Titan has had an action filled year.

It had to contend with a lockout in its manufacturing plant it Hosur. But it managed to pull itself together and launch two much talked about collections: the New World Range that positioned Titan as an international brand and the Rohit Bal collection -- the first of its kind where a watch maker has tied up with a premium fashion designer.

In the interim, internationally renowned designer watch brand Tommy Hilfiger too is set to enter into a strategic licensing arrangement with Titan Industries to market it watches in the country.

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For Titan, this will be the second alliance with a foreign company, the first being a joint venture with Timex Corporation of the US. Titan parted ways with Timex a few years ago.

The New World Watch range collection launched in September with a dazzling media campaign has brought in rich dividends for Titan.

The range ensured that the Titan watches division witnessed record sales -- their highest in 10 years.

In an interview with Special Correspondent Priya Ganapati, Titan Industries Chief Operating Officer Industries Bijou Kurien looks back at 2003 and discusses his challenges for the next year.

How was the year 2003 for the Titan watches division?

We started the year disastrously because in January we went into a prolonged lockout with the employees in the factory at Hosur.

We ended up in a situation where we had the plant partially locked out for almost 90 days between January and the third week of April. That led to limited availability of the product in the last quarter of the financial year, which is January to March.

That is also our peak selling quarter because we sell 30-35 per cent of our total volumes in that quarter. Because we had no availability, sales got affected.

Secondly, we were not able to plan anything since we were in a hand-to-mouth situation. While we have several assembly facilities across the country, in terms of production Hosur is what supplies many of the components to the assembly units.

After the lockout lifted, coinciding with the signing of a new wage agreement with the workers, everyone's mood changed. The workers were happy that the lockout was over, we were happy because we could now plan ahead and the dealers were happy because the supply of watches was going to work out better.

This coincided with the peak wedding season which is from April to June. A lot of the dealers, especially in the smaller towns, sell almost half the year's volume in those three months.

We were a bit late but we got into the season. July to September was a reasonable quarter. Diwali was phenomenal.

In terms of sales how has the year been?

In domestic market we are up 23 per cent compared to last year first seven months. The New World Watch range ensured that the Titan watches division witnessed record sales -- the highest in 10 years. Over 200,000 watches, worth Rs 25 crore (Rs 250 million), were sold in less than three months.

Sales in Delhi during Diwali grew by 100 per cent as compared to the last Diwali. Chandigarh saw a 50 per cent rise in sales, while the oldest World of Titan showroom in Mumbai crossed the Rs 1 crore (Rs 10 million) mark in a matter of one month.

Sales in the World of Titan showrooms in smaller towns like Bhagalpur increased by 165 per cent, in Varanasi by 85 per cent, and in Bhubaneswar by 50 per cent.

What is the New World Watch range about?

The range had a two-fold objective. One was showcasing a new collection for the Indian market. The second and more important part was it would help reposition the brand Titan.

Titan has been around for 16 years and everyone identifies it as India's leading brand. What is little known is that Titan is that it is available in 30 other countries and it is among the top five brands in many of these countries.

In Malaysia, the United Arab Emirates and Saudi Arabia we are among the top five.

In Oman, we are the number one as a brand. What has often been reported is the mistakes and losses we have incurred in Europe.

What is never talked about is the success we have had in the Asia-Pacific and Middle East. We also wanted an opportunity to introduce our international collections to the Indian consumer. So in all, it is not just a new product collection but also repositions the company and the brand.

How has the response to it been?

Absolutely brilliant! All the success and records we have created in October can be attributed to the New World Watch campaign.

It was a very refreshing campaign; not the typical pedantic ones that watch companies try to do. We showcased the product through a very interesting teaser campaign that ran for two weeks.

When the actual campaign was unveiled, it was very refreshing for people to see. We dressed the stores in the same elements that we did the campaign.

Was it your most expensive campaign?

Yes. It was.

How much did you spend on it?

We spent almost Rs 10 crore (Rs 100 million) over the last eight weeks.

How have the sales been for this range?

The sales have been outstanding. As of now, the range is contributing to almost 30 per cent of Titan's sales. This new collection is predominantly larger city-centric and to have 30 per cent of the total sales in such a short period of time is truly outstanding.

Also, because of the buzz around the New World watch and because of the campaign, dealers showcased it right up front. So even if the sales weren't there, in terms of visibility it was getting 100 per cent visibility when you walked into the store.

You also tied up with Rohit Bal for a new range of products? Are you increasingly targeting the upper segment of the watch market?

If you look at the watch market, at less than Rs 1,000 retail price, between 75 to 80 per cent of the volume sales happen. Of this, at less than Rs 500, almost 75 per cent of the sales happen. That is where watch is a commodity business.

At price points greater than Rs 1,000, where 20 per cent of the sales happen, that is where most of the branded action happens.

Titan is largely between Rs 1,000 and Rs 3,000, while the international brands coming in are positioned in a segment higher than that.

If you look at what is on offer, then the difference in the product is very subtle, but the difference in price is extremely visible. International brands are extremely high in terms of pricing, but there is not much difference in terms of products.

Which is why we also felt that we needed to move up in terms of the value chain.

The World Watch collection starts at Rs 1,500 but goes up to Rs 6,000, while the Rohit Bal Collection is tentatively priced upwards of Rs 50,000.

This is a price point we haven't tested on a large-scale earlier. But we are confident that given our success in holding out and improving though international brands have come in, we can now start making a more forceful play as far as the more expensive price point is concerned.

What kind of changes did Titan bring about in aspect of the business this year?

The first thing we did was create two business units for the watch business alone, Titan and Sonata. As a result, the focus we felt was sometimes lacking is not there anymore.

If you have two brands you tend to optimise between the two. Now there is no question of optimise, only maximise. So there is a sense of focus and alignment now.

The face of the Titan brand is the World of Titan showroom and the large outlets in cities including the shops in department stores have got a complete revamp. They have got a new look. By the end of the year, almost 60 showrooms in top eight cities will be covered with a new look.

We created a significant effort within the department stores to stand out among the numerous brands present there. The fourth thing is that we have cleaned up a lot of the backend processes to make us far more efficient.

Much of this has happened in the last nine months and we are seeing the impact of that in terms of increased sales now.

Now there is much greater measurability, accountability and focus within the organization. There is a lot more confidence and courage as we are just doing titan instead of both titan and Sonata and a much better articulation of where the brand is going.

Where do you see Titan's growth coming from over the next one or two years?

Much of it will be in the larger cities. It will be happening from consumers who already own a watch but haven't bought a second or a third watch.

The role of Titan in promoting multiple ownership of watches will be quite strong and Titan will be driving it.

What will induce these consumers to buy a second watch?

The fact that you have a very good looking product that plants the desire for a second watch. If you make products appealing to the consumer so that it becomes not just a time keeping device but a lifestyle accessory, then I think it will make a big change.

I take the example of the men's footwear industry. Ten years ago, most of us would be happy with two pairs, one black and one brown. Then colours changed and you had casual shoes, formal shoes, sports shoes, evening shoes.

Today, the number of options in the footwear for men are quite amazing compared to ten years ago. It is not that men started walking more or they have more feet now. It is just that there are more options available and now it has become a lifestyle accessory.

I think watches for long have not been seen as something that projects the lifestyle of the consumer. When they get to doing that there will be more than one watch for an individual. That's where lot of Titan's work will be -- driving multiple usage.

Other international brands will be able to do this too but where we have an advantage is the fact that we are far more competitively priced. So the intimidating factor of the price that will stop a person from buying a second or third watch is something that will not be there with a Titan.

What are the challenges that you still face and have to tackle over the next year?

We have a got strong design department that drives the design ethos within the department. While we are proud of it, we have to get the design department working faster from concept to product.

Currently, the time from thinking up of a concept to introducing it as a product can range from seven months to a year. What we are looking for is to get to a range of three to six months from concept to product.

That helps us to be able to introduce products in line with fashion trends. A lot of our operational processes require greater efficiencies.

There are several diagnostic tools, IT solutions, communications solutions that will help us improve the efficiency of our backend process. That needs to be taken up.

In terms of manufacturing, we will be looking at how to drive cost efficiencies much greater, especially as we reach capacity levels. Now we are looking at increasing capacity by improving the efficiency.

You are not planning a new plant?

We are expanding some assembly capacities in our plant in Uttar Pradesh and will add a new assembly plant in Himachal Pradesh.

As for manufacturing capacity, we would like to drive any increase out of productivity.

What about the international side of your business? You are already present in 30 countries. Are you looking at expanding into newer markets?

The big markets we are looking at is the Philippines and Indonesia. We launched in the Philippines three weeks ago and in Indonesia we will launch next year.

These are large markets. Between them they have a population of 300 million, which is a little more than all of Europe.

There are several South American countries -- like Brazil, Argentina, Chile -- which we haven't been into and we would like to start checking them out.

There are also countries in Africa that we would like to expand to. The countries that we look at expanding into have to be populous and have an average watch market suited to our requirements.

We would like to be in the mid-end of the market. So the market has to have a profile similar to that of India. We will invest about a quarter of a million dollars in brand-building and marketing in terms of a one-time spend to launch well.

By the end of the year, we expect the Philippines and Indonesia to contribute about 10 per cent to our exports business.

So, which watch are you currently wearing?

It is a from the New World Watch Collection, a chronograph watch with a blue enamel dial and matching blue crocodile leather strap.

How many watches do you own? Are they all Titan?