Tanishq: Positioning to capture Indian Womens heart

--- GROUP 9
Problem Statement:
Tanishq, a well-established jewellery brand of TATA group faces a dilemma whether
to roll out its subsidiary brand Goldplus stores in additional nine towns in addition to
the existing Erode store as full-fledged rollout of Goldplus means cannibalizing
Tanishq sales as Tanishq sells jewellery at higher markup price when compared to
GoldPlus and GoldPlus also allows price negotiations and Tanishq doesnt.

SWOT Analysis:

External Internal

Tanishq:
Helpful
Strengths:
Modern styling
Brand value
Aggressive marketing
Opportunities:

Demand for gold is ever rising in

India
Gold purchasing rituals

Harmful
Weakness:

Not for me attitude among

Indians regarding Tanishq
High price compared to local
Threat:

GoldPlus
Local vendors to whom
customers are loyal

External Internal

GoldPlus:
Helpful
Strengths:
Low price
Open to price negotiations
Concentrating more on Indian
Opportunities:

Semi-urban/rural market
Increasing number of outlets

Harmful
Weakness:

Limited number of outlets

Threat:

Tanishq
Government regulations
New entrants
Page 1 of 2

Suggestion:
Tanishq should be launched instead of Goldplus in semi-urban/rural markets.
Tanishq is already a well-established brand in urban markets and as the
consumers in semi-urban /rural markets are rapidly evolving and beginning to
resemble consumer in bigger cities, Tanishq has a good potential to penetrate
into rural markets.
Goldplus being a competitor of Tanishq launching of GoldPlus will result in
cannibalization of Tanishq brand.
Launching of GoldPlus may result in consumers losing trust, as same parent
company (TATA) will be selling similar products at different price range and
multiple brand approach may not work in case of jewellery products.
Profit margin of Tanishq (projected-15%) is greater than that of GoldPlus
(projected-11%)
Opening of multiple stores of GoldPlus will make GoldPlus a brand and pay
6% of excise duty against 2% excise duty now and it may lose its USP of low
price.
Projected ROCE (Exhibit 1 &2) of Tanishq is at 91% compared to that of GoldPlus at
66% for the period 2010-11 which means continuing operations in GoldPlus
may result in less earnings gradually.

Page 2 of 2