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Swatch Case Study

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SWOT analysis, PEST analysis, 4P marketing mix, company analysis and competitor analysis.

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Swatch Case Study

  1. 1. Marketing Case Study
  2. 2.  Swatch’s Microenvironment Environment Analysis
  3. 3. 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.
  4. 4. 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
  5. 5. Competitors  Swatch group’s competitors are mainly Rolex Group Richemont Group, LVMH Group, Citizen Group and Seiko Group.  For Swatch watch, it’s main competitor is Casio
  6. 6. Publics
  7. 7. Environment Analysis Swatch’s Macroenvironment
  8. 8. Political Economic Social Technologi cal
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. 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)
  13. 13. Company Analysis - Company Background & Mission - Target Market - Targeting Strategy - Positioning
  14. 14. Company Background & Mission Company 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.
  15. 15. 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
  16. 16. Positioning  Competitive position: market leader  Swatch are fighting to increase market share  Competitive advantage: Offering relatively low price and high quality products
  17. 17. Company Analysis Current 4 P: Product, Price, Place and Promotion
  18. 18. 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
  19. 19. 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.
  20. 20. 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.
  21. 21. 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.
  22. 22. Consumer Analysis Market Segments
  23. 23. 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 )
  24. 24. 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)
  25. 25. 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)
  26. 26. Athlete (G4)  Sponsored and provided sports collection for athletes  Special promotion with athletes
  27. 27. Consumer Analysis Buying behavior and characteristics
  28. 28. 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
  29. 29. 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)
  30. 30. 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)
  31. 31. Psychological Factors  Motivation: Actual uses vs. Promotion of company  Perception: Learning, Belief and Attitudes
  32. 32. Competitor Analysis• Identifying Competitor- Industry Perspective • Competitor’s Mission • Strength and Weakness of Competitor- Casio • Competitor’s 4P • Gallery of Competitor’s product
  33. 33. Identifying Competitors- Industry Perspective Provide Similar Product/ Service Same Customer Similar Prices - Yes Casio and Swatch both provide watch. - Yes Target to youngsters. - Yes Cheaper price compared to Rolex watches, more affordable by youngsters. Swatch VS Casio
  34. 34. Casio- Major Competitor of Swatch Casio’s Missions  Creating totally original product  Bring fun and convenience to daily life users
  35. 35. 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 -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 )
  36. 36. 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
  37. 37. Gallery of Competitor- Casio
  38. 38. SWOT Analysis
  39. 39. Strength Product 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 SWOT Analysis
  40. 40. Strength Product • 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
  41. 41. 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
  42. 42. 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
  43. 43. Threat •Youth prefers digital watches •Primarily all rangers of swatch have dials •Counterfeit products •Intense competition in crowded market •New competitors •Current economic recession
  44. 44. Recommendation• Marketing Objective • Marketing Strategy • Marketing Mix: 4P • Marketing Calendar
  45. 45. Marketing Objective  Increase the sales volume in Hong Kong market by $500,000 before Jun 2013. Specific Measurabl e Achievabl e Realistic Timed Yes Increase the sales volume Yes Increased by $500,000 Unknown Unknown Yes Before June 2013
  46. 46. Marketing Strategy Targeting Target 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.
  47. 47. 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
  48. 48. Market Calendar Jan Feb Mar Apr May June Idol Designed watch Search idol for design TV Ads Launch Elderly Watch Design Launch Occasion Promotion Chinese New Year and Valentine’s day University Competition Swatch Design Competitio n Appreciation of Competition Launch DIY Campaign Launch Online Shopping Available in Website Exhibition Preparation of Exhibition Exhibition

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