"Process exit value was 1" is well know error, but they are many solution which work/Or not.
Be sure you have Titanium studio AND Titanium SDK up to date. if it's ok , using the version 7 of Java is OK and correct.
did you change in your tiapp.xml :
<android xmlns:android="http://schemas.android.com/apk/res/android"/>
by
<android xmlns:android="http://schemas.android.com/apk/res/android">
<tool-api-level>15</tool-api-level>
</android>
i'm using 15 because i run on android 4.0.3 .Change it depends the version u want to use.
Finally, if you still have this message, try to go in
windows->preferences->studio->plateform->Android click on Manage AVDs. be sure you have a correct AVD configure. also check with rightclick on your project , properties, run/debug settings and be sure a correct emulator is in.
if the click isn't effective, you may have forgot a step in the instalation : http://docs.appcelerator.com/titanium/latest/#!/guide/Installing_the_Android_SDK