swatch case study
TRANSCRIPT
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Marketing Case Study
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Swatch’s MicroenvironmentEnvironment Analysis
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The Company: Swatch Group
Chairman and CEO of Swatch: Nicholas G. Hayek (Passed away). Revived Swiss watch industry in the 1980s when it was under threat from mass-production of time piece.
Swatch Group have various watch product lines, such as Omega for Luxury market, Tissot for Medium-end brand, and Swatch for Low-end market.
In countries where the Swatch Group has no actual distribution subsidiary, it is represented by retail dealers. In Hong Kong, is The Swatch Group (Hong Kong) Limited.
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Customers
Swatch group target at different range of customer with different brands.
Swatch watch target at basic range customer.
Example of Prestige and Luxury Range: Breguet, Omega, Tiffany & Co.; High Range: Longines, Rado; Middle Range: Tissot, CK watch & jewelry
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Competitors Swatch group’s
competitors are mainly Rolex GroupRichemont Group, LVMH Group, Citizen Group and Seiko Group.
For Swatch watch, it’s main competitor is Casio
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Publics
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Environment Analysis Swatch’s Macroenvironment
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Political
Economic
Social Technological
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Political No foreign exchange control
policies (Law of HKSAR) No restrictions on repatriation of
capital and profits-- Capital Movement is free
Open market policy Government’s control – minimal Minimal capitalization
requirements Individual Visit Scheme
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Economic Membership of the World Trade
Organization, APEC and other international economic organizations.
Laissez faire Free economic system Financial services exports Fixed HK$ against US Dollar
(HK$7.8/US$1)-- sometimes depends ( floating exchange rate)
About three-quarters of the world's 100 largest banks have a presence here
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Social Advertisement can be done by
cantonese High Educational level Age structure
-- 0-14 years: 11.6% (male 431,728/female 394,898) -- 15-64 years: 74.8% (male 2,573,929/female 2,757,095)-- 65 years and over: 13.5% (male 452,278/female 512,580) (2011 est.)
The shift in labour demand towards workers with better knowledge and skills
Media influence Idol effect High buying power
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Technological Broadband connectivity High online population Telecommunications hub in the
region Technology collaboration and
exchange programmes between the Mainland and Hong Kong
Innovation and Technology Commission (ITC)
Technological Infrastructure Intellectual Property Protection Commercial satellite-earth station Information technology (IT)
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Company Analysis- Company
Background & Mission
- Target Market- Targeting Strategy- Positioning
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Company Background &
MissionCompany Background Swatch was a brand of
Swatch group Ltd. 5 production lines: Swatch
Originals, Swatch Irony, Swatch Skin, Swatch Beat, Swatch Bijoux
Launched in 1983 and it has now spread the market almost to the whole world.
Mission To offer low cost, high quality, and accurate watch with synthetic material.
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Target Market Major target customers: teenagers
and young adults (aged around 15-35) price range is relatively low so that they
can affort Swatch products are colourful and
plastic made, which are more attractive to youngers
Secondary target customers: collectors special editions for collection, prices are
much higher
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Positioning Competitive position:
market leader Swatch are fighting to
increase market share
Competitive advantage:
Offering relatively low price and high quality products
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Company AnalysisCurrent 4 P: Product, Price, Place and Promotion
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Product Its design mainly mixed with
dazzling and colourful style. It caters the needs of youngsters.
High frequent of launching new products, e.g.: special events such as Olympic games.
Limited number of design version to ensures the scarcity of the products which satisfy the needs from different customers. Collectors may love the rare products, which represent their tastes.
Swatch for Olympic games
Special edition: 777 box worldwide
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Price Price is generally lower;
Teenagers may afford to buy Swatch. Price range is around $300-700.
Some special limited version of the products trigger the customer’s buying desire, some of it may cost 10,000 above.
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Place Swatch products can be
found in department stores, watch shops and swatch’s retail store in shopping malls.
Watches placed in watch shops are mixed with other brands, making it difficult to highlight its characteristic, lower its competitiveness.
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Promotion Its products appear in
fashion magazines. It can attract the attention of teenagers.
Addition to fixed new products, Swatch has its series collection to encourage the customers to collect it.
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Consumer AnalysisMarket Segments
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Teens and young aged Teens and young adult aged 15 – 25 (G1)
Lower income/ middle income group
wide variety of unique designs and colors (e.g. Chrono Plastic series)
Innovative design mixed with new technology( E.g. Swatch Touch series )
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Working adult aged 25- 35 (G2)
Mature designs for professionals (e.g. full-blooded thundering collection)
Unique designs suit for variety working fields and personality (e.g. skin collection)
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Collectors (G3)
Limited editions during occasions (e.g. Olympics series in 2008)
Art collections and special editions collaborated with designers artists (e.g. Artists collection 2009)
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Athlete (G4) Sponsored and provided sports collection for
athletes Special promotion with athletes
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Consumer AnalysisBuying behavior and characteristics
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Culture Factors Culture: Pursuit of creative
design by renowned artists Culture: Accompany with
the trend of new technology (e.g. touch monitor)
Social classes: Lower or middle class, who cannot afford high priced brand name watches
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Social Factors
Groups and networks: buying watches due to aspirational groups and trend setters like idols
Social Roles and Status: To define character with watches (e.g. Using Limited Designer watch)
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Personal Factors
Age and life-cycle stages: Watches materials used for different ages’ tastes
Occupation: To meet occupation needs or sponsor from company
Economic situation: Cheaper choice for lower or average income workers
Lifestyle: Customers AIOs towards watches (e.g. appreciation towards design, functions, and comparison to watches) (especially G3)
Personality and self- concept: watches indicate personality Brand personality: Aspiration towards company (e.g. collector of
Swatches)
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Psychological Factors
Motivation: Actual uses vs. Promotion of company
Perception: Learning, Belief and Attitudes
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Competitor Analysis• Identifying Competitor- Industry
Perspective• Competitor’s Mission• Strength and Weakness of
Competitor-Casio• Competitor’s 4P• Gallery of Competitor’s product
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Identifying Competitors-
Industry PerspectiveProvide
Similar Product/ Service
Same Customer
Similar Prices
- YesCasio and Swatch both provide watch.
- YesTarget to youngsters.
- YesCheaper price compared to Rolex watches, more affordable by youngsters.
Swatch VS Casio
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Casio- Major Competitor of
SwatchCasio’s Missions
Creating totally original product
Bring fun and convenience to daily life users
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Strength and Weakness of Casio
Strength Weakness-Sub brands, such as G-shock, baby G and Pathfinders are targeted for different groups and marketed accordingly.
-Good Brand image for technology advance and sponsor for sports event -Value for money
-Innovation: the first to design LCD watch with full-auto calendar
-Advertising: TV ads, newspaper/magazines ads are common
-Smaller scale than Swatch
-Recent economic downturn reduced the company sales
-Some series are designed with advanced function that are too heavy, which is not user-friendly (e.g. ProTrek, DataBank )
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Product Developed watch with GPS
service, act as a calculator, serve as a data storage device, and even control your TV
Place Online sales services-
ShopCasio Major electronic retail shop Department store Retailing giants Macy's,
Sears, and Best Buy
Price Reasonably priced
consumers for value Limited edition run slightly
high G shocks are targeted for
youngsters to standout from their peers
Promotion G Shocks series are
promoted in fashion magazines, outdoor magazines
introduce their new products to the market in a fun and cool way(use the rap music to promote products)
Casio’s 4P
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Gallery of Competitor- Casio
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SWOT Analysis
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Strength
ProductHigh- quality, accuracy and durability Wide range of products with different designs across all price points with youthful and innovative lookDistinct identity with its plastic body and vibrant colorsHigh quality services are provided
CompanyStrong brand and market leaderSwatch Club Membership Strengthen customer LoyaltyPopular around the worldGood reputation and brand imageRepositioning into in the fashion market
Weakness
Imitations and replicas.Plastic watchstrap are easily wear and tearHigher prices compared to other competitorsFancy design does not suit everyoneLack of access to distribution channelsLess and Ineffective promotion and advertisement Advertisement are mainly on trend magazine which can attract youngster only
Opportunitye-commerce gradually expanding market for expensive productsAbsents of a monopoly in the expensive watch categoryemerging markets and expansion abroad Further development that diversifying in different product categories in young brand industry
ThreatYouth prefers digital watchesPrimarily all rangers of swatch have dialsCounterfeit productsIntense competition in crowded marketNew competitors Current economic recession
SWOT Analysis
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StrengthProduct• High- quality, accuracy and durability • Wide range of products with different designs across
all price points with youthful and innovative look• Distinct identity with its plastic body and vibrant
colors• High quality services are provided
Company• Strong brand and market leader• Swatch Club Membership Strengthen customer
Loyalty• Popular around the world• Good reputation and brand image• Repositioning into in the fashion market
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Weakness•Imitations and replicas.•Plastic watchstrap are easily wear and tear•Higher prices compared to other competitors•Fancy design does not suit everyone•Lack of access to distribution channels•Less and Ineffective promotion and advertisement •Advertisement are mainly on trend magazine which can attract youngster only
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Opportunity•e-commerce •gradually expanding market for expensive products•Absents of a monopoly in the expensive watch category
•emerging markets and expansion abroad •Further development that diversifying in different product categories in young brand industry
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Threat•Youth prefers digital watches•Primarily all rangers of swatch have dials•Counterfeit products•Intense competition in crowded market•New competitors •Current economic recession
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Recommendation• Marketing Objective• Marketing Strategy• Marketing Mix: 4P• Marketing Calendar
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Marketing Objective
Increase the sales volume in Hong Kong market by $500,000 before Jun 2013.
Specific Measurable
Achievable
Realistic Timed
YesIncrease the sales volume
YesIncreased by $500,000
Unknown Unknown YesBefore June 2013
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Marketing StrategySegmentation
Keep. It is because Swatch is already familiar with these target segments market needs and wants. It will put more focus on “ Hong Kong citizens’ personalities", and try to promote product line that is recall citizens’ resonance.
TargetingTarget will be slightly change. Previously the major segment the company attract the segment of “juvenile aged 15-30”, so the target segment will be more diversified to other ages, like middle aged or even elderly.
PositioningKeep. Swatch is already a market leader. Its watch is positioned as fashionable. It must focus on keeping market share and competitiveness. It can expand the total demand for Swatch.
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Product• Larger wording, sound
technology watch for elderly
• More wearable design• Idol- designed product as
gimmick• DIY Product
Price• Value for price• Higher price for Idol-
designed watch• Lower price for elderly
watch
Promotion• Idol advertise at their
designed watch• Frequent advertisement
other than magazines• Special event promotion:
Chinese New year, Valentine’s day
• Swatch watch exhibition• Hold Inter-University
Swatch Design Competition
Place• Provide DIY
watch in Hong Kong
• Online shopping and booking
4P
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Market CalendarJan Feb Mar Apr May June
Idol Designed watch
Search idol for design
TV Ads Launch
Elderly Watch Design LaunchOccasion Promotion
Chinese New Year and Valentine’s day
University Competition
Swatch Design Competition
Appreciation of Competition
Launch
DIY Campaign LaunchOnline Shopping
Available in Website
Exhibition Preparation of Exhibition
Exhibition
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Q & A