HMT WATCH
DIVISION
A FAILURE??.....
Shobit
Incorporated in 1953 by the Government of India as a Machine Tool manufacturing company.
Over the years diversified into Watches, Tractors, Printing Machinery, Metal Forming Presses, Die Casting & Plastic Processing Machinery, CNC Systems & Bearings.
HMT : A Snapshot
The manufacture of wristwatches started as part of diversification strategy of HMT in the year 1962, under Technical collaboration with CITIZEN Watch Company of Japan. HMT Limited, the first company to start watch manufacturing in India; has incorporated "HMT WATCHES LIMITED" as its fully owned subsidiary on 9th August 1999. It manufactures Mechanical and Quartz Analog watches.
HMT Watches : Profile
Strength Weakness
Opportunity Threats
Strong government support. Good brand image and market leadership due
to high quality, low price and reliability.
Company’s liquidity position has been quite comfortable. Adequate availability of tangible assets such as land and buildings.
Record of good industrial relations.
In 1991 HMT set up a product development center for watch design.
S
T
R
E
N
G
T
H
S
Established marketing network
S
T
R
E
N
G
T
H
S
Its prime product category (mechanical watches) was in the decline stage of PLC. Weak Organizational culture. Over reliance on the production concept of marketing and hence ignoring the marketing concept. Insufficient emphasis on R&D and design engineering. HMT didn’t embrace new quartz technology to a great extent & suffered because of their adherence to mechanical watches.
W
E
A
K
N
E
S
S
Contd…
Bureaucratic and centralized decision making inhibited HMT’s ability to respond quickly with respect to market changes. Virtually ignored to maintain good trade relations with retail outlets vis a vis competition (retail margin was lower than what was provided by the competitor) It restricted product development to quality development only. Aesthetics and packaging of watches have not been duly attended too.
W
E
A
K
N
E
S
S
Worldwide decline in the production and demand of mechanical watches due to growing acceptance of Quartz watches. Significant competition from Allwyn and Titan. Competitors wooing HMT’s top managers.Competitors successfully exploited the lifestyle segmentation which HMT failed too.
T
H
R
E
A
T
S
Contd…
Titan had started marketing its watches in unconventional outlets like boutiques and jewellery shops.
The authorized service agents (ASAs) for foreign smuggled watches in the country are also offering competition to HMT.
T
H
R
E
A
T
S
The demand for Watches is growing rapidly both in domestic and international market. Capitalize on attractive segments. In coming years Fashion brands, luxury watches and watches with multiple functions are considered as the product segment with the biggest growth. Leveraging brand equity of HMT to products such as sports gear, personal accessories.
O
P
P
O
R
T
U
N
T
I
E
S
Product Few Designs as compared to competitors. There is less emphasis on product research and development. HMT has not been able to be a leader in Quartz watches segment & underestimation of this segment. Another flaw in its product strategy was scant attention to aesthetics and packaging of its watches.
M
I
S
T
A
K
E
S
PriceHMT positioned the quartz watches as the space age generation watches & charged high prices for this category which means that only the affluent middle aged consumer could afford it.
M
I
S
T
A
K
E
S
Place Didn’t strategize its established marketing network according to growing competition. Since retailers have enough foreign brands they were simply not interested in HMT’s home grown products as a result it had to sell through its 13 branch offices for Machine tool equipment. In mid 80’s HMT’s selective retailer policy began going against it. the retailer margins provided by HMT were 2% less than what its most prominent competitor, Titan.
M
I
S
T
A
K
E
S
PromotionThough HMT’s advertising was distinctive and did cater to the lifestyle segment, it failed to communicate the uniqueness of HMT’s quartz design vis-à-vis other HMT watches.
M
I
S
T
A
K
E
S
Product Create competitive advantage by differentiation through technological leadership. The products should be developed to enhance quality and features matching customers tastes and preferences and there by increasing buyers value. Mid & Premium segment: In this segment HMT should seek differentiation by providing better designs
C
O
R
R
E
C
T
I
O
N
S
Conduct market survey Involve leading market research organization along with your sales force. Do it periodic every six month; Involve retail-shops, shopping centers, department stores, dealers, sales force. Most popular brands, trend of consumers etc.Competition Competition among brands has been also getting stronger, and a lot of effort to keep sales has been required. Watches without an appeal, watches without clear marketing hardly attract consumers in the market glutted with commodities. Train agents to set forth clear brand vision and efficient campaign.
C
O
R
R
E
C
T
I
O
N
S
Competition Shift to quality with new added value.. Provide consumers with a lot of information select their watch wisely and professionally according to their own taste.
Distribution Prepare retailer to meet the changing consumer’s trend. Watches just displayed in showcases cannot sell. It is absolutely necessary to present them together with the background such as original story of the watch, its functionality and benefits of after sales service.
C
O
R
R
E
C
T
I
O
N
S
Contd…
Pricing In the lower end HMT should seek to achieve cost advantage by exploiting the differences in cost behavior. The pricing strategy can be to undercut main competitor by 10%, using market penetration strategy.Promotion Special focus on sales during festive time like Diwali, Christmas along with discount offer & finance schemes. Go for innovative and stylish ad campaign that reflects the aspirational, independent and modern dimensions of the watch collection.
C
O
R
R
E
C
T
I
I
O
N
S
THANK YOU
THANK YOU
