SEIKO WATCH CORPORATION: MOVING UPMARKET

SEIKO rose to international fame in 1969, when it integrated quartz technology for the first time
in wrist watches. As a vertically integrated watchmaker, SEIKO has held a competitive
advantage over its Swiss rivals which comprised mostly of mechanical watchmakers. This
structure made sure that watches were mass produced at low costs. SEIKO established itself as
a premier watch brand which can be attributed to its founder`s vision to bring the best product
possible to its customers. SEIKO`s sales declined throughout the 1990s leading to a decision to
establish SEIKO Watch Corporation (SWC). This decision was made to streamline internal
decision making and allow more focused branding vision. Its 95% of the watches were being
sold in Japan alone, with the other 5% in other Asian countries. But in Europe and UK it failed to
attract affluent watch enthusiasts and collectors, who thought SEIKO watches to be cheap,
hence poor quality. SEIKO never had a specific target segment or market; it believed that their
product offer had been their identity. By 2007 it was apparent that SEIKO had to work out a
plan to push into the upper segments of the international market, which might have required
an overhaul of consumer perceptions about the brand.

SWC`s main competitors included Swiss brands like SWATCH with prices as low as $ 50,
American watch houses like TIMEX, BULOVA, & HAMILTON. Chinese watchmakers made a huge
threat to SEIKO with their low cost produced watches which were sold at cheaper prices.
TIMEX was selling its quartz analog watches for $ 125. Japanese competitors included CASIO &
CITIZEN which were known for their ECO-Drive watch line. SWC`s main customers were watch
enthusiasts and collectors who looked for originality, exclusivity, and innovation.

SEIKO overhauled its brand image through two approaches, by changing their international
marketing strategy and their production approach. SWC globally marketed their Spring Drive
Technology to change brand perception. This helped SWC to win over watch enthusiasts and
saw this new technology as a platform to move up-market and have the ability to deliver quality
customer service. SWC`s management believed that it should not only compete in the low end
of the market. For this SEIKO only selects only one high-end retailer to keep the exclusivity
factor alive and makes sure that these retailers share the same marketing vision.