Amparo María Carrión Ramírez

CASE STUDY: THE BIRTH OF THE SWATCH

1. How were watches perceived by consumers in the earliest 50’s, in 1951, in 1970,
and 1983 when the Swatch was introduced? What (external or internal) factors
explain this evolution?

In the early 1950s, watches were perceived as luxury accessories, due to their great
economic value, and the way they were made, as well as all the materials used, such as
jewels (rubies, sapphires, or other precious stones), so wearing a watch at this time
generated prestige.

1. Product decision
- mechanical movement designed by engineer
-hadnmade by jewels
-attributes: jewels, beautiful
2. Distribution
3. Price
-very expensive
4. Communication/positioning
Label made in Switerland

In 1951, cheap watches appeared, watches made of much cheaper materials and with a
very simple design. The perception of wearing a watch had completely changed, now it
no longer generated prestige, but functionality.

1. Product decision
-disposable watches (no repair) produced
-No handmade mass production
-Technology: mechanical movemet
-Simple design, cheap material
2. Distribution
- and discount houses
3. Price
-Very cheap (lower costs)
4. Communication/positioning
-Utilitarian positioning “durability positioning”: torture test

Do you think that TIMEX fits into the same “positioning” than Swiss watches at that time?

No, watch category expands to include two sub-categories, watch as Jewelry sub-category and
watch as Tool sub-category.

In 1970 quartz technology appeared, integrating electronic components, generating a

more sophisticated functionality, as well as indicating the date and the day of the week.
Analogue designs used gold or silver plating to imitate Swiss watches, thus generating
more value for the consumer.
 1. Product decision
Mimic the aesthetic appearance and design of the swiss watches
New techno: more accurate than the swiss and with more functions
Simple design, cheap materials

2. Price
cheaper
3. Communication/positioning
Perceived as low cost jewelry

Watch category expands again, watch as jewelry at a lower price

In 1983, Swatch, a low-end quartz watch, emerged, distinguishing itself from other
watches by its ingenious designs, and the message it wanted to deliver. Consumers
perceived it as an affordable and accessible watch, because of its price. Watches are no
longer bought for their functionality but for their design; they are a complement to our
daily lives, like earrings or a handbag, which you combine with the whole look.

1. Product
No new techno
Design: plastic, colourful, frivolous, playful and provocative
Different collections each year
No lasting forever
2. Price
Very cheap, low price impulsive and spontaneous purchase
3. Distribution
Unconventional retailers
4. Communication/positioning
- positioning:emotional product, capturing mood of the moment,
Unusual promotion for a swatch: events,
Expansion of the overall watch category: -watches as fashion accessories

The evolution is due to the new technologies that are emerging, the times of crisis as in
the 50's with the Second World War, the new trends, and the needs of consumers, all this
is constantly changing, so companies must adapt to it.

2. Analyze and explain whether competitors of the Swiss watches are the same in the
years outlined before.

Competitors have not remained the same over the years because new brands are
emerging with innovative ideas, new trends, the economic and social environment also
influences, and consumers may have new needs over the years.

Before the 1950s, Swiss watches had hardly any competitors, as they dominated the
market, they had a consolidated position, a very good brand value, and wearing a Swiss
brand watch gave prestige, luxury, etc. To consumers.
From the 1950s onwards, things changed, and low-cost brands appeared, in particular
TIMEX, which would be the main competitor, taking advantage of the economic and
social situations at that time, introducing watches at very low prices, giving a merely
functional value to wearing a watch, just the opposite of the value of Swiss watches.

In the 70's, new competitors like HATTORI-SEIKO appeared, with the new quartz
technology, they were watches that had new advantages, they provided the date and the
day of the week apart from the time. Some incorporated a digital display, and others
used gold or silver to mimic the appearance of more expensive watches, and these were
the most popular.

3. What mistake did the Swiss make before the Swatch was introduced?

The main mistake was not to renew itself, as new competitors appeared, with new ideas,
technologies, and changing the value of wearing a watch, Swiss watches did nothing to
change their perspective and adapt to these changes, they stayed as they were, they did
not study the market, nor the competitors, and not even the consumers, to see if they
could continue to succeed with what they offered.

Didn´t look outside their current competitive box

Known competitors, mechanical movement (technology), hadmade, the walthy

consumers