Birth of

Group 8 (a)
Himanshu Jain (G20018), Divya Rana (G20016)
 (i) What was the structure of the Watch Market prior to 1950s ? What were the category associations and category habits?
Q1&2 (ii) How did Timex disrupt the market?

Until the 1945, with 2,500 firms, the Swiss dominated 80%
of the world’s watch production. Following 1951,
affordable mass produced watches penetrated the market
(i)
mainly from the US, Japan and Hong Kong. (ii)
Luxury Products (e.g.Rolex)
Mass Products (e.g. Timex,
• High end Swiss made watch holding
(legacy, history, and craftsmanship) SeikoGold)
Price Focused Luxury Product
• Limited quantity handmade piece of
VS • A functional watch / seasonal
watch– no cultural / historical
Rolex jewellery; built with care andprecision legacy
Beaume&
Mercier
Non Strategic Direction Omega
• A luxury product and statement • Mass produced, affordable,
(low quality vs high price)
Longines and targets everyone.
Piaget Movado • Distributed through luxurious channels
ProductPrice

/department stores – jewellerystores. • Daily usage – non-luxury

Mass Product • Passed on from generation to • Distributed through variety of

Efficient Strategy
Citizen generation. outlets
Seiko and stores. (No high end jewellers).
Hattori- Casio
Seiko
Times • Disposable
Buying Decision
• Price of jewellery • Timekeeping
• Luxury product / statement instrument
ProductQuality
• Belongingness to the prestige • Affordable and
segment VS functional
• Financial Investment • Disposable items
• Trendy and fashionable
Q3 (iii) How did Swatch disrupt the market?

The ‘Swatch’ strategy is certainly positioned asinnovativeplan.

(1) Leveraged on Swissstandards. (2) It holds aunique messageand genuine emotion. (3) Its delivery of unconventional promotional campaignsbacked by a
strong distribution strategy (availablein almost every country in the world). (4) Crafting apricing strategy againstthe basicfundamentals of economics(supply vs
demand) can be considered a
‘Clean’ Pricing StrategyMasterpiece

Product Strategy Promotion Strategy

• High quality. Lowprice • 30% - double the industry average onadvertising
• Fashionable Items • Unique style / fashion / trendy / etc…
• Large collection of choices • Unconventional methods (ex.Germany)
• Joy of life

Channel Strategy Pricing Strategy

• Shop in Shop • Very competitive in market
• Mini boutiques • Fixed and ‘Clean’.
• Non traditional POS(limited) • Rounded figures and no fluctuation based ondemand
• Free standing mono-brand location (flagships) • Low priced in comparison to product coming for Swiss
Q4 (iv) What is the difference between Swatch’s and Timex’s disruptions?

Nicolas Hayek “I decided, we could retreat no longer….. We needed at least

one profitable, growing, global brand in every segment – including the low
end.”

The following quadrant reflects The Traditional Swiss Watchmakers

Price Focused Luxury Product
product offering based on Price • 2,500 Swiss Watchmakers (Luxury)
vs Quality. This representation Rolex • Considered luxury & financial
Beume&
visualizes the strategic direction Mercier investment
Non Strategic Direction Omega
adopted by Swatch, their key (low quality vs high price) • 1945 – held 90% of world market
success factors and reflects its Longines share
Piaget Movado • Sold through jewellers & up-scale
differentiation points from

ProductPrice
other watch manufacturer stores
worldwide.
Mass Product Efficient Strategy Swatch – (Swiss +Watch)
Citizen • Swatch delivered a innovative
Seiko Leveraging on the
The American, Japanese, Hong Kong,etc.. Casio quality of theSwiss
product
Hattori-
• Low priced watches (mass Seiko • Delivered a new perception to
market) Competitive watches
Timex
pricing & • High quality product with low /
• Considered almost disposable
Larger target fixed pricing
• 1983 – Held 85% market share segment
(units) • Large collection – became fashion
• Sold through low priced item
Product Quality • Large network of distribution
outlets,etc..
• Leveraging on Swiss skills

Unique Message &

Genuine Emotion
Q5 (iv) Could you think of 2 examples emulating Swatch and Timex?
Ford – Model T
We resemble it to Forddue to
its affordable pricing strategy,
unique message, andgenuine
emotion
Timex
Coco-Cola
When Coca Cola treats the
overall population market
as one large market, it
creates a large pool of
potential customers who
are willing to buy the
product.
Swatch
General Motors IKEA
I resemble it to IKEA by
General Motors positions
delivering minimalistic
its offerings based on
concept, high quality vs
advanced technological
low price from a relatively
capabilities, features, and
design which helps the expensive country
brand in creating value for (Sweden)
money and high brand
recall in the mind of the
prospective customers.