The Hindu Business Line : Titan's Sonata plans outsourcing gambit

Sonata, the mass watch brand from Titan Industries, is looking to outsource manufacturing and assembling activities partially, may be next year, if economics and quality issues work in its favour.

For now, it plans to ramp up sourcing of components from indigenous suppliers and manufacturers from Hong Kong (currently, the company outsources a small part of its component requirements).

Sonata has a manufacturing facility in Hosur (near Bangalore) and assembly capacities in Hosur, Ooty, Dehra Dun and Himachal Pradesh. Last year, it manufactured 4.3 million watches and looks to increase that to 5 millions this fiscal year, said Mr C. Srinivasan, Vice-President and SBU Head, Sonata.

Steel `n' style

As part of its marketing strategy, the company plans to project itself as a more vibrant brand in the mass brands segment, with a focus on urban markets. Of special interest is the steel watches segment, which Mr Srinivasan believes is a "growing category."

The volume of the watch market is estimated at 36 million watches, of which the urban market accounts for 19 million units. Steel watches comprise about 36 per cent of the urban watch market. "But primarily, the steel watches are all high priced. There are no brands in the Rs 250-1,000 price range offering steel watches that are contemporary, sporty and appealing to the youth, who constitute 40 per cent of watch users. We are the first mass brand that is targeting the youth (primarily men) for steel watches in a big way," said Mr Srinivasan.

Towards this, Sonata has launched its `Solid Steel' collection in 24 designs. The company, which has a minuscule presence in the mass steel watches category (6-7 per cent), looks to double its share with the new steel range, priced Rs 645-795.

Ad campaign

To promote the collection, it has come out with a Rs 3-crore advertising campaign developed by Lowe, Bangalore.

The TV, print and outdoor campaign features cricketer M.S. Dhoni, also Sonata's brand ambassador. The campaign, running through the festival season, revolves around the concept of "solid style for people with hearts of steel, guts and confidence."

Apart from focussing on `steel for the urban youth', Sonata is also sensing potential in the rural market. "Seventy per cent of India does not own a watch, especially in the rural areas. This may be a long haul but rural India might open up a huge market. The ideal price point to tap this segment would be Rs 200, although it may not be possible cost wise," said Mr Srinivasan.

The company is looking to finish the current fiscal with a turnover of Rs 225 crore (Rs 190 crore). It is also hoping to increase share in the mass category from 27 per cent to 40 per cent in 3-4 years.

Sonata contributes 35-40 per cent to Titan Industries' watch division sales.

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