Economy
Culture
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
What was the answer? • A low-cost, high-quality plastic watch
– low cost means high volume
– high volume permits economical automation
– automation reduces labor costs (<10% of total costs)
– with low labor costs Swiss can produce the entire
product themselves (vertical integration)
– do not have to outsource for parts, they can maintain
strategic independence
Economy
Culture
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
Product Positioning
!"#$%
Cost
&'"#(
Quality
j brands
Importance
Weight
n Attributes
(a)
i (b)
Swatch
Tells Time
10
Inexpensive
6
(c)
i=n
S
Wi =1
i = 1
Attitude (j) =
i = n
S
Wi Xij
i=1
Timex
10
9
Economy
Culture
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
Economy
Culture
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
The SMH ("Swatch group") product line Breguet
Blancpain
Glashutte
Original
Jaquet Droz
Leon Hatot
Omega
Rado
Longines
Union
Balmain
cK
Tissot
Hamilton
Certina
Endura
Mido
Flik Flak
Swatch
CY3
Les Boutiques
The Swatch group product line
Economy
Culture
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
Economy
Culture
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
Brand identity and brand image • What was the brand image Swatch intends to portray?
–
–
–
–
• What image do you have of Swatch watches?
–
–
–
–
• Brand extensions?
–
–
Psychographic segmentation of U.S. consumers • 6-10 Consider it "cool", because big kids have it (42% awareness!)
• 11 –15 ("teeny boppers") provides sense of identity
• 11 –15 ("young rockers") high awareness, but represents t.b. lifestyle
• 11- 15 ("students") Swatch too wild for them, but they might buy it to fit in
• 16 –22 ("rockers") like the price, but dislike the male model geeks
• 16 –22 ("preppies") prefer a dressier watch
• 16- 22 ("trendies") hate it; "fast food of time pieces" (73% wear no watch)
• 22 –32 ("transitionaries") like its durability, disposability, price
• 22 –43 ("older casuals") watches are used to tell time (4% awareness!)
• 33- 43 ("weekend hippies") teen image (high awareness, but 43% have
never seen a Swatch in real life
Economy
Culture
Product
Price
Consumer
Needs
Promotion
Law
Place
Competition
Technology
What was Swatch's innovation
for stimulating demand for watches?
Market Segments
• Swatch was part of a multi-segment strategy 8
42
> $400 Omega
Longines
> $75
450
millions
sold per year
Swatch
price
j brands
Importance
Weight
n Attributes
i
Ultra
Brite
Gleem Crest
(0.6)
Decay Prevention
2
7
7
(0.3)
Taste
6
6
4
(0.1)
Whitening Power
7
5
2
i=n
S
Wi =1
i = 1
Attitude (j) =
i = n
S
Wi Xij
i=1