Swatch Case Study

1659 words - 7 pages


By Rahul Garhwal

How did consumers make buying decisions prior to the introduction of the Swatch? What kinds of watches were popular among customers, and what was their brand positioning?
The market was dominated by Timex, Hattori-Seiki, Citizen and Swiss manufacturers before the introduction of Swatch. Each brand had their unique brand positioning in the market because of the different product attributes and value proposition offered and thus were popular among different category of customers.

Watches above 350$

Watches between 50$ - 350$

Watches below 50$

Market ...view middle of the document...

It introduced low cost watches to the market which was the major point of difference and lead to their massive popularity among different category of consumers. The reason for cheapness was use of low cost hard alloys and automated production. The design was strictly functional. They were not repairable and thus pitched as disposables. They were

available at low priced outlets such as drug stores, discount houses and were positioned in the market by a series of extensive television advertising campaigns. The target market was primarily US. By 1970 Timex was selling more watches with respect to units than any other manufacturer in the world. HATTORI – SEIKO and CITIZEN In 1970, the introduction of quartz technology changed the nature of competition technology and led to the emergence of two Japanese companies namely Hattori-Seiko and Citizen. These watches were cheap but gold/silver plating gave them an expensive appearance which attracted consumers of all price ranges. Other major POD was high accuracy of sophisticated electronic circuit. The displays were both digital and analog. The watch also displayed date and day of week. The target market was global. The company initially dominated the Japanese and other Asian markets and then pushed its products to Europe and North American markets. By 1979, Hattori-Seiko had become the world`s largest company in terms of revenues and by 1986, Citizen had become the overall global leader in both movement and finished watch production volumes.





Hattori Seiko Timex Timex

Hattori Seiko




Why was Swatch so successful, and how did it build brand equity? What were its points of difference and parity, and how were they communicated using the marketing mix?

Swatch was successful because of the radical marketing strategy implemented by the new CEO Nicolas Hayek. The plan was to have one profitable, growing, global brand in every segment – including the low end. The management took the following steps for the implementation of the plan:  Compliance of the company to the VERTICAL INTEGRATION (The Company assembled all the watches it sold and built most of the components of the watched it assembled). Brought production costs down to Asian Levels by redesigning production techniques and by using cheap plastic as raw material DECENTRALIZED MARKETING (Each of the SMH`s 9 brands had total authority over product designs and marketing) PORTFOLIO MANAGEMENT (SMH`s goal was to have a competitive brand in every price segment in the market) UNIQUE AND STRONG MESSAGE – Selling not a commodity but an emotional product (PERSONAL CULTURE)

  

The company built its brand equity by focussing on the customer based brand equity model.

The company focussed on creating the brand awareness and the brand image while launching Swatch into the market. Swatch nullifies competing brands in POPs like affordability,...

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