Sarah Oumnad

Principles of Marketing
Second Case Study

Sarah Oumnad
Principles of Marketing
Second Case Study

Background Information about Victorinox Swiss Army

There are some interesting pieces of information in the official website of
Victorinox. It is better to have a look at them before starting any work of
analysis about the company:
In 1884, Karl Elsener launched his own cutlery workshop in Ibach,
situated in the Canton of Schwyz. He used waterwheel and the
stream of Tobelbach to supply energy to run the drinking and
polishing machines.

In 1891, the small business supplied for the first time the Swiss Army
with knives for soldiers.

In 1909 up to now, the famous emblem of a cross in the middle of a

shield has been used to differentiate the companys products from
potential copies.

The same year (1909), Karl Elseners mother, Victoria, passed away.
Thus, the company decided to choose Victoria as its name brand.

Shortly after, in 1921, stainless steel, also known as inox had been
recently invented. The company combined its name brand,
Victoria, with the word inox, coming up with Victorinox, which
is going to be from that moment on, the brand name of the
prestigious company.

In 1931, Victorinox acquires the first workshop of quenching that is

completely electric in the world.

In 1945, after WWII, American officers and soldiers buy high

amounts of the Swiss Army knives.

The launching in the U.S.A in 1989 of watches, under the name

brand Swiss Army reached a great success.

In 1999, the Travel Gear line is created.

In 2001, there was the starting of Sport Wear, specially developed

for the northern American market. Also it is the date of the launching
of the first flagship store ay NY, Soho with all the five categories of

Sarah Oumnad
Principles of Marketing
Second Case Study

Victorinoxs products:
-Pocket tools
- Travel Gear
- Fashion
- Time pieces
- Household & professional knives

In 2002, Victorinox became the only shareholder of Swiss Army Inc.

In 2005, there was an absorption by Victorinox of Wenger SA,

Delmont /JU which manufactured knives and supplied Swiss Army
as well. This acquisition is to ensure the prosperity of Swiss Army.

In 2007, the company launched fragrances.

The first European flagship store was opened in 2008 in London.

Sarah Oumnad
Principles of Marketing
Second Case Study

Answering Questions:
1. The president of Swiss Army mentioned that the success of
the new product expansions is based on the companys
brand equity. What is brand equity and how do companies
develop and maintain it?
According to Principles of Marketing fourteenth edition, by Kotler and
Armstrong, brand equity is the differential effect that knowing the brand
name has on customer response to the product or its marketing. (Kotler,
267)
In other words, brand equity is the influence of on customer habits only
by the brand name of a company. A company that has a strong brand
equity will sell so much more of a product than another company that sells
the exact product with the same features and quality price ratio. When a
company has a strong brand equity, we are certain that it has a high
customer loyalty. In some cases we can see customers having tattoos of
their favorite brands, this only shows how these brands have captured and
enhanced the fidelity of the consumers.
When we think of a situation where we could be affected by brand
equity, is for example shopping at the supermarket and facing choices.
Would we buy Coca Cola soda, or an unknown brand that sells the same
product? Would we by OMO or ONI? Apple computer or Lenovo? Would you
buy a Swiss Army knife or any other knife? The answer is simple; here
customers are more likely to choose companies with strong brand equity.
In these examples, the choices would have been oriented to Coca Cola,
OMO, Apple and Swiss Army. It is simply because those are well known
brands, with a well established reputation so that customers trust them
already and dont have to think a lot before choosing them over
competitors.
One of the most important aspects of brand equity, as explained in
investopedia, is that if a company has a good brand equity, when it
launches new products, it is highly probable that customers will associate

Sarah Oumnad
Principles of Marketing
Second Case Study

the new products with the successful name brand. Indeed, a positive name
brand lessens the risk of expending the product line. (Investopedia.com)
In order to develop strong brand equity, there are some steps. As it is
explained in Principles of Marketing fourteenth edition, by Kotler,
building strong brands goes through a process of four steps:
1- Brand positioning
2- Brand name selection
3- Brand sponsorship
4- Brand development
(Kotler, 268)

We can synthesize from managementstudyguide.com, that brand

positioning is giving a reason to the target customers to choose our brand
rather than competitors. It is done by focusing completely on the
consumers benefits and their perception on the brands value. Ones of the
ways of positioning a brand is:
1- To distinguish it from the competitors by making it unique
2- Focusing the products in a niche market
3- Making the brand appropriate for all kind of markets and
businesses
4- Sustainability

In order to select a name brand, there are a lot of criteria that should
be taken into consideration. As stated in www.mbanotesworld.in :

1) It should suggest something about the products benefits and qualities

2) It should be easy to pronounce, recognize, and remember. Short names
help
3) The brand name should distinctive.
4) The name should translate easily into foreign languages.
5) It should be capable of registration and legal protection. A brand name
cannot be registered if it infringes on existing brand names.
(www.mbanotesworld.in)
According to Principles of Marketing by Kotler, there are four ways
of sponsoring and four other ways of brand development. In order to
sponsor its brand, a company can:

Sarah Oumnad
Principles of Marketing
Second Case Study

Launching the brand as a national brand.

Selling to resellers which will give to the companys product a

private brand

Merging two companies in a co-brand

Marketing licensed brands

And when a company wants to develop its brand, here are the
options it got:

Line extensions
Brand extensions
Multibrands
New brands
(Kotler, 270-73)

2. What is it that Swiss Army is selling? What are the

consumers really buying? Discuss these questions in terms
of the core benefit, actual products and augmented product
levels.
Genuinely, Swiss Army is selling pocket tools, travel gear, clothes,
time pieces, household & professional knives, and finally perfumes.
However we can have a deeper look at what Swiss Army is selling as
a whole. In fact there are many levels of products or services. What
have been stated above is to be characterized as the actual products
Swiss Army is selling. Swiss Army knives and watches for instance are
the one of the actual products of Swiss Army Victorinox. They feature
Brand name, features, design, quality level and packaging.
These levels of products and services are to be classified as: Core
customer value, actual product and augmented product.
The core customer value is the most basic level. It actually answers
the question what does the customer really buying? For instance,
when someone buys a very expensive car, lets say the last Rang
Rover, is the customer only buying transportation mean? No, he or she
is actually buying not only a something that transports from point A to
B, but is also buying the social status that accompanies having such a
luxurious item.

Sarah Oumnad
Principles of Marketing
Second Case Study

The augmented product is when the product that is bought by the

consumer fulfils more than its primary objectives. When we buy a smart
phone, we are not only buying a device to make phone calls with, but
also to have access to the internet, organize our work, using some
utilities programs, taking pictures listening to music and so on.
(Kotler, 249-50)
In the case of Victorinoxs customers, the first thing they are actually
buying is the Swiss spirit. Indeed, when we think about Switzerland,
we automatically think about Swiss Banks, Swiss Chocolate and
Swiss Army knives.
After a research done in Asia in 2006 and published in
www.marketing.imu.unibe.ch, these figures were come up with:

As we can see in the results, when people extremely far from

Switzerland are asked what they know about this country, it is revealed
that they know about Victorinox as being part of the Swiss package, or
culture.
(www.marketing.imu.unibe.ch)
This proves that the company is not only a well known brand with a
strong brand equity, it has also become a symbol of a whole republic. So

Sarah Oumnad
Principles of Marketing
Second Case Study

when people buy Victorinoxs products, they are truly aiming to buy some
of the authentic and prestigious Swiss Spirit.
Even more, there are other things customers really buy when
acquiring the companys products. In a research/market analysis
accomplished about Victorinox by
Alexandra Kalinina, Anne Schr and Dijana Uki, they pointed out what they
haved called the brand personality. It contains the following:
Authenticity
- Trustworthiness
- Accessibility
- Passion
- Honesty
- Swiss spirit ( Kalinina et al)
These characteristics of the brands personality are what the customers of
Victorinox are really bying.
3. What future strategies would you recommend to Swiss Army
brand managers?
Swiss Army has a brand guided strategy. I would recommend them not
to change this strategy at all; theyve got a unique competitive advantage
when selling a spirit of an entire country in simple item to sophisticated
people. However they should be extremely innovative and attentive to
actual trends. Now everything is about new technologies, it is likely that
items like Swiss knives become obsolete. They should come up with other
ideas that fit this era of time. They have already started it by
manufacturing some products that look just like a Swiss knife, but when
opened up, is in fact USB keys. It is a great idea, but theyve still got to
innovate.
What should be done also is getting to new markets, and adapting the
actual products to these markets. In addition, they should probably
consider the idea of introducing a new product. They introduced watches,
travel gear and perfumes, maybe its time to consider sunglasses or even
hiking shoes or hiking material that will go along with the knives and the
sport wear, since they carry the same sense of adventure. As said the
fashion director of Victorinox, when we think of the Swiss Army, we think
of adventure, active life style, fashion and design.
However, before introducing any new product, or innovating an actual
one, they should respect their customer driven policies by asking their
customers. They have got many ways of doing that. The simplest way
would be to ask questions in their pages on social networks as Facebook or
Twitter.

Sarah Oumnad
Principles of Marketing
Second Case Study

Works Cited:
History. Retrieved 21 March, 2012, from
http://www.victorinox.com/ch/content/history_page
Inline Citation -- ( History., )

Kalinina, A, Schr, A, & Uki, D (2011). Victorinox Intercultural

Stakeholdermanagement Groupwork . Retrieved 21 March, 2012, from
http://www.marketing.imu.unibe.ch/download/lehre/intstake/10_Victorinox.
pdf
Inline Citation -- ( Kalinina, Schr & Uki, 2011)

Video case study (Swiss Army). Retrieved 21 March 2012, from

http://wps.pearsoned.co.uk/ema_uk_he_hollensen_globalmark_4/64/16425/4
204871.cw/content/index.html
Inline Citation -- ( Video case study (Swiss Army)., )

Kotler, P, & Armstrong, G (2012).Principles of Marketing. pearson.

Inline Citation -- (Kotler & Armstrong, 2012)

Brand equity. Retrieved 21 March, 2012, from

http://www.investopedia.com/terms/b/brandequity.asp#axzz1qTnuy000
Inline Citation -- ( Brand equity., )

Sarah Oumnad
Principles of Marketing
Second Case Study

Brand Positioning - Definition and Concept. Retrieved 21 March, 2012, from

http://www.managementstudyguide.com/brand-positioning.htm
Inline Citation -- ( Brand Positioning - Definition and Concept., )

Brand name selection. Retrieved 21, March 2012, from

http://www.mbanotesworld.in/2008/05/brand-name-selection.html
Inline Citation -- ( brand name selection., )