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MARKETING MANAGEMENT
Case Study
GROUP EIGHT Submitted By Ayank Jain 07FN-011 Neha Mittal 07FN-024 Pratik Luthra 07FN-033 Raunak Agarwal 07FN-038 Tarun Khurana 07FN-051 Vidyun Goel 07FN-057
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Introduction to Swatch
Swatch is a brand name for a line of wrist watches from the Swatch Group, a Swiss conglomerate with vertical control of the production of Swiss watches and related products. In 1982, Swatch was conceived and it was introduced on the market in Switzerland in March 1983.
Popularity
Swatches enjoyed their peak popularity in the United States and elsewhere during the mid-1980s.Also in the mid-1980's, mainstream Swatch fashion statements came about in the rising hip-hop scene with the introduction of various colored and interchangeable watch faces and wrist bands (made of vinyl). Colors included bright, day-glow and pastels. The key standard accessory was the so-called "face-guard", a braided rubber-band like "twistie" that would stretch over the watch face. A good number of "Swatchies" sported two face guards (one horizontal, one vertical). Whether or not these "guards" really protected the watch face from breaking and/or scratching remains to be addressed.
Diversified Offerings
Swatch itself has also diversified its offerings considerably, and the company now sells more than a dozen different types of watches, including metalbodied watches (the Irony series), diving watches (the Scuba series), thin and flat bodied watches (the Skin family) and even an Internet-connected watch that can download stock quotes, news headlines, weather reports, and other data (the Papparazzi series).They have now become fashionable objects, generating specialized models (the "Flik-Flak" for children, semiautomatic movements, and even diamond-decorated Swatches). The company also produces watches with seasonal themes.
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Current Competitive Strategies
Swatch pursues the focused strategy, integrated cost leadership and differentiated strategy. It is obvious that Swatch has the characteristic of niche idea according to the plastic material that can be considered as differentiation. Moreover, Swatch tries to be low cost manufacturer by constructing low cost structure that can be achieved through globally locating the production facilities. Applying all the strategies simultaneously is risky in confusing customers. The mission statement is to offer low cost, high quality and accurate watch with synthetic material. The low cost component is able to achieve when compared to the other Swiss companies. Although it is difficult to compete with the Asian region where the labor cost is much lower, Swatch is able to gain the advantage from being the first brand that comes along with the colorful plastic material, as Swatch is the first innovator in plastic watch business as a result of gaining the first mover advantage over the competitors. Moreover, Swatch tries to position itself as the fashionable timekeeping that owns different personalities and targets to niche markets where most of the companies might overlook these profitable markets.
Analysis
The Swatch Groups internal analysis and watch industrys external analysis shows that the companys key strengths lie in high technology, state of art technology, creativity, and innovation which make them respond all customers requirement effectively. The company has a strong presence both in the domestic market especially in Switzerland and international markets especially in United States and Japan. Moreover, the company is an expertise in microtechnology, micromechanics, and microelectronics as well as having the qualified employees to work in the company. In addition, the company first introduces Swatch Internet Time (SIT) in the worldwide watch market. The companys most remarkable weakness is the unclear image of the Swatch due to the inconsistent messages of each watch model. Moreover, SIT cannot be effectively universal unit of time because their time based on Central European Time. The companys major opportunity was that the company was a sponsor for the 1996 and the 2000 Summer
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Olympics which gave Swatch Group more opportunities to increase their brand awareness and sales. The worst threat is the diverse customer groups. Thus, the company is essential to put more efforts in implementing different strategies to cover all groups. Furthermore, there are the different costs of production in each country which results in price determination.
Critical Issues (CIs)
CI-1: Swatch fails to create a distinctive image in the customers mind.
This issue is the critical issue because it affects the overall image of Swatch Group due to the various messages of each Swatch model and their positioning strategy. The major reason of this problem is the different stores that sell the Swatchs products. Moreover, Swatch comes up with many watch models that are more than the watch market can bear especially in United States. Moreover, Swatch Group has the different messages for each watch model. This means that Swatch Group does not have the consistent messages to communicate with their customers and the messages also do not illustrate the main characteristics of Swatchs watch model.
CI-2: Swatch Internet Time is difficult to use because it doesnt emphasize on time zone.
Swatch offers free Internet time clock software for PCs on its website, therefore anyone around the world can download it and install on their computers. However, Swatch doesnt give any instructions about how to use SIT and the users still have to do the calculation for Swatch Internet time as they are in the different time zones. The users of SIT may not understand how to apply the Internet time with their different time zones; therefore, they may perceive this idea as a useless technology for them.
DISCUSSION QUESTIONS
B. How is Swatch managing its brand image?
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A. Is Swatch Internet Time (SIT) a good idea for Swatch?
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