Business Strategy Ticktock Watches

Question: Discuss about the Business Strategy Ticktock Watches. Answer: How would you use differentiation strategy to increase the customer base? Differentiation strategy is a business level strategy that allows the product or the brand to differentiate its benefit and the value proposition for the competitors. Differentiation strategy is important to compete in the market because it provides a distinct place for the product in the customers mind (Vasconcellos e Sa, Olao and Pereira 2011). In case of Ticktock Industries, two types of differentiation strategies will be most suitable to increase the customer base. The first is the Tangible differentiation strategy and the second is the intangible differentiation strategy. Differentiation strategy for Ticktock watch Market differentiation strategy is associated with several aspect of the product that is important to create consumer value. Therefore to develop the differentiation strategy of the company it is very important to understand that what are the differentiation opportunities in the market and what is the perspective that influence the differentiation to develop the strategy. Differentiation opportunities Figure 1: Differentiation opportunities for Ticktock watch company in the global market (Source: created by author) Differentiation opportunities of Ticktock clock are categorized in two segments, one is the tangible opportunities, the other is the intangible opportunities, and both are important because customers will measure from both the aspect (Lii, Wu and Ding 2013). Tangible opportunities In earlier time, wristwatch was one of the basic needs of every individual to measure and understand the time because that time there was no other option that can measure time. After the introduction of mobile phone, need of wristwatch has changed from basic, need to esteem need. Therefore, to sustain in this market it is very important to change the direction of business with tangible changes in the product (Verganti 2013). The company should meet the appearance of the product with premium brand. The lighter watch is more preferable by the premium customer therefore, it is very important to reduce the weight to differentiate form others. Premium brands are always stands for durability therefore there is opportunity to increase the durability of the product by improving material and technology. Intangible opportunities To sell wristwatch to a premium customer intangible factors become the most influential substance because of the awareness. In recent time the consumer of the wristwatch has changed their taste and wearing it for style. Ticktock has to enhance their brand value in such a way so that they their customer feel respectable after wearing it. There is a huge opportunity lying with the brand to enhance the brand status to differentiate. If the company is able to reduce the cost of production then they will be able to differentiate by price also (Rosenbaum-Elliott, Percy and Pervan 2015). Differentiation perspective Figure 2: Differentiation perspective of Ticktock Industries for their wristwatch (Source: Chen and Huang 2015) In the segment of wristwatch, many companies are operating their business in the global market with similar kind of product however; each brand has uniqueness in their marketing strategy. Ticktock is the largest manufacturer of wristwatch in China and they have good global exposure of their brand (Singh and Khan 2012). The company has good brand reputation however the brand is mostly popular among the aged customer therefore Ticktock is unable to capture the large market of young population. To increase the market share Ticktock industries has to enhance the perception of their brand value by offering social status to the customer. Through the help of advertisement, perception will change among the customer, which will increase the demand. In such case, the company should change the perception of supply to keep the demand in the market (Hoffmann and Coste-Manire 2011). Proposed differentiation strategy Figure 3: Proposed differentiation strategy for Ticktock Industries (Source: Created by author) The proposed differentiation strategy of Ticktock watch is divided in four areas for the implementation that are discussed below. Differentiation by user experience The first step to differentiate the product is to enhance the user experience of the product. If the product is lighter with bigger dial then the preference of the customer will increase. Apart from that company has to make watch that is completely water resistance in any situation with heat resistant. This kind of feature will allow user to use it in any situation with any fear by enhancing the user experience (Rangasamy 2011). Differentiation by looks The brand is preferred by the aged person, which means it lack in style. Company has to increase the design making it more stylish to attract the young customer. The stylish design should include modernization with trendy looks to achieve the differentiation effect. Differentiation by price Differentiation through price is important for the brand that should maintain the class lower than the premium and higher than the average brand. This will influence the young customers, as they always want to enhance their status (Bashutkina 2015). Differentiation by quality Differentiating through quality is most important because it will create the long-term brand value for the company. Implementing good material and superior technology will help to differentiate the brand in the market (Anjum 2011). Technological superiority will provide the maximum benefit to the company to differentiate their brand as one of the premium quality with affordability for the young earning generation. Explain the segmentation of the watch market and how you would target different customers. The market segmentation strategy of the company is associated with the four subclasses because this product is not going to sell to every customer. The company is trying to enhance the looks, quality and user experience within affordable price therefore the segmentation of the Ticktock market should include Demographic, Psychographic, Behavioral and Geographical segmentation (Wu and Zhang 2012). Figure 4: Market segmentation of Ticktock wristwatch (Source: Wedel and Kamakura 2012) Demographic segmentation Demographic segmentation of Tictock Company is very important because they already have the preference of aged persons only. Therefore, Tickrock Company has to segment the market according to the age consisting between 15 to 25, 25 to 45, 45 to 55 and above. This type of segmentation will help the company to differentiate the design of the clock according to the age. The segmentation of 15 to 25 will consist most stylish design that attract youth. For 25 to 45 segment will have style with classic because this age group prefers the classical stylish design (Wolmarans 2012). The aged class will get the classical looks. Apart from that under the demographic segmentation, social class is also an important factor. Psychographic segmentation To enhance the brand status it is very important to enhance the brand image. Psychographic segmentation will help to attend the objective of this segmentation. Lifestyle and personality is the base of this segmentation. Persons preferring gadgets to enhance their lifestyle and personality comes under this class. Most of the young population and earning groups poses this mentality (Birindelli 2012). The premium customer with lot of wealth also prefers to enhance their lifestyle through branded gadgets. Therefore, psychographic segmentation is very important to enhance the brand value of the product. Current perception of the product and the current marketing activity will help to bring change within the customer. Therefore, it is important to segment those customers who are psychologically vulnerable (Brondoni 2014). This kind of group always tries new things and help to enhance the market share. Behavioral segmentation Behavioral segmentation is associated with the several benefit and habit of occasion within a particular culture. Most of the premium watches customer first prefers the features of the product that will provide benefit to their life. Looks is also one of that benefit. In many countries, people wear valuable wristwatches in several occasions. Therefore, the product has the both preference of benefit and occasion. Segmentation of benefit and segmentation of occasion is very different but both come under the behavioral segmentation (Buza, Luterbacher and Sennhauser 2012). Benefit is the influence for the technology lovers and persons who prefer to wear watches in occasion prefer the looks of the watch. Geographical segmentation Geographic segmentation is also important for the company because right product will sell to the right customer. Customers are located in different areas and their preference changes across the geographic location due to the cultural, social and economical aspect. Wristwatch is highly preferred by the population of the developed country because they use it as the gadget and the style statement (Jeannerat and Crevoisier 2014). Therefore, geographic segmentation will help to understand the market in a better way and place the product in the right area. Availability of the product is also an important aspect of the company because once the product is available across the globe customers will start to show the preference towards the brand. Target market segment strategy The target market of Ticktock is associated with the market needs, market trends and market growth. Due to the use of Smartphone need of wristwatch has eliminated from the basic need therefore wristwatch is selling in the segment of lifestyle need. Therefore, the target customers of the company are young age persons who want to enhance their social status through the help of different gadgets. The primary target market of the company is the young age because these markets remain untapped by them and most the wristwatch consumer belongs to the age of 20 to 45 years of age. The company will target the age group within 15 to 25 with the most stylish look that are different from the common brand (Min 2016). The stylish look will have uniqueness with limited edition. For 25 to 45 years of age prefer style with classic design therefore this age group is targeted with classical stylish design. The aged class will be targeted with the classical looks. The current trend of the market is getting the preference of the college students and young earning group. These segments use the wristwatch for their style statement. Therefore, market segment also suggesting to target this class of customer to get the proper business. Apart from that, market growth is also an indicator to suggest the target market for every product. It is better to target those markets, which are showing good growth in the recent past. Therefore the company has decided to target the market of USA, UK, UAE, Singapore, Japan, China, Korea, India and Australia because these market are showing increased customer preference for the watch segment (Kracheel, Bronzi and Kazemi 2014). Consumer preference in these markets is also changing from the average brand of wristwatch to premium brand wristwatch, which is good chance to target the market, as lot of scope is available in these markets with the price differentiation, look differentiation, feature differentiation and use r experience differentiation. How can you use product positioning in your search for gaining competitive advantage? Explain Product positioning is very important to understand the proper market of the brand and the product. Ticktock is operating their business in the wristwatch segment where customer preference always remains with the dignity of the brand in the society. After the preference of the dignity, the preference of affordability comes after, that associate the economy class of people. Every class of people tries to buy those products that are premium as compared to his current position (Rawassizadeh, Price and Petre 2015). Therefore, Ticktock has lot of opportunity to place their brand in such a way that is nearer to the position of premium class but with the price hike just above affordability. Such positioning of the brand will help to associate more number of customers with their brand. Middle class has the highest user of wristwatch throughout the globe therefore, it is important to position the band in such way so that they get the maximum attraction in terms of price and brand value. Figure 5: Product positioning of Ticktock Industries in the global market (Source: Created by author) Ticktock has planned to position their brand in such a way that will remain low inn price as shown in the graph however; the brand value of the product will remain in the higher side. Most importantly, the brand of the product is associated with the higher brand value. This type of product helps to grab the middle class and upper class market very quickly. The reason behind this positioning is the affordability of the brand that will attract more number of customers. The better material and technology will promise the best value for money for the customer and give a feel of premium quality product (Tajeddini 2013). This type of brand positioning enhances the competitiveness of the brand that also helps to increase the competitive advantage in the market. Brand positioning enhancing the competitive advantage Enhanced user experience Ticktock has to establish their brand in such a way that provide enhanced user experience that will differentiate them to increase the competitive advantage in the market. If Ticktock is able to provide the lighter weight material that will reduce the weight them customer will become happier. The advantage of water and heat resistant is also need to enhance that provides flexibility to the customer to use it in any situation without any hesitation (Anwar 2012). Durable If Ticktock is able to use best material for the product then it can obviously position as one of the most durable brand in the wristwatch segment. Durability is very important to the premium as well as to the middle class customer because they measure the quality of the product through this. If the product is durable then it can compete in the segment of premium wristwatch by enhancing the competitive advantage as compared to the customer. Superior technology Technology is the most important part to gain the competitive advantage in the market. The company belongs to one such country that is highly superior inn technology. Therefore, Ticktock has to introduce some latest technology in the wristwatch segment that will enhance the user experience. Along with time if the watch is able to provide the current temperature then it will add extra benefit to the consumer. Therefore, to position the brand in the superior position is very important to enhance the competitive advantage. Technology implementation can also enhance the automatic update of time and in different time zone, which will be a added benefit to the traveler class. These kinds of features will always increase the competitive advantage, as they are not offering the same service to the customer (Kanagal 2014). Affordable price The brand positioning is highly associated with the price because market is highly sensitive to this factor.ref Most of the time good brands remain out of reach from the middle class customer. Therefore, if Ticktock is able to produce such brand that is superior in quality but affordable in price then it will get the maximum advantage in the market. To gain the competitive advantage pricing will be done that is lower than the premium brand because market trend is also changing. Customers are preferring the affordable price with same features like premium brand (Pradhan 2012). Therefore, pricing strategy of the company will also help to enhance the competitive advantage in the market. Better features Better features is the objective of every brand and they should improve it in a continuous basis to increase the competitive advantage in the market. Better features mean that better quality that provides better benefit to the customer. Technological improvement should make a continuous effort to enhance the product quality that adds values to the user experience. If the user are getting better product each time then they will also upgrade their self. This type of strategy will help to increase the market share in short term and business outcome will increase (Lii, Wu and Ding 2013). The loyalty of the customer also increases in this strategy, which also enhances the competitive advantage in the market. Stylish look The previous design of the brand is associated with the classical looks only that have built the customer base among the aged population. The company has established their brand as one of the durable and well-featured brand in the wristwatch segment. The only thing is the design that keeps away the young customer. Therefore, to enhance the competitive advantage in the market and to attract the young population it is very important to change the design of the product (Bashutkina 2015). Good-looking trendy and stylish design will help to attract the young customer that will help to enhance the market share by many times, because it will add a different set of customer suddenly. Gaining competitive advantage is very important for every brand therefore above strategy of Ticktok company will also help the organization to increase the competitive advantage because it will offer affordability with good features and design. The current market trend is also suggesting that consumer preference is towards those brands that are offering low price with every features of the premium brand. 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