Swatch case

the birth of TEAM 8 25005 Amit Seth 25006 Anandh Krishnan CK 25015 Chellaram 25021 Sachin 25027 Karthik Prasad 25030 Mithun Dutta 25037 Palaniappan 25038 Prabhu Raj 25056 Surenderan E

Swiss Watch Industry background:
Watch making – Skills of a master jewelry maker & micromechanical engineer.
Swiss dominated the watch industry because of their centuries-long history of jewelry making expertise.
Emergence of Low-cost Competition
U.S. Time – introduced line of disposable watches(TIMEX).
Low Cost & Durable
By 1950’s 1 out of 3 watches in US is Timex. 1970 most sold watches in world.

The Introduction of Quartz Technology
Swiss Watch Industry in Free Fall
Societe Suisse de Microelectronique et d’Horlogerie (SMH)
ASUAG & SSIH
Hayek, the CEO of Zurich-based consulting firm, merged 2 companies - SMH.
Shift in strategy – decided not to retreat. Aimed at broad market presence and at least one profitable, growing, global brand in every segment.

SWATCH Origins
Swatch concept
Low end product initiative was a quartz watch “ Swatch ” (Second Watch)
Production cost to Asian level – focus on labor(<10% of total cost) & automated production line.
Number of individual parts slashed to 51 from 91.
Swatch – encased in cheap plastics & have mass production & strong position in the low end.
Unique message – Not selling a consumer product or branded product, but a emotional product.

Positioning Breakaway: Swatch does not fit into either sub category

Product
Swatch Introduction
Launched in March 1983 (Swiss, GB & US).
First year – 200,000 units, within 2 years 100,000 units a month.
Designs & Collections
Swatch Design Lab - cranked 2 collections every year (70 different styles).
Collections were replaced rapidly, people bought from different collections.
Designs were created by assortment of artists, architects and industrial designers.
See-through watches & scented watches.

Price Prices low @ $40 to $50 Promotion SMH spent 30% of Swatch’s retail price on advertising. Notorious for unorthodox promotions In Germany – Swatch 500 feet high, 13 tons in front of Commerzbank. 1990: Started Swatch collectors club. (50000 members in a year @ $90 each p.a.) Place (Distribution) Avoided jewelry stores & Specialty watch shops “ Veggie Line” – in fruit & vegetable markets. Used shop in shop systems. Opened a number of free standing mono brand Swatch stores.

Customer Retention
Loyal Customers – affordable price, Price remained the same for 10 years($40 - $50)
Easy decision to make and live with, didn’t make the customer to think too much
The Swatch Success Story
'80s fads included wearing two Swatches and using a Swatch as a ponytail band
26 million watches sold in 1992 alone
Swatch message – Swiss made, Low cost, Provocative & Joy of life. Not offering watches , but personal culture.
Largest selling watches in the History

Omega
Omega greedy for volume
Launched across Hi/Med/Lo Prices
What does Omega stood for?
1985: Hayek puts Omega back on track-”a watch for people who achieve”

SMH Portfolio
Vertical Integration (assembled all watches & built components for Watches)
Decentralized Marketing ( SMH’s 9 Brands had authority over product designs & Mktg)
Portfolio Management (SMH’s goal - competitive brand in every price Segment)
Swatch pagers/telephones, Swatchmobil (Smart GmbH)

Swatch Unit Sales Trend YoY Sales Growth

Swatch/SMH Lifecycle

Current Situation
Still manufacturing done in Swiss
Hayek sees China as a market than as a supplier.
"We're a world leader in micromechanics," Hayek says. "We're not just a watch company.“
Consistent in its marketing communications

Thank you

http://surenderan.blogspot.com	375
http://www.slideshare.net	30
http://surenderan.blogspot.in	14
http://surenderan.blogspot.com.au	8
http://surenderan.blogspot.fr	6
http://surenderan.blogspot.de	5
http://surenderan.blogspot.co.uk	5
http://translate.googleusercontent.com	5
http://surenderan.blogspot.co.nz	2
http://surenderan.blogspot.se	2
http://surenderan.blogspot.ca	2
http://surenderan.blogspot.sg	2
http://webcache.googleusercontent.com	2
http://surenderan.blogspot.mx	1
http://surenderan.blogspot.ch	1
http://surenderan.blogspot.nl	1
http://surenderan.blogspot.com.es	1

Swatch case

by Surenderan E on Mar 16, 2010

Accessibility

Categories

Upload Details

Usage Rights

17 Embeds 462

Statistics

Swatch case — Presentation Transcript