Marketing Case Study

Swatch’s MicroenvironmentEnvironment Analysis

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.

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

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

Publics

Environment Analysis Swatch’s Macroenvironment

Political

Economic

Social Technological

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

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

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

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)

Company Analysis- Company

Background & Mission

- Target Market- Targeting Strategy- Positioning

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.

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

Positioning Competitive position:

market leader Swatch are fighting to

increase market share

Competitive advantage:

Offering relatively low price and high quality products

Company AnalysisCurrent 4 P: Product, Price, Place and Promotion

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

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.

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.

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.

Consumer AnalysisMarket Segments

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 )

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)

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)

Athlete (G4) Sponsored and provided sports collection for

athletes Special promotion with athletes

Consumer AnalysisBuying behavior and characteristics

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

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)

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)

Psychological Factors

Motivation: Actual uses vs. Promotion of company

Perception: Learning, Belief and Attitudes

Competitor Analysis• Identifying Competitor- Industry

Perspective• Competitor’s Mission• Strength and Weakness of

Competitor-Casio• Competitor’s 4P• Gallery of Competitor’s product

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

Casio- Major Competitor of

SwatchCasio’s Missions

Creating totally original product

Bring fun and convenience to daily life users

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 )

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

Gallery of Competitor- Casio

SWOT Analysis

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

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

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

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

Threat•Youth prefers digital watches•Primarily all rangers of swatch have dials•Counterfeit products•Intense competition in crowded market•New competitors •Current economic recession

Recommendation• Marketing Objective• Marketing Strategy• Marketing Mix: 4P• Marketing Calendar

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

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.

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

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

Q & A