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PROJECT REPORT ON

A STUDY ON GROWTH STRATEGIES OF RADO WATCHES

UNIVERSITY OF MUMBAI

MASTER OF COMMERCE
(Accountancy)
SEMESTER II
2015-16

SUBMITTED BY
Name: VIRAJ V. BALSARA

Roll No: 32

PROJECT GUIDE
DR. POONAM KAKKAD

K.P.B HINDUJA COLLEGE OF COMMERCE


315, NEW CHARNI ROAD, MUMBAI-400 004

M.Com (Accountancy)
2nd SEMESTER

A STUDY ON GROWTH STRATEGIES OF RADO


WATCHES

SUBMITTED BY
VIRAJ BALSARA
Roll No.: 32

1:2008

Smt. P.D. Hinduja Trusts

K.P.B. HINDUJA COLLEGE OF COMMERCE


315, New Charni Road, Mumbai 400 004 Tel.: 022- 40989000 Fax: 2385 93 97. Email:

NAAC Re-Accredited A

THE BEST COLLEGE OF UNIVERSITY OF MUMBAI FOR THE ACADEMIC YEAR 201
Prin. Dr. Minu Madlani (M. Com., Ph. D.)

CERTIFICATE
This is to certify that Ms. VIRAJ V. BALSARA

of

M.Com (Accountancy)

Semester 2nd [2015-2016] has successfully completed the Project on A


STUDY ON GROWTH STRATEGIES OF RADO WATCHES under the
guidance of DR. POONAM KAKKAD.

________________

________________

Project Guide

Co-coordinator

________________

________________

Internal Examiner

External Examiner

________________

________________

Principal

College Seal

DECLARATION
I Mr. VIRAJ V. BALSARA student of M.Com-Accountancy, 2nd semester
(2015-2016), hereby declare that I have completed the project on A STUDY
ON GROWTH STRATEGIES OF RADO WATCHES.

The information submitted is true and original copy to the best of our
knowledge.

(Signature)
Student

INDEX
SR.N
O
1

TOPICS

PAGES

A STUDY ON GROWTH STRATEGIES OF RADO WATCHES

6-8

1.1
1.2
1.3
1.4
1.5
2

INRODUCTION
HISTORY OF RADO
MARKETING MANAGEMENT
VISION
MISSION STATEMENT
BUSINESS PLAN

CORPORATE STRATEGY

10-18

MARKETING STRATEGY

19

MARKETING MIX

20-29

FIVE Ms OF ADVERTISING

30-36

CONCLUSION

37

BIBLOGRAPHY

38

CHAPTER 1: A STUDY ON GROWTH STRATEGIES OF


RADO WATCHES

1.1

INTRODUCTION:
Rado is a Swiss high range manufacturer of watches, with headquarters in
Lengnau, Switzerland. It is noted for its use of scratch-proof materials, a
field in which it is considered a pioneer. Today the company produces
about half a million watches a year with a staff of about 470 in total.
Rado's watches are obtainable in more than 150 countries, at over 5900
points of sale. The most important markets are Southeast Asia, Japan,
6

China, Middle East as well as countries within Europe such as


Switzerland, Germany, Italy and the USA.

1.2

HISTORY OF RADO:
Rado was formed in 1950 as Schlup & Co. Rado initially produced watch
movements only. In 1957 the company launched its first collection of
watches under the Rado brand. In 1962 the Rado Diastar, the world's first
scratch-proof watch, was launched. It has been in production ever since,
now sold as DiaStar the Original. In 1968, Rado became part of the
ASUAG, which merged 1983 with the SSIH to the SMH group, renamed
in 1998 as the Swatch Group.

1.3

MARKETING MANAGEMENT
Rados marketing management relates with both the theories of 20002011 and 2012-2016. These theories emphasize on maintaining a
sustainable growth by adding value to the customers by delivering and
communicating superior customer value.

1.4

VISION:
Rado strives to become one of the leading international seller and dealer
of quality authentic vintage & luxury Swiss watches of value online.

1.5

MISSION STATEMENT:

i.

Is to sell up to 20 unique watches weekly at profitable to the company yet

ii.

at affordable prices to customers.


To maintain Rado (Captain Cook, Manhattan), Zodiac (Sea Wolf,

iii.

Astrographic), & Bulova (Oceanographer, Snorkel) in weekly inventories;


To maintain favourable buyer-seller relationship by actively providing
assistance to all customers.
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CHAPTER 2: BUSINESS PLAN:


A business plan should have seven clear sections. These are: summary, concept
section, market conditions, promotion costs, marketing strategy, manpower
plans and exit strategy. Rado plans to innovate in order to stay strong for the
coming 50 years. The luxury watch brands that are suffering today were doing
rather well quite a few years ago but they increased their prices without having
altered the substance, the value that is inside the product. Luxury brands step up
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battle for travelling shoppers but Rado do not see the need to move upstairs
because it is positioned between Tissot and Omega. Rado has a strong brand in
each price segment, so its objective is clear that it always try to bring best value
for the price segment that it is strong in.

CHAPTER 3: CORPORATE STRATEGY:


Rado is strongly committed to the Groups clear, healthy corporate strategy of
broad geographical presence in all main markets of the world, its
unprecedented positioning in all market price segments as well as its reliance
on its highly integrated production and product development capabilities with

its innovative research and technical know-how. At Rado, nothing is


impossible. Its philosophy is to keep exploring and pushing the boundaries.

3.1: SWOT ANALYSIS:


I.

STRENGTHS:
i. Rados creation of high tech diamond (hardest material on earth) is in the
Guinness book of world records, strengthening the brand positioning of

II.

ii.
iii.

being technologically innovative in materials.


Proud recipient of more than 30 international design awards.
The brands USP in use of innovative materials is broad in nature and not

iv.

restricted to any particular look.


Rado has also associated itself with various sporting events, especially

v.

Tennis that has provided the brand international presence.


Part of the Swatch group that has 28,000 employees across 50 countries

WEAKNESS:
i. The brands non-classic design is not popular with traditional watch

collectors.
ii. Limited market share growth due to competition.
iii. Failure to keep up the middle income segment market share.
iv. Do not tap the rural market.
III. OPPORTUNITY:
As the brand has not restricted itself to any look, there are plenty of
opportunities in expanding the product line without affecting the brands
IV.

positioning.
THREATS:
i. The brands competitors in the high-end segment are positioned as watches
with classic design. While Rado has a classics collection, it is threatened
heavily by their presence
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ii.
iii.
iv.
v.

Fluctuating economies means limited spending on luxury items


Fake/cheap imitations cause damage to brand
Mobile phone as substitute product of watch.
Many foreign brands entering into market creating heavy competition.

3.2 PESTEL ANALYSIS:


PESTEL stands for Political, Economical, Sociocultural, Technological,
Environmental, Legal analysis of the external environment affecting the
business. PESTEL analysis is a tool used to look at the environment of the
business. PESTEL analysis provide the information that help Rado to
understand the market situation, business position and the direction of
operation. PESTEL analysis is done by managers to understand the macro
environmental factors affecting the business. These analyses are strategic
tools for understanding market growth, market share, and latest trends.
I. POLITICAL:
Being foreign watch maker Rado had to face challenges regarding tax policy,
employment laws and trade restrictions and tariffs. It cannot completely enter
into a foreign market until such issues are solved. Joint ventures are
sometimes beneficial if Rado can maintain all policies of that particular
country. If the government of a particular country where Rado has its
operation takes some steps to improve the rate of gross domestic product
(GDP) and decrease the inflation that would help Rado maintain its growth in
the market and perform well in the watch industry.
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II. ECONOMICAL:
If a country is prospering in its economic growth and other factors such as
interest rate, exchange rates and inflation rates are favourable then this would
reflect that many people have ability to purchase the luxury products. This
would create a favourable scenario for Rado to keep up its market share in
that country.
III. SOCIAL/SOCIO-CULTURE:
The consumer definitely became very knowledgeable and demanding in the
past 10-15 years in terms of watches, because of course not only the
perception of watches changed a lot, the watches are not simply a tool
anymore to tell the time, but it became an accessory that says something
about ones personality, lifestyle, preferences, and values. The consumer is
becoming more and more educated also about technical aspects. That had
changed the whole perception at the market in the past 10 years and that helps
develop Rado so well in different age group and among different career
professionals.
IV. TECHONOLOGIAL:
Rado is a technological brand focused on design and has brought major
innovation to this industry for the last 50 years. Innovation and high-tech
materials have been an obsession with Rado for the last 50 years. When other
watch brands were mainly focusing on legacy and craftsmanship, Rado was
the one brand always looking to the future and always trying to push the
boundaries. Some examples of this are the milestones that Rado were first to
achieve. First Sapphire Crystal, first curved sapphire, first ceramic watch,
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first high-tech diamond watch, pioneered the use of crystal metallization and
so on.
V. ENVIRONMENTAL/ECOLOGICAL:
The high-tech ceramic is lighter, scratch resistant and hypo-allergenic and it
has incredibly low thermal conductivity making it more comfortable in
adjusting to body temperature.
VI. LEGAL/REGULATORY:
Many governments have opened the market to encourage foreign investment.
The import license for watch is easy to obtain by foreign organization. This
created certain opportunists as well as challenges for Rado because many
foreign brands are entering into market into which Rado wants to expand.
Furthermore, by 1992, WTO has removed quantitative restriction and reduces
the import duty to 25% which earlier was 50% on import watches. This
makes Rado difficult to maintain a sustainable growth because of increased
competition of foreign brand.

3.3 MICHAEL PORTERS FIVE PROCESS:


Porter five forces analysis is a framework that attempts to analyze the level of
competition within an industry and business strategy development. It draws
upon industrial organization (IO) economics to derive five forces that determine
the competitive intensity and therefore attractiveness of an Industry. The five
processes are:i.

THREAT OF NEW ENTRANTS:


Profitable markets that yield high returns will attract new firms. This results in
many new entrants, which eventually will decrease profitability for all firms in
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the industry. The following factors can have an effect on how much of a threat
new entrants may pose:
The existence of barriers to entry (patents, rights, etc.). The most
attractive segment is one in which entry barriers are high and exit barriers
are low. Few new firms can enter and non-performing firms can exit

ii.

easily
Economies of scale
Product differentiation
Brand equity
Switching costs or sunk costs
Access to distribution
Customer loyalty to established brands

THREAT OF SUBSTITUTE PRODUCTS OR SERVICES:


The existence of products outside of the realm of the common product
boundaries increases the propensity of customers to switch to alternatives. For
example, tap water might be considered a substitute for Coke, whereas Pepsi is a
competitor's similar product. Another example is the substitute of a landline
phone with a cellular phone.
Potential factors:

Buyer propensity to substitute

Relative price performance of substitute


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iii.

Buyer switching costs

Perceived level of product differentiation.

BARGAINING POWER OF CUSTOMERS (BUYERS) :


The bargaining power of customers is also described as the market of outputs:
the ability of customers to put the firm under pressure, which also affects the
customer's sensitivity to price changes. Firms can take measures to reduce buyer
power, such as implementing a loyalty program. The buyer power is high if the
buyer has many alternatives. The buyer power is low if they act independently
e.g. If a large number of customers will act with each other and ask to make
prices low the company will have no other choice because of large number of
customers pressure.
Potential factors:

iv.

Buyer concentration to firm concentration ratio

Degree of dependency upon existing channels of distribution

Bargaining leverage, particularly in industries with high fixed costs

Buyer switching costs relative to firm switching costs.

BARGAINING POWER OF SUPPLIER:


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The bargaining power of suppliers is also described as the market of inputs.


Suppliers of raw materials, components, labour, and services (such as expertise)
to the firm can be a source of power over the firm when there are few
substitutes. If you are making biscuits and there is only one person who sells
flour, you have no alternative but to buy it from them. Suppliers may refuse to
work with the firm or charge excessively high prices for unique resources.
Potential factors are:

v.

Supplier switching costs relative to firm switching costs

Degree of differentiation of inputs

Impact of inputs on cost or differentiation

Presence of substitute inputs.

INTENSITY OF COMPETITIVE RIVALRY:


For most industries the intensity of competitive rivalry is the major determinant
of the competitiveness of the industry.
Potential factors:

Sustainable competitive advantage through innovation

Competition between online and offline companies


16

Level of advertising expense

Powerful competitive strategy.

CHAPTER 4: MARKETING STRATEGY:

17

The marketing strategy is based on the mix of the product, price, place and
promotion. These factors are determined according to the needs of the target
market. It can be seen that the marketing strategy targets high income segment
men and women. Rado is not a cyclical fashion brand, it has a core market but
it has also moved with the times whilst being respectful of its classic design
past. The strong aesthetics of the products also play a major part in the overall
sales machinery. The strategy is to incite the maximum amount of sales.
However, Rado faces a lot of competition from the already exiting players in
the market.

4.1 MARKET SEGMENTATON:


There are various ways through which the companies can identify attractive
market segments but the most popular approach is that the company evaluates
each segment on the basis of some factors. All segments are evaluated by Rado
on the basis of their size (number of customers). The growth rate of each
segment is explored and the competition which Rado has to face in each
segment in determined. The company also determines the brand loyalty of each
segment and attainable market shares are calculated. Rado then determines the
required market shares at break-even point and matches the profit margins of
each segment.

CHAPTER 5: MARKETING MIX:


Marketing is the effort made by an organization to identify needs and wants of
potential customers and then satisfying them. The most successful
organizations are those that are the most successful in first identifying and
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second satisfying customers needs. The greatest example of marketing genius


is displayed by the Rado watch company.
The marketing mix of the Rado Watch Company is an example of why not
following the usual way to market products is often a good idea. When the
company was started if the founder had not taken the unusual step of gaining
certification as to his watches accuracy the company and the hallmarks of the
product would not be known. It is important that successful marketing
managers take advantage of the controllable tools of the marketing mix as they
have done at Rado. Marketing strategies can be developed with techniques like
target marketing, niche marketing, branding and others. Although these
techniques can seem confusing, with understanding they can give you a solid
framework to begin developing a strategic competitive advantage.

5.1 TARGET MARKETING TECHNIQUES:


These technique target consumers based on characteristics they already have
1.

such as age, psychological profile, and special interests.


DEMOGRAPHIC TARGETING:
This is the most common, and general targeting technique. Demographics
target marketing is based on consumers' vital statistics such as age, sex,
location, income, etc. Though superficial; demographics can play a useful

2.

role in your marketing strategy.


PSYCHO- GRAPHIC TARGETING:
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Though this sounds like a psychological technique, it's really a target


marketing technique because it targets consumers based on their pre-existing
psychological characteristics. These characteristics can be general, such as
3.

conservative or liberal, outgoing or introverted, social or private.


NICHE MARKETING:
Niche marketing simply means finding a specific group of customers from
within a larger group of customers and basing your small business marketing
strategy on that. Marketing Strategy Click For example, lets say you want to
start a restaurant. 'Restaurants' is a large category with lots of competition.
Niche marketing should be applied. The trick to using niche marketing as part
of your marketing strategy is to choose a niche that's small enough for you to
dominate, but big enough to be profitable.

4.

1.

PSYCHOLOGICAL MARKETING TECHINQUE:


These are marketing techniques that actually place a thought, impression or
feeling into the minds of consumers.
POSTIONING:
In their book 'Positioning: the Battle for Your Mind', authors Al Ries and Jack
Trout popularized the idea that your product, service, or company has an image
(like a personality) in the minds of consumers. Positioning techniques are used
to be sure that the image in consumers' minds about your company is the one

2.

you want them to have.


BRANDING:
Many marketing strategies are founded on the concept of branding. Think of a
brand as the reputation of a product or company, translated into a marketing
tool. For example, Rado is a watch company, but the Rado Brand is far bigger
20

than just watches. The Rado Brand - its reputation - stands for elegance,
3.

celebrity, and class.


FOCUS:
By making Focus part of your marketing strategy, you create an image of
expertise. The guiding principal of focus is specialization. In the minds of
consumers, you can only be an expert in one thing. Therefore, focus all your
marketing efforts on that thing, and you will reinforce a perception of
specialization and expertise. This includes your product line. Keep your
product line focused. Avoid temptations to apply your name to more than one

4.

specialized area.
DIFFERENTIATION:
Differentiation means just that; making yourself different from the
competition. Fundamentally, differentiation is the underlying aspect of every
other technique. Entire books have been written on the subject including
'Differentiate or Die' by Jack Trout. For now, the principle to keep in mind is
that when you are in doubt about your marketing strategy, "be different."

5.2 MARKETING MIX OF RADO (7P+4C):

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Once you've developed your marketing strategy, there is a "Seven P Formula"


you should use to continually evaluate and re-evaluate your business activities.
These seven are: product, price, promotion, place, packaging, positioning and
people.
i.

PRODUCT:
In case of Rado, the product is intangible, heterogeneous and perishable.
Moreover, its production and consumption are inseparable. Hence, there is scope
for customizing the offering as per customer requirements and the actual
customer encounter therefore assumes particular significance. However, too
much customization would compromise the standard delivery of the service and
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adversely affect its quality. Hence particular care has to be taken in designing
the service offering.
ii.

PRICING:
Rado price is directly related to the technical perfection of the mechanism, the
use of precious stones and metals. It is recognized that a Rado - a sample of
technical excellence that is difficult to find equal counterparts. The company is
the largest consumer of gold in Switzerland, and the largest amount of gold used
in the watch making industry is this mark (for the production of male body gold
watches Rado takes about 40 grams of precious metal). The famous Rado
leaders also on the number of gold bracelets and watches encrusted with

iii.

diamonds.
PLACE:
The third P in the marketing mix is the place where your product is actually
sold. Develop the habit of reviewing and reflecting upon the exact location
where the customer meets the salesperson. Sometimes a change in place can
lead to a rapid increase in sales. This may include any physical store
(supermarket, departmental stores) as well as virtual stores (e-markets and e-

iv.

malls) on the Internet.


PROMOTION:
When speaking about promotion strategy of Rado, I can propose to focus on
event marketing. As the name implies, the basis of event marketing is an event,
and often a set of special events organized to promote a product or service. We
can say that, in terms of business objectives, a special event is a form of human
involvement in the culture of the brand, corporate or other community
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organization through his actions and feelings, because of this we can achieve
long-term effects of event-marketing: affect both those who take part in it and
even indirectly affect those who missed the event, but is the target group.
We now look at the 3 new elements of the services marketing mix - people,
process and physical evidence - which are unique to the marketing of services.
a. PEOPLE:
People are a defining factor in a service delivery process, since a service
is inseparable from the person providing it. Thus, a restaurant is known as
much for its food as for the service provided by its staff. The same is true
of banks and department stores. Consequently, customer service training
for staff has become a top priority for many organizations today.
b. PROCESS:
The process of service delivery is crucial since it ensures that the same
standard of service is repeatedly delivered to the customers. Therefore,
most companies have a service blue print which provides the details of
the service delivery process, often going down to even defining the
service script and the greeting phrases to be used by the service staff.
c. PHYSICAL EVIDENCE:
Since services are intangible in nature most service providers strive to
incorporate certain tangible elements into their offering to enhance
customer experience. Thus, there are hair salons that have well designed
waiting areas often with magazines and plush sofas for patrons to read
and relax while they await their turn. Similarly, restaurants invest heavily
in their interior design and decorations to offer a tangible and unique
experience to their guests.
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The traditional Marketing mix is a 4 Ps model and is business oriented.


The 4 Cs model of marketing on the other hand is more consumers
oriented. Because of its focus on consumers, the 4 Cs model is mainly
used for Niche Marketing. However, just like the traditional marketing
mix, it can also be used for mass markets. The four variables in the 4 Cs
model are

i.

COST:
Cost is equivalent to Pricing in the traditional marketing mix. Cost is a very
important consideration during consumer decision making and hence in the 4
Cs principle, the cost variable is given special attention. The 4 Cs model
generally plans on the basis of Customers and not products. And hence they

ii.

have to plan the cost of the product on the basis of their customer.
CONSUMER:

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The principle of four Cs of marketing states that your customer should be your
prime focus. Unlike the traditional marketing mix where the primary focus is on
Products, in the 4 Cs model, the primary focus is on the customer.
CONVENIENCE:
Convenience is equivalent of distribution or placement of the traditional

iii.

marketing mix. When you have a niche customer base, the convenience of the
customer in acquiring your product plays a critical role. Take a niche product
like Heavy machinery as an example or even products like television and air
conditioners.
COMMUNICATION:
The concept of communication remains same for both, the traditional marketing

iv.

mix as well as for the 4 Cs of marketing. Off course, the marketing


communications for a company following the 4 Cs of marketing is completely
different as it needs a completely different Segmentation, targeting and
positioning.

5.3 BRAND AND BRANDING:


The brand name Rado as a symbol of his image:
i.
ii.
iii.
iv.
v.

creates a positive attitude to the product and firm


guarantees for buyers the product quality,
creates a high level of expectations about its properties,
provides a high reputation of the goods,
Increases its value in the eyes of consumers.
The Brand value is called a set of goodwill and good impressions. Creating and
maintaining a positive attitude to the goods is an important indicator of loyalty

26

to the brand (the degree of attractiveness of the product to consumers, high


enough to ensure high demand and regular purchases). Brand value is confirmed
by its characteristic features - prestige, fame, national or international
recognition, stability and attractive position for a long period of time. Brand
image is a way to interact with target consumers, and the image in the mind of
the consumer binds the good and the values of consumers. Image of the brand is
aimed at long-term recognition of the good and company, and the formation of a
clear understanding of the product. Building brand image involves activity of
image makers, whose task is to analyze the image formation and target
customers. Thus, the images of the brand combine:
i. A rational component - special properties of consumer goods;
ii. Emotional and irrational component - a dream, a legend, personal history,
especially attitudes and stereotypes of the consumer;
iii. The human factor - service standards.

27

CHAPTER 6: FIVE Ms OF ADVERTISING:


Advertising is a form of communication where organizations brands or products
are marketed to a targeted to an audience. It is a paid form of communication;
the message is disseminated to an audience through a message channel. These
channels could include the World Wide Web, televisions, radios and print based
advertisements. Advertising objectives have a flow structure through which the
ad is disseminated to a particular group of individuals. The flow structure
consists of 5 Ms, popularly known as the 5 Ms of Advertising. The five Ms
are mission, money, message, media and measurement; these elements
combined create advertisements.

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i.

MISSION:
There are several ways that a company can determine what the mission of an
advertising strategy should be. Quantitative measures such as increasing the
awareness of the brand among a certain segment by a certain percentage can be
chosen. Rado is increasing the awareness among the customers of South East
Asia and Central Asia 20% could be a mission. This could be measured before
and after using a survey or some other form of primary research.

ii.

MONEY:
Budget constraints are everywhere in business, and nowhere are they more
evident than in small businesses. Advertising and marketing can sometimes be
ignored because they do not offer immediate results. However, in every business
environment, some resources must be allocated to building a brand and image.
Without this, the company will not continue to grow. Even during recessions,
marketing must be a priority to avoid losing market share. Having a suitable
budget is an important part of the process. Rado is now spending money on
online advertisement rather than its mainstream advertisement.

iii.

MESSAGE:
Advertising is a creative process. There are slogans, themes and gimmicks that
try to lure the customer in. The message of an advertisement is this creative
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aspect. Any manner of theme can be implemented as long as it is in line with


what the company stands for. Rado online based advertisement in Asia zone
attracted a quite good number of customers.
iv.

MEDIA:
This aspect of the program refers to the media that will be used to communicate
the message. This can include television, radio, mail, telephone and in person
contact. Most media has metrics to measure their efficiency and costs associated
with those metrics. Choosing the right media can make or break an advertising
program.

v.

MEASUREMENT:
Finally, the firm must measure the effects of the program on their intended
audience. This can be done by measuring sales or trying to gauge interest
through research. It is often very difficult to measure how much the
advertisements actually impacted customer interest and how much other
external factors played a part.

6.1 MASS COMMUNICATION:


i.

ADVERTISING BUDGET & CAMPAIGN COST:


An advertising campaign is typically broadcast through several media channels.
Successful advertising campaigns achieve far more than the sporadic
advertising, and may last from a few weeks and months to years. For Rado,
30

advertising budget formulation and spending campaign cost is very important to


grab the competitive business mark
ii.

SALES PROMOTION & BUDGET:


The allocation of monetary resources to sales promotion is determined by the
promotion strategy of the firm. In most cases, first the total amount of money
for promotion is determined then it is budgeted for different activities. Before
deciding the money allocated to sales promotion, the management should
evaluate relevant factors such as type of product, its stage in PLC, the market
situation, level of competitive activity, etc. All these factors, alone or in
combination, can significantly affect the promotional budget.

iii.

EVENTS & EXPERIENCES/ SPONSERS:


To sponsor something is to support an event, activity, person, or organization
financially or through the provision of products or services. A sponsor is the
individual or group that provides the support, similar to a benefactor.

iv.

PUBLIC RELATION/GOVERNMENT LOBBYING:


Public relations (PR) are the practice of managing the spread of information
between an individual or an organization (such as a business, government
agency, or a non-profit organization) and the public. Public relations may
include an organization or individual gaining exposure to their audiences using
topics of public interest and news items that do not require direct payment.
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v.

CORPORATE SOCIAL RESPONSIBILITY:


CSR is a form of corporate self-regulation integrated into a business model.
CSR policy functions as a self-regulatory mechanism whereby a business
monitors and ensures its active compliance with the spirit of the law, ethical
standards and international norms. CSR aims to embrace responsibility for
corporate actions and to encourage a positive impact on the environment and
stakeholders including consumers, employees, investors, communities, and
others.

6.2 PRICING STRATEGY:


The pricing strategy that the Rado Company employs is distinct in its
conception and execution. Rado sets its prices with little regard to the
competition and their pricing, choosing instead to price its timepieces as it sees
fit and therefore setting the price point for others to follow. Rado watches vary
in pricing according to model, age and materials but the core collection of Rado
pieces will range from about US$700 to about US$28,000. Models that include
pave dials of diamonds and baguette diamonds can cost approximately
US$30,000 to US$250,000. The company does not offer any sort of discounts
for customers or any sort of price reductions or sales although occasionally there
are dealers that offer discounts because of financial difficulties. Rado does not
offer discounts because consumers are willing to pay the prices set by the
company as is evidenced by the fact that even during an economic downturn and
32

faced with discounted other brands of watches the majority of luxury watch
shoppers where looking for a Rado.

6.3 BREAKEVEN ANALYSIS:


Companies do breakeven analysis to determine the point at which revenue
received equals the costs associated with receiving the revenue. Break-even
analysis calculates what is known as a margin of safety, the amount that
revenues exceed the break-even point. This is the amount that revenues can fall
while still staying above the break-even point. Break-even analysis is a supplyside analysis; that is, it only analyzes the costs of the sales. It does not analyze
how demand may be affected at different price levels.

Rado which formed in 1950 as Schlup & Co., initially produced watch
movements only. In 1957 the company launched its first collection of watches
under the Rado brand. Today the company produces about half a million
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watches a year with a staff of about 470 in total. Rado's watches are obtainable
in more than 150 countries, at over 5900 points of sale. So we can understand
that the company crossed its breakeven point and now it is producing and
distributing its watches with substantial profit margin

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CHAPTER 7: CONCLUSION:
The wristwatch, for most of the last century, has been the ultimate male
accessory. One of the few accepted male adornments, the pocket watch evolved
into the wristwatch and subsequently into a key indicator of social status,
particularly in the upper echelons of society. Wrist Watches form an integral part
of the personality of individuals in the present era. Earlier seen as a luxury item,
they are now witnessing a fundamental change in perception, and are now
gaining respect as an essential utility item. For the watch industry, time seems in
its favour what with the liberalization of the global market coupled with the
rising purchasing power of the young and consumerist customers. Though
mobile phones have become the substitute for watches clocking the penetration
to only 27%, still Asian watch market is growing at high speed bringing hosts of
opportunities for all the segments equally. There are oodles of innovations,
better watch portfolios with quality and price ranges and enhanced selling
outlets to increase consumer base at large. The new generation, encompassing
todays tweens and teenagers, has never had it so good. Brand-conscious, techsavvy, old before their years and equipped with generous incomes that are
almost entirely discretionary, they are an increasingly attractive segment for
marketers of all kinds of products, ranging from fashion and beauty to digital
devices. Rados unique and latest design, luxurious image and customers
loyalty are the main key components of sustaining as a market leader in this
competitive global market.
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CHAPTER 8: BIBLOGRAPAHY:
i.
ii.

http://www.rado.com/en/
Porter, M. E. "Strategy and the Internet." Harvard Business Review 79,

iii.
iv.

no. 3
http://www.fhs.ch/en/history.php.
http://www.nationmultimedia.com/2006/10/14/business/business_300161

v.
vi.

28.php.
https://en.wikipedia.org/wiki/Rado_(watchmaker)
https://www.academia.edu/DiscoverResearch

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