or referral
marketing is a method of product distribution. The products are moved through
independent distributors. The distributors are given an opportunity to introduce other
distributors to thebusiness. Instead of incurring massive media advertising and sales
promotion cost, the savings are passed on to distributor consumers. Distributors share the
large revenue that normally goes to the middleman. At the same time products are available
to consumers at wholesale prices.MLM is a new strategy in the marketing system to
capture customers. India has the greatest potential in the multilevel marketing in the
world. This is because of the existence of the huge middle class, highly entrepreneurial
culture, massive international connection, huge technology base and the use of English
language. It offers an alternative to traditional employment for those who desire a flexible
income earning opportunity to supplement their household income, whose responsibilities
or circumstances do not allow for regular part-time or full time employment.

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BUYER BEHAVIOUR

Buyer behaviour is influenced by cultural, social and personal factors. Culture, subculture
and social class influence consumer buying behaviour. Social factors include reference
groups, family and personal factors comprise of age and stage in the life cycle, occupation
and economic circumstances, personality and self-concept and life style and values. The
buying decision process comprises of five stage model involving: problem recognition,
information search, evaluation of alternatives, purchase decisions and post- purchase
behaviour.

BRAND LOYALTY

Brand loyalty occurs when a customer repurchases the same product whenever possible,
and continues to recommend or maintain a positive attitude towards the product.
Customers may be loyal due to high switching barriers or lack of real alternatives.
Customers are loyal when they aresatisfied and thus want to continue that
relationship.Customer brand loyalty is a buyer’s overall attachment or deep commitment to
a product, service brand or organization. Brand loyalty is important for an organization to
ensure that its product is kept in the minds of the consumers and prevent them from
switching to other brands.Brand loyalty is one of the most important issue in the world of
marketing and business due to great importance that the brand is subjected in international
business. Brand loyalty is very important from marketing strategy perspective as current
markets are marked through a high mature phase and intense competition . Retaining loyal
customers of the brand is very crucial for the survival and continuity of the
organization.Brand-loyal consumers may are willing to pay more for a brand. This strategy
is considered more effective and efficient than attracting a new customer. Brand loyalty
leads to greater market share when the same brand is repeatedly purchased by loyal
consumers. The brand is the sole distinguishing factor among competing and similar
products.

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RELATIONSHIP OF BRAND LOYALTY WITH BUYER

BEHAVIOUR

Consumers make their choices based on names and positive images associated with a
brand. In a retail outlet, when consumers face number of choices for the same type of
product, a strong brand has a clear competitive advantage as it is difficult for the
competitors to copy. Competitors can match specifications and create duplicate products.
Hence it is important for the Companies to build brand loyalty.

STATEMENT OF THE PROBLEM

A consumer while making a purchase decision evaluates the different factors present in a
particular brand and finally decides on a particular brand after assessing from other
brands available in the market. Consumer shows brand loyalty towards a particular product
or service but the exact reason of his brand loyalty is not always explicit through his
reactions while making a purchase decision. Hence a marketer should try to understand the
buyer behaviour of customers that makes them brand loyal towards the product. This study
has been conducted to identify the factors that influence buyer behaviour and brand loyalty
and impact of brand loyalty on buyer behaviour as regards MLM products of customers
in Chennai.

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INTRODUCTION

India is an under penetrated market for watches. Only 27% of Indians own a watch. Total
estimated volume as per 2008 is 44 million units and value of
Rs.2700crores. Vast proportion of Indian market is below Rs 500 by about 68%. The market
Share of Indian Watch Industry 2009 Market has been split into:

 Low end
 Mass market
 Premium and Luxury Brands

50 million wristwatches are sold in India every year. Notwithstanding the presence of global
players and the opening up of the market, the Indian market has always been dominated by a
single player. In the past, till the late 80’s, in the mechanical era, HMT dominated the market.
And after that it has again been the domination of a single company, Titan. Today Titan has
almost 65% market share of the organized watch market in the country. The organized watch
market itself is estimated at 35% of the total industry size. In value terms, the size of the
organized market is estimated at around Rs. 1500 crores, which means that the average price
of watches sold even today is less than Rs.1000.

Watches are typically segmented into specialist watches and fashion watches. All
International watch brands have a clear position as to where they belong. In India most sales
are in the fashion segment and this fine distinction has not yet been used by marketers. Male
watch buyers far outnumber females and account for around 65% of sales. Students are the
largest segment of buyers accounting for approximately 30% of the sales.Since penetration is
still low and the unorganized sector big, this industry has a lot of scope to grow both in value
and volume. The jury is still out though whether the Indian companies like Titan will lead
this growth or the global majors like Seiko, Citizen Etc. After all the domestic players have
hitherto grown because of a retail strategy and the wining global players are clearly focused
on product.

WATCH

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The watch market can be broadly sub divided into formal, classic, fashionable and sporty
kind. The preference of the ‘watch kind’ depends on an array of factors ranging from age
group, income corridor, taste and preference, peer and reference group, occupation, to price,
gender, Fad or trend. The market segmentation may also be done on such basis where various
brands concentrate on specific type, from classic to sporty. More so, the formal and classic
watches are more often than not on the higher range side, while fashionable and sporty
watches generally have a wider price range. There is also the unorganized sector which
majorly deals in fashionable and sporty watches at a much lower price, which becomes a
major concern for the organized sector.

MAJOR PLAYERS

 HMT-

 First major watch manufacturer in India and undisputed market leader till the entry of
Titan

 Offshoot of India’s self-reliance and import substitution concept

 Main quality offered sturdiness and reliability

 As a market leader very few aggressive advertisement campaign

 No new advertisement drive in recent years

 Still holds a small market share among the old faithful loyal

 Lack of new and trendy design has led to erosion of value among the new generation

 TITAN-

 A joint venture between the Tata group and the Tamil Nadu Industrial Development
Corporation

 Launched in 1984

 Titan is today world’s sixth largest, integrated watch manufacturer and India’s largest

 4 factories - main watch and jewellery plants in Hosur near Bangalore

(India’s ‘Silicon valley’), Watch Assembly plants at Dehradun and in Himachal

Pradesh, with an ECB plant in Goa

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 Investment of over US$130 million. A 450,000 sq.ft. state-of-the-art facility

 Leader in the watch and jewellery businesses in India

 First and largest branded player in the jewellery (Tanishq)

 Covers more than 50% share of the organized watch market

 Over 60 million watches sold across 30 countries

 Brands offered: Steel, Edge, Raga, Sonata, Fastrack, Regalia, Bandhan, Sonata,
Nebula, Flip, Purple, Chocolate, Ocean etc.

 Recently Titan has taken a drive to improve its image as a maker of contemporary
style and design in wrist watches

 TIMEX-

 The main focus is on reflecting a sporty and fashionable look for the men

 In the ladies segment it is offering highly stylized bangle bracelet watches that are
sleek and sophisticated.

 The advertising campaign aims at focusing on power, precision and timing.

 Brett Lee was their brand ambassador.

 OTHER PLAYERS-

 Mainly Rado, Tommy Hilfiger and Evidenza from Longines.

 Tommy Hilfiger is positioned in the mid and premium segment while the other two
players are in the luxury segment.

 Trying to catch the up-market, urban, western-minded youth.

 Also offer a sense of exclusivity and style as their products are distributed through
some selected outlets. Using high society and stylish brand ambassadors such as
Shahrukh Khan, Aishwarya Rai, Yana Gupta, Lisa Ray.Titan Industries is the
organization that brought about a paradigm shift in the Indian watch market when it
introduced its futuristic quartz technology, complemented by international styling.
With India's two most recognized and loved brands Titan and Tanishq to its credit,
Titan Industries is the fifth largest integrated watch manufacturer in the world.The
success story began in 1984 with a joint venture between the Tata Group and the

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Tamil Nadu Industrial Development Corporation. Presenting Titan quartz watches

that sported an international look, Titan Industries transformed the Indian watch
market. After Sonata, a value brand of functionally styled watches at affordable
prices, Titan Industries reached out to the youth segment with Fastrack, its third
brand, trendy and chic. The company has sold over 135million watches world over
and manufactures 13 million watches every year.With a license for premium fashion
watches of global brands, Titan Industries repeated its pioneering act and brought
international brands into Indian market. Tommy Hilfiger and FCUK as well as the
Swiss made watch Xylys owe their presence in Indian market to Titan
Industries.Entering the largely fragmented Indian jewellery market with no known
brands in 1995, Titan Industries launched Tanishq, India's most trusted and fastest
growing jewellery brand. Gold Plus, the later addition, focuses on the preferences of
semi-urban and rural India. Completing the jewellery portfolio is Zoya, the latest
retail chain in the luxury segment.Titan Industries has also made its foray into
eyewear, launching Fastrack eyewear and sunglasses, as well as prescription eyewear.
The organization has leveraged its manufacturing competencies and branched into
precision engineering products and machine building.With over 827 retail stores
across a carpet area of over 10,08,083 sq. ft. Titan Industries has India’s largest retail
network spanning over 155 towns. The companyhas over 340 exclusive ‘World of
Titan' showrooms and over 125 Fastrack stores. It also has a large network of over
700 after-sales-service centers.

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1.12 Brand profile:-

TITAN:-

Titan is one of India's leading watch brands that brought about a paradigm shift in the
Indian watch market, offering quartz technology with international styling. The Titan
portfolio owns over 60% of the domestic market share in the organized watch market.

The brand Titan is committed to offering its consumers watches that represent the
compass of their imagination. The brand regularly introduces exciting new collections,
which connect with the various facets of deep-rooted human yearnings for self-
expression. The new brand philosophy of Titan, encapsulated in the catchphrase ‘Be
More’, touches this as well as all other aspects of the brand.

The Titan brand architecture comprises several collections and sub-brands, each of
which is a leader in own space. Notable among them are: Titan Edge - world's slimmest
watch based on the philosophy ‘less is more’, Titan Raga - feminine and sensuous
accessory for today's woman, Nebula - crafted with solid 18k gold and precious stones.
Several other popular collections like Heritage, Aviator, Automatic, Regalia, Obaku
also form a part of the Titan portfolio.

The watch division boasts of over 300 exclusive showrooms christened ‘World of Titan',
placing the brand amongst the largest chains in its category backed by over 650 after-
sales-service centres. The division has a world-class design studio that constantly
invents new trends in wrist watches.

SONATA:-

Sonata, India's largest selling watch brand, offers stylish looks at affordable prices. The
thoughtfully crafted designs encompass the aspirations of young India. The boldness
and uniqueness of each design reflects the confidence of the wearer The brand offers a
variety of looks, to suit every occasion and every wallet:

Dressy Sona Sitara watches for special occasions

Bold Yuva watches crafted in steel for today’s confident youth

Contemporary Office Wear watches with formal appearance and leather strap

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Stylish and Strong Super Fibre watches 

FASTRACK:-

Fastrack was launched in 1998 as a sub-brand of Titan. It was spun off as an

independent brand of watches targeting the urban youth in 2005. Since then, it has
carved a niche for itself with designs that were refreshingly different and affordable.
During that time, Fastrack also extended its footprint into eye gear and in the last 4
years has quickly notched up the title of being the largest sunglass brand in the country.

Fastrack has now chartered into newer categories – bags, belts, wallets and wrist bands
– as part of its vision to become a complete fashion brand for the youth. With enough
categories to fill up one cool store, Fastrack has ‘moved on’ to open its own stores for its
young consumers. The store is positioned as a complete

accessories destination with all Fastrack gear under one roof. The first store was opened
in Pune in 2010. Fastrack plans to have 100 such stores by 2012. 

XYLYS:-

Xylys, is an exclusive brand of Swiss made watches from Titan.

The tagline (you don’t possess a Xylys, it possesses you), says it succinctly. And if that
doesn’t convince you, one look at a Xylys timepiece will. Crafted and designed with the
legendary Swiss eye for detail and perfection, every Xylys watch is an experience of love
at first sight. Priced between Rs. 8500 and Rs. 24000, the Xylys range of watches comes
in three collections - Contemporary, Classic and Sport and offers over 100 distinctive
models.

INTERNATIONAL BRANDS:

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Tommy Hilfiger Watches

Titan Industries Limited has made Tommy Hilfiger Watches available in India at most
‘World of Titan’ stores, leading multi-brand watch outlets, and department stores like
Shoppers Stop, Central and Lifestyle.

Hugo Boss Watches

Hugo Boss, one of the world’s most popular European brands, has its roots in Germany.
Hugo Boss is known for shoes, accessories, and fragrances. Watches complement and
complete the portfolio. Hugo Boss watches were launched globally early this year. The
Hugo Boss watch designs connote European elegance and couture and are a symbol of
power and sophistication.

Hugo Boss watches are now available in India, thanks to Titan Industries Limited.

D. PRODUCTS PROFILE:

1.13 PRODUCTS:

Titan Industries, best known as India's pioneering manufacturer of quartz watches, has
also etched a niche for itself in some of the most competitive spaces in the fashion
industry such as jewellery and eyewear.

Watches: 

Being the world's fifth largest integrated watch manufacturer, Titan Industries has
created and sold more than a 110 million pieces the world over.

With a production rate of over 12 million watches per annum and a customer base of
over 100 million, Titan Industries owns

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manufacturing and assembly operation centers in Hosur in Karnataka, Dehradun,

Roorkee and Pant Nagar in Uttaranchal, Baddi in Himachal Pradesh, and an Electronic
Circuit Boards (ECB) plant in Goa.

Capturing the important market segments and the changing fashion trends, Titan
Industries has brought forth four core watch brands:

Titan is designed for the mid-premium segment.

Fastrack is crafted to fit the trendy fashion space with a focus on the youth.

Sonata is created for the mass market and has emerged as India’s largest selling watch
brand.

Xylys is fashioned for the premium market, aiming at the high-end connoisseur and
new-age achiever.

The Titan brand architecture comprises several sub-brands, each of which is a market
leader in own space. Notable among them are: Titan Edge, Titan Raga, Nebula,
Heritage and several other collections like WWF, Zoop, Orion, Purple, Obaku and the
Automatic series. The Titan portfolio owns over 60% of the domestic market share in
the organized watch market.

Titan Industries’ pride possession, a world-class design studio for watches and
accessories, is the place where some of the most coveted creations have been
conceptualized.

Exclusive World of Titan and Fastrack showrooms and over 12,000 outlets in more than
2,554 cities in India make these much-sought-after watches available to the buyers. The
watches are also offered internationally in 30 countries, with a special focus on the
Middle East and Asia Pacific regions. The after-sales service, a benchmarked operation
with a large network of exclusive service centers spread across the country, is one of the
operation units with the fastest turnaround time in the world.

Jewellery: 

Following the suit of time products, Titan Industries’ Tanishq has been India’s largest,
fastest growing and most popular jewellery brand.

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Tanishq offers a premium range of innovatively created gold jewellery with an aesthetic
use of diamonds and precious, semi-precious stones in various hues. Arresting designs
in 22kt pure gold as well as platinum are among the most admired products on the
company’s list. GoldPlus the recent retail plain gold jewellery offering, is specifically
created for semi urban and rural Indian market. The brand offers gold jewellery, as
well as unique designs crafted with diamonds, American diamonds and other precious
stones.

Titan Industries boasts of 119 Tanishq boutiques, 2 Zoya stores and 29 Gold Plus stores
in India. The enchanting jewellery patterns that are part of these brands originate in
the well-equipped exclusive jewellery design studio of Titan Industries.

Eye wear: 

Titan Eye+ of Titan Industries offers sunglasses under its Fastrack brand. Prescription
eyewear such as lenses and contact lenses is also part of the range. Titan Eye+ offers
frames, sunglasses, and accessories of Titan Industries’ in-house brands as well as other
premium brands.

Precision Engineering: 

The Precision Engineering division of Titan Industries supplies precision components to

the aviation and the automotive industry. As an Original Equipment Manufacturer
(OEM), the company makes dashboard clocks for car manufacturers in Europe and
America

E. AREA OF OPERATION:

The area of operation of M/S TITAN INDUSTRIES LTD. Is as follows-

The manufacturing of the products is limited to national where as in HONGKONG

there is another unit of manufacturing the marketing and the selling and distribution is
global operated activity.

Business Overview:-

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In its silver jubilee year, Titan Industries indeed came up with a sterling performance,
in spite of a backdrop of a challenging economic scenario. The recovery of the Indian
economy in the second half of the year is well reflected by our best ever performance,
attributed to initiatives both of revenue growth and cost reduction undertaken by the
Company. Income grew by 22% from Rs.3, 848crores last year to Rs. 4,703crores this
year while Net Profit grew by 57% from Rs. 158.96crores last year to Rs. 250.32crores
this year.

The Company was incorporated on 26th July, at Chennai. They manufacture analog
electronic watches with a choice of over 150 designs. The Comp. was promoted jointly
by Questar Investments Ltd., a Tata Comp. with its associates Tata Sons, Ltd., & Tata
Press, Ltd., & Tamil Nadu Industrial Development Corporation, Ltd. [TIDCOs]. The
main objective of Comp. is to manufacture analog electronic watches with a choice of
over 150 designs.

The Comp. undertook to set up a plant for manufacture of quartz analog electronic
watches in the State Industries Promotion Corporation of Tamil Nadu, limited
Industrial area at Hosur.

The Comp. entered into a collaboration agreement with France Ebauches [FEs] of
France, manufacturers of watch movements and components, for technical
documentation, assistance in procurement of manufacturing equipments, raw materials,
etc

B. NATURE OF BUSINESS CARRIED:

M/S Titan Industries Ltd. is basically a manufacturing industry which is dealt in

manufacturing of stylish and the brand watches to satisfy the needs of the public.

Working capital requirement is considerably influenced by the nature of business.

Example: for trading concerns the working capital requirement is more and
requirement of fixed assets will be less. For manufacturing concern requirement of
working capital is moderate and for public utility services like Railways, Hotels,
Electricity, Transport the requirement of working capital is less.

C. VISION AND MISSION STATEMENTS:

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Our Vision:
To be a world-class, innovative and progressive organisation and to build India’s most
desirable brands.

Our Mission:
To create wealth for all our stakeholders by building highly successful businesses based
on a customer-centric approach, and to contribute to the community.

Our Values and Standards:

Total customer orientation - Customers take precedence over all else, always.

Employee appreciation - We value and respect Titanium and Endeavour to fulfill their
needs and aspiration.

Performance culture and teamwork - At Titan Industries, high performance is but a
way of life and is nurtured by teamwork.

1.14 .ACHIVEMENTS OR AWARDS:

Over the years, Titan Industries has received several prestigious awards and
distinctions. Some of the recent and most noteworthy recognitions are:

Titan Industries received the Award for the Most Admired Timewear Brand of the
Year in   2010 for the ninth successive year for Titan and the Most Admired Jewellery
Brand of the Year for the seventh consecutive year for Tanishq.

Gold plus bags 2 dragons and 2 certificates of merits at the Promotion marketing
awards of Asia 2010.

Jewellery Division was declared the winner of the “GOLD AWARD" in FMCG sector
in the Genentech Environment Excellence Award 2010.

Jewellery Division wins first prize in “Innovation in Supply Chain Management”

organized by Indian Institute of Material Management for the second consecutive year
and ranked amongst the top five amongst 50 global entries at European Business
School, Wiesbaden Germany

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Titan brand won the “Most Valuable Brand in the State” award at the IIPM & The
Sunday Times STATE EXCELLENCE AWARD.

Titan Industries bagged 19th position across all industry categories and 1st position in
the Retail Industry category in the Economic Times – Great Place to Work Institute
study.

G.COMPETITORS INFORMATION:

Titan sells around 7 million watches annually,

Timex sells under 1.2 million watches,

Other Brands (all put together sell less than 0.5 million watches)

The Japanese – Citizen, Casio, have been present, while Seiko has not made any
significant moves in India.

The Swiss – Rolex, Omega, Rado, Tissot, Tag, Longines, Cartier, Ebel

The fashion brands – Esprit, Giordano, Tommy Hilfiger,Calvin Klien, Fossil, Swatch.

3.THE MCKINSEY 7S FRAMEWORK

“Ensuring that all parts of your organization work in harmony”

How do you go about analyzing how well your organization is positioned to achieve its
intended objective? This is a question that has been asked for many years, and there are
many different answers. Some approaches look at internal factors, others look at
external ones, some combine these perspectives, and others look for congruence between
various aspects of the organization being studied. Ultimately, the issue comes down to
which factors to study.
While some models of organizational effectiveness go in and out of fashion, one that has
persisted is the McKinsey 7S framework.

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It's all very well devising a strategy, but you have to be able to implement it if it's to do
any good. The Seven S Framework first appeared in "The Art of Japanese
Management" by Richard Pascale and Anthony Athos in 1981.  They had been looking
at how Japanese industry had been so successful, at around the same time that Tom
Peters and Robert Waterman were exploring what made a company excellent.  The
Seven S model was born at a meeting of the four authors in 1978.  It went on to appear
in "In Search of Excellence" by Peters and Waterman, and was taken up as a basic tool
by the global management consultancy McKinsey: it's sometimes known as the
McKinsey 7S model.

The Seven-Ss is a framework for analyzing organizations and their effectiveness. It

looks at the seven key elements that make the organizations successful, or not: strategy;
structure; systems; style; skills; staff; and shared values.

The model shows that organizational immune systems and the many interconnected
variables involved make change complex, and that an effective change effort must
address many of these issues simultaneously.

7-S Model – A Systemic Approach to Improving Organizations

The 7-S model is a tool for managerial analysis and action that provides a structure
with which to consider a company as a whole, so that the organization's problems may
be diagnosed and a strategy may be developed and implemented.

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Organisation structre

Structure is the organizational chart and associated information that shows who reports
to whom and how tasks are both divided up and integrated. In other words, structures
describe the hierarchy of authority and accountability in an organization, the way the
organization's units relate to each other: centralized, functional divisions (top-down);
decentralized (the trend in larger organizations); matrix, network, holding, etc. These
relationships are frequently diagrammed in organizational charts. Most organizations
use some mix of structures - pyramidal, matrix or networked ones - to accomplish their
goals.

Strategy

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Strategies are plans an organization formulates to reach identified goals, and a set of
decisions and actions aimed at gaining a sustainable advantage over the competition.

It is the direction and scope of the company over the long term.It is the plan devised to
maintain and build competitive advantage over the competitors.

Systems

Systems define the flow of activities involved in the daily operation of business,
including its core processes and its support systems. They refer to the procedures,
processes and routines that are used to manage the organization and characterize how
important work is to be done.

Systems in Business System:-

Business Process Management System (BPMS)

Management information system

Innovation system

Performance management system

Financial system/capital allocation system

Compensation system/reward system

Customer satisfaction monitoring system etc.

The 4Ss across the bottom of the model are less tangible, more cultural in nature, and
were termed 'Soft Ss' by McKinsey. These are :-

Shared Values

“The interconnecting center of McKinsey's model is: Shared Values”

Shared values are commonly held beliefs, mindsets, and assumptions that shape how an
organization behaves – its corporate culture. Shared values are what engender trust.

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Values are the identity by which a company is known throughout its business areas,
what the organization stands for and what it believes in, it central beliefs and attitudes.
These values must be explicitly stated as both corporate objectives and individual
values.

When the model was first developed, these are the core values of the company that are
evidenced in the corporate culture and the general work ethic.

Style

"Style" refers to the culture of the organization, how key managers behave in achieving
the organization's goals, how managers collectively spend their time and attention, and
how they use symbolic behaviour . How management acts is more important 

than what management says.

Style represents the leadership approach of top management and the company's overall
operating approach.

Staff

"Staff" refers to the number and types of personnel within the organization and how
companies develop employees and shape basic values. It is the company's people
resources and how they are developed, trained, and motivated.

Skills

"Skills" refer to the dominant distinctive capabilities and competencies of the personnel
or of the organization as a whole.

"Hard" elements are easier to define or identify and management can directly influence
them: These are strategy statements; organization charts and reporting lines; and
formal processes and IT systems.

"Soft" elements, on the other hand, can be more difficult to describe, and are less
tangible and more influenced by culture. However, these soft elements are as important
as the hard elements if the organization is going to be successful.

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The way the model is presented in Figure above depicts the interdependency of the
elements and indicates how a change in one affects all the others.

For example, a change in HR-systems like internal career plans and management
training will have an impact on organizational culture (management style) and thus will
affect structures, processes, and finally characteristic competences of the organization.

In change processes, many organizations focus their efforts on the hard S’s:- Strategy,
Structure and Systems. They care less for the soft S’s, Skills, Staff, Style and Shared
Values. Peters and Waterman in “In Search of Excellence” commented however, that
most successful companies work hard at these soft S’s. The soft factors can make or
break a successful change process, since new structures and strategies are difficult to
build upon inappropriate cultures and values. These problems often come up in the
dissatisfying results of spectacular mega-mergers. The lack of success and synergies in
such mergers is often based in a clash of completely different cultures, values, and
styles, which make it difficult to establish effective common systems and structures. 

1.15 SWOT ANALYSIS:

Appraising a company’s resource strengths and weaknesses and its external

opportunities and threats, commonly known as SWOT analysis, it provides a good
overview of whether its overall situation is fundamentally healthy of unhealthy. SWOT
analysis provides the basis for crafting a strategy that capitalizes in the company’s
resources aims squarely at capturing the company’s best opportunities and defends
against the threats to its well being.

Strengths

The varied offerings to diverse segments with a clear cut positioning.

b) The quality of watches is impressive.

c) Innovation is core to its strategy.

d) Visual Merchandizing has been Titan’s strength ever since its inception.

e) Good retail network by “WORLD OF TITAN”

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f) Excellent customer service.

g) International tie-ups with Hugo Boss and Tommy Hilfiger.

Weaknesses

 Waterproof watches not a part of its kitty.

 Rural India does not form a substantial part of customer base.

 Kids are fascinated with mobile phones rather than watches and incidentally,
they show the time.

Opportunities

 Under-penetrated market for watches as only 35% (approximately) of Indian

population possesses watches.

  Watches positioned as a fashion wear rather than just utility products.

 With a changing consumer attitude, people like to possess multiple watches for
different occasions and events.

 Huge market in the exchange business.

 Introducing waterproof watches.

 .Rural market may be tapped.

Threats

From competitors –

1.  Japanese- Citizen, Casio

2. Swiss- Rolex, Omega, Rado, Tissot, Tag Heur, etc.

3.Chinese watches

1. A. GENERAL INTRODUCTION

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Finance is the life-blood of business. It is rightly termed as the science of money.

Finance is very essential for the smooth running of the business. Finance controls the
policies, activities and decision of every business.

FINANCIAL PERFORMANCE ANALYSIS

The word ‘Performance is derived from the word ‘parfourmen’, which means ‘to do’,
‘to carry out’ or ‘to render’. It refers the act of performing; execution, accomplishment,
fulfilment, etc. In border sense, performance refers to the accomplishment of a given
task measured against preset standards of accuracy, completeness, cost, and speed. In
other words, it refers to the degree to which an achievement is being or has been
accomplished.

In the words of Frich Kohlar “The performance is a general term applied to a part or
to all the conducts of activities of an organization over a period of time often with
reference to past or projected cost efficiency, management responsibility or
accountability or the like. Thus, not just the presentation, but the quality of results
achieved refers to the performance. Performance is used to indicate firm’s success,
conditions, and compliance.

Financial performance refers to the act of performing financial activity. In broader

sense, financial performance refers to the degree to which financial objectives being or
has been accomplished. It is the process of measuring the results of a firm's policies and
operations in monetary terms. It is used to measure firm's overall financial health over
a given period of time and can also be used to compare similar firms across the same
industry or to compare industries or sectors in aggregation.

This Studying contain following analysis:

 comparative analysis statement

 common-size analysis statement

 Ratio analysis

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CHAPTER II

2.1 Research design:

Research design means a search of facts, answers to question and solution to the
problems. It is a prospective investigation. Research is a systematic logical study of an
issue or problem through scientific method. It is a systematic and objective analysis and
recording of controlled observation that may lead to the development of generalization,
principles, resulting in prediction and possibly ultimate control of events.

Research design is the arrangement of conditions for the collection and analysis of data
in manner that aims to combine relevance to the research purpose with relevance to
economy. There are various designs, which are descriptive and helpful for analytical
research.

In brief a research design contains

 A clear statement of the research problem.

 A specification of data required.

 Procedure and techniques to be adopted for data collection.

 A method of processing and analysis of data.

 The Descriptive form of research method is adopted for study.

The major purpose of descriptive research is description of state of affairs of the

institution as it exits at present. The nature and characteristics of the financial
statements of titan industries Ltd have been described in this study.

Period of study:

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The period of 17th February 2012 to 18th March 2012.

Nature of data:

The data required for the study has been collected from secondary source .The relevant
information were taken from annual reports, journals and internet.

Methods of data collection:

This study is based on the annual report of Titan Industries Ltd. Hence the information
related to, profitability, short term and long term solvency and turnover were very
much required for attaining the objectives of the present study.

Tools applied:

To have a meaningful analysis and interpretation of various data collected, the

following tools were made for this study.

Ratio analysis

Common-size statement

Comparative statement

Trend analysis

2.2 LIMITATIONS OF THE STUDY

The analysis was taken from the annual reports. Therefore, is only a limited to find.

Major part of the concerned with the financial data adequate data was not able to pool
because of the secrecy maintained by the company.

The study reveals the findings for the present and its will not reflect the past and the
future.

Every tools used in data analysis has certain limitations.

The study is limited one month only.

2.3 OBJECTIVES OF THE STUDY

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Objectives, Initiatives and Goals are the final element of organizational strategy and
illustrate a company's ability to articulate what it wants to accomplish, how it will do it,
and when it will be achieved. Included in this process are defining direction, aligning
financial and human resources, instilling accountability and determining critical
measurements.

 Organization Strategy Needs Vital Direction

 Identifying key strategic objectives

 Prioritizing action items by their importance to strategic intent

 Ensuring objectives are quantifiable and measurable

 Those responsible for implementation participate in the strategic planning

process

 Plans must specify how each area will contribute to achieving strategic plan

 Resource Alignment

 Allocating sufficient resources to achieve strategic intent

 Clearly defining resources necessary for each objective

 Evaluatiing individual or group capacity prior to assigning workload

 Organization Accountabilities

 Ensuring that employees understand how their roles and responsibilities relate
to strategic objectives

 Holding individuals accountable for their work

 Employee goals reflect accountabilities and timeliness

 Employing an internal system to routinely review the status of key objectives

 Measuring key financial indicators

 Utilizing a uniform format to measure and report performance.

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CHAPTER III

3.1 Literature Review

Debasish (2003), in his research paper titled, “Prime Discriminants of Profitability in the Indian
Commercial Banks” tried to develop a discriminant function for bank profitability using the most
significant ratios/parameters. The validity of the model was assessed by calculating the analysis
sample (78 banks). The hit ratio for analysis sample was 49/78 = 62.82 per cent. The efficiency
was judged on four major parameters: Liquidity of the bank, Return performance, Expense
parameters, and Operational efficiency. As per step-wise discriminant analysis, out of various
measures, i.e., smallest Ratio, Mahalnobis Distance, and Wilk Lambda, the study employs Wilk
Lambda with minimum value required for entry as 3.84 and maximum value for removal of the
independent variable as 2.71. At each step the variable that minimizes the overall Wilk Lambda is
entered. The computation ends when any further entry of variables fails to minimize the Wilk
Lambda.
Krishana et al. (2003), in their research paper, “Performance of Regional Rural Banks in
Karnataka − An Application of Principal Components and Discriminant Function Analysis”
tried to identify the important discriminating characteristics of the two identified groups of
Regional Rural Banks in the state of Karnataka. They used the discriminate function approach and
sought to obtain linear discriminate coefficient, such that the squared difference between the mean
Z-score for the one group and the mean Z-score for the other group was as large as possible in
relation to the variation of scores within the groups. They concluded that the number of employees
per branch had maximum discriminating power to the extent of 55%, followed by amount of
borrowings (18%), credit deposit ratio (14%) and income to expenditure ratio (13%).
Nair (2004) in his paper titled, “Village Co-operatives − A Century of Service to the Nation”
observed that by 2004, the formal institutionalized co-operative sector completed a century of its
service to the nation. Analysing the progress of Primary Agricultural Co-operative Societies, he
observed that during the half century spread over 1951-2001, the PACs made rapid strides in
membership, owned funds, deposits, and channelising production credit for farmers. They were
versatile in the sense; they can take up any type of rural financing and rural service activity at
short notice and at lowest transaction cost. But besides excelling on all fronts, the co-operatives
are feeling handicapped due to mounting NPAs. The overdue loans of PACs increased to
`95,899.60 million in 2000-01 as compared to `63.79 million indicated in 1950-51, thereby
subjecting them to a sustained and systematic process of reviews, reorganisation and
restructuring.
Carlos et al. (2015) studied productivity changes in European co- operative banks and concluded
that an effective use of technology between 1996 and 2003 had increased productivity for majority

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of the European co-operative banks under study. An appropriate policy recommendation by the
researchers was for larger or centralized co-operative banks to develop and franchise technology
to smaller co-operatives.
NABARD (2015) conducted a study “Development in Co-operative Banking”, to evaluate the
financial performance of 1872 urban co-operative banks and 1, 06,919 rural co-operative credit
institutions. The findings of the study revealed that in all financial institutions in the rural
sector (SCBs, DCCBs, SCARDBS, and PCARDBS), percentage of NPAs in the substandard
category declined, while it had increased in doubtful category. NABARD was worried about
deterioration in asset quality of these banks. However, all the institutions were able to meet
the necessary provisioning requirements. It further highlighted that NPAs ratio in DCCBs
varied significantly across the states from 5% to 68% at the end March 2004. Only in
four states(Haryana, Himachal Pradesh, Punjab and Uttranchal), the NPA ratio was less than
10%. NABARD suggested that co-operative banks should implement One Time Settlement
system (OTS) and refer small value advances to Lok Adalats and high value advances to Debt
Recovery Tribunals (DRTS). Further, State Governments were requested to help co-operative
banks in reducing NPAs by taking special recovery derives.
Mr. Joseph (2015) studied the performance of Lead Bank Scheme in Kerala, the
mobilisation of bank deposits in Kerala by commercial Banks. He observed that competition
from co-operative and other institutions was the main obstacles to achieving the deposit
mobilisation target. The popularity of private financial institutions was due to their personal
relations with local people. 56.4 percent of the customers (self employed) surveyed had their
first percent dealing with banks for taking loans.
Mr. Laurent (2006) studied the perception of customers on five competing banks in a
medium size city in UK for private deposits. He observed that these five banks differed from
each other as a result of oligopolistic market situation only on seven attributes i.e.,
friendliness, quality of service, community spirit, modem facilities, convenience, range of
services and ownership. These seven attributes accounted for 91 percent of the overall
differences between the five banks. The study revealed that on the basis of perception of
overall image of the five banks relative to each other, there existed the different market
segments.
K. Avadhani (2007) studied the performance of rural branches of some commercial banks in
order to identify the factors influencing deposit mobilisation in rural areas in different states.
He came out with the opinion that there existed sufficient relationship between the deposits of
a rural branch and its age. The growth of deposits is at a faster rate in the first six years and
tapers off subsequently. The growth rate in deposits of commercial banks cannot be
explained in terms of price differentials as co-operatives offer high rates of interest.

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Therefore product differentials would offer a better explanation of the disparate growth rates
in deposits.
Mr. Nag and Mr. Shivaswamy (2008) studied the comparative performance of foreign and
Indian banks and observed that there was a distinct preference of bank customers to bank with
foreign banks notwithstanding the fact that foreign banks stipulate relatively high levels of
minimum amounts to be maintained as deposits and charge relatively high interest rates and
service costs. In respect of deposit supplies, their strategy had been to procure from a
segmented part of the total supplies of deposits of large size from a relatively small number of
depositors. Large accretion of non-resident deposits with foreign banks was mainly because
of the familiarity of the names of foreign banks operating in India to banks abroad.
Raju (2009) studiedthe levels of savings and the manner of their distribution among different
physical and financial assets of household sector in Kerala and identified the factors
influencing their savings behaviour. He found that major portions of the savings of
households in Kerala were in the form of financial savings and that too in the form of bank
deposits.
Subramanian (2010) analyzedthe empirical analysis on dis-intermediation from the
household sectors portfolio preferences point of view based on demand model of five assets
including bank deposits The study revealed that the household sectors preferences between
bank deposits and lending to private corporate sector tended to be in favour of the latter
and against the former.
Nalini (2011) studied on the impact of mutual funds on the deposit mobilisationof
commercial banks examined the awareness level and adoption level of mutual funds among
household investors in Thiruvananthapuram district. She found that the advent of mutual
funds has brought in expected changes in the growth of bank deposits and their ownership
pattern, but the changes were not of a significant magnitude.

Satyanarayane (1996) studied productivity beyond per employee business, and suggested a
model to measure overall efficiency of the banks. He emphasised that the size of the bank should
be squared off while measuring efficiency of bank. According to him, Productivity of bank =
(Average index market share of all the output factors/Average index market share of all the
input factors) X 100 where, output factors were deposits, non-deposit working funds, loans &
advances, investments, interest spread, non-interest income and the net profit. The input factors
were network of branches, numb of staff, wage bill, non-wage operating expenses, etc. In order to
facilitate comparison of one bank with the other, irrespective of size, the market share of each
factor in percentage terms has to be taken into account instead of absolute levels.

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Niranjanraj and Chitanbaram (2000), in their study titled, “Measuring the Performance
of DCCBs” observed that suitable models should be developed to evaluate the performance
of co-operative banks. They considered 23 parameters falling into four major groups for
measuring the performance of District Central Co- operative Banks and assigned appropriate
weights to each parameter. They ranked 14 District Central Co-operative Banks of Kerala based
on composite marks. They suggested that performance of co-operative banks should not be
measured in terms of financial/ economic achievements only but their performance as co-
operative organizations (social achievements) should also be evaluated.

Satyasai and Badatya (2000) conducted a study regarding restructuring Rural Credit Co-
operative Institutions. They analysed performance of rural co-operative credit institutions on
the basis of borrowings and lending operations, cost structure, financial viability, etc. and found
that co-operative system, in general, had failed to perform its functions properly. They advised
the co-operative banks to diversify their business and also to overcome internal (rising
transaction cost, declining business level, mismanagement of overdues) and external
(excessive bureaucratization, politicization) weaknesses.

Verma and Reddy (2000), conducted a study analyzing the causes Overdues in Co- operatives
under SWOOD, to assess recovery and NPAs position in these banks. Policy distortions in
liberalized economy and inefficient management were identified as main reasons for poor
recovery. Misutilisation of credit, political interference at every level, successive crop failures,
non-remunerative prices of agriculture produce, inadequate income and natural calamities, were
some other factors, which affect the working culture of co-operative banks considerably. To
improve the working of these banks, the study suggested that available credit size should be need
based and production-oriented. Effective supervision of loans to minimize misutilisation and
close social relations with loanee members were two other suggestions to improve the profitability
and productivity of these banks.

Das (2001) in his study titled, “A Study on the Repayment Behaviour of Sample Borrowers
of Arunachal Pradesh State Co-operative Apex Bank Limited”, examined the repayment
behaviour of loanees, covering a period of 1994-95 to 1998-99. On the basis of primary data
collected, researchers concluded that incidence of default was highest among borrowers for
agriculture allied activities loans. Agriculture loanees, horticulture loanees, small business loanees
nd rd th th
and service sector loanees were ranked 2 , 3 , 4 and 5 in a descending order on the basis of
percentage defaulters. Study further revealed that the number of defaulter loanees was highest in
government sponsored schemes.
Viswanath (2001) in his study titled, “An Analysis of Performance of Agricultural Credit Co-

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operatives and their Overdues Problems in India” concluded that during the crore to `14,201 crore
i.e. 587 times, but unfortunately this increase was followed by a corresponding increase in
overdues. The results of Development Index in PACs of 16 states indicated that the performance
of only 5 states, i.e., Karnataka, Gujarat, Tripura, Orissa, and Maharashtra was above the National
average, while that of the remaining 11 states including Punjab were below the average. Using
correlation technique, the extent of relationship between overdues and four variables, i.e., number
of societies, total membership, working capital and total amount of loans advanced was studied.
He concluded that there was a direct and positive link between overdues and membership on one
hand, and overdues and working capital, amount of loans advanced on the other.

Debasish (2003), in his research paper titled, “Prime Discriminants of Profitability in the Indian
Commercial Banks” tried to develop a discriminant function for bank profitability using the most
significant ratios/parameters. The validity of the model was assessed by calculating the analysis
sample (78 banks). The hit ratio for analysis sample was 49/78 = 62.82 per cent. The efficiency
was judged on four major parameters: Liquidity of the bank, Return performance, Expense
parameters, and Operational efficiency. As per step-wise discriminant analysis, out of various
measures, i.e., smallest F- Ratio, Mahalnobis Distance, and Wilk Lambda, the study employs Wilk
Lambda with minimum value required for entry as 3.84 and maximum value for removal of the
independent variable as 2.71. At each step the variable that minimizes the overall Wilk Lambda is
entered. The computation ends when any further entry of variables fails to minimize the Wilk
Lambda.

Krishana et al. (2003), in their research paper, “Performance of Regional Rural Banks
in Karnataka − An Application of Principal Components and Discriminant Function
Analysis” tried to identify the important discriminating characteristics of the two identified
groups of Regional Rural Banks in the state of Karnataka. They used the discriminate
function approach and sought to obtain linear discriminate coefficient, such that the squared
difference between the mean Z-score for the one group and the mean Z-score for the other
group was as large as possible in relation to the variation of scores within the groups. They
concluded that the number of employees per branch had maximum discriminating power
to the extent of 55%, followed by amount of borrowings (18%), credit deposit ratio (14%)
and income to expenditure ratio (13%).

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CHAPTER IV
CHAPTER IV

Finding & Analyzing

1. Which type of watch do you use?

Sports Chain Bracelet others _____________

Types of Watch Sports

Chain
Braclet
19%
Others

11% 48%

22%

 55% of people are like to wearing sports watches

 25% of people are like to wearing chain watches
 12% of people are like to wearing bracelet watches
 22% of people are like to wearing other types of watches

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2. Which brand you are currently using ?

Titan Timex Casio Rado others____________

Currently Using Watches

10%
13%

43%
Titan
Times
Casio
Rado
Others
13%

21%

 55% of people are currently wearing Titan Watches.

 25% of people are currently wearing Times Watches.
 15% of people are currently wearing Casio Watches.
 15% of people are currently wearing Rado Watches.
 12% of people are currently wearing other brands of watches.

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3. Feature you consider while purchasing a watch ?

Warranty Quality Price Brand image Style /design

Features of Watch
20%
31%

Warranty
9% Quality
Price
Brand image
Style /Design

26% 14%

 55% of people are considering warranty while purchasing watches

 25% of people are considering quality while purchasing watches
 45% of people are considering price while purchasing watches
 15% of people are considering brand image while purchasing watches
 45% of people are considering style and design

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4. If given a chance to switch your wrist watch brand, you have likelihood to go for which
brand?

Titan Timex Rado Rolex

Brand Switch of Wrist Watch

17% 6%

Titan
Timex
Rado
Rolex

14%
63%

 55% of people will switch Titan watches

 12% of people will switch Timex watches
 15% of people will switch Rado watches
 5% of people will Rolex watches

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5. Does publicity of watches by celebrity affects your buying decision?

Yes No

Buying Decision
Yes No

25%

75%

 75% of people are affected by publicity while purchasing watches

 25% of people are not affected by publicity while purchasing watches

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6. Are you satisfide by the brand ou are using ?

Yes No

Satisification By Brand
25%

Yes
No

75%

 75% of people are satisfied by brand while purchasing watches

 25% of people are not satisfied by brand while purchasing watches

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7. Where did you buy your wrist watch from?

Company Showroom Retail Shop Online

Buying Wrist Watch

20%

35%
Company Showroom
Retail Shop
Online

45%

 20% of people are buying wrist watches from Company Showroom

 45% of people are buying wrist watches from Retail Shops
 35% of people are buying from online

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8. How often you swtiched off the brand ?

Very often Depends on mood Affordability No (Brand Loyal)

Switched Off Brand

28%
36% Very Often
Depends on Mood
Affordability
No Brand Loyal

24%
12%

 35% of people switched her brand while purchasing watch is very often
 15% of people switched her brand depends on his mood
 30% of people switched her brand of his affordability
 35% of people had no brand loyal

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9. Given chance to change the watch which one would you go for?

Titan Rado Timex other_____________

Chance to Change Watch

22%

Titan
39% Rado
Timex
Other
9%

30%

 25% of people are having chance to change her Titan watch to other model
 10% of people are having chance to change her Rado watch to other model
 35% of people are having chance to change her Timex watch to other model
 45% of people are having chance to any model

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10. What kind of warranty you expect ?

1 year 2year 3year

Warranty
5%
27%

1Year
2 Year
3 Year

68%

 5% of people are expecting 1year warranty while purchasing watch

 30% of people are expecting 2year warranty while purchasing watch
 75% of people are expecting 3year warranty while purchasing watch

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CHAPTER IV

Interpertation & Suggesstion

Suggestions given by the respondents to improve brand image.

Varied responses were received for this question. All the responses have been
summarized as follows:

-Introduce more trendy and innovative designs

-Focus on niche markets such as working men and women
-Spread awareness about availability of watches in lower segments as most of the
consumers feel that Titan brand is synonymous with premium watches
-Take steps to change consumer perception that Titan watches are high priced.
-Improve after sales service.

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CHAPTER VI

Conclusion

To meet changing lifestyles wrist watch market in India has added element of fashion in it.
Also withdrawal of import restrictions has attracted a large number of foreign watch
companies to enter the Indian market. Generally upper middle class people in India are
reported to own more than one watch which matches one’s attire and occasions. Like in
apparel, new styles/models are introduced every season. Large chunky cases with colorful
dials are in vogue. The grey market selling imitations of popular styles and leading brands at
half the price continues to be a menace for the organized sector. The growing popularity of
mobile phones is likely to erode the functional importance of a wrist watch. To increase its
visibility, Titan Company can sponsor events similar to fashion shows in which all latest
designs launched are displayed. This would have multiplier effect as the latest designs
launched by the company get noticed by different segments of the customers in varied ways.
Tie up with FM radio channels for reminder advertisements and informing customers about
various sales promotion offers from time-to-time. Invest more in R&D as customer
expectations are changing rapidly. Though Titan has got more product collections, it should
focus on introducing more varieties in already existing product collections. In other words,
having a limited but more depth in product collections would be more advantageous.

Introduce exclusive collection for working women which is more contemporary and
complements both traditional and western wear. Majority of the population in India live in
rural areas. So, showrooms should be set up at places nearer to them. Introduce cheaper and
rough use watches for this segment. After sales service has to be improved. That is, the
process of servicing and repairing of watches should be made faster. This can be done by
ensuring the spare parts availability and training all sales personnel in Titan showrooms to
undertake these tasks. Tie up with international watch brands and make them available
locally. Make use of internet to spread awareness among consumers about the brand.

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CHAPTER VII

Reference

Books
 Lehman, Donald R., Product Management 2005, Tata McGraw-Hill
 Ramanuj Majumdar, Product Management in India, 3rd Ed

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Questionnaire
Name: ________________________________________ Gender:
Male/Female
Q1. Which type of watch do you use?

Sports Chain Bracelet others _____________

Q2. Which brand you are currently using ?

Titan Timex Casio Rado others____________

Q3. Feature you consider while purchasing a watch ?

Warranty Quality Price Brand image Style /design

Q4. If given a chance to swich your wrist watch brand, you have a likelihood to go for which
brand?

Titan Timex Rado Rolex

Q5. Does publicity of watches by celebrity affects your buying decision?

Yes No

Q6. Are you satisfide by the brand ou are using ?

Yes No

Q7. Where did you buy your wrist watch from?

Company Showroom Retail Shop Online

Q8. How often you swtiched off the brand ?

Very often Depends on mood Affordability No (Brand Loyal)

Q9. Given chance to change the watch which one would you go for?

Titan Rado Timex other_____________

Q10. What kind of warranty you expect ?

1 year 2year 3year

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