Business Today Net Special

Interview: Joe Santana, CEO, Timex

Once considered the best way to dress the wrist, Timex watches have lost some of their sheen in the global market. In India, the company is in the process of turning around its fortunes after the break-up of its relationship with Titan. Santana, the company's president, CEO and owner, spoke to
BT's Vinod Mahanta on the road ahead for the brand.

Q. Timex is a brand that is doing well in the US? How is the Timex brand doing worldwide?

A. We are doing well in most international markets, particularly the Far East. In India, we are enjoying partial success. In Europe, the company has performed well in the first two quarters. In the US, the economic slowdown is affecting us to some extent, although we expect things to improve by the end of the year.

What in your opinion is the core value of the Timex brand that has contributed to the success of Timex in the America?

It is difficult to pinpoint exactly what makes a brand successful. I think we are an honest and an admirable brand. In the watch market, we are what Coke is in the soft drinks market. Over the years we have nurtured an emotional connection with the consumers.

How severe are the competition that Timex faces from the Swiss and Japanese watches in North America?

The Swiss is no competition for us in North America. We don't face any threat from them. The Japanese also have never given us any real competition in North America. I think our actual competition comes from the fashion brands in the low-end market, such as Gucci, YSL, and Esprit.

What about the competition from the Japanese in the Middle East?

In the Middle East, the Japanese play a dominant role in the watch market. In fact, our market is weak in the Middle East. If you look at the world market, you have the Swiss dominating in Europe and the Japanese in the Far East, whereas Timex is a powerful brand in North America. We have a strong presence in Mexico. Down south, we have a very strong presence in Brazil.

How do you rate the Indian subsidiary's performance till now?

Before Kapil Kapoor (CEO, Timex India) joined the company, the performance of the subsidiary was way below the expected standard. But, under Kapil's leadership, the performance of the company seems to be improving everyday. We are happy with the performance of our Indian subsidiary.

Though Timex started in India on the right note. However, somewhere down the line, Timex deviated from course. Where do you think Timex went wrong?

In India, we were positioned as a low-end brand and not as a global brand which we are. That was the wrong beginning for us. Recently, we have repositioned Timex as a technology brand, which offers style, fashion, and is still an affordable watch. This, in my opinion, is what we should have done at the outset.

The watch industry has been changing very fast in the last decade? What according to you has been the most significant change?

The change that you are referring to has been happening for over a decade. The quartz movement was, obviously, a major change in the watch industry. I think the coming of digital watches is also a significant change. In fact, it was a milestone. For Timex, the Indiglo has been our most significant and technologically enhanced product. And we are looking forward to the next gate, which I believe is around the corner.

What is the technology of the future as far as watches are concerned?

I think that the advancement in the field of microelectronics and the miniaturisation of electronics has made it possible for us to launch the internet-based watch six weeks back. This is a wrist instrument that is fashionable, relatively small, and can also send information and help in communication. You can get e-mail, short messages, and access the MSN through this watch. We believe that the market for wireless applications (monitoring, communication, and transmission) will grow. The traditional watch market will probably decline in the next 10 or 20 years.

What will be Timex's thrust area in the next 10 years?

Both technology and style. You can't sell technology that is only functional, as people will not wear bricks on their wrist. I think we have learnt our lesson in I-control where we initially made some mistakes.

When do you think the Indian arm will break even?

We are a performance-based company. So we expect Kapil to deliver profits, increase marketshare, and eventually become the number one company in India. I think we will break even in the next two years.

With respect to the global scenario, where do you think India fits in? What are the company's plans for India?

Our focus is firstly the domestic market. We want to be a strong and a dominant brand in this segment. There is a lot of talent in India. At present, we are focussing on utilising all the capacity available from the point of business development. That's how it's going to be for the next two years. When you talk of manufacturing, it is very difficult to project long-term plans.

Despite being an international brand, sporting the latest technology, and having a large distribution network, why is it taking so much time to make a comeback in India?

When you come to a country and position yourself as a low-end product, you are doing damage to yourself. This kind of positioning can't take a product far. It is not possible for us to undo the damage overnight. We are trying to build up a demand and trying to make the consumers perceive Timex as an aspirational brand, which means they are ready to pay a premium for the brand.

What are the new markets you are looking at worldwide?

We are still working on Europe, we have built a strong presence in the UK and some other markets in Europe. Our presence is weak in Germany, but we are well-placed in a number of East-European countries. But we are taking few countries at one time. Our policy is to concentrate on developing a market and build a dominant position there.

How is Timex tackling the slowdown in the US economy? How do you cope with price war in the US?

As far as the slowdown is concerned, we follow a typical business approach. You watch your expenses and try to outsmart your competitors by coming out with marketing ideas that are closest to the heart of the consumer. During a slowdown, consumers tend to go back to brands and that is exactly what is happening right now. Obviously, there is a price war in the US. But we try to hold our own prices. As a company policy, we never cut the prices of our products because we feel it would lower the dignity and position of the brand.

How successful was Timex's move to use former presidents and stars like Arnold Schwarzenegger in advertisements?

It was very successful. It's a natural phenomenon. Presidents wear Timex watches, actors wear Timex watches, and businessmen wear Timex watches. In November, astronauts are going to wear Timex watches. We are undergoing the necessary certification in NASA. So in November, Timex Watches will be up in space.

Where do you see Timex watches in the future?

Maybe acquiring Titan in India. Talking about acquisitions, we acquired a small French brand last year, Opex, which we are planning to launch worldwide. We have had several contacts with other companies for acquisitions worldwide.

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