The Hindu Business Line : Titan gets on the FasTrack

Waking up to the fact that youth might find FasTrack pricey, Titan has revamped the brand to make it attractive to a larger base of youngsters, a move that is expected to help the brand grow faster.

TITAN Industries, the country's nearly two decade-old watchmaker, is thinking younger. The Rs 1,100-crore company has firmly established FasTrack, for youth, as the third independent watch brand after Sonata and house brand Titan, in its portfolio that accounts for nearly 60 per cent of the watches sold in the country annually.

FasTrack dates back to the late '90s when it started off as a product range within the Titan umbrella. Positioned as `cool watches from Titan,' it came with a heavy fashion quotient and was undeniably the youth face of the country's largest selling watch brand. Nearly three years ago, the company started developing the FasTrack story further as it emerged as a distinct sub-brand supported by a commercial featuring ace Formula-1 driver Narain Karthikeyan in a prelude to its currently evolving independent brand status. In the meantime, the company extended FasTrack into the eye gear segment, with FasTrack sunglasses under its accessories business unit. Now, the company has decided to merge both FasTrack watches and the eye gear business under a joint marketing team as it sets out to target the youth market in a focused manner.

Last month, it unveiled new-look FasTrack watches that are more funky in fashion and style, and pepped up the re-launch through a co-branding exercise with the iconic youth brand MTV. As part of this association, which will bestow significant benefits on the FasTrack brand in terms of below-the-line promotions targeted at the universe of youth, the company also launched a FasTrack-MTV product range of 10 designs that are inspired by some of the ubiquitous elements in Indian life. Priced at Rs 500, it marks the brand's definite move to reach out to the youth in pricing and in its appeal.

It is clear that bulk of FasTrack's offerings will now fall in the Rs 500-1,000 range as against its earlier price bracket of Rs 1,100-2,500. Titan, as a brand, does not play in the below Rs 1,000 market, leaving the mass market and upcountry share to the company's second brand, Sonata.

The move to lower price points of the fashionable youth brand comes at a time when the company is waging a serious battle to improve its value share in the domestic watch market as the international brands make a dent in the premium segment priced above Rs 5,000. While Titan as a company accounts for 60 per cent of the organised market by volume, its share by value is just about 50 per cent in the wake of some erosion. Global names make an impact in the high-value segment of the overall organised watch industry pegged between Rs 1,200 crore and Rs 1,300 crore annually.

Industry estimates suggest that the premium end of the watch market is roughly Rs 350 crore in value and growing significantly faster than the larger market, which is still ticking at single digit growth rates. So, what merits FasTrack's independent brand avatar with funky positioning at much more affordable price points?

The company says it never really understood the contribution of the youth to watch buying in the country until last year when it conducted a study of the market, in about 1.5 lakh interviews including both urban and rural inputs. "We realised that youth aged between 11 and 20 years account for 42 per cent of the overall watch buying. That sort of shook us up. We knew that it was some proportion, but never thought their contribu<147,1,7>tion was so big," says Bijou Kurien, Chief Operating Officer, Titan Industries Ltd.

The company was quick to grasp that FasTrack was limited by price points usually associated with the mother brand. "We realised that we will constrain ourselves if we were to keep FasTrack operating only in the higher-than- Rs 1,000 marketplace. It will certainly put the brand beyond the capabilities of several youth looking at buying watches. It was also obvious to us that FasTrack cannot remain as part of Titan, and that we have to establish it as an independent brand," Kurien adds.

The FasTrack road to being an independent brand was also evolving on another front. Says Kurien, "We had already started using FasTrack in the eye gear market, in sunglasses, where the customer is again the youth. We then decided to combine the watch and sunglasses business of FasTrack into a standalone brand and let it have price points as determined by the dynamics of the youth segment rather than be guided by the imperatives of the Titan brand structure."

In overhauling the products, the company has searched for a balance between fashion, style and use of popular icons (like the use of John Abraham for eye gear and roping in MTV for watches). "Today, we look at FasTrack as a solid youth brand, starting at Rs 500 and going up to Rs 2,500, with a mix of products with most of it being fashion- and style-oriented, cases which are not very conventional-looking. It is sort of more funky," says Kurien.

"It is also a product which does not have to last like the way a Titan needs to last. Because people who buy it will typically wear it for a period of time before getting bored and moving on to the next one. If we want to facilitate that, we cannot have high prices creating barriers for the first purchase and certainly not for replacement purchase as well," he adds.

The company plans to leverage the association with MTV at many levels. Besides creating co-branded products, it will look at the way MTV approaches its market and partnering with several of the channel's below-the-line promotions. FasTrack, which earlier looked at the 20-25-year-olds as its core customers, is now chasing the 15-20-year-olds as they will form the core of the brand's watch business. "In the case of sunglasses, the age group tends to be slightly higher as youth go for eye gear at the time of purchasing the first two-wheeler. So the brand spans customers in the age bracket of 15-25 years," Kurien says.

The unified FasTrack brand stands to benefit from the synergies between marketing watches and sunglasses to youth. "Both are typically what we describe as fashion accessories. In terms of the target customer, they are very close to other in terms of reach, and thirdly, both the product categories cater to the same set of youth who cannot be reached out to through conventional media. They have niche channels, spend a lot of time hanging out, and are very Net-savvy," he explains. Analysts tracking the watch sector seem to be upbeat on Titan's fresh moves, even though they recall that FasTrack has not lived up to its promise in the past. They remark that it was only a Rs 37-crore brand (watches and sunglasses combined) last year when it was expected to turn up Rs 100 crore in watches alone. However, by rejigging pricing and striking an alliance with MTV, FasTrack stands to benefit from a wider customer base and go beyond being metro-centric, they add.

The company expects the unified brand to throw up Rs 75 crore (watch business doubling to Rs 50 crore) in revenues in fiscal 2005-06. It now projects between Rs 150 crore and Rs 175 crore as brand turnover in three years, with watches alone contributing Rs 100 crore. But will it deliver this time? Kurien says extensive market research in the youth market has helped put FasTrack in the right perspective. "In hindsight we realise that the biggest problem was the price point, having defined Rs 1,100 as the entry price when the significant youth buying was in the range of Rs 250-1,000," he adds. Further, industry information suggests that about 10 per cent of the watch buying universe owns multiple watches compared to only three per cent five years ago, and this is being touted as a trend working in favour of brands like FasTrack. Industry observers say Titan now has a better understanding of the youth market than before, and that is what perhaps prompted FasTrack's new `How Many You Have?' commercial on air currently. "It was well researched even though some of us were uncomfortable in putting it out. But the target segment has responded well. They have empathised with it because it is tongue-in-cheek and captures a certain interlude in life without appearing to be a very serious brand building effort," Kurien says.

The developments in FasTrack come at a time when the company has emerged from an indifferent phase of growth, and reporting robust figures in recent quarters. And as the browsers take notice, the stock is seemingly attracting valuation for its future growth. With the new look FasTrack, Titan is getting younger, and hopefully, wiser.

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