Swatch brand information and 4Ps analysis

Swatch is one of the most successful brands of the Swatch Group. Its first line of plastic quartz analog line was launched in 1983, and went to become a global phenomenon. It is a cost effective, classic wristwatch, produced in endless bright, appealing designs, and even became a cult collectors’ item.
Swatch has enjoyed this success due to its innovative design and quality, with a perfect marketing strategy for its target audience. It is a hot collectable fashion accessory, which could be attached to clothes and also wore as a ponytail band.
However, due to the recent economic downturn coupled with changing taste and culture of the target market, most of the wrist watch companies have been hit hard including the parent company Swatch Group.
SWATCH as a brand has been performing well in these changing environment. But in order to stay ahead of this aggressive market, SWATCH has to work on its R&D with a combination of new marketing strategies.


SWOT Analysis

This technique is specially designed to help identify suitable marketing strategies for the company to follow.(hollensen 2007)
Swatch enjoys consumer loyalty. This was further enhanced with the launch of Swatch Members Club. It is a collectable, which has proven to be a hot asset and has raised high prices at auctions.
It enjoys an esteemed brand position in the world market as being one of the most successful brands of the Swiss Conglomerate Swatch Group.
It has a variety of product lines, including Bijoux Jewelleries: which has new designs for every season with a mixture of fashion, art and sports.

The watch market is becoming very fragmented which makes the promotion of the brand difficult.
Swatch has been facing a very low turnover of its assets compared to its competitor’s parent company.
The productivity per employee is weak hence affecting the financial profits of the parent company. The productivity of Swatch Group is $0.2Million Compared to $0.3 Million of its competitor’s Seiko.

Improved economic condition in developing countries like China and India is increasing people’s disposable income.
As developing countries become more westernised; Swatch could gain a competitive edge in these growing markets with a mixture of its innovative design and artistic approach.
The recent economic downturn has changed the spending ability of the con­sumer. They are switching from luxurious to affordable goods.
The innovative change in the e-commerce and retail sector gives a direct exposure to market its product.

Threats from the counterfeit watch market is growing concern been. This results in loss of brand and its reputation. Recent reports show that, the counterfeit watch industry causes losses of over $1 Billion every year.
Swatch customers are urban trendsetters who prefer changes and are unpredictable. So if swatch fails to produce innovate style it can make huge loss on its sales.
Europe is currently the biggest market for Swatch watches, however due to the economic recession and price fixation its position is threatened.
Plastic and metal is the main raw material for Swatch watches. Recent price increase in crude oil and metal is making the raw material expensive and production cost very high which leaves a very low margin for profit.

Marketing Mix Decision

When marketing their product, firms need to create a successful mix of

  • The right product
  • Sold at the right price
  • In the right place
  • Using the most suitable promotion
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  • Selecting the most effective promotional channel

The main reasons for the success of Swatch in comparison to its competitors in the East is its marketing strategy, quality and design of their watches. No matter how good the product is, it needs to be marketed correctly. With marketing mix of product, price, place and promotion we should be able to suggest the future strategy to maintain its number one position in the market.

Swatch has diversified its original cult plastic design by offering different range from Metal-bodied watches, diving watches (the Scuba series), thin and flat bodied watches and also internet watch. To improve its product appearance and differentiate itself in the market Swatch can market personalised watches where customers get to choose their colour and design. This can help Swatch to develop its brand diversity and offering to the target audience.

There have a swatch product and price list in website

Pricing is the only element of the marketing mix to help generate the revenue. Pricing sends a very powerful message, it is extremely important that they reflect the customer value the company delivers. To find the trick to balance it’s pricing, Swatch can differentiate its product line on the basis of pricing; economy, standard and superior versions which will help them to gain an edge over their competitors and to globally gain the market share especially in BRIC countries were Swatch Group is showing tremendous growth.
Demographics suggest that the main target market of Swatch is the age group of 15-34. Taking this in to consideration, I suggest it could provide special prices to students and a discount on customisation of the watch if registered with Swatch Club Membership.

Promotion is the process whereby marketers inform, educate, persuade, remind and reinforce through communication. It is important for Swatch to capture target audience to generate sales and revenue. Swatch has been an active sponsor of European sports and also an official time keeper of Olympic which has helped it to gain the international attention and market an international culture. It also had its hand on the entertainment industry through partnership with MTV by running different contest within the shows. It also has a partnership with World Volley Ball Federation which helps to promote the sport internationally and also helped Swatch to market itself as a company with public interest.
Currently there is an exponential rise in the use of social networking sites. Demographics suggest that Swatch target audience are the youth and they are very well connected through these social networking sites. Swatch already has a fan following of 3, 20,102 on face book which is increasing day by day. This page also gives an access to Twitter, Swatch Club and the Swatch website.
This could increase its brand awareness and also alert its target audience about the uniqueness of their product. Facebook is one of the, most successful social network website. Swatch has an exceedingly good chance to attract new customers. It can also run competition and contest like it does on MTV on these social networking sites.

It should also participate in university based social events, which can help gain popularity with the youth who are the trendsetters of today’s society. Due to the economic down turn companies have made huge cuts on their marketing budgets, Swatch can use this latency in the market to its advantage; they could increase their promotional marketing activity, which may enable them to increase their market share.

Choosing the right channel of distribution is very important for a company.
It’s famously said ‘supply creates demand’. If we analyse the current market segment and also increase competition in the watch industry I would suggest Swatch could use multiple channel strategy in which the product is available through multiple channels of distribution such as Internet, sales force, call centre, retail store, departmental store and direct mail. But to keep the brand identity and exclusivity of its product Swatch can sell its personalised and limited collection only through its Swatch Membership club, which can help to maintain the exclusivity of their watches. In this way different customer with different buying behaviour will seek channels that best serve their needs



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