Though communication is the most visible,
it is the smallest part of marketing.
The marketing process involves the following
stages:
1. Understanding the customer
2. Setting up the segment, target and
positioning process
3. Execution of strategy i.e., offering,
communicating with the customers, formulating the routes for marketing and
finally pricing.
Focusing on communication channels and
message alone would not yield the desired results.
2. Is marketing is all about creating needs?
Answer is No.
Customer seeks satisfaction of need through
goods or services provided by the provider. Various reasons can contribute to
cultivation of such need, like problems with existing channel, frustration due
to process of procurement or aspirations and desires.
Types of needs
Expressed needs are the one which a
customer values while selecting a product or service. After sale service,
installation procedure, guarantee, appealing design, desired price range etc.
are some of these expressed needs.
For a provider, improving on expressed
needs beyond a point does not yield relative higher returns as customers are
already satisfied and their perception would not change much.
Implicit needs are those who customers take
for granted and that need not to be mentioned. A customer while ordering a
sandwich expects tomato sauce to be served too.
Another implicit need is a choice which has
been tested among different varieties of a product. Customer’s perception is
impacted negatively if there is a denial of implicit needs. An ice-cream
parlour would risk loss of business if it suddenly starts offering only
vanilla.
Latent needs unlike expressed and implicit
are those which a customer has not experienced yet and when such innovative
ideas or products are offered, customers are captivated.
Focusing on expressed and implicit needs
enables a business to continue at the same level while addressing latent needs innovators
can draw benefit from creating new level of customer satisfaction.
Hence, marketing enables to understand need
but not creating them.
3. Marketing is about exaggerating reality?
Answer is No.
Marketing is often seen as presenting the
best of products, services and even self, highlighting the highest achievements
while down-playing failures and facts of lesser importance.
Since most of the marketers adopt this
method, it hardly provides any marketing competitiveness. You may have often
seen advertisement of weight loss products or beauty products showing off ‘before’
and ‘after’ scenarios. No matter how sharp the ‘after‘ is, buyers in general
are aware that such advertisement are result of trick photography and digital
enhancement.
Hence, exaggerating reality is only a
standard execution process and does not provide substantial advantage.
So,
why should a customer chose your product and service? He does so because he
identifies a certain value of the choice.
Above
all, the marketer needs to understand the value of their proposal and employ
clear and creative communication to reach up to the desired customers to
deliver such values.
∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞
Vinay Pandey, 03/02/2018
PS : If you have a suggestion or have noticed a mistake, please leave a comment.
Intellectual Properties for layman. Its definition and types.
Table of Contents
1. What is Intellectual Property?
2. Brief History
3. Different IP Rights
#Trademarks
#Patents
#Copyrights
#Trade
Secrets
4. Searching for trademarks
5. Do you know?
What is Intellectual Property?
According to
World Intellectual Property Organization (WIPO), “Intellectual property
(IP) refers to creations of the mind, such as inventions; literary and artistic
works; designs; and symbols, names and images used in commerce.”
Intellectual
property is basically divided into two categories:
Industrial
Property and
Copyright
The definition
can be extended to “Intellectual property rights are like any other property
right. They allow creators, or owners, of patents, trademarks or copyright works to benefit from their own work or investment in a creation.”
Broadly there
are five types of protections:
Trademarks
Patents
Industrial
Design
Copyright and
Trade Secrets
Brief History
First instant of
legislation drawn related to IP was in 1623, when British Parliament passed the
“ Statute of Monopolies”. In a change brought through this legislation,
the hold of powerful industry guilds, who dictated what and how much can be
imported or made available in the market, was broken. As per the new law, authors or inventors were allowed to retain their ownership rights for a period
of 14 years during which they held the exclusive rights to manage the use of their
invention and creation. Various further enactments related to copyright laws
were passed by British parliament. Significant among them was “Statute of
Anne”. Brought in 1710, in an era of printing press and new colleges and
universities, an author was granted property rights over his work for 14 years
with provision for renewal of further 14 years.
In USA, the
first patent act was signed in 1790, based on new constitution of USA.
Similarly in 1791, during French Revolution, patents laws were created,
followed by Copyright legislation in 1793, under which such patents were extended
to outside France. By 19th century most of the developed countries
had Patent and copyright laws.
However, by end
19th century situation so arose that patent and copyright laws were
rampantly misused due to national boundaries. Paris Convention in 1883 established a trans-boundary union. Under this convention signed by 11 countries,
a foreigner was granted equal right as a citizen, meaning a French had equal
rights with regards to copyrights as a Spanish citizen enjoys in Spain.
Further, right to priority was granted, which enabled any copyright holder to
file patent within 12 months and within 6 months for trademark and industrial
designs from filing of patents in their own country. During this period, the
patent holders were granted temporary protection in other countries.
The journey of
harmonization continued with prominent revisions of treaty in:.
1886 – Berne
Convention
1891 - Madrid
Agreement
1893 - BIRPI
1925 - Hague
Agreement
1957 - NICE
Agreement
1967 - WIPO
, Stockholm Convention
1970 - Patent
Co-operation treaty ( PCT )
1973 - European
Union comes together for EPC (EU)
1974 - WIPO
joins United Nations
1989 - Madrid
Protocol
1994 - TRIPS
( under WTO )
1996 - WIPO
Copyright Treaty ( WCT )
1997 - Trademark
Law Treaty
2000 - Patent
Law Treaty
2011 - America
Invents Act ( AIA )
2012 - Unitary
Patent Rules
2013 - UPCA
( EU )
Currently there
are 177 member nations.
Different IP rights
Trademarks
According to
WIPO’s definition “a Trademark is
a sign capable of distinguishing the goods or services of one enterprise from
those of other enterprises”.
A trademark can be any of the following:
Single and simple wordApple, Shell, Mobil, Virgin
Combination of words Microsoft, JOHNNIE
WALKER, US Polo
Family Name TATA, Gucci
Geographic NameHimalaya, Mont Blanc, Mount Everest
PseudonymsPaco Rabanne, Kate Moss, Lady Gaga
Numbers737,747 of Boeing, i586 of Intel,501 of
Levi
The primary goals of Trademarks are:
Distinguishing mark
Origin and quality of goods which goes with the name behind
the Trademark
Prevent competitors to benefit from goodwill of the brand.
A trademark can be a combination of:
A sign
Image
A combination of
colors and words
A sound
A smell
The scent, Flowery Musk Scentused in Verizon stores was trademarked
in 2014. And,
3-D
hologram
A holder of trademark enjoys some exclusive rights :
Trademark can be sold or transferred
Trademark can be licensed or permitted to be used commercially
Conditions of validity
1. Distinctive Character – TM needs to be arbitrarily chosen,
having no link with necessity and should not be descriptive.
Yahoo, Kodak and Xerox have no link with what they are into,
while International Business Machine and Microsoft partially indicate their line of business.
2. A
mark is not distinctive when it fails to indicate origin, does not allow a
reasonable choice of purchase or is anti-competitive.
3. A
registered trademark is not permanent and the following factors can end
protection:
TM
is not auto-renewed. They need to be renewed every ten year.
Protection
can be refused if TM rights is not lawfully used in form of trade or in
litigation for 3 to 5 years.
TM should not be
subjected to de-generation, i.e., consumers start referring to it in generic
manner instead of a registered trademark and the TM is lost to common use. 'Cellophane' of Innovia Films Ltd, 'Dry Ice' of Dry Ice Corporation and 'Escalator' of Otis Elevator Company are examples of such trademarks lost due to common
use.
Patents
WIPO defines
Patents as “an exclusive right granted for an invention, which is a product or
a process that provides, in general, a new way of doing something, or offers a
new technical solution to a problem.
To get a patent, technical information
about the invention must be disclosed to the public in a patent application.”
Patents are:
Limited to the
territory where it is patented.
Patents are
independently granted in different countries/region.
Protection is generally given for maximum of 20 years from date of filing of application, subject
to payment of annual fees. On a lapse or expiry, a patent is free to be used by anyone. For example generic drugs are free for usage once patent has expired.
Patents are
designed for exclusion rather than for making and using. Meaning, it forbids others
from using the same technology or design, but does not give the holder exclusivity of usage. Any similar patent can hamper the plans of the holder.
A patent is
exhausted on first sale anywhere. A patentee loses rights once it is sold
anywhere in the world. Until recently US was an exemption, where a sale in any
other country was viewed as non-exhaustion in US. It may be noted that, the sale
as mentioned is of the patent and not of the product.
It may be
interesting to know that, India in 2012 allowed Natco Ltd, a local bulk drug manufacturing
company to sell copies of Bayer’s cancer medicine Nexavar at fraction of Bayer's price. This was done under a provision which enabled governments to issue compulsory
licence under certain conditions, such as public health emergencies. A licence fees is paid under this arrangement but does not require any permission from patentee.
For more information on this matter, please read : https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm and
Definition
as per WIPO is, “Copyright (or author’s right) is a legal term used to describe
the rights that creators have over their literary and artistic works. Works
covered by copyright range from books, music, paintings, sculpture, and films,
to computer programs, databases, advertisements, maps, and technical drawings.”
Broadly
speaking, by copyrights the protection is provided for:
Literary
works such as novels, poems, plays, reference works, and newspaper articles;
computer
programs, databases;
films,
musical compositions, and choreography;
artistic
works such as paintings, drawings, photographs, and sculpture;
architecture;
and
advertisements,
maps, and technical drawings.
It may be noted that Copyrights does not protect the idea itself, but the expressions of the idea. Meaning, a painter’s painting of a landscape is copyright for the method and style of expression but it cannot deter somebody else to paint the same landscape in a different way.
A copyright is enforceable from the moment of creation and there is no requirement for registration of such rights, expect in certain cases.
Only the original ideas are protected and Originality is defined as an “expression of the author’s personality” in countries which use civil laws, while in countries practicing common laws, a work is original if an author puts skill and effort into its creation.
Definition of ‘authorship’ also differs in the two systems, in Copyright system, it can be a physical person or legal entity while in Droit d’ auteur system it is a physical person.
As per WIPO, there are two types of rights under copyright:
economic rights, which allow
the rights owner to derive financial reward from the use of his works by
others; and
moral rights, which protect the non-economic
interests of the author.
Most copyright laws state that the rights owner has the economic right to authorize or prevent certain uses in relation to a work or, in some cases, to receive remuneration for the use of his work (such as through collective management). The economic rights owner of a work can prohibit or authorize:
its
reproduction in various forms, such as printed publication or sound recording;
its
public performance, such as in a play or musical work;
its
recording, for example, in the form of compact discs or DVDs;
its
broadcasting, by radio, cable or satellite;
its
translation into other languages; and
its
adaptation, such as a novel into a film screenplay.
Protection
in EU and US is for 70 years from death of author and 50 years in others.
Trade Secrets
As
per WIPO, “any confidential business information which provides an enterprise a
competitive edge may be considered a trade secret. Trade secrets encompass
manufacturing or industrial secrets and commercial secrets. The unauthorized
use of such information by persons other than the holder is regarded as an unfair
practice and a violation of the trade secret. Depending on the legal system,
the protection of trade secrets forms part of the general concept of protection
against unfair competition or is based on specific provisions or case law on
the protection of confidential information.
The
subject matter of trade secrets are usually defined in broad terms and includes
sales methods, distribution methods, consumer profiles, advertising strategies,
lists of suppliers and clients, and manufacturing processes. While a final
determination of what information constitutes a trade secret will depend on the
circumstances of each individual case, clearly unfair practices in respect of
secret information including industrial or commercial espionage, breach of
contract and breach of confidence.”
A
trade secret is not needed to be registered and protection is permanent. It may
be noted that, trade secrets are secret only if they are kept as secret, i.e.,
they should be not be available in public and right holders takes appropriate
steps to keep them so. Any disclosure or sharing should be through legally
enforceable contracts.
Know-how differs from Trade Secrets and is generally defined as:
A
production factor, i.e., it is used in manufacturing or processing of goods and
materials,
Negative
information is included, i.e., a knowledge to prevent mistakes by using the
know-how,
A
know-how gives an advantage over others, and
It
must meet the criteria of a trade secret.
Searching for trade marks
For search
related queries, the following sites may be visited :
TESS
eSearch plus
TMview , the
newest and most popular
Do you know?
That, even though Apple Computers is a registered trade mark, it cannot stop Apple Products Inc from using a similar name and logo, as products of both the companies are different and filed under different chapters.
That, the word "Entrepreneur" is a trademark word.
That, catchphrase:
"That's Hot!" is trademarked to Paris Hilton.
That, Twitter failed
to register the phrase “tweet” because a third party developer trademarked the
phrase “Let Your Ad Meet Tweets" in 2008. The matter was mutually settled in 2011. http://www.telegraph.co.uk/technology/twitter/8821577/Twitter-wins-battle-over-ownership-of-tweet-trademark.html
That, Harley Davidson
tried and failed to trademark the sound of revving engine.
And
Donald Trump once tried trademarking the phrase “You are fired”. Ironically, it got rejected
because it sounded too similar to “You are hired”, a board game.
Vinay Pandey, 29/11/2017
PS : If you have a suggestion or have noticed a mistake, please leave a comment.
This case study would involve the collection of data, information and discuss the following topics :
Does a company benefit from being present in multiple businesses?
If the firm sticks to its core business, does it do better or worse?
Does Titan achieve competitive advantage by present in watches, jewellery and eyewear business?
Table of Contents
Prologue
Background of Titan
Vision and Mission
Awards and recognition
Strategic reasons and strengths - the creation of Titan and entry into watch business
Strategic reasons for diversification - Jewellery
Competition and competitive advantage
Conclusion
Titan, a Indian company that sells watches, jewellery, eyewear and precision engineering products.
Prologue
Titan Industries Ltd, currently known as Titan Company, is a part of the TATA Group of companies. The Tata group has ventures in Steel, Chemicals, Tea, Coffee, Automotive, Electrical appliances and IT.
Background
Incorporated as Titan Watches Ltd in Tamil Nadu state in July 1984, the company started with an objective to manufacture a wide range of analog watches. It sets up a plant at Hosur, Tamil Nadu to manufacture quartz analog electronic watches with collaboration with France Ebauches of France. Among its range of products are Titan, Aqura, Raga, Spectra, Tanishq and Sonata, reaching to all income segments of the market. Titan sold off its Aqura brand to Timex in 1992. As in 2017, Titan has 438 stores in 120 cities across India. It also has joint ventures with the known global brands for marketing in India. What started as an initial offering of 150 models, now handles more than 3000.
It also forayed into the digital watch segment in collaboration with Casio Computer of Japan in 1986 and introduced Cyber, Classique and Fasttrack range of digital watches.
In 1991, Titan undertook to set up at Hosur a jewellery business both for daily-wear and luxury.
Titan Time Products Ltd was formed in 1992, as a fully owned subsidiary, with an aim to offer a wide range of electronics manufacturing services to companies in the Medical, Automotive, Industrial Controls, Instrumentation and Aerospace Industries. In the same year, Titan stepped into the global market with the launch of Titan watches in Mid-East and in later years in Southeast Asia and Africa.
The jewellery division, Tanishq was initially started in 1994 as a range of jewellery and jewellery watches for European and American markets. It tapped into the Indian market with a showroom in Chennai in 1996 and by 2017 has 200 stores in 115 cities across India. Pioneering the introduction of Karatmeter, it changed how the purity of gold is checked and how Indians shop for gold. Its’ offer of ‘Golden Harvest Scheme’, a monthly installment scheme was a huge hit with mid-income groups. In 2003, Tanishq stepped into Silverware with a range designed by Michael Folly, the designer for Titan. This additional range has a potential market of Rs 5,000 crore and has few organized and branded players.
Titan Company owns manufacturing and assembly operation centres in Hosur in Tamil Nadu, Dehradun, Roorkee, Pantnagar in Uttaranchal and an Electronic Circuit Boards (ECB) plant in Goa, all in India. Producing over 15 million watches per annum and has a customer base of over 135 million globally, 60% of the domestic market share in the organized watch market is with Titan.
Titan entered the eyewear business in 2007 to market world-class lens and in 2008 it tied up with Sankara Nethralaya, a globally known eye hospital and eye care chain in India for training of store staff and optometrists. Titan Eyeplus formally started lens manufacturing unit in 2010.Today it has over 470 exclusive stores operating in over 200 cities, offering a wide range of stylish and contemporary eyewear.
In 2013, Titan entered the fragrances segment with SKINN.
Among the recent addition are bags, wallets and belts under Titan and ethnic wear through Taneira, its youngest brand.
Titan, with a humble beginning in quartz watch now has wide ranged verticals.
Vision and Mission
Vision of Titan is “We create elevating experiences for the people we touch and significantly impact the world we work in”.
While its mission is “We will do this through a pioneering sprit and a caring, value-driven culture that fosters innovation, drives performance and ensures the highest global standards in everything we do.”
Awards and recognition
Jewellery division - Golden Peacock Innovation - 2010 in the Engineering sector.
TITAN has been ranked 10th among 16,000 in The Brand Trust Report, India Study, 2011.
Jewelry Division - 3rd position on the Productivity championship award for Innovative - 2011.
TIL and Brand Tanishq - 3 awards at the Star Retailer and Franchise Awards - 2011.
Titan Industries, Jewellery division was awarded Gold Award in Engineering sector in the Economic Times India Manufacturing Excellence Awards 2011.
3 awards at the ET retail awards - 2012
Best Governed Company 2012 by Asian Centre for Corporate Governance & Sustainability
Strategic reasons and strengths -- the creation of Titan and entry into watch business
Void in market in targeted price segment.
Absence of available options to customers, presenting opportunities.
Demand from affluent and growing upper middle class for better choices.
Easing of the economy in the country allowed TATAs to collaborate and bring in better and cost-effective technologies from Japan.
Lowering of Import duty around that time, made it easy to imports essential parts.
The possibility of capitalization of the brand TATA.
The existing strong distribution system of its other businesses, extendable to Titan.
Strong procurement channels to lower input cost.
Strategic reasons for diversification - Jewellery
Titan did a product mix gig with the introduction of Sonata label, to reduce the onslaught of cheap Chinese watches flooding the market. Sonata caused a dent in Titan’s business, hurting its own well established mid-range market. With 60 % of the market share, growth seems to be stagnant.
Jewellery was partially a part of business outlook already, with an existing plant in Hosur for European and American markets. It only needed to set-up infrastructure for domestic consumption.
First mover advantage to enter an unorganized market of estimated Rs. 50,000 crores.
Capitalization of Titan’s brand name.
Customer profiles similar to watches.
Increasing economic of scope by utilizing Titan's counters,distribution network, HRD and warehousing.
The potential for further expansion in wedding segment and high-value diamond jewellery.
Tax Benefits.
Competition and competitive advantage
Watch
When Titan entered the watch market in the early 80s, its main competitor was HMT, a public sector company, literally holding a monopoly of watches, dealing primarily in low priced machined analog watches. Other players in the market were few and unorganized. Allwyn, an Andhra Pradesh based, state owned company entered the watch business in 1981 with a technical tie-up with Seiko of Japan. However, Allwyn's journey ended in 1995 with the closure of the company.
With the opening of the economy in the 80s, TATAs entered the market initially to offer a higher alternative for growing middle and upper class. It was the first company to offer quartz watches of international quality. Sleek looks, exciting new collections, a style statement and sense of prosperity induced customers to choose a Titan instead of dull key wind mechanical watch from HMT.
It created a new market for this business and soon became the overall leader. Its competitive advantage was not limited to the new price segment, but also to innovative marketing strategies. Its initiatives and promotions to gift a watch and aggressive advertisement using film and sports celebrities played a big role in its expansion.
Titan from its advantageous position was able to cause the decline of HMT sales and completely push its main competitor out of the market.
The biggest challenge to watch business was from smuggled foreign watches. Titan tied up and started marketing licensed brands as Tommy Hilfier, FCUK, Timberland, Police, Anne Klein and Kenneth Cole. Thereby mitigating partial risk to its own brand.
Jewellery
Jewellery market was unorganized, fragmented, mostly run by the family-owned chain or local goldsmith.
Titan came in with Tanishq brand and penetrated the market with quality assurances and a range of fresh designs. By 2001, Tanishq became the single largest player in the Indian market, though with a market share of only 0.5 per cent.
Differentiation - Tanishq
Most important differentiation was quality. There was a huge gap in the reliability of the available gold. Hallmark and Karetmeter, a non-destructive tool to measure the purity of gold were part of the assurance and guarantee. The brand value of TATA and TITAN helped.
Newer designs offered by Tanishq.
Potential in bullion trade through coins, especially during festivals with certified products.
Customer care already experienced by shoppers in TITAN showrooms.
Eyewear
Eyewear business offered similar incentives. The market is still not matured and domestic competitors as GKB Opticals, Lenskart and Vision Express are growing but have not caused any risk to Titan Eyeplus.
Differentiation - Titan Eyeplus
Zero-error, remote eye-testing by trained optometrists.
Tie-up with Sankara Nethralaya for training of store staff and optometrists.
Branded, fashionable, and quality eyewear at affordable prices.
Broadly none of its competitor is anywhere near to the product mix and lines offered by Titan.
Conclusion
Having studied the various aspects of the company including competitive advantage , we now look into the scope of the case study and draw a conclusion.
Let us now examine few financial parameters to understand whether Titan’s diversification strategy has been successful :
Titan and its watch business only :-
Titan with its diversified portfolio :-
It is apparent from the above graphical representations that Titan's diversified portfolio generated more revenue than its core business.
Further, the enterprise value has increased from Rs. 22,000 crores at March 2013 to 40,000 crores in 2017.
Hence, TITAN has successfully mitigated risk in its core business and benefited hugely from diversification.
References :
http://www.titancem.com
https://www.titan.co.in
https://eyeplus.titan.co.in
http://www.moneycontrol.com
https://en.wikipedia.org/wiki/Tanishq
https://en.wikipedia.org/wiki/Titan_Company
Logo - https://upload.wikimedia.org/wikipedia/commons/8/83/Titan_Company_Logo.png
Vinay Pandey, 16/11/2017
#titan,#diversification,#tanishq,#tata,#strategy
PS : If you have a suggestion or have noticed a mistake, please leave a comment.
